FREE WRITING PROSPECTUS | ||
FILED PURSUANT TO RULE 433 | ||
REGISTRATION FILE NO.:333-228597-02 | ||
July 29, 2019
Free Writing Prospectus
Structural and Collateral Term Sheet
$1,276,634,964
(Approximate Initial Mortgage Pool Balance)
$1,092,156,000
(Offered Certificates)
Citigroup Commercial Mortgage Trust 2019-GC41
As Issuing Entity
Citigroup Commercial Mortgage Securities Inc.
As Depositor
Commercial Mortgage Pass-Through Certificates, Series 2019-GC41
Citi Real Estate Funding Inc.
Goldman Sachs Mortgage Company
German American Capital Corporation
As Sponsors and Mortgage Loan Sellers
STATEMENT REGARDING THIS FREE WRITING PROSPECTUS
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
IMPORTANT NOTICE RELATING TO AUTOMATICALLY GENERATED EMAIL DISCLAIMERS
Any legends, disclaimers or other notices that may appear at the bottom of the 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 being made that these materials are accurate or complete and that these materials may not be updated or (3) these materials possibly being confidential, are, in each case, 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.
Citigroup | Deutsche Bank Securities | Goldman Sachs & Co. LLC | |
Co-Lead Managers and Joint Bookrunners | |||
Bancroft Capital, LLC | Drexel Hamilton | ||
Co-Manager | Co-Manager |
The securities offered by this structural and collateral term sheet (this “Term Sheet”) are described in greater detail in the preliminary prospectus, dated on or about July 30, 2019, included as part of our registration statement (SEC File No. 333-228597) (the “Preliminary Prospectus”). The Preliminary Prospectus contains material information that is not contained in this Term Sheet (including, without limitation, a detailed discussion of risks associated with an investment in the offered securities under the heading“Risk Factors” in the Preliminary Prospectus). The Preliminary Prospectus is available upon request from Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC or Drexel Hamilton, LLC. This Term Sheet is subject to change.
For information regarding certain risks associated with an investment in this transaction, refer to “Risk Factors” in the Preliminary Prospectus. Capitalized terms used but not otherwise defined in this Term Sheet have the respective meanings assigned to those terms in the Preliminary Prospectus.
The Securities May Not Be a Suitable Investment for You
The securities offered by this Term Sheet are not suitable investments for all investors. In particular, you should not purchase any class of securities unless you understand and are able to bear the prepayment, credit, liquidity and market risks associated with that class of securities. For those reasons and for the reasons set forth under the heading “Risk Factors” in the Preliminary Prospectus, the yield to maturity of, the aggregate amount and timing of distributions on and the market value of the offered securities are subject to material variability from period to period and give rise to the potential for significant loss over the life of those securities. The interaction of these factors and their effects are impossible to predict and are likely to change from time to time. As a result, an investment in the offered securities 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 due diligence on the mortgage loans and the securities. Potential investors are advised and encouraged to review the Preliminary Prospectus in full and to consult with their legal, tax, accounting and other advisors prior to making any investment in the offered securities described in this Term Sheet.
The securities offered by these materials are being offered when, as and if issued. This Term Sheet is not to be construed as an offer to sell or the solicitation of any offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. The information contained in this Term Sheet may not pertain to any securities that will actually be sold. The information contained in this Term Sheet may be based on assumptions regarding market conditions and other matters as reflected in this Term Sheet. We make no representations regarding the reasonableness of such assumptions or the likelihood that any of such assumptions will coincide with actual market conditions or events, and this Term Sheet should not be relied upon for such purposes. We and our affiliates, officers, directors, partners and employees, including persons involved in the preparation or issuance of this Term Sheet may, from time to time, have long or short positions in, and buy or sell, the securities mentioned in this Term Sheet or derivatives thereof (including options). Information contained in this Term Sheet is current as of the date appearing on this Term Sheet only. Information in this Term Sheet regarding the securities and the mortgage loans backing any securities discussed in this Term Sheet supersedes all prior information regarding such securities and mortgage loans. None ofCitigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC or Drexel Hamilton, LLCprovides accounting, tax or legal advice.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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The issuing entity will be relying on an exclusion or exemption from the definition of “investment company” 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 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 “Risk Factors—Legal and Regulatory Provisions Affecting Investors Could Adversely Affect the Liquidity and Other Aspects of the Offered Certificates” in the Preliminary Prospectus). See also “Legal Investment” in the Preliminary Prospectus.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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CERTIFICATE SUMMARY |
OFFERED CERTIFICATES | |||||||||||||||
Offered Classes | Expected Ratings | Approximate Initial Certificate Balance or Notional | Approximate Initial Credit Support(3) | Initial Pass-Through | Pass-Through Rate Description | Expected | Expected Principal Window(5) | ||||||||
Class A-1 | AAA(sf) / AAAsf / AAA(sf) | $11,825,000 | 30.000% | % | (6) | 2.73 | 9/19 – 5/24 | ||||||||
Class A-2 | AAA(sf) / AAAsf / AAA(sf) | $128,097,000 | 30.000% | % | (6) | 4.88 | 5/24 – 8/24 | ||||||||
Class A-3 | AAA(sf) / AAAsf / AAA(sf) | $10,112,000 | 30.000% | % | (6) | 6.97 | 8/26 – 8/26 | ||||||||
Class A-4 | AAA(sf) / AAAsf / AAA(sf) | (7) | 30.000% | % | (6) | (7) | 5/29 – 7/29 | ||||||||
Class A-5 | AAA(sf) / AAAsf / AAA(sf) | (7) | 30.000% | % | (6) | 9.90 | 7/29 – 8/29 | ||||||||
Class A-AB | AAA(sf) / AAAsf / AAA(sf) | $19,494,000 | 30.000% | % | (6) | 7.47 | 8/24 – 5/29 | ||||||||
Class X-A | AAA(sf) / AAAsf / AAA(sf) | $972,004,000 | (8) | N/A | % | Variable IO(9) | N/A | N/A | |||||||
Class A-S | AAA(sf) / AAAsf / AAA(sf) | $109,370,000 | 21.125% | % | (6) | 9.97 | 8/29 – 8/29 | ||||||||
Class B | NR / AA-sf / AA(high)(sf) | $69,319,000 | 15.500% | % | (6) | 9.97 | 8/29 – 8/29 | ||||||||
Class C | NR / A-sf / A(high)(sf) | $50,833,000 | 11.375% | % | (6) | 9.97 | 8/29 – 8/29 | ||||||||
NON-OFFERED CERTIFICATES(10) | |||||||||||||||
Non-Offered Classes | Expected Ratings | Approximate Initial Certificate Balance or Notional | Approximate Initial Credit Support(3) | Initial Pass-Through | Pass-Through Rate Description | Expected | Expected Principal Window(5) | ||||||||
Class X-B | NR / A-sf / AA(low)(sf) | $120,152,000 | (8) | N/A | % | Variable IO(9) | N/A | N/A | |||||||
Class X-D | NR / BBB-sf / BBB(high)(sf) | $58,536,000 | (8) | N/A | % | Variable IO(9) | N/A | N/A | |||||||
Class X-F | NR / BB-sf / BBB(low)(sf) | $26,187,000 | (8) | N/A | % | Variable IO(9) | N/A | N/A | |||||||
Class D | NR / BBBsf / BBB(high)(sf) | $32,349,000 | 8.750% | % | (6) | 9.97 | 8/29 – 8/29 | ||||||||
Class E | NR / BBB-sf / BBB(sf) | $26,187,000 | 6.625% | % | (6) | 9.97 | 8/29 – 8/29 | ||||||||
Class F | NR / BB-sf / BB(high)(sf) | $26,187,000 | 4.500% | % | (6) | 9.97 | 8/29 – 8/29 | ||||||||
Class G-RR(11) | NR / B-sf / B(high)(sf) | $12,324,000 | 3.500% | % | (6) | 9.97 | 8/29 – 8/29 | ||||||||
Class J-RR(11) | NR / NR / NR | $43,131,964 | 0.000% | % | (6) | 9.97 | 8/29 – 8/29 | ||||||||
Class S(12) | N/A | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||
Class R(12) | N/A | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||
NON-OFFERED VERTICAL RISK RETENTION INTEREST(10) | |||||||||||||||
Non-Offered Eligible Vertical Interest | Expected Ratings | Approximate Initial Combined VRR Interest Balance(2) | Approximate Initial Credit Support(3) | Initial Effective Interest Rate(4) | Effective Interest Rate Description | Expected | Expected Principal Window(5) | ||||||||
Combined VRR Interest(13) | NR / NR / NR | $44,300,000 | N/A(14) | % | (15) | 9.26 | 9/19 – 8/29 |
(1) | It is a condition of issuance that the offered certificates and certain classes of non-offered certificates receive the ratings set forth above. The anticipated ratings shown are those of S&P Global Ratings, a Standard & Poor’s Financial Services LLC business (“S&P”), Fitch Ratings, Inc. (“Fitch”) and DBRS, Inc. (“DBRS”). Subject to the discussion under “Ratings” in the Preliminary Prospectus, the ratings on the certificates address the likelihood of the timely receipt by holders of all payments of interest to which they are entitled on each distribution date and, except in the case of the interest only certificates, the ultimate receipt by holders of all payments of principal to which they are entitled on or before the applicable rated final distribution date. Certain nationally recognized statistical rating organizations, as defined in Section 3(a)(62) of the Securities Exchange Act of 1934, as amended, that were not hired by the depositor may use information they receive pursuant to Rule 17g-5 under the Securities Exchange Act of 1934, as amended, or otherwise to rate the offered certificates. We cannot assure you as to what ratings a non-hired nationally recognized statistical rating organization would assign. See “Risk Factors—Nationally Recognized Statistical Rating Organizations May Assign Different Ratings to the Certificates; Ratings of the Certificates Reflect Only the Views of the Applicable Rating Agencies as of the Dates Such Ratings Were Issued; Ratings May Affect ERISA Eligibility; Ratings May Be Downgraded” in the Preliminary Prospectus. S&P, Fitch and DBRS have informed us that the “sf” designation in the ratings represents an identifier of structured finance product ratings. For additional information about this identifier, prospective investors can go to the related rating agency’s website. The depositor and the underwriters have not verified, do not adopt and do not accept responsibility for any statements made by the rating agencies on those websites. Credit ratings referenced throughout this Term Sheet are forward-looking opinions about credit risk and express a rating agency’s opinion about the willingness and ability of an issuer of securities to meet its financial obligations in full and on time. Ratings are not indications of investment merit and are not buy, sell or hold recommendations, a measure of asset value or an indication of the suitability of an investment. |
(2) | Approximate, subject to a variance of plus or minus 5% and further subject to any additional variance described in the footnotes below. In addition, the notional amounts of the Class X-A, Class X-B, Class X-D and Class X-F certificates(collectively, the “Class X Certificates”)may vary depending upon the final pricing of the classes of Principal Balance Certificates (as defined in footnote (14) below) whose certificate balances comprise such notional amounts, and, if as a result of such pricing (a) the pass-through rate of any class ofClassX Certificates would be equal to zero at all times, such class of Class X Certificates will not be issued on the closing date of this securitization or (b) the pass-through rate of any class of Principal Balance Certificates whose certificate balance comprises such notional amount is at all times equal to the weighted average of the net interest rates on the mortgage loans (in each case, adjusted, if necessary, to accrue on the basis of a 360-day year consisting of twelve 30-day months) as in effect from time to time, the certificate balance of such class of Principal Balance Certificates may not be part of, and there would be a corresponding reduction in, such notional amount of the related class of Class X Certificates. |
(3) | “Approximate Initial Credit Support” means, with respect to any Class of Non-Vertically Retained Principal Balance Certificates (as defined in footnote (6) below), the quotient, expressed as a percentage, of (i) the aggregate of the initial certificate balances of all classes of Non-Vertically Retained Principal Balance Certificates, if any, junior to such class of Non-Vertically Retained Principal Balance Certificates, divided by (ii) the aggregate of the initial certificate balances of all classes of Non-Vertically Retained Principal Balance Certificates.The approximate initial credit support percentages shown in the table above do not take into account the Combined VRR Interest (as defined in footnote (13) below).The approximate initial credit support percentages set forth for the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 and Class A-AB certificates are represented in the aggregate. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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(4) | Approximateper annum rate as of the Closing Date. |
(5) | Determined assuming no prepayments prior to the maturity date or any anticipated repayment date, as applicable, for anymortgage loan and based on the modeling assumptionsdescribed under “Yield, Prepayment and Maturity Considerations” in the Preliminary Prospectus. |
(6) | For any distribution date, the pass-through rate for each class of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-AB, Class A-S, Class B, Class C, Class D, Class E, Class F, Class G-RR and Class J-RR certificates (collectively, the “Non-Vertically Retained Principal Balance Certificates”, and collectively with the Class X Certificates, the Class S certificates and the Class R certificates, the “Non-Vertically Retained Certificates”, and collectively with the Class VRR certificates, the “certificates”) will generally be equal to one of (i) a fixedper annum rate, (ii) the weighted average of the net interest rates on the mortgage loans (in each case, adjusted, if necessary, to accrue on the basis of a 360-day year consisting of twelve 30-day months) as in effect from time to time, (iii) a rate equal to the lesser of a specifiedper annum rate and the weighted average rate described in clause (ii), or (iv) the weightedaverage rate described in clause (ii) less a specified percentage, but no less than 0.000%. The Non-Vertically Retained Certificates, other than the Class S and Class R certificates, are collectively referred to in this prospectus as the “Non-Vertically Retained Regular Certificates”. See “Description of the Certificates—Distributions—Pass-Through Rates” in the Preliminary Prospectus. |
(7) | The exact initial certificate balances of the Class A-4 and Class A-5 certificates are unknown and will be determined based on the final pricing of those classes of certificates. However, the respective initial certificate balances and weighted average lives of the Class A-4 and Class A-5 certificates are expected to be within the applicable ranges reflected in the following chart. The aggregate initial certificate balance of the Class A-4 and Class A-5 certificates is expected to be approximately $693,106,000, subject to a variance ofplus orminus 5%. |
Class of | Expected Range of Initial Certificate Balance | Expected Range of Weighted Avg. Life (Yrs) |
Class A-4 | $100,000,000 – $330,000,000 | 9.83 – 9.87 |
Class A-5 | $363,106,000 – $593,106,000 | N/A |
(8) | The Class X Certificates will not have certificate balancesandwill not be entitled to receive distributions of principal. Interest will accrue on each class of Class X Certificates at the related pass-through rate based upon the related notional amount. The notional amount of each class of the Class X Certificates will be equal to the certificate balance or the aggregate of the certificate balances, as applicable, from time to time of the class or classes of the Non-Vertically Retained Principal Balance Certificates identified in the same row as such class of Class X Certificates in the chart below (as to such class of Class X Certificates, the “Corresponding Principal Balance Certificates”): |
Class of Class X Certificates | Class(es) of Corresponding Principal Balance Certificates |
Class X-A | Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-AB and Class A-S |
Class X-B | Class B and Class C |
Class X-D | Class D and Class E |
Class X-F | Class F |
(9) | The pass-through rate for each class of Class X Certificates will generally be aper annum rate equal to the excess, if any, of (i) the weighted average of the net interest rates on the mortgage loans (in each case, adjusted, if necessary, to accrue on the basis of a 360-day year consisting of twelve 30-day months) as in effect from time to time, over (ii) the pass-through rate (or, if applicable, the weighted average of the pass-through rates) of the class or classes of Corresponding Principal Balance Certificates as in effect from time to time, as described in the Preliminary Prospectus. See “Description of the Certificates—Distributions—Pass-Through Rates” in the Preliminary Prospectus. |
(10) | Not offered by this Term Sheet. |
(11) | In partial satisfaction of the risk retention obligations of Citi Real Estate Funding Inc. (“CREFI”) (as “retaining sponsor” with respect to this securitization transaction), all of the Class G-RR and Class J-RR certificates (collectively, the “HRR Certificates”), with an aggregate fair value expected to represent at least 1.53% of the fair value, as of the closing date for this securitization transaction, of all of the “ABS interests” (i.e. all of the certificates (other than the Class R certificates) and the Uncertificated VRR Interest) issued by the issuing entity, will collectively constitute an “eligible horizontal residual interest” that is to be purchased and retained by RREF III-D AIV RR, LLC, a Delaware limited liability company, in accordance with the credit risk retention rules applicable to this securitization transaction.“Retaining sponsor,” “ABS interests” and “eligible horizontal residual interest” are as such terms are defined in Regulation RR.See “Credit Risk Retention” in the Preliminary Prospectus. |
(12) | Neither the Class S certificates nor the Class R certificates will have a certificate balance, notional amount, pass-through rate, rating or rated final distribution date. A specified portion of the excess interest accruing after the related anticipated repayment date on any mortgage loan with an anticipated repayment date will, to the extent collected, be allocated to the Class S certificates as set forth in “Description of the Certificates—Distributions—Excess Interest” in the Preliminary Prospectus.The Class R certificates will represent the residual interests in each of two separate REMICs, as further described in the Preliminary Prospectus. The Class R certificates will not be entitled to distributions of principal or interest. |
(13) | In partial satisfaction of CREFI’s remaining risk retention obligations as retaining sponsor for this securitization transaction, CREFI is expected to acquire (or cause one or more other retaining parties to acquire) from the depositor, on the closing date for this transaction, portions of an “eligible vertical interest” in the form of a “single vertical security” with an initial principal balance of approximately $44,300,000 (the “Combined VRR Interest”), which is expected to represent approximately 3.47% of all of the “ABS interests” (i.e. of the sum of the aggregate initial certificate balance of all of the certificates (other than the Class R certificates) and the initial principal balance of the Uncertificated VRR Interest) issued by the issuing entity on the closing date for this transaction, subject to any variation in the initial principal balance of the Combined VRR Interest following calculation of the actual fair value of the HRR Certificates, all of the other classes of certificates (other than the Class R certificates) and the Uncertificated VRR Interest, as described under “Credit Risk Retention”in the Preliminary Prospectus. The Combined VRR Interest will consist of the “Uncertificated VRR Interest” and the “Class VRR Certificates” (each as defined under “Credit Risk Retention” in the Preliminary Prospectus). The Combined VRR Interest will be retained by certain retaining parties in accordance with the credit risk retention rules applicable to this securitization transaction. “Eligible vertical interest,” “single vertical security” and “ABS interests” are as such terms are defined in Regulation RR. See “Credit Risk Retention” in the Preliminary Prospectus. The Combined VRR Interest is not offered hereby. |
(14) | Although the approximate initial credit support percentages shown in the table above with respect to the Non-Vertically Retained Principal Balance Certificates do not take into account the Combined VRR Interest losses incurred on the mortgage loans will be allocated between the Combined VRR Interest, on the one hand, and the Non-Vertically Retained Principal Balance Certificates, on the other hand,pro rata in accordance with the principal balance of the Combined VRR Interest and the aggregate outstanding certificate balance of the Non-Vertically Retained Principal Balance Certificates. See “Credit Risk Retention” and “Description of the Certificates”in the Preliminary Prospectus. The Class VRR Certificates and the Non-Vertically Retained Principal Balance Certificates are collectively referred to in this prospectus as the “Principal Balance Certificates”. |
(15) | Although it does not have a specified pass-through rate (other than for tax reporting purposes), the effective interest rate for the Combined VRR Interest will be the weighted average of the net mortgage interest rates on the mortgage loans (in each case, adjusted, if necessary, to accrue on the basis of a 360-day year consisting of twelve 30-day months) as in effect from time to time. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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MORTGAGE POOL CHARACTERISTICS |
Mortgage Pool Characteristics(1) | |
Initial Pool Balance(2) | $1,276,634,964 |
Number of Mortgage Loans | 43 |
Number of Mortgaged Properties | 100 |
Average Cut-off Date Balance | $29,689,185 |
Weighted Average Mortgage Rate | 3.86566% |
Weighted Average Remaining Term to Maturity/ARD (months)(3) | 113 |
Weighted Average Remaining Amortization Term (months)(4) | 371 |
Weighted Average Cut-off Date LTV Ratio(5) | 58.3% |
Weighted Average Maturity Date/ARD LTV Ratio(3)(5) | 56.5% |
Weighted Average UW NCF DSCR(6) | 2.48x |
Weighted Average Debt Yield on Underwritten NOI(7) | 10.4% |
% of Initial Pool Balance of Mortgage Loans that are Amortizing Balloon | 10.3% |
% of Initial Pool Balance of Mortgage Loans that are Interest Only then Amortizing Balloon | 9.2% |
% of Initial Pool Balance of Mortgage Loans that are Interest Only | 80.5% |
% of Initial Pool Balance of Mortgaged Properties with Single Tenants | 33.6% |
% of Initial Pool Balance of Mortgage Loans with Mezzanine Debt | 4.3% |
% of Initial Pool Balance of Mortgage Loans with Subordinate Debt | 18.0% |
(1) | The Cut-off Date LTV Ratio, Maturity Date/ARD LTV Ratio, UW NCF DSCR, Debt Yield on Underwritten NOI and Cut-off Date Balance Per SF / Unit / Room information for each mortgage loan is presented in this Term Sheet (i) if such mortgage loan is part of a loan combination (as defined under “Collateral Overview—Loan Combination Summary” below), based on both that mortgage loan and any related pari passu companion loan(s) but, unless otherwise specifically indicated, without regard to any related subordinate companion loan(s), and (ii) unless otherwise specifically indicated, 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. |
(2) | Subject to a permitted variance of plus or minus 5%. |
(3) | Unless otherwise indicated, mortgage loans with anticipated repayment dates are presented as if they were to mature on the anticipated repayment date. |
(4) | Excludes mortgage loans that are interest-only for the entire term. |
(5) | The Cut-off Date LTV Ratios and Maturity Date/ARD LTV Ratios presented in this Term Sheet are generally based on the “as-is” appraised values of the related mortgaged properties (as set forth on Annex A to the Preliminary Prospectus), provided that such LTV ratios may be calculated based on (a) (i) “as-stabilized” or similar values in certain cases where the completion of certain hypothetical conditions or other events at the property are assumed and/or where reserves have been established at origination to satisfy the applicable condition or event that is expected to occur, or (ii) the “as-is” appraised value for a portfolio of mortgaged properties may include a premium relating to the valuation of the portfolio of mortgaged properties as a whole rather than as the sum of individually valued mortgaged properties, or (b) the Cut-off Date Balance or Balloon Balance, as applicable, net of a related earnout or holdback reserve, in each case as further described in the definitions of “Appraised Value”, “Cut-off Date LTV Ratio” and “Maturity Date/ARD LTV Ratio” under “Description of the Mortgage Pool—Certain Calculations and Definitions” in the Preliminary Prospectus. |
(6) | The UW NCF DSCR for each mortgage loan is generally calculated by dividing the UW NCF for the related mortgaged property or mortgaged properties by the annual debt service for such mortgage loan, as adjusted in the case of mortgage loans with a partial interest only period by using the first 12 amortizing payments due instead of the actual interest only payment due. |
(7) | The Debt Yield on Underwritten NOI for each mortgage loan is generally calculated as the related mortgaged property’s Underwritten NOI divided by the Cut-off Date Balance of such mortgage loan, and the Debt Yield on Underwritten NCF for each mortgage loan is generally calculated as the related mortgaged property’s Underwritten NCF divided by the Cut-off Date Balance of such mortgage loan;provided, that such Debt Yields may be calculated based on the Cut-off Date Balance net of a related earnout or holdback reserve, as further described in the definitions of “Debt Yield on Underwritten NOI” and “Debt Yield on Underwritten NCF” under“Description of the Mortgage Pool—Certain Calculations and Definitions” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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KEY FEATURES OF THE CERTIFICATES |
Co-Lead Managers and Joint Bookrunners: | Citigroup Global Markets Inc. Goldman Sachs & Co. LLC Deutsche Bank Securities Inc. |
Co-Managers: | Bancroft Capital, LLC Drexel Hamilton, LLC |
Depositor: | Citigroup Commercial Mortgage Securities Inc. |
Initial Pool Balance: | $1,276,634,964 |
Master Servicer: | Midland Loan Services, a Division of PNC Bank, National Association |
Special Servicer: | Rialto Capital Advisors, LLC |
Certificate Administrator: | Citibank, N.A. |
Trustee: | Wilmington Trust, National Association |
Operating Advisor: | Park Bridge Lender Services LLC |
Asset Representations Reviewer: | Park Bridge Lender Services LLC |
Risk Retention Consultation Parties: | Citi Real Estate Funding Inc., Goldman Sachs Mortgage Company and Deutsche Bank AG, New York Branch |
Credit Risk Retention: | For a discussion on the manner in which the U.S. credit risk retention requirements are being satisfied by Citi Real Estate Funding Inc., as retaining sponsor, see “Credit Risk Retention” in the Preliminary Prospectus. Note that this securitization transaction is not structured to satisfy the EU risk retention and due diligence requirements. |
Closing Date: | On or about August 20, 2019 |
Cut-off Date: | With respect to each mortgage loan, the due date in August 2019 for that mortgage loan (or, in the case of any mortgage loan that has its first due date subsequent to August 2019, the date that would have been its due date in August 2019 under the termsof that mortgage loanif a monthly payment were scheduled to be due in that month) |
Determination Date: | The 6th day of each month or next business day, commencing in September 2019 |
Distribution Date: | The 4th business day after the Determination Date, commencing in September 2019 |
Interest Accrual: | Preceding calendar month |
ERISA Eligible: | The offered certificates are expected to be ERISA eligible, subject to the exemption conditions described in the Preliminary Prospectus |
SMMEA Eligible: | No |
Payment Structure: | Sequential Pay |
Day Count: | 30/360 |
Tax Structure: | REMIC |
Rated Final Distribution Date: | August 2056 |
Cleanup Call: | 1.0% |
Minimum Denominations: | $10,000 minimum for the offered certificates (other than the Class X-A certificates); $1,000,000 minimum for the Class X-A certificates; and integral multiples of $1 thereafter for all the offered certificates |
Delivery: | Book-entry through DTC |
Bond Information: | Cash flows are expected to be modeled by TREPP, INTEX and BLOOMBERG |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
7
TRANSACTION HIGHLIGHTS |
■ | $1,092,156,000 (Approximate) New-Issue Multi-Borrower CMBS: |
— | Overview: The mortgage pool consists of 43 fixed-rate commercial mortgage loans that have an aggregate Cut-off Date Balance of $1,276,634,964 (the “Initial Pool Balance”), have an average mortgage loan Cut-off Date Balance of $29,689,185 and are secured by 100 mortgaged properties located throughout 25 states. |
— | LTV: 58.3% weighted average Cut-off Date LTV Ratio |
— | DSCR: 2.48x weighted average Underwritten Debt Service Coverage Ratio |
— | Debt Yield: 10.4% weighted average Debt Yield on Underwritten NOI |
— | Credit Support: 30.000% credit support to Class A-1 / A-2 / A-3 / A-4 / A-5 / A-AB |
■ | Loan Structural Features: |
— | Amortization: 19.5% of the mortgage loans by Initial Pool Balance have scheduled amortization: |
– | 10.3% of the mortgage loans by Initial Pool Balance have amortization for the entire term with a balloon payment due at maturity |
– | 9.2% of the mortgage loans by Initial Pool Balance have scheduled amortization following a partial interest only period with a balloon payment due at maturity |
— | Hard Lockboxes: 49.0% of the mortgage loans by Initial Pool Balance have a Hard Lockbox in place |
— | Cash Traps: 100.0% of the mortgage loans by Initial Pool Balance have cash traps triggered by certain declines in cash flow, all at levels equal to or greater than (i) a 1.05x coverage or (ii) a 6.0% debt yield, that fund an excess cash flow reserve |
— | Reserves: The mortgage loans require amounts to be escrowed for reserves as follows: |
– | Real Estate Taxes: 34 mortgage loans representing 57.7% of the Initial Pool Balance |
– | Insurance: 15 mortgage loans representing 29.5% of the Initial Pool Balance |
– | Replacement Reserves (Including FF&E Reserves): 33 mortgage loans representing 60.2% of the Initial Pool Balance |
– | Tenant Improvements / Leasing Commissions: 18 mortgage loans representing 50.9% of the portion of the Initial Pool Balance that is secured by office, retail, industrial and mixed use properties |
— | Predominantly Defeasance Mortgage Loans: 61.5% of the mortgage loans by Initial Pool Balance permit defeasance only after an initial lockout period |
■ | Multiple-Asset Types > 5.0% of the Initial Pool Balance: |
— | Office: 33.3% of the mortgaged properties by allocated Initial Pool Balance are office properties |
— | Retail: 16.3% of the mortgaged properties by allocated Initial Pool Balance are retail properties (9.1% are anchored retail properties) |
— | Mixed Use: 12.8% of the mortgaged properties by allocated Initial Pool Balance are mixed use properties |
— | Industrial: 12.7% of the mortgaged properties by allocated Initial Pool Balance are industrial properties |
— | Hospitality: 10.2% of the mortgaged properties by allocated Initial Pool Balance are hospitality properties |
— | Multifamily: 9.5% of the mortgaged properties by allocated Initial Pool Balance are multifamily properties |
■ | Geographic Diversity: The 100 mortgaged properties are located throughout 25 states, with only two states having greater than 10.0% of the allocated Initial Pool Balance: New York (23.0%) and California (15.9%). |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
8
COLLATERAL OVERVIEW |
Mortgage Loans by Loan Seller
Mortgage Loan Seller | Mortgage | Mortgaged | Aggregate Cut-off Date Balance | % of Initial Pool Balance | ||||||||
Goldman Sachs Mortgage Company | 20 | 57 | $540,512,906 | 42.3% | ||||||||
Citi Real Estate Funding Inc. | 11 | 21 | 306,920,000 | 24.0 | ||||||||
German American Capital Corporation | 10 | 20 | 273,952,059 | 21.5 | ||||||||
German American Capital Corporation / Goldman Sachs Mortgage Company(1)(2) | 2 | 2 | 155,250,000 | 12.2 | ||||||||
Total | 43 | 100 | $1,276,634,964 | 100.0% |
(1) | The 30 Hudson Yards mortgage loan is part of a loan combination that was co-originated by Deutsche Bank AG, New York Branch, Wells Fargo Bank, National Association and Goldman Sachs Bank USA. Such mortgage loan is evidenced by three (3) promissory notes:(i) notes A-1-C6 and A-1-C8, with an aggregate outstanding principal balance of $70,000,000 as of the cut-off date, as to which German American Capital Corporation is acting as mortgage loan seller; and (ii) note A-2-C2, with an outstanding principal balance of $30,000,000 as of the cut-off date, as to which Goldman Sachs Mortgage Company is acting as mortgage loan seller. |
(2) | The Moffett Towers II Buildings 3 & 4 mortgage loan is part of a loan combination that was co-originated by Barclays Capital Real Estate Inc., Goldman Sachs Bank USA and Deutsche Bank AG, New York Branch. Such mortgage loan is evidenced by two (2) promissory notes:(i) note A-2-C, with an outstanding principal balance of $43,175,000 as of the cut-off date, as to which German American Capital Corporation is acting as mortgage loan seller; and (ii) note A-3-C, with an outstanding principal balance of $12,075,000 as of the cut-off date, as to which Goldman Sachs Mortgage Company is acting as mortgage loan seller. |
Ten Largest Mortgage Loans(1)(2)
# | Mortgage Loan Name | Loan Seller | Cut-off Date Balance | % of Initial Pool Balance | Property Type | Property Size Rooms | Cut-off Date Balance Per SF/Unit/Room | UW NCF | UW | Cut-off Date LTV Ratio(3) | |||||||||||||||||
1 | 30 Hudson Yards | GACC / GSMC | $100,000,000 | 7.8 | % | Office | 1,463,234 | $765 | 3.45 | x | 10.9 | % | 50.9 | % | |||||||||||||
2 | Millennium Park Plaza | GSMC | 70,000,000 | 5.5 | Mixed Use | 560,083 | $375 | 2.01 | x | 7.5 | % | 65.8 | % | ||||||||||||||
3 | USAA Office Portfolio | GSMC | 62,400,000 | 4.9 | Office | 881,490 | $275 | 2.84 | x | 9.8 | % | 63.8 | % | ||||||||||||||
4 | The Lincoln Apartments | CREFI | 60,420,000 | 4.7 | Multifamily | 141 | $428,511 | 1.58 | x | 6.6 | % | 57.2 | % | ||||||||||||||
5 | Post Ranch Inn | GACC | 60,000,000 | 4.7 | Hospitality | 39 | $1,538,462 | 4.88 | x | 18.3 | % | 42.3 | % | ||||||||||||||
6 | Grand Canal Shoppes | GSMC | 60,000,000 | 4.7 | Retail | 759,891 | $1,000 | 2.46 | x | 9.6 | % | 46.3 | % | ||||||||||||||
7 | Moffett Towers II Buildings 3 & 4 | GACC / GSMC | 55,250,000 | 4.3 | Office | 701,266 | $499 | 3.46 | x | 13.2 | % | 44.3 | % | ||||||||||||||
8 | The Zappettini Portfolio | CREFI | 55,000,000 | 4.3 | Office | 251,575 | $477 | 1.83 | x | 8.0 | % | 64.0 | % | ||||||||||||||
9 | Delong Self Storage | GACC | 54,300,000 | 4.3 | Mixed Use | 166,294 | $327 | 2.01 | x | 8.6 | % | 60.3 | % | ||||||||||||||
10 | Powered Shell Portfolio - Manassas | GSMC | 51,550,000 | 4.0 | Industrial | 728,460 | $115 | 2.61 | x | 9.9 | % | 55.9 | % | ||||||||||||||
Top 10 Total / Wtd. Avg. | $628,920,000 | 49.3 | % | 2.76 | x | 10.2 | % | 55.0 | % | ||||||||||||||||||
Remaining Total / Wtd. Avg. | 647,714,964 | 50.7 | 2.21 | x | 10.6 | % | 61.6 | % | |||||||||||||||||||
Total / Wtd. Avg. | $1,276,634,964 | 100.0 | % | 2.48 | x | 10.4 | % | 58.3 | % |
(1) | See footnotes to table entitled“Mortgage Pool Characteristics” above. |
(2) | With respect to each mortgage loan that is part of a loan combination (as identified under “Collateral Overview—Loan Combination Summary” below), the Cut-off Date Balance Per SF/Unit/Room, UW NCF DSCR, UW NOI Debt Yield and Cut-off Date LTV Ratio are calculated based on both that mortgage loan and any related pari passu companion loan(s), but without regard to any related subordinate companion loan(s) or other indebtedness. |
(3) | With respect to certain of the mortgage loans identified above, the Cut-off Date LTV Ratios have been calculated using “as-stabilized”, “portfolio premium” or similar hypothetical values. With respect to certain of the mortgage loans identified above, the UW NOI Debt Yield has been calculated net of an economic holdback. Such mortgage loans are identified under the definitions of “Appraised Value” or “Debt Yield on Underwritten NOI” set forth under “Description of the Mortgage Pool—Certain Calculations and Definitions” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
9
COLLATERAL OVERVIEW (continued) |
Loan Combination Summary
Mortgage Loan Name(1) | Mortgage Loan Cut-off Date Balance | Mortgage Loan as Approx. % of Initial Pool Balance | Aggregate Pari Passu Companion Loan Cut-off Date Balance | Aggregate Subordinate Companion Loan Cut-off Date Balance | Loan Combination Cut-off Date Balance | Controlling Pooling/Trust and Servicing Agreement (“Controlling PSA”)(2) | Master Servicer / Outside Servicer | Special Servicer / Outside Special Servicer |
30 Hudson Yards | $100,000,000 | 7.8% | $1,020,000,000 | $310,000,000 | $1,430,000,000 | HY 2019-30HY | Wells Fargo | Situs |
Millennium Park Plaza | $70,000,000 | 5.5% | $140,000,000 | — | $210,000,000 | CGCMT 2019-GC41 | Midland | Rialto |
USAA Office Portfolio | $62,400,000 | 4.9% | $180,000,000 | — | $242,400,000 | CGCMT 2019-GC41 | Midland | Rialto |
Grand Canal Shoppes | $60,000,000 | 4.7% | $700,000,000 | $215,000,000 | $975,000,000 | MSC 2019-H7 | Midland | LNR Partners |
Moffett Towers II Buildings 3 & 4 | $55,250,000 | 4.3% | $294,750,000 | $155,000,000 | $505,000,000 | MFTII 2019-B3B4 | KeyBank | Situs |
The Zappettini Portfolio | $55,000,000 | 4.3% | $65,000,000 | — | $120,000,000 | Benchmark 2019-B12 | Midland | Midland |
Powered Shell Portfolio - Manassas | $51,550,000 | 4.0% | $32,250,000 | — | $83,800,000 | CGCMT 2019-GC41 | Midland | Rialto |
U.S. Industrial Portfolio V | $50,000,000 | 3.9% | $80,358,000 | — | $130,358,000 | CGCMT 2019-GC41 | Midland | Rialto |
505 Fulton Street | $45,000,000 | 3.5% | $40,000,000 | — | $85,000,000 | CGCMT 2019-GC41 | Midland | Rialto |
Wind Creek Leased Fee | $45,000,000 | 3.5% | $101,600,000 | — | $146,600,000 | CGCMT 2019-GC41(3) | Midland(3) | Rialto(3) |
Powered Shell Portfolio - Ashburn | $40,800,000 | 3.2% | $29,000,000 | — | $69,800,000 | CGCMT 2019-GC41 | Midland | Rialto |
CIRE Equity Retail & Industrial Portfolio | $27,160,000 | 2.1% | $101,440,000 | — | $128,600,000 | Benchmark 2019-B12 | Midland | Midland |
The Centre | $15,000,000 | 1.2% | $45,000,000 | $70,000,000 | $130,000,000 | Benchmark 2019-B12 | Midland | Trimont |
(1) | Each of the mortgage loans included in the issuing entity that is secured by a mortgaged property or portfolio of mortgaged properties identified in the table above, together with the related companion loan(s) (none of which is included in the issuing entity), is referred to in this Term Sheet as a “loan combination”. See “Description of the Mortgage Pool—The Loan Combinations” in the Preliminary Prospectus. |
(2) | Each loan combination will be serviced under the related Controlling PSA and, in the event the Controlling Note is included in the related securitization transaction, the controlling class representative (or an equivalent entity) under such Controlling PSA will generally be entitled to exercise the rights of the controlling note holder for the subject loan combination. See, however, the chart entitled “Loan Combination Controlling Notes and Non-Controlling Notes” below and “Description of the Mortgage Pool—The Loan Combinations” in the Preliminary Prospectus for information regarding the party that will be entitled to exercise such rights in the event the Controlling Note is held by a third party or included in a separate securitization transaction. |
(3) | The subject loan combination is a servicing shift loan combination. Accordingly, although such loan combination will initially be serviced under the pooling and servicing agreement for the CGCMT 2019-GC41 securitization transaction. Upon the inclusion of the related controlling pari passu companion loan in a future securitization transaction, the subject loan combination will then be serviced under the pooling and servicing agreement entered into in connection with that future securitization, which will be the applicable Controlling PSA for such loan combination. See “Description of the Mortgage Pool—The Loan Combinations” in the Preliminary Prospectus. |
Mortgage Loans with Existing Mezzanine Debt or Subordinate Debt(1)
Mortgage Loan Name | Mortgage Loan Cut-off Date Balance | Aggregate Pari Passu Companion Loan Cut-off Date Balance | Aggregate Mezzanine Debt Cut-off Date Balance | Aggregate Subordinate Companion Loan Cut-off Date Balance | Cut-off Date Total Debt Balance(2) | Wtd. Avg Cut-off Date Total Debt Interest Rate(2) | Cut-off Date Mortgage Loan LTV(3) | Cut-off Date Total Debt LTV(2) | Cut-off Date Mortgage Loan UW NCF DSCR(3) | Cut-off Date Total Debt UW NCF DSCR(2) | Cut-off Date Mortgage Loan UW NOI Debt Yield(3) | Cut-off Date Total Debt UW NOI Debt Yield(2) |
30 Hudson Yards | $100,000,000 | $1,020,000,000 | — | $310,000,000 | $1,430,000,000 | 3.35000% | 50.9% | 65.0% | 3.45x | 2.51x | 10.9% | 8.5% |
Grand Canal Shoppes | $60,000,000 | $700,000,000 | — | $215,000,000 | $975,000,000 | 4.29411%(4) | 46.3% | 59.5% | 2.46x | 1.67x | 9.6% | 7.5% |
Moffett Towers II Buildings 3 & 4 | $55,250,000 | $294,750,000 | $85,000,000 | $155,000,000 | $590,000,000 | 4.05000% | 44.3% | 74.7% | 3.46x | 1.91x | 13.2% | 7.9% |
The Centre | $15,000,000 | $45,000,000 | — | $70,000,000 | $130,000,000 | 4.48000% | 31.9% | 69.1% | 2.26x | 1.32x | 13.2% | 6.1% |
(1) | See footnotes to table entitled “Mortgage Pool Characteristics” above. |
(2) | All “Total Debt” calculations set forth in the table above include any related pari passu companion loan(s), any related subordinate companion loan(s) and any related mezzanine debt. |
(3) | “Cut-off Date Mortgage Loan LTV”, “Cut-off Date Mortgage Loan UW NCF DSCR” and “Cut-off Date Mortgage Loan UW NOI Debt Yield”calculations include any related pari passu companion loan(s). |
(4) | The Wtd. Avg. Cut-off Date Total Debt Interest Rate for Grand Canal Shoppes has been rounded for presentation purposes. The full precision total debt interest rate it 4.29411076923077%. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
10
COLLATERAL OVERVIEW (continued) |
Loan Combination Controlling Notes and Non-Controlling Notes(1)(2)
Mortgage Loan Name | Servicing of | Note Detail | Controlling Note | Current Holder of | Current or | Aggregate Cut-off |
30 Hudson Yards | Outside Serviced | Notes A-1-S1, A-1-S2, A-1-S3, A-2-S1, A-2-S2, A-2-S3, A-1-C1, A-1-C2, A-1-C9, A-2-C1, A-3-S1, A-3-S2, A-3-S3 | No | — | HY 2019-30HY | $698,000,000 |
Notes A-1-C6, A-1-C8, A-2-C2 | No | — | CGCMT 2019-GC41 | $100,000,000 | ||
Notes A-1-C4, A-1-C5, A-1-C10 | No | — | Benchmark 2019-B12(6) | $93,200,000 | ||
Note A-1-C7 | No | DBNY(7) | Not Identified | $40,000,000 | ||
Notes A-1-C3, A-2-C3, A-2-C4, A-2-C5 | No | GSB | Not Identified | $104,400,000 | ||
Notes A-3-C1, A-3-C2, A-3-C3, A-3-C4, A-3-C5 | No | WFB | Not Identified | $84,400,000 | ||
Notes B-1, B-2, B-3 | Yes (Note B-1) | — | HY 2019-30HY | $310,000,000 | ||
Millennium Park Plaza | Serviced | Note A-1 | Yes | — | CGCMT 2019-GC41 | $70,000,000 |
Notes A-2, A-3, A-4 | No | GSB | Not Identified | $140,000,000 | ||
USAA Office Portfolio | Serviced | Note A-1 | Yes | — | CGCMT 2019-GC41 | $62,400,000 |
Notes A-2, A-3, A-4, A-5 | No | GSB | Not Identified | $180,000,000 | ||
Grand Canal Shoppes | Outside Serviced | Notes A-1-1, A-1-6 | Control Shift Note (Note A-1-1)(8) | — | MSC 2019-H7 | $70,000,000 |
Notes A-1-2, A-2-1 | No | — | BANK 2019-BNK19(9) | $100,000,000 | ||
Notes A-1-3, A-1-4, A-1-5, A-1-7, A-1-8 | No | MSBNA | Not Identified | $113,846,154 | ||
Notes A-2-2, A-2-3, A-2-4, A-2-5 | No | WFB | Not Identified | $125,384,615 | ||
Note A-3-1 | No | — | Benchmark 2019-B12(6) | $50,000,000 | ||
Note A-4-1 | No | — | CGCMT 2019-GC41 | $60,000,000 | ||
Notes A-3-2, A-3-3, A-3-4, A-3-5 | No | JPMCB | Not Identified | $125,384,615 | ||
Notes A-4-2, A-4-3, A-4-4, A-4-5 | No | GSB | Not Identified | $115,384,615 | ||
Note B | Yes(8) | CRE Fund Investments III LLC | Not Identified | $215,000,000 | ||
Moffett Towers II Buildings 3 & 4 | Outside Serviced | Notes A-1-A, A-2-A, A-3-A | No | — | MFTII 2019-B3B4 | $5,000,000 |
Notes A-2-C, A-3-C | No | — | CGCMT 2019-GC41 | $55,250,000 | ||
Notes A-1-B, A-1-D, A-1-E | Control Shift Note (Note A-1-B)(8) | BCREI | Not Identified | $139,750,000 | ||
Note A-1-C | No | — | BANK 2019-BNK19(9) | $50,000,000 | ||
Note A-2-B | No | DBNY | Not Identified | $34,450,000 | ||
Note A-3-B | No | GSB | Not Identified | $65,550,000 | ||
Notes B-1, B-2, B-3 | Yes(8) | — | MFTII 2019-B3B4 | $155,000,000 | ||
The Zappettini Portfolio | Outside Serviced | Note A-1 | Yes | — | Benchmark 2019-B12(6) | $65,000,000 |
Note A-2 | No | — | CGCMT 2019-GC41 | $55,000,000 | ||
Powered Shell Portfolio - Manassas | Serviced | Note A-1 | Yes | — | CGCMT 2019-GC41 | $51,550,000 |
Note A-2 | No | GSB | Not Identified | $32,250,000 | ||
U.S. Industrial Portfolio V | Serviced | Note A-1 | Yes | — | CGCMT 2019-GC41 | $50,000,000 |
Notes A-2, A-3 | No | GSB | Not Identified | $80,358,000 | ||
505 Fulton Street | Serviced | Note A-1 | No | CREFI | Not Identified | $40,000,000 |
Note A-2 | Yes | — | CGCMT 2019-GC41 | $45,000,000 | ||
Wind Creek Leased Fee | Servicing Shift | Note A-3 | No | — | CGCMT 2019-GC41 | $45,000,000 |
Note A-1 | Yes | CCRE | Not Identified | $30,000,000 | ||
Notes A-2, A-4, A-5, A-6 | No | DBRI | Not Identified | $71,600,000 | ||
Powered Shell Portfolio - Ashburn | Serviced | Note A-1 | Yes | — | CGCMT 2019-GC41 | $40,800,000 |
Note A-2 | No | GSB | Not Identified | $29,000,000 | ||
CIRE Equity Retail & Industrial Portfolio | Outside Serviced | Notes A-1, A-2-1 | Yes | — | Benchmark 2019-B12(6) | $50,000,000 |
Notes A-2-2, A-3 | No | — | CGCMT 2019-GC41 | $27,160,000 | ||
Note A-4 | No | — | WFCM 2019-C51 | $22,000,000 | ||
Notes A-5, A-6 | No | UBS AG | Not Identified | $29,440,000 | ||
The Centre | Outside Serviced | Note A-1 | Control Shift Note(8) | — | Benchmark 2019-B12(6) | $30,000,000 |
Note A-2-1 | No | — | CGCMT 2019-GC41 | $15,000,000 | ||
Note A-2-2 | No | CREFI | Not Identified | $15,000,000 | ||
Note B | Yes(8) | — | Benchmark 2019-B12(6) | $70,000,000 |
(1) | The holder(s) of one or more specified controlling notes (collectively, the “Controlling Note”) will be the “controlling note holder(s)” (collectively, the “Controlling Note Holder”) entitled (directly or through a representative) to (a) approve or, in some cases, direct material servicing decisions involving the related loan combination (while the remaining such holder(s) generally are only entitled to non-binding consultation rights in such regard), and (b) in some cases, replace the applicable special servicer with respect to such loan combination with or without cause. See “Description of the Mortgage Pool—The Loan Combinations” and “The Pooling and Servicing Agreement—Directing Holder” in the Preliminary Prospectus. |
(2) | The holder(s) of the note(s) other than the Controlling Note (each, a “Non-Controlling Note”) will be the “non-controlling note holder(s)” generally entitled (directly or through a representative) to certain non-binding consultation rights with respect to any decisions as to which the holder of the Controlling Note has consent rights involving the related loan combination, subject to certain exceptions, including that in certain cases where the related Controlling Note is a B-note, C-note or other subordinate note, such consultation rights will not be afforded to the holder(s) of the Non-Controlling Notes until after a control trigger event has occurred with respect to either such Controlling Note(s) or certain certificates backed thereby, in each case as set forth in the related co-lender agreement. See “Description of the Mortgage Pool—The Loan Combinations” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
11
COLLATERAL OVERVIEW (continued) |
(3) | Unless otherwise specified, with respect to each loan combination, any related unsecuritized Controlling Note and/or Non-Controlling Note may be further split, modified, combined and/or reissued (prior to its inclusion in a securitization transaction) as one or multiple Controlling Notes or Non-Controlling Notes, as the case may be, subject to the terms of the related co-lender agreement (including that the aggregate principal balance, weighted average interest rate and certain other material terms cannot be changed). In connection with the foregoing, any such split, modified, combined or re-issued Controlling Note or Non-Controlling Note, as the case may be, may be transferred to one or multiple parties (not identified in the table above) prior to its inclusion in a future commercial mortgage securitization transaction. |
(4) | Unless otherwise specified, with respect to each loan combination, each related unsecuritized pari passu companion loan (whether controlling or non-controlling) is expected to be contributed to one or more future commercial mortgage securitization transactions. Under the column “Current or Anticipated Holder of Securitized Note”, (i) the identification of a securitization trust means we have identified an outside securitization that has closed or as to which a preliminary prospectus or final prospectus has been filed with the SEC that has included or is expected to include the subject Controlling Note or Non-Controlling Note, as the case may be, (ii) “Not Identified” means the subject Controlling Note or Non-Controlling Note, as the case may be, has not been securitized and no preliminary prospectus or final prospectus has been filed with the SEC that identifies the future outside securitization that is expected to include the subject Controlling Note or Non-Controlling Note, and (iii) “Not Applicable” means the subject Controlling Note or Non-Controlling Note is not intended to be contributed to a future commercial mortgage securitization transaction. Under the column “Current Holder of Unsecuritized Note”, “—” means the subjectControlling Note or Non-Controlling Note is not an unsecuritized note and is currently held by the securitization trust referenced under the “Current or Anticipated Holder of Securitized Note” column. |
(5) | Entity names have been abbreviated for presentation. |
“BCREI” means Barclays Capital Real Estate Inc.
“CCRE” means Cantor Commercial Real Estate Lending, L.P.
“CREFI” means Citi Real Estate Funding Inc.
“DBNY” means Deutsche Bank, AG New York Branch.
“DBRI” means DBR Investments Co. Limited.
“JPMCB” means JPMorgan Chase Bank, National Association.
“WFB” means Wells Fargo Bank, National Association.
“MSBNA” means Morgan Stanley Bank, N.A.
“GSB” means Goldman Sachs Bank USA.
“UBS AG” means UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York.
(6) | The Benchmark 2019-B12 securitization transaction is scheduled to close on or about August 8, 2019. |
(7) | DBNY expects to transfer the related pari passu Companion Note to DBR Investments Co. Limited and contribute such note to one or more future commercial mortgage securitization transactions. |
(8) | The subject Loan Combination is an AB Loan Combination or a Pari Passu-AB Loan Combination, and the Controlling Note as of the date hereof (as identified in the chart above) is a related subordinate note. Upon the occurrence of certain trigger events specified in the related Co-Lender Agreement, however, control will generally shift to a more senior note (or, if applicable, first to one more senior note and, following certain additional trigger events, to another more senior note) in the subject Loan Combination (each identified in the chart above as a “Control Shift Note”), which more senior note will thereafter be the Controlling Note. See “Description of the Mortgage Pool—The Loan Combinations—The Grand Canal Shoppes Pari Passu-AB Loan Combination”, “—The Loan Combinations—The Moffett Towers II Buildings 3 & 4 Pari Passu-AB Loan Combination” and “—The Loan Combinations—The Centre Pari Passu-AB Loan Combination” in the Preliminary Prospectus for more information regarding the manner in which control shifts under each such Loan Combination. |
(9) | The BANK 2019-BNK19 securitization transaction is scheduled to close on or about August 8, 2019. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
12
COLLATERAL OVERVIEW (continued) |
Previously Securitized Mortgaged Properties(1)
Mortgaged Property Name | Mortgage Loan Seller | City | State | Property Type | Cut-off Date | % of | Previous Securitization |
Post Ranch Inn | GACC | Big Sur | California | Hospitality | $60,000,000 | 4.7% | COMM 2014-CCRE19 |
Grand Canal Shoppes | GSMC | Las Vegas | Nevada | Retail | $60,000,000 | 4.7% | GSMS 2012-SHOP |
Federal Highway Self Storage | GSMC | Deerfield Beach | Florida | Self Storage | $11,000000 | 0.9% | WFRBS 2011-C4 |
Compass Self Storage Shelby | CREFI | Shelby Township | Michigan | Self Storage | $5,250,000 | 0.4% | WFRBS 2011-C5 |
Compass Self Storage Fraser | CREFI | Fraser | Michigan | Self Storage | $4,750,000 | 0.4% | WFRBS 2011-C5 |
Central Park Shopping Center | GACC | Denver | Colorado | Retail | $3,036,808 | 0.2% | COMM 2013-CCRE10 |
(1) | The table above includes mortgaged properties securing mortgage loans for which the most recent prior financing of all or a significant portion of such mortgaged properties was included in a securitization. Information under “Previous Securitization” represents the most recent such securitization with respect to each of those mortgaged properties. The information in the above table is based solely on information provided by the related borrower or obtained through searches of a third-party database, and has not otherwise been confirmed by the mortgage loan sellers. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
13
COLLATERAL OVERVIEW (continued) |
Property Types
Property Type / Detail | Number of Mortgaged Properties | Aggregate Cut-off Date Balance(1) | % of Initial Pool Balance(1) | Wtd. Avg. Underwritten NCF DSCR(2)(3) | Wtd. Avg. Cut-off Date LTV Ratio(2)(3) | Wtd. Avg. Debt Yield on Underwritten |
Office | 23 | $425,547,745 | 33.3% | 2.85x | 56.1% | 11.0% |
Suburban | 20 | 268,197,745 | 21.0 | 2.64x | 57.9% | 10.8% |
CBD | 2 | 146,850,000 | 11.5 | 3.32x | 52.3% | 11.4% |
Medical | 1 | 10,500,000 | 0.8 | 1.56x | 63.6% | 9.8% |
Retail | 15 | $207,670,140 | 16.3% | 2.34x | 57.2% | 10.1% |
Anchored | 12 | 115,770,140 | 9.1 | 2.37x | 59.2% | 10.5% |
Specialty Retail | 1 | 60,000,000 | 4.7 | 2.46x | 46.3% | 9.6% |
Shadow Anchored | 2 | 31,900,000 | 2.5 | 1.98x | 70.4% | 9.8% |
Mixed Use | 5 | $163,700,000 | 12.8% | 1.97x | 61.9% | 8.1% |
Multifamily/Office/Retail | 1 | 70,000,000 | 5.5 | 2.01x | 65.8% | 7.5% |
Self Storage/Retail | 1 | 54,300,000 | 4.3 | 2.01x | 60.3% | 8.6% |
Multifamily/Retail | 1 | 20,750,000 | 1.6 | 1.96x | 55.0% | 8.1% |
Office/Retail | 1 | 12,700,000 | 1.0 | 1.87x | 57.7% | 8.1% |
Manufactured Housing Community/Self Storage | 1 | 5,950,000 | 0.5 | 1.50x | 64.7% | 9.5% |
Industrial | 42 | $161,508,868 | 12.7% | 2.52x | 59.6% | 10.0% |
Data Center | 7 | 92,350,000 | 7.2 | 2.60x | 56.9% | 9.8% |
Warehouse/Distribution | 22 | 30,081,764 | 2.4 | 2.47x | 64.4% | 10.3% |
Flex | 1 | 17,000,000 | 1.3 | 2.21x | 59.8% | 10.2% |
Manufacturing | 10 | 14,122,617 | 1.1 | 2.49x | 64.4% | 10.3% |
Cold Storage | 1 | 5,586,377 | 0.4 | 2.49x | 64.4% | 10.3% |
Manufacturing/Warehouse | 1 | 2,368,110 | 0.2 | 2.49x | 64.4% | 10.3% |
Hospitality | 6 | $130,588,212 | 10.2% | 3.39x | 52.4% | 16.1% |
Full Service | 2 | 78,600,000 | 6.2 | 4.19x | 47.7% | 17.0% |
Extended Stay | 3 | 44,696,153 | 3.5 | 2.13x | 60.4% | 14.1% |
Limited Service | 1 | 7,292,059 | 0.6 | 2.52x | 54.0% | 17.7% |
Multifamily | 5 | $121,620,000 | 9.5% | 1.57x | 57.4% | 8.1% |
High Rise | 2 | 75,420,000 | 5.9 | 1.72x | 52.2% | 7.9% |
Garden | 3 | 46,200,000 | 3.6 | 1.33x | 65.8% | 8.3% |
Land | 1 | $45,000,000 | 3.5% | 1.27x | 85.0% | 7.1% |
Self Storage | 3 | $21,000,000 | 1.6% | 2.30x | 60.8% | 9.5% |
Total | 100 | $1,276,634,964 | 100.0% | 2.48x | 58.3% | 10.4% |
(1) | Calculated based on the mortgaged property’s allocated loan amount for mortgage loans secured by more than one mortgaged property. |
(2) | Weighted average based on the mortgaged property’s allocated loan amount for mortgage loans secured by more than one mortgaged property. |
(3) | See footnotes to the table entitled “Mortgage Pool Characteristics” above. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
14
COLLATERAL OVERVIEW (continued) |
Geographic Distribution
Property Location | Number of | Aggregate | % of Initial | Aggregate | % of Total | Underwritten | % of Total | |||||||||||
New York | 6 | $293,170,000 | 23.0 | % | $2,630,300,000 | 34.0 | % | $141,719,752 | 33.3 | % | ||||||||
California | 17 | 203,037,548 | 15.9 | 1,192,000,000 | 15.4 | 71,584,035 | 16.8 | |||||||||||
Virginia | 7 | 92,350,000 | 7.2 | 270,000,000 | 3.5 | 15,099,979 | 3.6 | |||||||||||
Florida | 10 | 83,614,729 | 6.5 | 290,865,000 | 3.8 | 20,014,126 | 4.7 | |||||||||||
Illinois | 4 | 73,764,062 | 5.8 | 333,655,000 | 4.3 | 16,632,046 | 3.9 | |||||||||||
Texas | 6 | 68,910,217 | 5.4 | 244,679,999 | 3.2 | 15,153,322 | 3.6 | |||||||||||
Nevada | 1 | 60,000,000 | 4.7 | 1,640,000,000 | 21.2 | 73,021,709 | 17.2 | |||||||||||
Ohio | 10 | 54,799,093 | 4.3 | 123,600,000 | 1.6 | 8,035,900 | 1.9 | |||||||||||
Missouri | 3 | 53,785,919 | 4.2 | 110,900,000 | 1.4 | 7,356,203 | 1.7 | |||||||||||
Idaho | 1 | 46,850,000 | 3.7 | 84,900,000 | 1.1 | 5,917,574 | 1.4 | |||||||||||
Pennsylvania | 1 | 45,000,000 | 3.5 | 172,500,000 | 2.2 | 10,402,235 | 2.4 | |||||||||||
Oregon | 3 | 38,676,053 | 3.0 | 83,100,000 | 1.1 | 4,663,638 | 1.1 | |||||||||||
Arizona | 5 | 33,562,120 | 2.6 | 125,010,000 | 1.6 | 9,045,445 | 2.1 | |||||||||||
Wisconsin | 3 | 27,791,604 | 2.2 | 48,300,000 | 0.6 | 3,856,559 | 0.9 | |||||||||||
Colorado | 2 | 20,036,808 | 1.6 | 49,550,000 | 0.6 | 3,349,775 | 0.8 | |||||||||||
Georgia | 2 | 18,365,229 | 1.4 | 29,045,000 | 0.4 | 2,232,231 | 0.5 | |||||||||||
Michigan | 6 | 15,761,032 | 1.2 | 38,600,000 | 0.5 | 2,450,939 | 0.6 | |||||||||||
New Jersey | 1 | 15,000,000 | 1.2 | 188,200,000 | 2.4 | 7,900,270 | 1.9 | |||||||||||
Kentucky | 2 | 14,419,325 | 1.1 | 31,450,000 | 0.4 | 2,597,085 | 0.6 | |||||||||||
Tennessee | 2 | 7,302,417 | 0.6 | 14,400,000 | 0.2 | 1,235,721 | 0.3 | |||||||||||
Indiana | 4 | 4,340,027 | 0.3 | 18,700,000 | 0.2 | 1,286,339 | 0.3 | |||||||||||
Minnesota | 1 | 2,388,658 | 0.2 | 9,300,000 | 0.1 | 628,711 | 0.1 | |||||||||||
South Carolina | 1 | 2,368,110 | 0.2 | 9,220,000 | 0.1 | 637,855 | 0.2 | |||||||||||
Arkansas | 1 | 706,323 | 0.1 | 2,750,000 | 0.0 | 194,192 | 0.0 | |||||||||||
Mississippi | 1 | 635,691 | 0.0 | 2,475,000 | 0.0 | 193,791 | 0.0 | |||||||||||
Total | 100 | $1,276,634,964 | 100.0 | % | $7,743,499,999 | 100.0 | % | $425,209,430 | 100.0 | % |
(1) | Calculated based on the mortgaged property’s allocated loan amount for mortgage loans secured by more than one mortgaged property. |
(2) | Aggregate Appraised Values and Underwritten NOI reflect the aggregate values without any reduction for the pari passu companion loan(s). |
(3) | For multi-property loans that do not have underwritten cash flow information reported on a property level basis, Underwritten NOI is allocated based on each respective property’s allocated loan amount. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
15
COLLATERAL OVERVIEW (continued) |
Distribution of Cut-off Date Balances
Range of Cut-off Date Balances ($) | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
5,950,000 - 9,999,999 | 8 | $58,762,312 | 4.6 | % | |||||||
10,000,000 - 19,999,999 | 15 | 214,418,106 | 16.8 | ||||||||
20,000,000 - 29,999,999 | 4 | 95,384,547 | 7.5 | ||||||||
40,000,000 - 49,999,999 | 4 | 177,650,000 | 13.9 | ||||||||
50,000,000 - 100,000,000 | 12 | 730,420,000 | 57.2 | ||||||||
Total | 43 | $1,276,634,964 | 100.0 | % |
Distribution of UW NCF DSCRs(1)
Range of UW DSCR (x) | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
1.23 - 1.50 | 5 | $98,687,745 | 7.7 | % | |||||||
1.51 - 2.00 | 14 | 289,001,047 | 22.6 | ||||||||
2.01 - 2.50 | 11 | 333,304,114 | 26.1 | ||||||||
2.51 - 3.00 | 8 | 242,042,059 | 19.0 | ||||||||
3.01 - 4.88 | 5 | 313,600,000 | 24.6 | ||||||||
Total | 43 | $1,276,634,964 | 100.0 | % |
(1) | See footnotes (1) and (6) to the table entitled “Mortgage Pool Characteristics” above. |
Distribution of Amortization Types(1)
Amortization Type | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
Interest Only | 25 | $912,470,000 | 71.5 | % | |||||||
Interest Only, Then Amortizing(2) | 8 | 117,596,500 | 9.2 | ||||||||
Interest Only - ARD | 2 | 115,250,000 | 9.0 | ||||||||
Amortizing (30 Years) | 7 | 86,318,464 | 6.8 | ||||||||
Amortizing (35 Years) | 1 | 45,000,000 | 3.5 | ||||||||
Total | 43 | $1,276,634,964 | 100.0 | % |
(1) | All of the mortgage loans will have balloon payments at maturity date or have an anticipated repayment date, as applicable. |
(2) | Original partial interest only periods range from 24 to 84 months. |
Distribution of Lockboxes
Lockbox Type | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
Hard | 17 | $626,144,567 | 49.0 | % | |||||||
Springing | 22 | 539,540,398 | 42.3 | ||||||||
Soft | 1 | 8,200,000 | 0.6 | ||||||||
Soft (Residential); Hard (Nonresidential) | 1 | 70,000,000 | 5.5 | ||||||||
Soft (Residential); Hard (Retail) | 1 | 20,750,000 | 1.6 | ||||||||
None | 1 | 12,000,000 | 0.9 | ||||||||
Total | 43 | $1,276,634,964 | 100.0 | % |
Distribution of Cut-off Date LTV Ratios(1)
Range of Cut-off Date LTV (%) | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
31.9 - 39.9 | 1 | $15,000,000 | 1.2 | % | |||||||
40.0 - 49.9 | 4 | 220,250,000 | 17.3 | ||||||||
50.0 - 59.9 | 13 | 443,083,665 | 34.7 | ||||||||
60.0 - 69.9 | 21 | 496,654,800 | 38.9 | ||||||||
70.0 - 85.0 | 4 | 101,646,500 | 8.0 | ||||||||
Total | 43 | $1,276,634,964 | 100.0 | % |
(1) | See footnotes (1) and (5) to the table entitled “Mortgage Pool Characteristics” above. |
Distribution of Maturity Date/ARD LTV Ratios(1)
Range of Maturity Date/ARD LTV (%) | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
31.9 - 39.9 | 1 | $15,000,000 | 1.2 | % | |||||||
40.0 - 49.9 | 6 | 239,542,059 | 18.8 | ||||||||
50.0 - 59.9 | 19 | 528,546,406 | 41.4 | ||||||||
60.0 - 69.9 | 16 | 448,546,500 | 35.1 | ||||||||
70.0 - 72.8 | 1 | 45,000,000 | 3.5 | ||||||||
Total | 43 | $1,276,634,964 | 100.0 | % |
(1) | See footnotes (1), (3) and (5) to the table entitled “Mortgage Pool Characteristics” above. |
Distribution of Loan Purpose
Loan Purpose | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
Refinance | 29 | $771,288,464 | 60.4 | % | |||||||
Acquisition | 12 | 445,346,500 | 34.9 | ||||||||
Recapitalization | 2 | 60,000,000 | 4.7 | ||||||||
Total | 43 | $1,276,634,964 | 100.0 | % |
Distribution of Mortgage Rates
Range of Mortgage Rates (%) | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
3.110 - 3.990 | 21 | $871,350,000 | 68.3 | % | |||||||
3.991 - 4.500 | 14 | 311,268,359 | 24.4 | ||||||||
4.501 - 5.000 | 7 | 79,016,606 | 6.2 | ||||||||
5.001 - 5.682 | 1 | 15,000,000 | 1.2 | ||||||||
Total | 43 | $1,276,634,964 | 100.0 | % |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
16
COLLATERAL OVERVIEW (continued) |
Distribution of Debt Yield on Underwritten NOI(1)
Range of Debt Yields on Underwritten NOI (%) | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
6.6 - 7.9 | 3 | $175,420,000 | 13.7 | % | |||||||
8.0 - 8.9 | 8 | 197,160,000 | 15.4 | ||||||||
9.0 - 9.9 | 12 | 342,587,745 | 26.8 | ||||||||
10.0 - 10.9 | 5 | 206,160,000 | 16.1 | ||||||||
11.0 - 14.9 | 11 | 264,793,555 | 20.7 | ||||||||
15.0 - 18.3 | 4 | 90,513,665 | 7.1 | ||||||||
Total | 43 | $1,276,634,964 | 100.0 | % |
(1) | See footnotes (1) and (7) to the table entitled “Mortgage Pool Characteristics” above. |
Distribution of Debt Yield on Underwritten NCF(1)
Range of Debt Yields on Underwritten NCF (%) | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
6.4 - 7.9 | 6 | $217,070,000 | 17.0 | % | |||||||
8.0 - 8.9 | 6 | 165,247,745 | 12.9 | ||||||||
9.0 - 9.9 | 16 | 445,890,000 | 34.9 | ||||||||
10.0 - 10.9 | 5 | 164,721,047 | 12.9 | ||||||||
11.0 - 14.9 | 7 | 204,414,114 | 16.0 | ||||||||
15.0 - 16.3 | 3 | 79,292,059 | 6.2 | ||||||||
Total | 43 | $1,276,634,964 | 100.0 | % |
(1) | See footnotes (1) and (7) to the table entitled “Mortgage Pool Characteristics” above. |
Mortgage Loans with Original Partial Interest Only Periods
Original Partial Interest Only Period (months) | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
24 | 2 | $17,000,000 | 1.3 | % | |||||||
36 | 2 | $45,900,000 | 3.6 | % | |||||||
48 | 1 | $17,146,500 | 1.3 | % | |||||||
60 | 2 | $17,950,000 | 1.4 | % | |||||||
84 | 1 | $19,600,000 | 1.5 | % |
Distribution of Original Terms to Maturity/ARD(1)
Original Term to Maturity/ARD (months) | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
60 | 4 | $132,721,606 | 10.4 | % | |||||||
84 | 1 | 12,000,000 | 0.9 | ||||||||
120 | 37 | 1,069,513,359 | 83.8 | ||||||||
121 | 1 | 62,400,000 | 4.9 | ||||||||
Total | 43 | $1,276,634,964 | 100.0 | % |
(1) | See footnote (3) to the table entitled “Mortgage Pool Characteristics” above. |
Distribution of Remaining Terms to Maturity/ARD(1)
Range of Remaining Terms to Maturity/ARD (months) | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
58 - 60 | 4 | $132,721,606 | 10.4 | % | |||||||
84 - 84 | 1 | 12,000,000 | 0.9 | ||||||||
118 - 121 | 38 | 1,131,913,359 | 88.7 | ||||||||
Total | 43 | $1,276,634,964 | 100.0 | % |
(1) | See footnote (3) to the table entitled “Mortgage Pool Characteristics” above. |
Distribution of Original Amortization Terms(1)
Original Amortization Term (months) | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
Interest Only | 27 | $1,027,720,000 | 80.5 | % | |||||||
360 | 15 | 203,914,964 | 16.0 | ||||||||
420 | 1 | 45,000,000 | 3.5 | ||||||||
Total | 43 | $1,276,634,964 | 100.0 | % |
(1) | All of the mortgage loans will have balloon payments at maturity or have an anticipated repayment date, as applicable. |
Distribution of Remaining Amortization Terms(1)
Range of Remaining Amortization Terms (months) | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
Interest Only | 27 | $1,027,720,000 | 80.5 | % | |||||||
358 - 360 | 15 | 203,914,964 | 16.0 | ||||||||
420 - 420 | 1 | 45,000,000 | 3.5 | ||||||||
Total | 43 | $1,276,634,964 | 100.0 | % |
(1) | All of the mortgage loans will have balloon payments at maturity or have an anticipated repayment date, as applicable. |
Distribution of Prepayment Provisions
Prepayment Provision | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
Defeasance | 31 | $784,843,359 | 61.5 | % | |||||||
Yield Maintenance | 7 | 189,191,606 | 14.8 | ||||||||
Defeasance or Yield Maintenance | 5 | 302,600,000 | 23.7 | ||||||||
Total | 43 | $1,276,634,964 | 100.0 | % |
Distribution of Escrow Types
Escrow Type | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
Real Estate Tax | 34 | $736,884,964 | 57.7 | % | |||||||
Replacement Reserves(1) | 33 | $768,738,464 | 60.2 | % | |||||||
TI/LC(2) | 18 | $484,476,753 | 50.9 | % | |||||||
Insurance | 15 | $376,136,606 | 29.5 | % |
(1) | Includes mortgage loans with FF&E reserves. |
(2) | Percentage of the portion of the Initial Pool Balance secured by office, retail, industrial and mixed use properties. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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SHORT TERM CERTIFICATE PRINCIPAL PAY DOWN SCHEDULE |
Class A-2 Principal Pay Down(1)(2)
Mortgage Loan Name | Property Type | Cut-off Date | % of Initial | Remaining | Underwritten | Debt Yield on Underwritten NOI | Cut-off Date |
The Zappettini Portfolio | Office | $55,000,000 | 4.3% | 58 | 1.83x | 8.0% | 64.0% |
Summit Technology Center | Office | $51,500,000 | 4.0% | 60 | 3.19x | 12.9% | 50.5% |
The Centre | Multifamily | $15,000,000 | 1.2% | 59 | 2.26x | 13.2% | 31.9% |
Home2 Suites Florence | Hospitality | $11,221,606 | 0.9% | 58 | 2.36x | 15.8% | 59.1% |
(1) | The table above presents the mortgage loans whose balloon payments would be applied to pay down the certificate balance of the Class A-2 certificates assuming no prepayments prior to the maturity date or any anticipated repayment date, as applicable, for any mortgage loan and applying the modeling assumptions described under “Yield, Prepayment and Maturity Considerations” in the Preliminary Prospectus, including the assumptions that (i) no mortgage loan in the pool experiences prepayments prior to its stated maturity date or anticipated repayment date, as applicable, or defaults or losses; (ii) there are no extensions of the maturity date of any mortgage loan in the pool; and (iii) each mortgage loan in the pool is paid in full on its stated maturity date or, if applicable, anticipated repayment date. Each class of certificates, including the Class A-2 certificates, and the Uncertificated VRR Interest evidences undivided ownership interests in the entire pool of mortgage loans. Debt service coverage ratio, debt yield and loan-to-value ratio information does not take into account any subordinate debt (whether or not secured by the mortgaged property) that currently exists or is allowed under the terms of any mortgage loan. See Annex A to the Preliminary Prospectus. See the footnotes to the table entitled “Mortgage Pool Characteristics” above. |
(2) | See footnotes to the table entitled “Mortgage Pool Characteristics” above. |
Class A-3 Principal Pay Down(1)(2)
Mortgage Loan Name | Property Type | Cut-off Date | % of Initial | Remaining | Underwritten | Debt Yield on Underwritten | Cut-off Date |
Home2 Suites Orlando South Park | Hospitality | $12,000,000 | 0.9% | 84 | 2.53x | 16.6% | 54.5% |
(1) | The table above presents the mortgage loans whose balloon payments would be applied to pay down the certificate balance of the Class A-3 certificates assuming no prepayments prior to the maturity date or any anticipated repayment date, as applicable, for any mortgage loan and applying the modeling assumptions described under “Yield, Prepayment and Maturity Considerations” in the Preliminary Prospectus, including the assumptions that (i) no mortgage loan in the pool experiences prepayments prior to its stated maturity date or anticipated repayment date, as applicable, or defaults or losses; (ii) there are no extensions of the maturity date of any mortgage loan in the pool; and (iii) each mortgage loan in the pool is paid in full on its stated maturity date or, if applicable, anticipated repayment date. Each class of certificates, including the Class A-3 certificates, and the Uncertificated VRR Interest evidences undivided ownership interests in the entire pool of mortgage loans. Debt service coverage ratio, debt yield and loan-to-value ratio information does not take into account any subordinate debt (whether or not secured by the mortgaged property) that currently exists or is allowed under the terms of any mortgage loan. See Annex A to the Preliminary Prospectus. See the footnotes to the table entitled “Mortgage Pool Characteristics” above. |
(2) | See footnotes to the table entitled “Mortgage Pool Characteristics” above. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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STRUCTURAL OVERVIEW (continued) |
Allocation Between
Combined VRR Interest and
Non-Vertically
Retained Certificates | The aggregate amount available for distribution to holders of the Non-Vertically Retained Certificates and the Combined VRR Interest on each distribution date will be: (i) the gross amount of interest, principal, yield maintenance charges and prepayment premiums collected with respect to the mortgage loans in the applicable one-month collection period, net of specified expenses of the issuing entity, including fees payable therefrom to, and losses, liabilities, advances (with interest thereon), costs and expenses reimbursable or indemnifiable therefrom to, the master servicer, the special servicer, the certificate administrator, the trustee, the operating advisor, the asset representations reviewer and CREFC®; and (ii) allocated to amounts available for distribution to the holders of the Combined VRR Interest, on the one hand, and amounts available for distribution to the holders of the Non-Vertically Retained Certificates (exclusive of the Class R certificates), on the other hand. On each distribution date, the portion of such aggregate available funds allocable to: (a) the Combined VRR Interest will be the product of such aggregate available funds multiplied by the Vertically Retained Percentage; and (b) the Non-Vertically Retained Certificates (exclusive of the Class R certificates) will at all times be the product of such aggregate available funds multiplied by the Non-Vertically Retained Percentage. See “Credit Risk Retention” and “Description of the Certificates” in the Preliminary Prospectus. |
The “Vertically Retained Percentage” is a fraction, expressed as a percentage, the numerator of which is the initial principal balance of the Combined VRR Interest, and the denominator of which is the sum of (x) the aggregate initial certificate balance of all classes of Non-Vertically Retained Principal Balance Certificates and (y) the initial principal balance of the Combined VRR Interest. |
The “Non-Vertically Retained Percentage” is the difference between 100% and the Vertically Retained Percentage. |
Distributions | On each Distribution Date, funds available for distribution to holders of the Non-Vertically Retained Certificates (exclusive of any portion thereof that represents the Non-Vertically Retained Percentage of (i) any yield maintenance charges and prepayment premiums and/or (ii) any excess interest accrued after the related anticipated repayment date on any mortgage loan with an anticipated repayment date) (“Non-Vertically Retained Available Funds”) will be distributed in the following amounts and order of priority (in each case to the extent of remaining available funds): |
1. | Class A-1, A-2, A-3, A-4, A-5, A-AB, X-A, X-B, X-D and X-F certificates: to interest on the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-AB, Class X-A, Class X-B, Class X-D and Class X-F certificates, up to, andpro rata in accordance with, their respective interest entitlements. |
2. | Class A-1, A-2, A-3, A-4, A-5 and A-AB certificates: to the extent of Non-Vertically Retained Available Funds allocable to principal received or advanced on the mortgage loans, (i) to principal on the Class A-AB certificates until their certificate balance is reduced to the Class A-AB scheduled principal balance set forth in Annex F to the Preliminary Prospectus for the relevant Distribution Date, then (ii) to principal on the Class A-1 certificates until their certificate balance is reduced to zero, all funds available for distribution of principal remaining after the distributions to the Class A-AB certificates in clause (i) above, then (iii) to principal on the Class A-2 certificates until their certificate balance is reduced to zero, all funds available for distribution of principal remaining after the distributions to the Class A-1 certificates in clause (ii) above, then (iv) to principal on the Class A-3 certificates until their certificate balance is reduced to zero, all funds available for distribution of principal remaining after the distributions to the Class A-2 certificates in clause (iii) above, then (v) to principal on the Class A-4 certificates until their certificate balance is reduced to zero, all funds available for distribution of principal remaining after the distributions to the Class A-3 certificates in clause (iv) above, then (vi) to principal on the Class A-5 certificates until their certificate balance is reduced to zero, all funds available for distribution of principal remaining after the distributions to the Class A-4 certificates in clause (v) above and then (vii) to principal on the Class A-AB certificates until their certificate balance is reduced to zero, all funds available for distribution of principal remaining after the distributions to the Class A-5 certificates in clause (vi) above. However, if the certificate balances of each and every class of the Class A-S, Class B, Class C, Class D, Class E, Class F, Class G-RR and Class J-RR certificates have been reduced to zero as a result of the allocation of mortgage loan losses and other unanticipated expenses to those certificates, then Non-Vertically Retained Available Funds allocable to principal will be distributed to the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 and Class A-AB certificates,pro rata, based on their respective certificate balances (and the schedule for the Class A-AB principal distributions will be disregarded). |
3. | Class A-1, A-2, A-3, A-4, A-5 and A-AB certificates: to reimburse the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 and Class A-AB certificates,pro rata, for any unreimbursed losses on the mortgage loans that were previously allocated to reduce the certificate balances of those classes, together with interest at their respective pass-through rates. |
4. | Class A-S certificates: (i) first, to interest on the Class A-S certificates in the amount of their interest entitlement; (ii) next, to the extent of Non-Vertically Retained Available Funds allocable to principal remaining after distributions in respect of principal to each class of Non-Vertically Retained Principal Balance Certificates with a higher principal payment priority (in this case, the Class A-1, Class A-2, Class |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
19
STRUCTURAL OVERVIEW (continued) |
A-3, Class A-4, Class A-5 and Class A-AB certificates), to principal on the Class A-S certificates until their certificate balance is reduced to zero; and (iii) next, to reimburse the Class A-S certificates for any unreimbursed losses on the mortgage loans that were previously allocated to reduce the certificate balance of that class, together with interest at its pass-through rate. |
Distributions (continued) | 5. | Class B certificates: (i) first, to interest on the Class B certificates in the amount of their interest entitlement; (ii) next, to the extent of Non-Vertically Retained Available Funds allocable to principal remaining after distributions in respect of principal to each class of Non-Vertically Retained Principal Balance Certificates with a higher principal payment priority (in this case, the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-AB and Class A-S certificates), to principal on the Class B certificates until their certificate balance is reduced to zero; and (iii) next, to reimburse Class B certificates for any unreimbursed losses on the mortgage loans that were previously allocated to reduce the certificate balance of that class, together with interest at its pass-through rate. |
6. | Class C certificates: (i) first, to interest on the Class C certificates in the amount of their interest entitlement; (ii) next, to the extent of Non-Vertically Retained Available Funds allocable to principal remaining after distributions in respect of principal to each class of Non-Vertically Retained Principal Balance Certificates with a higher principal payment priority (in this case, the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-AB, Class A-S and Class B certificates), to principal on the Class C certificates until their certificate balance is reduced to zero; and (iii) next, to reimburse the Class C certificates for any unreimbursed losses on the mortgage loans that were previously allocated to reduce the certificate balance of that class, together with interest at its pass-through rate. |
7. | After the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-AB, Class X-A, Class X-B, Class X-D, Class X-F, Class A-S, Class B and Class C certificates are paid all amounts to which they are entitled on such Distribution Date, the remaining Non-Vertically Retained Available Funds will be used to pay interest and principal and to reimburse (with interest) any unreimbursed losses to the Class D, Class E, Class F, Class G-RR and Class J-RR certificates, sequentially in that order and with respect to each such class in a manner analogous to the Class C certificates pursuant to clause 6 above. |
Realized Losses | The certificate balances of the respective classes of Non-Vertically Retained Principal Balance Certificates will each be reduced without distribution on any Distribution Date as a write-off to the extent of any loss realized on the mortgage loans allocated to the related class on such Distribution Date. On each Distribution Date,the Non-Vertically Retained Percentage ofany such losses will be applied to the respective classes ofNon-Vertically RetainedPrincipal Balance Certificates in the following order, in each case until the related certificate balance is reduced to zero: first, to the Class J-RR certificates; second, to the Class G-RR certificates; third, to the Class F certificates; fourth, to the Class E certificates; fifth, to the Class D certificates; sixth, to the Class C certificates; seventh, to the Class B certificates; eighth, to the Class A-S certificates; and, finallypro rata, to the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 and Class A-AB certificates, based on their then current respective certificate balances. The notional amount of each class of Class X Certificates will be reduced to reflect reductions in the certificate balance(s) of the class (or classes, as applicable) of Corresponding Principal Balance Certificates as a result of allocations of losses realized on the mortgage loans to such class(es) of Principal Balance Certificates. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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STRUCTURAL OVERVIEW (continued) |
Prepayment Premiums
and Yield Maintenance
Charges | On each Distribution Date, until the notional amounts of the Class X-A, Class X-B and Class X-D certificates and the certificate balances of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-AB, Class A-S, Class B, Class C, Class D and Class E certificates have been reduced to zero, the Non-Vertically Retained Percentage of each yield maintenance charge collected on the mortgage loans during the related one-month collection period (or, in the case of an outside serviced mortgage loan, that accompanied a principal prepayment included in the aggregate available funds for such Distribution Date) is required to be distributed to holders of the Non-Vertically Retained Certificates (excluding holders of the Class X-F, Class F, Class G-RR, Class J-RR, Class S and Class R certificates) as follows: (a) first theNon-Vertically Retained Percentage of such yield maintenance charge will be allocated between (i) the group (the “YM Group A”) of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-AB, Class X-A and Class A-S certificates, (ii) the group (the “YM Group BC”) of the Class X-B, Class B and Class C certificates, and (iii) the group (the “YM Group DE” and, together with the YM Group A and the YM Group BC, the “YM Groups”) of the Class X-D, Class D and Class E certificates,pro rata, based upon the aggregate amount of principal distributed to the class or classes ofNon-Vertically Retained Principal Balance Certificates in each YM Group on such Distribution Date, and (b) then the portion of such yield maintenance charge allocated to each YM Group will be further allocated as among the classes of Non-Vertically Retained Regular Certificates in such YM Group, in the following manner: (i) each class ofNon-Vertically Retained Principal Balance Certificates in such YM Group will entitle the applicable certificateholders to receive on the applicable Distribution Date that portion of such yield maintenance charge equal to the product of (X) a fraction whose numerator is the amount of principal distributed to such class of Non-Vertically Retained Principal Balance Certificates on such Distribution Date and whose denominator is the total amount of principal distributed to all of theNon-Vertically Retained Principal Balance Certificates in that YM Group on such Distribution Date, (Y) the Base Interest Fraction (as defined in the Preliminary Prospectus) for the related principal prepayment and such class of Non-Vertically Retained Principal Balance Certificates, and (Z) the portion of such yield maintenance charge allocated to such YM Group, and (ii) the portion of such yield maintenance charge allocated to such YM Group and remaining after such distributions with respect to theNon-Vertically RetainedPrincipal Balance Certificates in such YM Group will be distributed to the class of Class X Certificates in such YM Group. If there is more than one class ofNon-Vertically Retained Principal Balance Certificates in any YM Group entitled to distributions of principal on any particular Distribution Date on which yield maintenance charges are distributable to such classes, the portion of such yield maintenance charges allocated to such YM Group will be allocated among all such classes ofNon-Vertically Retained Principal Balance Certificates up to, and on apro rata basis in accordance with, their respective entitlements in those yield maintenance charges in accordance with the prior sentence of this paragraph. |
If a prepayment premium (calculated as a percentage of the amount prepaid) is imposed in connection with a prepayment rather than a yield maintenance charge, then the prepayment premium so collected will be allocated as described above. For this purpose, the discount rate used to calculate the Base Interest Fraction will be the discount rate used to determine the yield maintenance charge for mortgage loans that require payment at the greater of a yield maintenance charge or a minimum amount equal to a fixed percentage of the principal balance of the mortgage loan or, for mortgage loans that only have a prepayment premium based on a fixed percentage of the principal balance of the mortgage loan, such other discount rate as may be specified in the related loan documents. |
After the notional amounts of the Class X-A, Class X-B and Class X-D certificates and the certificate balances of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-AB, Class A-S, Class B, Class C, Class D and Class E certificates have been reduced to zero, the Non-Vertically Retained Percentage of all prepayment premiums and yield maintenance charges with respect to the mortgage loans will be allocated among the holders of the Class F, Class G-RR and Class J-RR certificates as provided in the CGCMT 2019-GC41 pooling and servicing agreement. No yield maintenance charges or prepayment premiums will be distributed to the holders of the Class X-F, Class S or Class R certificates. For a description of prepayment premiums and yield maintenance charges required on the mortgage loans, see Annex A to the Preliminary Prospectus. See also “Certain Legal Aspects of the Mortgage Loans—Default Interest and Limitations on Prepayments” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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STRUCTURAL OVERVIEW (continued) |
Advances | The master servicer and, if it fails to do so, the trustee, will be obligated to make P&I advances with respect to each mortgage loan in the issuing entity and, with respect to all of the mortgage loans serviced under the CGCMT 2019-GC41 pooling and servicing agreement, servicing advances, including paying delinquent property taxes, condominium assessments, insurance premiums and ground lease rents, but only to the extent that those advances are not deemed non-recoverable from collections on the related mortgage loan and, in the case of servicing advances, any related companion loans as described below. P&I advances are subject to reduction in connection with any appraisal reductions that may occur. The special servicer will have no obligation to make any advances, provided that, in an urgent or emergency situation requiring the making of a property protection advance, the special servicer may, in its sole discretion, make a property protection advance and will be entitled to reimbursement from the master servicer for such advance. The master servicer, the special servicer and the trustee will each be entitled to receive interest on advances they make at the prime rate, compounded annually. |
Serviced Mortgage
Loans/Outside Serviced
Mortgage Loans | One or more loan combinations each constitutes an“outside serviced loan combination”(as identified under “Collateral Overview—Loan Combination Summary” above), in which case, the CGCMT 2019-GC41 pooling and servicing agreement is not the Controlling PSA, and each related mortgage loan constitutes an “outside serviced mortgage loan,” each related companion loan constitutes an “outside serviced companion loan,” and each related Controlling PSA constitutes an “outside servicing agreement.” |
One or more loan combinations each constitutes a“servicing shift loan combination”(as identified under “Collateral Overview—Loan Combination Summary” above), in which case the related mortgage loan constitutes a“servicing shift mortgage loan” and each related companion loan constitutes a“servicing shift companion loan”. Any servicing shift loan combination will initially be serviced pursuant to the CGCMT 2019-GC41 pooling and servicing agreement during which time such mortgage loan, such loan combination and each related companion loan will be a serviced mortgage loan, a serviced loan combination and a serviced companion loan (each as defined below), respectively. However, upon the inclusion of the related controlling pari passu companion loan in a future securitization transaction, the servicing of such mortgage loan will shift to the servicing agreement governing such securitization transaction, and such mortgage loan, such loan combination and each related companion loan will be an outside serviced mortgage loan, an outside serviced loan combination and an outside serviced companion loan, respectively. |
All of the mortgage loans transferred to the issuing entity (other than any outside serviced mortgage loan) are sometimes referred to in this Term Sheet as the “serviced mortgage loans” and, together with any related companion loans, as the “serviced loans” (which signifies that they are being serviced by the master servicer and the special servicer under the CGCMT 2019-GC41 pooling and servicing agreement); each related loan combination constitutes a “serviced loan combination”; and each related companion loan constitutes a “serviced companion loan.” See “Description of the Mortgage Pool—The Loan Combinations” in the Preliminary Prospectus. |
Appraisal Reduction
Amounts | An Appraisal Reduction Amount generally will be created with respect to a required appraisal loan (which is a serviced loan as to which certain defaults, modifications or insolvency events have occurred (as further described in the Preliminary Prospectus)) in the amount, if any, by which the principal balance of such required appraisal loan, plus other amounts overdue or advanced in connection with such required appraisal loan, exceeds 90% of the appraised value of the related mortgaged property plus certain escrows and reserves (including letters of credit) held with respect to such required appraisal loan;provided that, if so provided in the related co-lender agreement, the holder of a subordinate companion loan may be permitted to post cash or a letter of credit to offset some or all of an Appraisal Reduction Amount. In the case of an outside serviced mortgage loan, any Appraisal Reduction Amounts will be calculated pursuant to, and by a party to, the related outside servicing agreement. In general, any Appraisal Reduction Amount calculated with respect to a loan combination will be allocatedfirst, to any related subordinate companion loan(s) (up to the outstanding principal balance(s) thereof), andthen, to the related mortgage loan and any related pari passu companion loan(s) on apro rata basis in accordance with their respective outstanding principal balances. As a result of an Appraisal Reduction Amount being calculated for and/or allocated to a given mortgage loan, the interest portion of any P&I advance for such mortgage loan will be reduced, which (to the extent of the Non-Vertically Retained Percentage of the reduction in such P&I advance) will have the effect of reducing the amount of interest available for distribution to the most subordinate class(es) ofNon-Vertically Retained Certificates (exclusive of the Class S and Class R certificates) then outstanding (i.e., first, to the Class J-RR certificates, then, to the Class G-RR certificates, then, to the Class F certificates, then, to the Class E certificates, then, to the Class D certificates, then, to the Class C certificates, then, to the Class B certificates, then, to the Class A-S certificates, and then,pro rata based on interest entitlements, to the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-AB, Class X-A, Class X-B, Class X-D and Class X-F certificates). In general, a serviced loan will cease to be a required appraisal loan, and no longer be subject to an Appraisal Reduction Amount, when the same has ceased to be a specially serviced loan (if applicable), has been brought current for at least three consecutive months and no other circumstances exist that would cause such serviced loan to be a required appraisal loan. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
22
STRUCTURAL OVERVIEW (continued) |
Appraisal Reduction
Amounts (continued) | For purposes of determining the identity of the Controlling Class and the existence of a Control Termination Event and an Operating Advisor Consultation Trigger Event, as well as the allocation and/or exercise of voting rights for certain purposes, the Non-Vertically Retained Percentage of any Appraisal Reduction Amounts will be allocated to notionally reduce the certificate balances of the Non-Vertically Retained Principal Balance Certificates as follows: first, to the Class J-RR, Class G-RR, Class F, Class E, Class D, Class C, Class B and Class A-S certificates, in that order, in each case until the related certificate balance is notionally reduced to zero; and then to the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 and Class A-AB certificates,pro rata based on certificate balance. |
Cumulative Appraisal
Reduction Amounts | A “Cumulative Appraisal Reduction Amount”, as of any date of determination, is equal to the sum of (i) all Appraisal Reduction Amounts then in effect, and (ii) with respect to any AB Modified Loans, any Collateral Deficiency Amounts then in effect. |
“Collateral Deficiency Amount” means, with respect to any AB Modified Loan as of any date of determination, the excess of (i) the stated principal balance of such AB Modified Loan (taking into account the related junior note(s) included therein), over (ii) the sum of (in the case of a loan combination, solely to the extent allocable to the subject mortgage loan) (x) the most recent appraised value for the related mortgaged property or mortgaged properties, plus (y) solely to the extent not reflected or taken into account in such appraised value and to the extent on deposit with, or otherwise under the control of, the lender as of the date of such determination, any capital or additional collateral contributed by the related borrower at the time the mortgage loan became (and as part of the modification related to) such AB Modified Loan for the benefit of the related mortgaged property or mortgaged properties (provided, that in the case of an outside serviced mortgage loan, the amounts set forth in this clause (y) will be taken into account solely to the extent relevant information is received), plus (z) any other escrows or reserves (in addition to any amounts set forth in the immediately preceding clause (y)) held by the lender in respect of such AB Modified Loan as of the date of such determination. For purposes of determining the identity of the Controlling Class and the existence of a Control Termination Event and an Operating Advisor Consultation Trigger Event, the Non-Vertically Retained Percentage of Collateral Deficiency Amounts will be allocable to the respective classes of Control Eligible Certificates (as defined below), in reverse alphabetical order of class designation, in a manner similar to the allocation of Appraisal Reduction Amounts to such classes. |
“AB Modified Loan” means any corrected mortgage loan (1) that became a corrected mortgage loan (which includes for purposes of this definition any outside serviced mortgage loan that became a “corrected” mortgage loan (or any term substantially similar thereto) pursuant to the related outside servicing agreement) due to a modification thereto that resulted in the creation of an A/B note structure (or similar structure) and as to which the new junior note(s) did not previously exist or the principal amount of the new junior note(s) was previously part of either an A note held by the trust or the original unmodified mortgage loan and (2) as to which an Appraisal Reduction Amount is not in effect. |
Age of Appraisals | Appraisals (which can be an update of a prior appraisal) with respect to a serviced loan are required to be no older than 9 months for purposes of determining appraisal reductions (other than the annual re-appraisal), market value, and other calculations as described in the Preliminary Prospectus. |
Sale of Defaulted Loans | There will be no “Fair Market Value Purchase Option”. Instead defaulted mortgage loans will be sold in a process similar to the sale process for REO property. With respect to an outside serviced loan combination, the party acting as special servicer with respect to such outside serviced loan combination pursuant to the related outside servicing agreement (the “outside special servicer”) may offer to sell to any person (or may offer to purchase) for cash such outside serviced loan combination in accordance with the terms of the related outside servicing agreement during such time as such outside serviced loan combination constitutes a defaulted mortgage loan qualifying for sale thereunder and, in connection with any such sale, the related outside special servicer is required to sell both the applicable outside serviced mortgage loan and the related outside serviced pari passu companion loan(s) and, if so provided in the related co-lender agreement or the Controlling PSA, any related subordinate companion loan(s), together as one defaulted loan. |
Directing Holder | The “Directing Holder” with respect to any mortgage loan or loan combination serviced under the CGCMT 2019-GC41 pooling and servicing agreement will be: |
● | except (i) with respect to an excluded mortgage loan, (ii) with respect to a serviced loan combination as to which the Controlling Note is held outside the issuing entity (sometimes referred to in this Term Sheet as a “serviced outside controlled loan combination”), and (iii) during any period that a Control Termination Event has occurred and is continuing, the Controlling Class Representative; and |
● | with respect to any serviced outside controlled loan combination (which may include a servicing shift loan combination or a serviced loan combination with a controlling subordinate companion loan held outside the issuing entity), if and for so long as such holder is entitled under the related co-lender agreement to exercise consent rights similar to those entitled to be exercised by the Controlling Class Representative, the holder of the related Controlling Note (during any such period, the “outside controlling note holder”). |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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STRUCTURAL OVERVIEW (continued) |
The applicable directing holder (or equivalent party) with respect to any outside serviced mortgage loan will be, in general, (i) in the event the related Controlling Note is included in the subject outside securitization transaction, the controlling class representative (or equivalent entity) under the related outside servicing agreement, and (ii) in all |
other cases, the third party holder of the related Controlling Note or its representative (which may be a controlling class representative (or equivalent entity) under a separate securitization transaction to which such note has been transferred (if any)), as provided in the related co-lender agreement. |
An “excluded mortgage loan” is a mortgage loan or loan combination with respect to which the Controlling Class Representative or the holder(s) of more than 50% of the Controlling Class (by certificate balance) is (or are) a Borrower Party (as defined in the Preliminary Prospectus). |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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STRUCTURAL OVERVIEW (continued) |
Controlling Class
Representative | The “Controlling Class Representative” will be the controlling class certificateholder or other representative designated by at least a majority of the controlling class certificateholders, by certificate balance. The “Controlling Class” is, as of any time of determination, the most subordinate class of the Control Eligible Certificates that has an aggregate outstanding certificate balance as notionally reduced by any Cumulative Appraisal Reduction Amount allocable to such class, at least equal to 25% of the initial certificate balance of that class of certificates;provided that (except under the circumstances set forth in the next proviso) if no such class meets the preceding requirement, then the Class G-RR certificates will be the controlling class;provided,further,however, that if, at any time, the aggregate outstanding certificate balance of the classes of Non-Vertically Retained Principal Balance Certificates senior to the Control Eligible Certificates has been reduced to zero (without regard to the allocation of any Cumulative Appraisal Reduction Amounts), then the “Controlling Class” will be the most subordinate class of Control Eligible Certificates with an outstanding certificate balance greater than zero (without regard to the allocation of any Cumulative Appraisal Reduction Amounts). The “Control Eligible Certificates” consist of the Class G-RR and Class J-RR certificates. See “The Pooling and Servicing Agreement—Directing Holder” in the Preliminary Prospectus. No other class of certificates will be eligible to act as the controlling class or appoint a Controlling Class Representative. No person may exercise any of the rights and powers of the Controlling Class Representative with respect to an excluded mortgage loan. |
On the Closing Date, RREF III-D AIV RR, LLC is expected to (i) purchase the Class G-RR and Class J-RR certificates, and (ii) appoint itself as the initial Controlling Class Representative. RREF III Debt AIV, LP (the parent of RREF III-D AIV, RR LLC), or its affiliate, may purchase certain other classes of certificates, including the Class X-F and Class F certificates, and is also expected to receive the Class S certificates. |
Control Termination
Event | A “Control Termination Event” will either (a) occur when none of the classes of the Control Eligible Certificates has an outstanding certificate balance (as notionally reduced by any Cumulative Appraisal Reduction Amount then allocable to such class) that is at least equal to 25% of the initial certificate balance of that class of certificates or (b) be deemed to occur as described in the Preliminary Prospectus;provided,however, that a Control Termination Event will in no event exist at any time that the certificate balance of each class of the Non-Vertically Retained Principal Balance Certificates senior to the Control Eligible Certificates (without regard to the allocation of Cumulative Appraisal Reduction Amounts) has been reduced to zero. With respect to excluded mortgage loans, a Control Termination Event will be deemed to exist. |
The holders of Certificates representing the majority of the certificate balance of the most senior class of Control Eligible Certificates whose certificate balance is notionally reduced to less than 25% of the initial certificate balance of that class as a result of an allocation of an Appraisal Reduction Amount or a Collateral Deficiency Amount, as applicable, to such class will have the right to challenge the Special Servicer’s Appraisal Reduction Amount determination or a Collateral Deficiency Amount determination, as applicable, and, at their sole expense, obtain a second appraisal of any serviced loan for which an Appraisal Reduction Event has occurred or as to which there exists a Collateral Deficiency Amount, under the circumstances described in the Preliminary Prospectus. |
Consultation Termination
Event | A “Consultation Termination Event” will either (a) occur when none of the classes of the Control Eligible Certificates has an outstanding certificate balance, without regard to the allocation of any Cumulative Appraisal Reduction Amount, that is equal to or greater than 25% of the initial certificate balance of that class of certificates or (b) be deemed to occur as described in the Preliminary Prospectus;provided,however, that a Consultation Termination Event will in no event exist at any time that the certificate balance of each class of the Non-Vertically Retained Principal Balance Certificates senior to the Control Eligible Certificates (without regard to the allocation of Cumulative Appraisal Reduction Amounts) has been reduced to zero. With respect to excluded mortgage loans, a Consultation Termination Event will be deemed to exist. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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STRUCTURAL OVERVIEW (continued) |
Control/Consultation |
Rights | So long as a Control Termination Event does not exist, the Controlling Class Representative will be entitled to have consent and/or consultation rights under the CGCMT 2019-GC41 pooling and servicing agreement with respect to certain major decisions (including with respect to assumptions, waivers, certain loan modifications and workouts) and other matters with respect to each serviced mortgage loan, except with respect to any serviced mortgage loan (i) as to which the Controlling Class Representative or a holder of more than 50% of the Controlling Class (by certificate balance) is a Borrower Party (as defined in the Preliminary Prospectus) (any such mortgage loan, an “excluded mortgage loan”) or (ii) that is part of a serviced outside controlled loan combination. |
After the occurrence and during the continuance of a Control Termination Event, the consent rights of the Controlling Class Representative will terminate, and the Controlling Class Representative will retain non-binding consultation rights under the CGCMT 2019-GC41 pooling and servicing agreement with respect to certain major decisions and other matters with respect to the serviced mortgage loans, other than (i) any excluded mortgage loan and (ii) any servicing shift mortgage loan. |
After the occurrence and during the continuance of a Consultation Termination Event, all of these rights of the Controlling Class Representative with respect to the serviced mortgage loans will terminate. |
With respect to any serviced outside controlled loan combination (including any servicing shift loan combination for so long as it is serviced under the CGCMT 2019-GC41 pooling and servicing agreement), the holder of the related Controlling Note identified above under the table entitled “Loan Combination Controlling Notes and Non-Controlling Notes” under “Collateral Overview” above (which holder will not be the Controlling Class Representative) will instead be entitled to exercise the above-described consent and consultation rights, to the extent provided under the related co-lender agreement. |
With respect to each outside serviced loan combination, the applicable outside controlling class representative or other related controlling noteholder pursuant to, and subject to the limitations set forth in, the related outside servicing agreement and the related co-lender agreement will have consent, consultation, approval and direction rights with respect to certain major decisions (including with respect to assumptions, waivers, loan modifications and workouts) regarding such outside serviced loan combination, as provided for in the related co-lender agreement and in the related outside servicing agreement. To the extent permitted under the related co-lender agreement, the Controlling Class Representative (so long as a Consultation Termination Event does not exist) may have certain consultation rights with respect to each outside serviced loan combination. |
See “Description of the Mortgage Pool—The Loan Combinations” in the Preliminary Prospectus. |
Risk Retention
Consultation Parties | The “risk retention consultation parties”, with respect to any serviced mortgage loan or, if applicable, serviced loan combination will be: (i) the party selected by Citi Real Estate Funding Inc., (ii) the party selected by Goldman Sachs Bank USA, and (iii) the party selected by Deutsche Bank AG, New York Branch. Each risk retention consultation party will have certain non-binding consultation rights in certain circumstances, (i) for so long as no Consultation Termination Event is continuing, with respect to any specially serviced loan (other than any outside serviced mortgage loan), and (ii) during the continuance of a Consultation Termination Event, with respect to any mortgage loan (other than any outside serviced mortgage loan), as further described in the Preliminary Prospectus. Notwithstanding the foregoing, none of the risk retention consultation parties will have any consultation rights with respect to any mortgage loan that is an excluded RRCP mortgage loan with respect to such party. Citi Real Estate Funding Inc., Goldman Sachs Mortgage Company and Deutsche Bank AG, New York Branch are expected to be appointed as the initial risk retention consultation parties. |
With respect to any risk retention consultation party, an “excluded RRCP mortgage loan” is a mortgage loan or loan combination with respect to which such risk retention consultation party, or the person(s) entitled to appoint such risk retention consultation party, is a Borrower Party. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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STRUCTURAL OVERVIEW (continued) |
Termination of
Special Servicer | At any time, prior to the occurrence and continuance of a Control Termination Event, the special servicer (but not any outside special servicer for any outside serviced loan combination) may be removed and replaced by the Controlling Class Representative (except with respect to any excluded mortgage loan) with or without cause upon satisfaction of certain conditions specified in the CGCMT 2019-GC41 pooling and servicing agreement. |
After the occurrence and during the continuance of a Control Termination Event, the holders of at least 25% of the voting rights of the certificates (other than the Class S and Class R certificates) (without regard to the application of any Appraisal Reduction Amounts) may request a vote to replace the special servicer (but not any outside special servicer for any outside serviced loan combination). The subsequent vote may result in the termination and replacement of the special servicer if, within 180 days of the initial request for that vote, the holders of (a) at least 66-2/3% of the voting rights allocable to the certificates of those holders that voted on the matter (provided that holders representing the applicable Certificateholder Quorum voted on the matter), or (b) more than 50% of the voting rights of each class of Non-Reduced Certificates vote affirmatively to so replace. |
“Non-Reduced Certificates” means each class of Principal Balance Certificates that has an outstanding certificate balance as may be notionally reduced by any Appraisal Reduction Amounts allocated to that class, equal to or greater than 25% of an amount equal to the initial certificate balance of that class of certificates minus all principal payments made on such class of certificates. |
Notwithstanding the foregoing, but subject to the discussion in the next paragraph, solely with respect to a serviced outside controlled loan combination (including any servicing shift loan combination, for so long as it is serviced pursuant to the CGCMT 2019-GC41 pooling and servicing agreement), only the holder of the related Controlling Note identified above under the table entitled “Loan Combination Controlling Notes and Non-Controlling Notes” under “Collateral Overview” above may terminate the special servicer without cause (solely with respect to the related loan combination) and appoint a replacement special servicer for that loan combination. |
At any time, if the operating advisor determines, in its sole discretion exercised in good faith, that (1) the special servicer has failed to comply with the servicing standard and (2) a replacement of the special servicer would be in the best interest of the certificateholders and the holder of the Uncertificated VRR Interest (as a collective whole), the operating advisor will have the right to recommend the replacement of the special servicer with respect to the serviced mortgage loans (but not any outside special servicer for any outside serviced loan combination), resulting in a solicitation of a certificateholder vote. The subsequent vote may result in the termination and replacement of the special servicer if, within 180 days of the initial request for that vote, the holders of at least a majority of the aggregate outstanding principal balance of the certificates of those holders that voted on the matter (provided that holders representing the applicable Certificateholder Quorum vote on the matter) vote affirmatively to so replace. |
“Certificateholder Quorum” means a quorum that, (a) for purposes of a vote to terminate and replace the special servicer or the asset representations reviewer at the request of the holders of certificates evidencing not less than 25% of the voting rights (without regard to the application of any Appraisal Reduction Amounts), consists of the holders of certificates evidencing at least 50% of the aggregate voting rights (taking into account the allocation of any Appraisal Reduction Amounts to notionally reduce the certificate balances of the respective classes of Principal Balance Certificates) of all certificates (other than the Class S and Class R certificates), on an aggregate basis, and (b) for purposes of a vote to terminate and replace the special servicer based on a recommendation of the operating advisor, consists of the holders of certificates evidencing at least 20% of the aggregate of the outstanding principal balances of all certificates, with such quorum including at least three (3) holders that are not affiliated with each other. |
The related outside special servicer under each outside servicing agreement generally may be (or, if the applicable outside servicing agreement has not yet been executed, it is anticipated that such outside special servicer may be) replaced by the related outside controlling class representative (or an equivalent party), or the vote of the requisite holders of certificates issued, under the applicable outside servicing agreement (depending on whether or not the equivalent of a control termination event or a consultation termination event exists under that outside servicing agreement) or by any applicable other controlling noteholder under the related co-lender agreement in a manner generally similar to the manner in which the special servicer may be replaced under the CGCMT 2019-GC41 pooling and servicing agreement as described above in this “Termination of Special Servicer” section (although there will be differences, in particular as regards certificateholder votes and the timing of when an outside special servicer may be terminated based on the recommendation of an operating advisor). |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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STRUCTURAL OVERVIEW (continued) |
Termination of
Special Servicer
(continued) | If the special servicer, to its knowledge, becomes a Borrower Party with respect to a mortgage loan, the special servicer will not be permitted to act as special servicer with respect to that mortgage loan. Subject to certain limitations described in the Preliminary Prospectus, the applicable Directing Holder will be entitled to appoint a replacement special servicer for that mortgage loan. If there is no applicable Directing Holder or if the applicable Directing Holder does not take action to appoint a replacement special servicer within the requisite period, a replacement special servicer will be appointed in the manner specified in the CGCMT 2019-GC41 pooling and servicing agreement. |
Voting Rights | At all times during the term of the CGCMT 2019-GC41 pooling and servicing agreement, the voting rights for the certificates will be allocated among the respective classes of certificateholders in the following percentages: |
(1) | 1% in the aggregate in the case of the respective classes of the Class X Certificates, allocatedpro rata based upon their respective notional amounts as of the date of determination (for so long as the notional amount of at least one class of the Class X Certificates is greater than zero), and |
(2) | in the case of any class of Principal Balance Certificates, a percentage equal to the product of 99% (or, if the notional amounts of all classes of the Class X Certificates have been reduced to zero, 100%) and a fraction, the numerator of which is equal to the certificate balance of such class of Principal Balance Certificates as of the date of determination, and the denominator of which is equal to the aggregate of the certificate balances of all classes of the Principal Balance Certificates, in each case, as of the date of determination, |
provided, that in certain circumstances described under “The Pooling and ServicingAgreement” in the Preliminary Prospectus, voting rights will only be exercisable by holders of the Non-Reduced Certificates and/or may otherwise be exercisable or allocated in a manner that takes into account the allocation of Appraisal Reduction Amounts. |
The voting rights of any class of certificates are required to be allocated among certificateholders of such class in proportion to their respective percentage interests. |
The Class S and Class R certificates and the Uncertificated VRR Interest will not be entitled to any voting rights. |
Servicing
Compensation | Modification Fees: Certain fees resulting from modifications, amendments, waivers or other changes to the terms of the loan documents, as more fully described in the Preliminary Prospectus, will be used to offset expenses on the related serviced mortgage loan (i.e. reimburse the trust for certain expenses including unreimbursed advances and interest on unreimbursed advances previously incurred (other than special servicing fees, workout fees and liquidation fees) on the related serviced mortgage loan but not yet reimbursed to the trust or servicers or to pay expenses (other than special servicing fees, workout fees and liquidation fees) that are still outstanding in each case unless as part of the written modification the related borrower is required to pay these amounts on a going forward basis or in the future). Any excess modification fees not so applied to offset expenses will be available as compensation to the master servicer and/or special servicer. Within any prior 12 month period, all such excess modification fees earned by the master servicer or by the special servicer (after taking into account the offset described below applied during such 12-month period) with respect to any serviced mortgage loan will be subject to a cap equal to the greater of (i) 1% of the outstanding principal balance of such mortgage loan after giving effect to such transaction and (ii) $25,000. |
All excess modification fees earned by the special servicer will be required to offset any future workout fees or liquidation fees payable with respect to the related serviced mortgage loan or related REO property; provided, that if the serviced mortgage loan ceases being a corrected loan, and is subject to a subsequent modification, any excess modification fees earned by the special servicer prior to such serviced mortgage loan ceasing to be a corrected loan will no longer be offset against future liquidation fees and workout fees unless such serviced mortgage loan ceased to be a corrected loan within 18 months of it becoming a modified mortgage loan. |
Penalty Fees: All late fees and default interest will first be used to reimburse certain expenses previously incurred with respect to the related mortgage loan (other than special servicing fees, workout fees and liquidation fees) but not yet reimbursed to the trust, the master servicer or the special servicer or to pay certain expenses (other than special servicing fees, workout fees and liquidation fees) that are still outstanding on the related mortgage loan, and any excess received with respect to a serviced loan will be paid to the master servicer (for penalty fees accrued while a non-specially serviced loan) and the special servicer (for penalty fees accrued while a specially serviced loan). To the extent any amounts reimbursed out of penalty charges are subsequently recovered on a related serviced loan, they will be paid to the master servicer or special servicer who would have been entitled to the related penalty charges that were previously used to reimburse such expense. |
Liquidation / Workout Fees: Liquidation fees will be calculated at the lesser of (a) 1.0% or (b) with respect to any serviced mortgage loan (or related serviced loan combination, if applicable) or related REO Property, such lesser rate as would result in a liquidation fee of $1,000,000, for each serviced loan that is a specially serviced loan and any REO property, subject in any case to a minimum liquidation fee of $25,000. For any serviced loan that is a corrected loan, workout fees will be calculated at the lesser of (a) 1.0% and (b) such lower rate as would result in a workout fee of $1,000,000 when applied to each expected payment of principal and interest (other than default interest and excess interest) on the related serviced loan (or related serviced loan combination, if applicable) from the date such serviced loan becomes a corrected loan through and including the then related maturity date, subject in any case to a minimum workout fee of $25,000. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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STRUCTURAL OVERVIEW (continued) |
Notwithstanding the foregoing, in connection with a maturity default, no liquidation or workout fee will be payable in connection with a payoff or refinancing of the related serviced loan within 90 days of the maturity default, but the special servicer may collect and retain appropriate fees from the related borrower in connection with the subject liquidation or workout. |
In the case of an outside serviced loan combination, calculation of the foregoing amounts payable to the related outside servicer or outside special servicer may be different than as described above. For example, the extent to which modification fees and penalty fees are applied to offset expenses may be different and liquidation fees and workout fees may be subject to different caps or no caps. |
Operating Advisor | The operating advisor will, in general and under certain circumstances described in the Preliminary Prospectus, have the following rights and responsibilities with respect to the serviced mortgage loans: |
● | reviewing the actions of the special servicer with respect to specially serviced loans and with respect to certain major decisions regarding non-specially serviced loans as to which the operating advisor has consultation rights; |
● | reviewingreports provided by the special servicer to the extent set forth in the CGCMT 2019-GC41 pooling and servicing agreement; |
● | reviewing foraccuracy certain calculations made by the special servicer; |
● | issuing anannual report generally setting forth, among other things, its assessment of whether the special servicer is performing its duties in compliance with the servicing standard and the CGCMT 2019-GC41 pooling and servicing agreement and identifying any material deviations therefrom; |
● | recommending the replacement of the special servicer if the operating advisor determines, in its sole discretion exercised in good faith, that (1) the special servicer has failed to comply with the servicing standard and (2) a replacement of the special servicer would be in the best interest of the certificateholders and the holder of the Uncertificated VRR Interest (as a collective whole); and |
● | after theoccurrence and during the continuance of an Operating Advisor Consultation Trigger Event, consulting on a non-binding basis with the special servicer with respect to certain major decisions (and such other matters as are set forth in the CGCMT 2019-GC41 pooling and servicing agreement) in respect of the applicable serviced mortgage loan(s) and/or related companion loan(s). |
An “Operating Advisor Consultation Trigger Event” will occur when the aggregate outstanding certificate balance of the HRR Certificates (as notionally reduced by any Cumulative Appraisal Reduction Amount then allocable to the HRR Certificates) is 25% or less of the initial aggregate certificate balance of the HRR Certificates. With respect to excluded mortgage loans, an Operating Advisor Consultation Trigger Event will be deemed to exist. |
Notwithstanding the foregoing, the operating advisor will generally have no obligations or consultation rights as operating advisor under theCGCMT 2019-GC41pooling and servicing agreement with respect to any outside serviced mortgage loan or any related REO property. |
The operating advisor will be subject to termination and replacement if the holders of at least 15% of the voting rights of Non-Reduced Certificates vote to terminate and replace the operating advisor and such termination and replacement is affirmatively voted for by the holders of more than 50% of the voting rights allocable to the Non-Reduced Certificates of those holders that exercise their right to vote (provided that holders entitled to exercise at least 50% of the voting rights allocable to the Non-Reduced Certificates exercise their right to vote within 180 days of the initial request for a vote). The holders initiating such vote will be responsible for the fees and expenses in connection with the vote and replacement. |
See “The Pooling and Servicing Agreement—Operating Advisor”in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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STRUCTURAL OVERVIEW (continued) |
Asset Representations
Reviewer | The asset representations reviewer will be required to review certain delinquent mortgage loans after a specified delinquency threshold has been exceeded and the required percentage of certificateholders vote to direct a review of such delinquent mortgage loans. An asset review will occur when either (1) mortgage loans with an aggregate outstanding principal balance of 25% or more of the aggregate outstanding principal balance of all of the mortgage loans (including any REO loans) held by the issuing entity as of the end of the applicable collection period are at least 60 days delinquent in respect of their related monthly payments or balloon payment, if any (for purposes of this paragraph, “delinquent loans”) or (2) at least 15 mortgage loans are delinquent loans as of the end of the applicable collection period and the aggregate outstanding principal balance of such delinquent loans constitutes at least 20% of the aggregate outstanding principal balance of all of the mortgage loans (including any REO loans) held by the issuing entity as of the end of the applicable collection period. |
The asset representations reviewer may be terminated and replaced without cause. Upon (i) the written direction of certificateholders evidencing not less than 25% of the voting rights requesting a vote to terminate and replace the asset representations reviewer with a proposed successor asset representations reviewer that is an eligible asset representations reviewer, and (ii) payment by such holders to the certificate administrator of the reasonable fees and expenses to be incurred by the certificate administrator in connection with administering such vote, the certificate administrator will promptly provide notice of such request to all certificateholders and the asset representations reviewer by posting such notice on its internet website, and by mailing such notice to all certificateholders and the asset representations reviewer. Upon the affirmative vote of certificateholders evidencing at least 75% of the voting rights allocable to those holders that exercise their right to vote (provided that holders representing the applicable Certificateholder Quorum exercise their right to vote within 180 days of the initial request for a vote), the trustee will be required to terminate all of the rights and obligations of the asset representations reviewer under the CGCMT 2019-GC41 pooling and servicing agreement by written notice to the asset representations reviewer, and the proposed successor asset representations reviewer will be appointed. See “The Pooling and Servicing Agreement—The Asset Representations Reviewer in the Preliminary Prospectus. |
Dispute Resolution
Provisions | The mortgage loan sellers will be subject to the dispute resolution provisions set forth in the CGCMT 2019-GC41 pooling and servicing agreement to the extent those provisions are triggered with respect to any mortgage loan sold to the depositor by a mortgage loan seller and such mortgage loan seller will be obligated under the related mortgage loan purchase agreement to comply with all applicable provisions and to take part in any mediation or arbitration proceedings that may result. |
Generally, in the event that a Repurchase Request (as defined in the Preliminary Prospectus) is not “Resolved” (as defined below) within 180 days after the related mortgage loan seller receives such Repurchase Request, then the enforcing servicer will be required to send a notice to the “Initial Requesting Certificateholder” (if any) indicating the enforcing servicer’s intended course of action with respect to the Repurchase Request. If (a) the enforcing servicer’s intended course of action with respect to the Repurchase Request does not involve pursuing further action to exercise rights against the applicable mortgage loan seller with respect to the Repurchase Request and the Initial Requesting Certificateholder, if any, or any other certificateholder or certificate owner wishes to exercise its right to refer the matter to mediation (including nonbinding arbitration) or arbitration, or (b) the enforcing servicer’s intended course of action is to pursue further action to exercise rights against the related mortgage loan seller with respect to the Repurchase Request but the Initial Requesting Certificateholder, if any, or any other certificateholder or certificate owner does not agree with the dispute resolution method selected by the enforcing servicer, then the Initial Requesting Certificateholder, if any, or such other certificateholder or certificate owner may deliver a written notice to the enforcing servicer indicating its intent to exercise its right to refer the matter to either mediation or arbitration. In addition, any other certificateholder or certificate owner may deliver, within the time frame provided in the CGCMT 2019-GC41 pooling and servicing agreement, a written notice requesting the right to participate in any dispute resolution consultation that is conducted by the enforcing servicer following the enforcing servicer’s receipt of the notice described in the preceding sentence. |
“Resolved” means, with respect to a Repurchase Request, (i) that any material breach of representations and warranties or a material document defect has been cured, (ii) the related mortgage loan has been repurchased in accordance with the related mortgage loan purchase agreement, (iii) a mortgage loan has been substituted for the related mortgage loan in accordance with the related mortgage loan purchase agreement, (iv) the applicable mortgage loan seller has made a “loss of value payment”, (v) a contractually binding agreement has been entered into between the enforcing servicer, on behalf of the issuing entity, and the related mortgage loan seller that settles the related mortgage loan seller’s obligations under the related mortgage loan purchase agreement, or (vi) the related mortgage loan is no longer property of the issuing entity as a result of a sale or other disposition in accordance with the CGCMT 2019-GC41 pooling and servicing agreement. See “The Pooling and Servicing Agreement—Dispute Resolution Provisions” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
30
STRUCTURAL OVERVIEW (continued) |
Liquidated Loan Waterfall | On liquidation of any mortgage loan, all net liquidation proceeds related to the mortgage loan (but not any related companion loan) will be applied (after allocation to offset certain advances) so that amounts allocated as a recovery of accrued and unpaid interest will not, in the first instance, include any delinquent interest that was not advanced as a result of Appraisal Reduction Amounts or interest that accrued on any junior note(s) if such mortgage loan is an AB Modified Loan. After the adjusted interest amount is so allocated, any remaining liquidation proceeds will be allocated to pay principal on the mortgage loan until the unpaid principal amount of the mortgage loan has been reduced to zero. Any remaining liquidation proceeds will then be allocated to pay delinquent interest that was not advanced as a result of Appraisal Reduction Amounts and any interest that accrued on any junior note(s) if such mortgage loan is an AB Modified Loan. |
Credit Risk Retention | This securitization transaction will be subject to the credit risk retention rules of Section 15G of the Securities Exchange Act of 1934, as amended. An economic interest in the credit risk of the mortgage loans in this transaction is expected to be retained pursuant to risk retention regulations (as codified at 12 CFR Part 43) promulgated under Section 15G (“Regulation RR”), as a combination of (A) an “eligible vertical interest” in the form of the Combined VRR Interest, and (B) an “eligible horizontal residual interest” in the form of the HRR Certificates. Citi Real Estate Funding Inc. will act as retaining sponsor under Regulation RR for this securitization transaction and is expected, on the Closing Date, to partially satisfy its risk retention obligation through (i) the acquisition by each of Goldman Sachs Bank USA and Deutsche Bank AG, New York Branch (or, in each case, a “majority-owned affiliate” (as defined in Regulation RR) thereof) of a portion of the Combined VRR Interest, and (ii) the purchase by a third party purchaser of the HRR Certificates. For a further discussion of the manner in which the credit risk retention requirements are expected to be satisfied by Citi Real Estate Funding Inc., as retaining sponsor for this securitization transaction, see “Credit Risk Retention” in the Preliminary Prospectus. |
Combined VRR Interest | Prepayment Premiums and Yield Maintenance Charges. On each Distribution Date, the Vertically Retained Percentage of each yield maintenance charge and prepayment premium collected on the mortgage loans during the related collection period (or, in the case of an outside serviced mortgage loan, that accompanied a principal prepayment included in the aggregate available funds for such Distribution Date) will be required to be distributed to the holders of the Combined VRR Interest. |
Appraisal Reduction Amounts. On each Distribution Date, the Vertically Retained Percentage of any Appraisal Reduction Amounts will be allocated to the Combined VRR Interest to notionally reduce (to not less than zero) the principal balance thereof. |
Investor Communications | The certificate administrator is required to include on any Form 10–D any request received from a certificateholder to communicate with other certificateholders related to certificateholders exercising their rights under the terms of the CGCMT 2019-GC41 pooling and servicing agreement. Any certificateholder wishing to communicate with other certificateholders regarding the exercise of its rights under the terms of the CGCMT 2019-GC41 pooling and servicing agreement will be able to deliver a written request signed by an authorized representative of the requesting investor to the certificate administrator. |
Deal Website | The certificate administrator will maintain a deal website including, but not limited to: |
—all special notices delivered. |
—summaries of final asset status reports. |
—all appraisals in connection with an appraisal reduction plus any subsequent appraisal updates. |
—an “Investor Q&A Forum” and a voluntary investor registry. |
Cleanup Call | On any Distribution Date on which the aggregate unpaid principal balance of the mortgage loans remaining in the issuing entity is less than 1% of the aggregate principal balance of the pool of mortgage loans as of the Cut-off Date, certain specified persons will have the option to purchase all of the remaining mortgage loans (and all property acquired through exercise of remedies in respect of any mortgage loan) at the price specified in the Preliminary Prospectus. Exercise of the option will terminate the issuing entity and retire the then outstanding certificates and the Uncertificated VRR Interest. |
If the aggregate certificate balances of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-AB, Class A-S, Class B, Class C, Class D and Class E certificates and the notional amounts of the Class X-A, Class X-B and Class X-D certificates have been reduced to zero and certain other conditions specified in the CGCMT 2019-GC41 pooling and servicing agreement are satisfied, the issuing entity could also be terminated in connection with an exchange of all the then-outstanding certificates (excluding the Class S and Class R certificates) and the Uncertificated VRR Interest for the mortgage loans remaining in the issuing entity, as further described under “The Pooling and Servicing Agreement—Optional Termination; Optional Mortgage Loan Purchase” in the Preliminary Prospectus. |
The Offered Certificates involve certain risks and may not be suitable for all investors. For information regarding certain risks associated with an investment in the Offered Certificates, see “Risk Factors” in the Preliminary Prospectus. Capitalized terms used but not otherwise defined in this Term Sheet have the respective meanings assigned to those terms in the Preliminary Prospectus.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
31
LOAN #1: 30 HUDSON YARDS
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
32
LOAN #1: 30 HUDSON YARDS
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
33
LOAN #1: 30 HUDSON YARDS
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
34
LOAN #1: 30 HUDSON YARDS
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
35
LOAN #1: 30 HUDSON YARDS
Mortgaged Property Information | Mortgage Loan Information | |||||
Number of Mortgaged Properties | 1 | Loan Seller(2) | GACC, GSMC | |||
Location (City/State) | New York, New York | Cut-off Date Balance(3) | $100,000,000 | |||
Property Type | Office | Cut-off Date Balance per SF(1) | $765.43 | |||
Size (SF) | 1,463,234 | Percentage of Initial Pool Balance | 7.8% | |||
Total Occupancy as of 8/6/2019 | 100.0% | Number of Related Mortgage Loans | None | |||
Owned Occupancy as of 8/6/2019 | 100.0% | Type of Security | Fee Simple | |||
Year Built / Latest Renovation | 2019 / NAP | Mortgage Rate(4) | 3.11000% | |||
Appraised Value | $2,200,000,000 | Original Term to Maturity (Months) | 120 | |||
Appraisal Date | 5/23/2019 | Original Amortization Term (Months) | NAP | |||
Borrower Sponsor | 30 HY WM REIT Owner LP | Original Interest Only Period (Months) | 120 | |||
Property Management | Self-Managed | First Payment Date | 8/6/2019 | |||
Maturity Date | 7/6/2029 | |||||
Underwritten Revenues | $164,291,079 | |||||
Underwritten Expenses | $42,267,893 | Escrows(5) | ||||
Underwritten Net Operating Income (NOI) | $122,023,186 | Upfront | Monthly | |||
Underwritten Net Cash Flow (NCF) | $121,730,539 | Taxes | $0 | $0 | ||
Cut-off Date LTV Ratio(1) | 50.9% | Insurance | $0 | $0 | ||
Maturity Date LTV Ratio(1) | 50.9% | Replacement Reserve(6) | $0 | $0 | ||
DSCR Based on Underwritten NOI / NCF(1) | 3.46x / 3.45x | TI/LC | $0 | $0 | ||
Debt Yield Based on Underwritten NOI / NCF(1) | 10.9% / 10.9% | Other | $0 | $0 | ||
Sources and Uses | ||||||
Sources | $ | % | Uses | $ | % | |
Loan Combination Amount | $1,430,000,000 | 64.6% | Purchase Price | $2,155,000,000 | 97.4% | |
Borrower Sponsor Equity | 781,978,273 | 35.4 | Closing Costs | 56,978,273 | 2.6 | |
Total Sources | $2,211,978,273 | 100.0% | Total Uses | $2,211,978,273 | 100.0% |
(1) | Calculated based on the aggregate outstanding principal balance as of the Cut-off Date of the 30 Hudson Yards Senior Notes and excludes the 30 Hudson Yards Junior Notes. |
(2) | The 30 Hudson Yards Loan is part of a loan combination that was co-originated by Deutsche Bank AG, New York Branch (“DBNY”), Goldman Sachs Bank USA and Wells Fargo Bank, National Association. German American Capital Corporation (“GACC”) is selling the 30 Hudson Yards Senior Notes A-1-C6 and A-1-C8 with an aggregate original principal amount of $70.0 million and Goldman Sachs Mortgage Company (“GSMC”) is selling the 30 Hudson Yards Senior Note A-2-C2 with an original principal amount of $30.0 million. |
(3) | The Cut-off Date Balance of $100,000,000 represents the non-controlling note A-1-C6, note A-1-C8 and note A-2-C2, and is part of the 30 Hudson Yards Loan Combination, which is evidenced by 29pari passu senior notes and three junior notes, and has an aggregate outstanding principal balance as of the Cut-off Date of $1,430,000,000. See“—The Mortgage Loan” below. |
(4) | The Mortgage Rate of 3.11000% represents the mortgage rate of the 30 Hudson Yards Senior Notes. |
(5) | See “—Escrows” below. |
(6) | On each payment date from and after July 6, 2024, the borrower will be required to make monthly deposits into the replacement reserve in an amount equal to 1/12th of $0.20 per rentable square foot. |
■ | The Mortgage Loan.The mortgage loan (the “30 Hudson Yards Loan”) is secured by a first mortgage encumbering the borrower’s fee simple interest in a Class A office condominium located in New York, New York (the “30 Hudson Yards Property”), and is part of a loan combination (the “30 Hudson Yards Loan Combination”) evidenced by 29pari passu senior notes with an aggregate initial principal balance of $1,120,000,000 (collectively the “30 Hudson Yards Senior Notes”) and three junior notes with an aggregate initial principal balance of $310,000,000 (collectively the “30 Hudson Yards Junior Notes”). A portion of the 30 Hudson Yards Senior Notes, with an aggregate balance of $698.0 million and the 30 Hudson Yards Junior Notes were contributed to the Hudson Yards 2019-30HY Trust. The 30 Hudson Yards Loan, which is evidenced by the non-controlling note A-1-C6, note A-1-C8 and note A-2-C2, has an aggregate outstanding principal balance as of the Cut-off Date of $100,000,000 and represents approximately 7.8% of the Initial Pool Balance. The remaining 30 Hudson Yards Senior Notes are currently held by DBNY,Goldman Sachs Bank USA (“GSBI”)andWells Fargo Bank, National Association(“WFB”), as presented in the chart below, and are expected to be contributed to one or more future commercial mortgage securitization transactions. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
36
LOAN #1: 30 HUDSON YARDS
Loan Combination Summary | |||||||
Note | Original Balance | Cut-off Date Balance | Note Holder | Controlling Piece | |||
A-1-S1, A-1-S2, A-1-S3, A-2-S1, A-2-S2, A-2-S3, A-1-C1, A-1-C2, A-1-C9, A-2-C1, A-3-S1, A-3-S2, A-3-S3 | $698,000,000 | $698,000,000 | Hudson Yards 2019-30HY | No(1) | |||
A-1-C6, A-1-C8, A-2-C2 | $100,000,000 | $100,000,000 | CGCMT 2019-GC41 | No | |||
A-1-C4, A-1-C5, A-1-C10 | $93,200,000 | $93,200,000 | Benchmark 2019-B12(2) | No | |||
A-1-C7 | $40,000,000 | $40,000,000 | DBNY(3) | No | |||
A-1-C3, A-2-C3, A-2-C4, A-2-C5 | $104,400,000 | $104,400,000 | GSBI(4) | No | |||
A-3-C1, A-3-C2, A-3-C3, A-3-C4, A-3-C5 | $84,400,000 | $84,400,000 | WFB(4) | No | |||
B-1, B-2, B-3 | $310,000,000 | $310,000,000 | Hudson Yards 2019-30HY | Yes(1) | |||
Total | $1,430,000,000 | $1,430,000,000 |
(1) | The holder of the 30 Hudson Yards Junior Notes will have the right to appoint the special servicer of the 30 Hudson Yards Loan Combination and to direct certain decisions with respect to the 30 Hudson Yards Loan Combination, unless a control appraisal event exists under the related co-lender agreement; provided that after the occurrence of a control appraisal event with respect to the 30 Hudson Yards Junior Notes, the holder of the 30 Hudson Yards Note A-1-S1 will have such rights. |
(2) | Expected to be contributed to the Benchmark 2019-B12 transaction. |
(3) | DBNY expects to transfer Note A-1-C7 to DBR Investments Co. Limited and contribute such note to one or more future securitizations. |
(4) | Expected to be contributed to one or more future securitization transactions. |
The 30 Hudson Yards Senior Notes have an interest rate of 3.11000%per annum and the 30 Hudson Yards Junior Notes have an interest rate of 4.21709677%per annum, resulting in a weighted average interest rate of 3.35000%per annum on the 30 Hudson Yards Loan Combination. The proceeds of the 30 Hudson Yards Loan Combination and a new cash contribution from the borrower sponsor were primarily used to fund the acquisition of the 30 Hudson Yards Property and pay closing costs. The 30 Hudson Yards Loan received a credit assessment of A-sf by Fitch and A (high)(sf) by DBRS.
The 30 Hudson Yards Loan Combination had an initial term of 120 months, has a remaining term of 119 months as of the Cut-off Date and requires monthly payments of interest-only for the term of the 30 Hudson Yards Loan Combination. The scheduled maturity date of the 30 Hudson Yards Loan Combination is July 6, 2029. At any time after the earlier to occur of (i) the second anniversary of the securitization closing date of the final real estate mortgage investment conduit that includes that last portion of the 30 Hudson Yards Loan Combination and (ii) June 14, 2022, the 30 Hudson Yards Loan Combination may be (i) defeased with direct, non-callable obligations of the United States of America or other obligations which are “government securities” permitted under the loan documents or (ii) prepaid with a payment of a yield maintenance premium. Voluntary prepayment of the 30 Hudson Yards Loan Combination is permitted on or after March 6, 2029 without payment of any prepayment premium.
■ | The Mortgaged Property. The 30 Hudson Yards Property is comprised of a 1,463,234 square feet office condominium designated as the Time Warner Unit located across 26 floors within the larger 30 Hudson Yards building in New York, New York. The larger 30 Hudson Yards Building was constructed in 2019 and consists of approximately 2.6 million square feet across 68 floors (the “30 Hudson Yards Building”). The 30 Hudson Yards Building, which is 1,296 feet tall and is the second tallest office building in New York City, is designed to achieve LEED Core & Shell Gold certification, features panoramic views, outdoor terraces, a triple-height lobby, the highest outdoor observation deck in the city, direct access to restaurants and retail at The Shops at Hudson Yards and a future underground connection to the new No. 7 subway station. Collateral for the 30 Hudson Yards Loan Combination is comprised of the WarnerMedia unit, which consists of 1,463,234 rentable square feet across 26 floors (construction floors 12 through 38 and display floors 16 through 51) within the 30 Hudson Yards Building (the “WarnerMedia Unit”). Four floors are used for amenity space including a fitness center, a cafeteria, technology bar and a sky lobby. Only the WarnerMedia Unit is collateral for the 30 Hudson Yards Loan Combination. |
The 30 Hudson Yards Property is subject to a condominium declaration. The 20-30 Hudson Yards Condominium is comprised of eight units: the WarnerMedia Unit (36.09% common interest), the Retail Unit (33.39% common interest), five office units (28.04% common interest collectively) and the Observation Deck Unit (2.48% common interest). In addition to the subject WarnerMedia Unit, the five office units and the Observation Deck Unit are located at the 30 Hudson Yards Building. The Retail Unit consists of the Shops at Hudson Yards, and is located adjacent to the 30 Hudson Yards Property at 20 Hudson Yards.
The borrower acquired the 30 Hudson Yards Property from TW NY Properties LLC, a wholly-owned subsidiary of Warner Media LLC (“WarnerMedia”) for $2.155 billion ($1,473 PSF) in a sale-leaseback transaction. WarnerMedia previously acquired the WarnerMedia Unit following the 2014 sale of its existing headquarters, Time Warner Center at Columbus Circle.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
37
LOAN #1: 30 HUDSON YARDS
As of August 6, 2019, the 30 Hudson Yards Property was 100.0% occupied by WarnerMedia. WarnerMedia, who along with parent company AT&T Inc. (“AT&T”; rated Baa2/BBB/A- by Moody’s/S&P/Fitch), has reportedly invested approximately $700 million ($478 PSF) on the fit-out of its space and at loan origination, entered into a direct 15-year triple-net lease with the borrower for the entire 30 Hudson Yards Property. WarnerMedia is in the process of consolidating all of its New York-based business segments, including Turner, HBO, Warner Bros. and CNN, into 30 Hudson Yards which will serve as WarnerMedia’s global headquarters and is expected to host approximately 5,000 employees.
WarnerMedia (formerly Time Warner Inc.) is a media and entertainment with businesses in television networks, film and TV entertainment and publishing. Comprised of HBO, Turner, and Warner Bros., WarnerMedia creates premium content, operating one of the world’s largest television and film studios, and owning a vast library of entertainment. As of December 31, 2017, WarnerMedia had approximately 26,000 employees. Prior to being acquired by AT&T, Time Warner Inc. was rated Baa2/BBB/A- by Moody’s/S&P/Fitch.
The WarnerMedia lease is a direct 15-year triple-net lease for the entire WarnerMedia Unit comprising 1,463,234 rentable square feet across 26 floors (construction floors 12 through 38 and display floors 16 through 51) within the 30 Hudson Yards Building, at an initial base rent of $75.00 PSF with 2.5% annual rent escalations. AT&T is the guarantor on the WarnerMedia lease. The WarnerMedia lease includes four, five-year extension options each at 100% of fair market rent. The WarnerMedia lease was signed in conjunction with loan origination in June 2019. There are no free rent periods or outstanding tenant improvements or leasing costs.
Additionally, the WarnerMedia lease is structured with a contraction option for up to 10 floors totaling 404,325 square feet (27.6% of rentable square feet) (the“Contraction Space”) where, on June 14, 2024, the 5th anniversary of the lease commencement date, WarnerMedia has the right to contract one or more contiguous full floors comprising floors 42 through 51. In connection with the contraction option, WarnerMedia is required to pay a contraction fee to the borrower equal to $24,000,000 for each floor contracted (the“Contraction Payment”). If WarnerMedia elects to contract more than three floors, the borrower is required to deposit with the lender an amount equal to $125 PSF of the contracted space in excess of the highest three floors, to be held by the lender and held as additional collateral for the 30 Hudson Yards Loan Combination (the“Contraction Escrow”), with the balance of the Contraction Payment (including with respect to the highest three floors), after payment of any amounts owed to the WarnerMedia tenant and all costs incurred in connection with the contraction, distributed to the borrower, or if a Trigger Period (defined below) exists, deposited with the lender as additional collateral for the 30 Hudson Yards Loan Combination. The Contraction Escrow will be released to the borrower in connection with the borrower’s re-leasing of the Contraction Space (or any portion of such space, subject to a cap of $125 PSF of re-let space, calculated in the aggregate across all re-let Contraction Space) with Qualified Leases that are in full force and effect in order to pay for the cost of tenant improvements, leasing commissions, leasing costs and other landlord obligations with respect to such replacement lease and (if any remaining portion of such $125 PSF cap remains after application or allocation to the foregoing amounts) to cover the payment of base rent during any initial free rent period under such replacement leases. Once all the subject Contraction Space has been re-let, any remaining funds in the Contraction Escrow after payment of such costs and the expiration of such initial free rent periods (determined on a per square foot basis), or retention in the Contraction Escrow of amounts sufficient to pay the same, will be disbursed to the borrower, or if a Trigger Period exists, deposited with the lender as additional collateral for the 30 Hudson Yards Loan Combination.
A“Qualified Lease” means a replacement lease (i) with a term that extends at least five years beyond the maturity date to at least July 6, 2034; (ii) entered into in accordance with the 30 Hudson Yards Loan Combination documents and (iii) on market terms with respect to, among other things, base rent, additional rent and recoveries and tenant improvement allowances.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
38
LOAN #1: 30 HUDSON YARDS
The following table presents certain information relating to the sole tenant at the 30 Hudson Yards Property:
Largest Owned Tenant Based on Underwritten Base Rent(1)
Tenant Name | Credit Rating (Fitch/MIS/S&P)(2) | Tenant | % of GLA | UW Base | % of Total | UW Base | UW Gross | UW Gross | Lease Expiration | Renewal / |
WarnerMedia | A- / Baa2 / BBB | 1,463,234 | 100.0% | $109,742,550 | 100.0% | $75.00 | $152,010,443 | $103.89 | 6/30/2034 | 4, 5-year options |
All Tenants | 1,463,234 | 100.0% | $109,742,550 | 100.0% | $75.00 | $152,010,443 | $103.89 | |||
Vacant | 0 | 0.0 | 0 | 0.0 | 0.00 | 0 | 0.00 | |||
Total / Wtd. Avg. All Owned Tenants | 1,463,234 | 100.0% | $109,742,550 | 100.0% | $75.00 | $152,010,443 | $103.89 |
(1) | Based on the rent roll dated June 14, 2019. |
(2) | Credit Ratings are those of the parent company and guarantor on the WarnerMedia lease, AT&T. |
(3) | UW Gross Rent and UW Gross Rent $ per SF represents the base rent of $75.00 PSF plus underwritten reimbursements of $42,267,893 ($28.89 PSF), which are based on the 100% triple-net structure of the WarnerMedia lease. |
The following table presents certain information relating to the lease rollover schedule at the 30 Hudson Yards Property, based on the initial lease expiration date:
Lease Expiration Schedule(1)(2)
Year Ending December 31 | Expiring Owned GLA | % of Owned GLA | Cumulative % of Owned GLA | UW Base Rent | % of Total UW | UW Base Rent $ per SF | # of Expiring | |||||||||||||
MTM | 0 | 0.0% | 0.0 | % | $0 | 0.0% | $0.00 | 0 | ||||||||||||
2019 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||
2020 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||
2021 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||
2022 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||
2023 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||
2024 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||
2025 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||
2026 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||
2027 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||
2028 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||
2029 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||
2030 & Thereafter | 1,463,234 | 100.0 | 100.0 | % | 109,742,550 | 100.0 | 75.00 | 1 | ||||||||||||
Vacant | 0 | 0.0 | 100.0 | % | NAP | NAP | NAP | NAP | ||||||||||||
Total / Wtd. Avg. | 1,463,234 | 100.0% | $109,742,550 | 100.0% | $75.00 | 1 |
(1) | The tenant has contraction options that may become exercisable prior to the originally stated expiration date of the tenant lease that are not considered in this rollover schedule. |
(2) | Based on the underwritten rent roll dated June 14, 2019. |
The following table presents certain information relating to historical leasing at the 30 Hudson Yards Property:
Historical Leased %(1)(2)
| 2015 | 2016 | 2017 | 2018 | As of 8/6/2019 |
Owned Space | NAP | NAP | NAP | NAP | 100.0% |
(1) | Based on the underwritten rent roll dated June 14, 2019. |
(2) | The 30 Hudson Yards Property was completed in 2019, therefore there is no historical leasing information. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #1: 30 HUDSON YARDS
■ | Underwritten Net Cash Flow. The following table presents certain information relating to the Underwritten Net Cash Flow at the 30 Hudson Yards Property: |
Cash Flow Analysis
Underwritten | Underwritten | ||
Base Rent | $109,742,550 | $75.00 | |
Rent Steps(1) | 2,743,564 | 1.88 | |
Straight Line Rent Credit(2) | 14,618,240 | 9.99 | |
Gross Up Vacancy | 0 | 0.00 | |
Reimbursements | 42,267,893 | 28.89 | |
Other Income | 0 | 0.00 | |
Vacancy & Credit Loss(3) | (5,081,167) | (3.47) | |
Effective Gross Income | $164,291,079 | $112.28 | |
Real Estate Taxes (PILOT)(4) | $21,270,425 | $14.54 | |
Insurance | 1,547,918 | 1.06 | |
Condo Association Fees | 5,847,159 | 4.00 | |
Management Fee(5) | 1,000,000 | 0.68 | |
Other Operating Expenses | 12,602,391 | 8.61 | |
Total Operating Expenses | $42,267,893 | $28.89 | |
Net Operating Income | $122,023,186 | $83.39 | |
TI/LC | 0 | 0.00 | |
Capital Expenditures | 292,647 | 0.20 | |
Net Cash Flow | $121,730,539 | $83.19 | |
Occupancy(6) | 100.0% | ||
NOI Debt Yield(7) | 10.9% | ||
NCF DSCR(8) | 3.45x |
(1) | Underwritten Rent Steps includes the first annual rent step to $76.88 PSF in June 2020. |
(2) | Straight Line Rent Credit given to (i) the WarnerMedia non-contraction space through the fully-extended lease term and (ii) the WarnerMedia Contraction Space through June 2024 (contraction option year 5). |
(3) | Vacancy & Credit Loss represents an underwritten economic vacancy of 3.0%. |
(4) | Real Estate Taxes (PILOT) is underwritten to the average of the projected PILOT payments over the 15-year lease term. |
(5) | Management Fee is set to 1.5% of Effective Gross Income as calculated under the management agreement, capped at $1.0 million. |
(6) | Occupancy is based on the underwritten rent roll dated June 14, 2019. |
(7) | NOI Debt Yield is calculated based on the aggregate outstanding principal balance as of the Cut-off Date of the 30 Hudson Yards Senior Notes. |
(8) | NCF DSCR is based on the interest only debt service payments of the 30 Hudson Yards Senior Notes. |
■ | Appraisal. According to the appraisal, the 30 Hudson Yards Property had an “as-is” appraised value of $2,200,000,000 as of an effective date of May 23, 2019. |
Appraisal Approach | “As-Is” Value | Discount Rate | Capitalization Rate |
Direct Capitalization Approach | $2,225,000,000 | N/A | 4.75% |
Discounted Cash Flow Approach | $2,200,000,000 | 5.75% | 5.25%(1) |
(1) | Represents the terminal capitalization rate. |
■ | Environmental Matters. According to a Phase I environmental report, dated May 30, 2019, the environmental consultant did not identify evidence of any recognized environmental conditions. |
■ | Market Overview and Competition. The 30 Hudson Yards Property is located at 530 West 33rd Street on the southwest corner of 33rd Street and 10th Avenue in New York, New York. Per the appraisal, the Manhattan office market saw leasing velocity rise 46.0% in Q4 2018 on a year-over-year basis and up 43.9% when compared to the ten-year average. Manhattan leasing in Q4 2018 was one of the strongest on record for the 2018 year, totaling 43.2 million square feet. As of Q1 2019, average asking rents in Manhattan were $76.12 PSF, slightly down from the 2018 average of $76.30 PSF. Availability saw a slight increase from 12.2% to 12.3% from year-end 2018 to Q1 2019. Midtown average asking rents remained flat for Q1 2019, at $82.02 PSF. The Far West Side, Plaza District, and Park Avenue submarkets represent the three highest overall asking rents in all of Manhattan, with all 3 submarkets averaging above $100 PSF. These submarkets tend to have higher rents due to newer, boutique office product, high demand, and high leasing activity. Midtown Manhattan has a higher mix of Class A trophy buildings that range from the new construction occurring in Hudson Yards and Midtown East, to the classic, staple buildings located along Park Avenue and Plaza District. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #1: 30 HUDSON YARDS
Hudson Yards is an approximately 28-acre area on the far West Side of Manhattan, bounded by West 30th St., West 33rd Street, 10th Avenue and 12th Avenue. Hudson Yards is the cornerstone of the greater Hudson Yards District, which recently has been rezoned to accommodate nearly 40 million square feet of new mixed-use development. Due to the rezoning, the Hudson Yards District has the capacity to include approximately 26 million square feet of new office development, approximately 20,000 housing units, approximately three million square feet of hotel space, a public school, approximately two million square feet of retail space and more than 20 acres of public open space. The neighborhood transformation will be facilitated by the recently-completed extension of the No. 7 subway line from Grand Central Station, with the final station located immediately adjacent to the Hudson Yards site.
The 30 Hudson Yards Property is located in the Far West Side submarket of Manhattan. As of Q1 2019, the submarket was home to approximately 6.9 million square feet of commercial real estate space, with a vacancy rate of 2.4% and average asking rent of $119.03 PSF. The Far West Side submarket has transformed in recent years due to the establishment of the Hudson Yards development. This development has encompassed a variety of office buildings, residential buildings, retail stores and parks. Many office tenants have decided to relocate from Midtown to the Far West Side. As a result of the new developments, average asking rents increased approximately 18.5% throughout 2017 from $100.38 PSF as of Q1 2017 to $118.94 PSF as of Q4 2017. For the same time period, the average vacancy rate decreased from 20.7% as of Q1 2017 to 3.8% as of Q4 2017. Both average asking rent and the vacancy rate have slightly improved as of Q1 2019 at $119.03 PSF and 2.4%, respectively.
In order to compare contract rent at the 30 Hudson Yards Property with market standards, the appraiser adjusted the base rent to reflect the modified gross equivalent rent. The appraisal’s modified gross equivalent contract rent at the 30 Hudson Yards Property was $106.01 PSF, which includes contract rent of $75.00 PSF, real estate taxes of $13.85 PSF and operating expenses of $17.15 PSF. The appraisal determined a modified gross equivalent market rent at the 30 Hudson Yards Property of $100.00 PSF for floors 16 through 24, $110.00 PSF for floors 35 through 43 and $120.00 PSF for floors 44 through 51, for an overall average of $108.24 PSF. The WarnerMedia lease provides for an initial base rent of $75.00 PSF for all floors.
The following chart summarizes comparable office leases per the appraisal. Due to the lack of large single tenant building leases available in the marketplace, the appraiser identified comparable single-tenant and large headquarter leases within comparable properties that would directly compete with the WarnerMedia lease. The most comparable leases to the WarnerMedia lease are Deutsche Bank’s recent lease at Time Warner Center and Blackrock’s lease at 50 Hudson Yards:
Large Headquarter and Net Lease Comparables(1)
Property Name | Tenant Name | Lease Year | Term (mos.) | Tenant Size (SF) | Contract Net | Modified Gross | Free |
30 Hudson Yards Property | WarnerMedia | 2019 | 120 | 1,463,234 | $75.00(2) | $106.01 | 0 |
50 Hudson Yards | Blackrock | 2017 | 264 | 847,081 | $91.00 | $128.50 | 21 |
1100 Avenue of the Americas | Bank of America | 2018 | 240 | 357,940 | NAP | $118.00 | 17 |
424 Fifth Avenue | WeWork | 2018 | 240 | 697,029 | $108.74 | $129.97 | 12 |
One Columbus Circle | Deutsche Bank | 2019 | 264 | 1,063,104 | $73.01 | $119.00 | 15 |
Total / Wtd. Avg.(3) | 255 | 2,965,154 | $88.41 | $124.17 | 16 |
(1) | Source: Appraisal. |
(2) | Based on the underwritten rent roll dated June 14, 2019. |
(3) | Total / Wtd. Avg. excludes the 30 Hudson Yards Property. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #1: 30 HUDSON YARDS
Summary of Comparable Office Leases(1)
Property Name | Tenant Name | Lease Year | Term (mos.) | Lease Type | Tenant Size (SF) | Base Rent PSF | Free Rent (mos.) |
55 Hudson Yards | Apple | Feb-2019 | 135 | Modified Gross | 29,881 | $104.00 | 12 |
520 Madison Avenue | Madison Realty Capital | Feb-2019 | 128 | Modified Gross | 19,000 | $118.00 | 8 |
425 Park Avenue | Citadel | Jan-2019 | 150 | Modified Gross | 161,200 | $178.27 | 14 |
1095 Avenue of the Americas | Lloyds Bank | Jan-2019 | 120 | Modified Gross | 34,846 | $150.00 | 0 |
1114 Avenue of the Americas | Vinson & Elkins, LLP | Jan-2019 | 192 | Modified Gross | 76,497 | $95.00 | 12 |
50 Hudson Yards | Confidential | Jan-2019 | 120 | Modified Gross | 400,000 | $110.00 | 18 |
1 Vanderbilt Avenue | TD Securities | Dec-2018 | 198 | Modified Gross | 118,872 | $130.00 | 18 |
55 Hudson Yards | Third Point | Nov-2018 | 120 | Modified Gross | 89,043 | $130.00 | 13 |
1114 Avenue of the Americas | The Trade Desk | Nov-2018 | 144 | Modified Gross | 95,580 | $139.00 | 12 |
441 Ninth Avenue | Peloton Interactive, LLC | Nov-2018 | 180 | Modified Gross | 312,000 | $106.66 | 22.5 |
55 Hudson Yards | Vista Equity Partners | Nov-2018 | 192 | Modified Gross | 28,429 | $104.00 | 13 |
1271 Avenue of the Americas | Bessemer Trust Company | Sep-2018 | 264 | Modified Gross | 236,631 | $107.00 | 0 |
1 Vanderbilt Avenue | The Carlyle Group | July-2018 | 189 | Modified Gross | 95,367 | $166.00 | 9 |
66 Hudson Boulevard | AllianceBernstein | May-2018 | 240 | Modified Gross | 186,226 | $105.00 | 16 |
390 Madison Avenue | JP Morgan Chase | Mar-2018 | 128 | Modified Gross | 417,157 | $94.40 | 20 |
Total / Wtd. Avg. | 168 | 2,300,729 | $116.14 | 15 |
(1) | Source: Appraisal. |
■ | The Borrower. The borrower is 30 HY WM Unit Owner LP, a single-purpose, single-asset entity with two independent directors. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the 30 Hudson Yards Loan Combination. The sponsor of the borrower, 30 HY WM REIT Owner LP (the “Borrower Sponsor”), is a joint venture among RSA 30 HY WM LLC (the “Related Partner”), RFM Cactus NYSS 30HY Sub LLC (the “ASRS/Related JV”), Allianz U.S. Private REIT LP (“Allianz REIT”) and APKV US Private REIT LP (“APKV REIT”). The Related Partner holds 1.01% direct equity interest of the Borrower Sponsor, ASRS/Related JV holds 49.99% direct equity interest of the Borrower Sponsor, APKV REIT holds 4.9% direct equity interest of the Borrower Sponsor, and Allianz REIT holds 44.1% direct equity interest of the Borrower Sponsor. The 30 Hudson Yards Loan Combination is recourse to the borrower, and there is no separate recourse guarantor. |
The Related Companies, L.P. (“Related”) is a privately owned real estate firm in the United States. Founded by Stephen M. Ross in 1972, Related is a fully integrated, highly diversified company with experience in development, acquisition, management, finance, marketing and sales. Headquartered in New York City, Related has offices and major developments in Boston, Chicago, Los Angeles, San Francisco, South Florida, Washington, DC and London, and has a team of approximately 4,000 professionals.
Arizona State Retirement System (“ASRS”) is a state agency that administers a pension plan, long term disability plan, retiree health insurance plans and other benefits to qualified government workers for the state of Arizona. More than a half-million of Arizona’s public servants belong to the ASRS, which encompasses state employees, the three state universities, community college districts, school districts and charter schools, all 15 counties, most cities and towns, and a variety of political subdivisions, such as fire and water districts.
Allianz is a European financial services company headquartered in Munich, Germany with core businesses in insurance and asset management. As of year-end 2018, the Allianz had approximately €1,961 billion of assets under management. In the United States, investment advisory services are provided by AllianzGlobal Investors Capital, Allianz Global Investors Solutions and PIMCO.
■ | Escrows. The 30 Hudson Yards Loan Combination did not require upfront reserves. |
During a Trigger Period, the borrower is required to fund the following reserves with respect to the 30 Hudson Yards Loan Combination: (i) a tax reserve in an amount equal to 1/12th of the amount that the lender estimates will be necessary to pay taxes over the then succeeding 12-month period, (ii) if an acceptable blanket policy is not in place, an insurance reserve in an amount equal to 1/12th of the amount that the lender estimates will be necessary to pay insurance premiums over the then succeeding 12-month period, (iii) a replacement reserve in an amount equal to 1/12th of $0.20 PSF and (iv) a condominium reserve in an amount equal to 1/12th of the amount that the lender estimates will be necessary to pay common charges over the then succeeding 12-month period.
In addition, regardless of whether a Trigger Period exists, on each payment date from and after July 6, 2024, replacement reserves will be required in a monthly amount equal to 1/12th of $0.20 PSF.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #1: 30 HUDSON YARDS
■ | Lockbox and Cash Management. The 30 Hudson Yards Loan Combination is structured with a hard lockbox and springing cash management. During the continuance of a Trigger Period, the borrower is required to send tenant direction letters to all tenants of the 30 Hudson Yards Property instructing them to deposit all rents and other payments into the lockbox account controlled by the lender, and any funds received by the borrower or the property manager are required to be immediately deposited in the lockbox account. During a Trigger Period, all funds in the lockbox account are required to be transferred on each business day into a cash management account established for the sole and exclusive benefit of the lender, and applied to all required payments and reserves as set forth in the 30 Hudson Yards Loan Combination documents, and all property costs and expenses contained in the lender-approved budget, and thereafter, minimum distributions to holders of preferred shares issued by the REIT in a maximum amount not to exceed $100,000per annumand all property costs and expenses contained in the lender-approved budget, and thereafter, minimum distributions to holders of preferred shares issued by the REIT in a maximum amount not to exceed $100,000per annum, with any excess funds being held by the lender in a lease sweep reserve or cash collateral account, as applicable, as additional collateral for the 30 Hudson Yards Loan Combination. Under certain circumstances and for limited purposes described in the 30 Hudson Yards Loan Combination documents, the borrower may request disbursements of such excess cash flow. |
A “Trigger Period” means a period during which (i) an event of default under the 30 Hudson Yards Loan Combination documents has occurred until cured, (ii) the debt yield falling below 6.50% for any calendar quarter (“Low Debt Yield Trigger”) until the debt yield is equal to or greater than 6.50% for two consecutive calendar quarters or (iii) upon the occurrence of a Lease Sweep Period until such Lease Sweep Period is cured as described below. In addition, the borrower has the right to cure a Low Debt Yield Trigger by delivering cash collateral or an acceptable letter of credit to the lender in an amount that, if applied to reduce the outstanding principal balance of the 30 Hudson Yards Loan Combination, would cause the debt yield test to be satisfied.
Notwithstanding the foregoing, so long as the WarnerMedia lease remains in full force and effect, in the event the debt yield falls below the Low Debt Yield Trigger as a result of the WarnerMedia tenant’s exercise of its contraction right with respect to any Contraction Space, the foregoing minimum debt yield requirement and cash flow sweep upon a Low Debt Yield Trigger will not apply until such time as the debt yield has increased to (or above) the Low Debt Yield Trigger (in which event, and thereafter, the minimum debt yield requirement, and cash flow sweep upon a Low Debt Yield Trigger, will again be applicable). Any letters of credit provided as described above are subject to an aggregate cap of 10% of the loan amount and other criteria to be set forth in the 30 Hudson Yards Loan Combination documents.
A “Lease Sweep Period” will occur upon or during (a) a bankruptcy, insolvency or similar events of the Major Tenant or lease guarantor, (b) failure to pay base rent or other material monetary or material nonmonetary defaults by a Major Tenant under its Major Lease beyond all notice and cure periods thereunder, (c) the Major Tenant going dark (i.e. ceases operations at its leased premises with respect to a portion of its leased premises such that the Major Tenant is no longer operating 800,000 rentable square feet (less contraction space that has been relet)), with subleases not counting as dark space except during the last two years of the term of the 30 Hudson Yards Loan Combination, (d) notice of (or actual) termination, cancellation, surrender, contraction of a portion of its leased premises such that the Major Tenant is no longer occupying 800,000 gross square feet or non-renewal of such Major Tenant’s lease, or (e) upon a decline in the credit rating of AT&T (or of any lease guarantor of a replacement tenant that has a rating of at least “BB-” at the time of replacement) below “BB-” or the equivalent by any of the rating agencies. For the avoidance of doubt, the exercise by the WarnerMedia tenant of its contraction option for all or any portion of the Contraction Space will not, in and of itself, constitute a Lease Sweep Period.
A Lease Sweep Period may be cured as follows: (i) with respect to any Lease Sweep Period, at such time as the borrower has reserved with the lender into the lease sweep reserve (or has delivered a letter of credit (satisfying criteria to be set forth in the 30 Hudson Yards Loan Combination documents) reasonably acceptable to the lender) an amount equal to $125 (or, if the only Lease Sweep Period is pursuant to clause (e) above, $50 or, if the only Lease Sweep Period is pursuant to clause (c) above, $87) per rentable square foot of the applicable lease sweep, (ii) in the case of a Lease Sweep Period under clause (a), (1) if the Major Tenant became subject to a bankruptcy proceeding, (A) the Major Lease has been assumed (but not assigned) by the Major Tenant without any negative material change in the economics, scope or duration of such Major Lease and a plan of reorganization has been confirmed as to the Major Tenant and the effective date of such plan of reorganization has occurred or (B) the assignment and assumption of the Major Lease by an unaffiliated third party assignee pursuant to an assignment approved in the bankruptcy proceeding by non-appealable court order and execution of a guaranty by a replacement guarantor; and (2) if the guarantor under the Major Lease became subject to a bankruptcy proceeding, (A) the Major Lease has remained in effect and no base rent default or material monetary or material non-monetary default has occurred and is
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #1: 30 HUDSON YARDS
continuing (other than a bankruptcy of the Major Tenant, provided in such case, clause (1) above will also apply), and a plan of reorganization has been confirmed as to the guarantor of the Major Lease and the effective date of such plan of reorganization has occurred (and, if applicable, clause (1)(B) above has been satisfied) or (B) the assignment and assumption of the Major Lease by an unaffiliated third party assignee pursuant to an assignment approved in the bankruptcy proceeding by non-appealable court order and execution of a guaranty by a replacement guarantor, (iii) in the case of a Lease Sweep Period under clause (b), a cure by the Major Tenant of the applicable default under its Major Lease, (iv) in the case of a Lease Sweep Period under clause (c), the Major Tenant is operating at least 800,000 rentable square feet of its leased premises (less contraction space that has been relet), which will include subleased space except during the last two years of the term of the 30 Hudson Yards Loan Combination or (v) in the case of a Lease Sweep Period under clauses (c) or (d), (x) the borrower’s re-leasing of the affected portion of the leased premises (or 95% of such affected portion if the contraction option has not been exercised by WarnerMedia tenant) pursuant to qualified leases and (y) the completion and payment in full of all tenant improvements, leasing commissions, leasing costs and other landlord obligations of an inducement nature with respect to such leases, all free and abated rent periods will have expired and full rent thereunder commenced (or either (A) sufficient reserves therefor have been escrowed with the lender or (B) the borrower has delivered a letter of credit to the lender (satisfying criteria in the 30 Hudson Yards Loan Combination documents) reasonably acceptable to the lender to secure the payment of such costs and free or abated rent).
“Major Lease” means the WarnerMedia lease, and any replacement Lease covering all or substantially all of the space currently demised under the WarnerMedia lease (which, for this purpose, if the Contraction Option is exercised, will not include any tenant under a lease with respect to the Contraction Space.
“Major Tenant” will mean a tenant under a Major Lease.
■ | Property Management.The 30 Hudson Yards Property is self-managed by WarnerMedia or its affiliate. If WarnerMedia is no longer managing the 30 Hudson Yards Property, the borrower is required to cause the 30 Hudson Yards Property to be managed by a property manager, subject to certain qualifications set forth in the 30 Hudson Yards Loan Combination documents). |
■ | Current Mezzanine or Secured Subordinate Indebtedness.The 30 Hudson Yards Loan Combination consists of 29pari passu senior notes with an aggregate initial principal balance of $1,120,000,000 and three junior notes, with an aggregate initial principal balance of $310,000,000. Based on the total combined debt of $1,430,000,000, the Cut-off Date LTV Ratio, Maturity Date LTV Ratio, DSCR Based on Underwritten NCF and Debt Yield Based on Underwritten NOI are illustrated below: |
Financial Information
30 Hudson Yards Senior Notes | 30 Hudson Yards Loan Combination | |
Cut-off Date Balance | $1,120,000,000 | $1,430,000,000 |
Cut-off Date LTV Ratio | 50.9% | 65.0% |
Maturity Date LTV Ratio | 50.9% | 65.0% |
DSCR Based on Underwritten NCF | 3.45x | 2.51x |
Debt Yield Based on Underwritten NOI | 10.9% | 8.5% |
■ | Permitted Future Mezzanine or Secured Subordinate Indebtedness.Not permitted. |
■ | Release of Collateral. Not permitted. |
■ | IDA / PILOT. The borrower leases the 30 Hudson Yards Property to the New York City Industrial Development Agency (the “Agency”) pursuant to a lease (the “Company Lease”), and the Agency subleases the 30 Hudson Yards Property back to the borrower (the “Agency Lease”) (the Company Lease and Agency Lease, collectively the “IDA Leases”). The benefits of this lease structure to the borrower are a mortgage recording tax exemption and real property tax abatements. As such, the borrower pays installment payments in lieu of real estate taxes as the rent under the Agency Lease (the “PILOT Payments”). In order for the PILOT Payments to achieve the same priority as would real estate tax payments (i.e., ahead of any mortgage or other lien), the borrower (with the Agency as holder of the leasehold under the Company Lease) provided mortgages in favor of the Hudson Yards Infrastructure Corporation, a not-for-profit local development corporation (“HYIC”) to secure the PILOT Payments (collectively, the “PILOT Mortgage”). The HYIC has issued Hudson Yards revenue bonds for which the PILOT Payments are used to repay the bondholders. The term of the IDA Leases runs to June 30, 2044 (such period, the “Initial Term”), with |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #1: 30 HUDSON YARDS
annual automatic extensions thereof for a term of one year, unless within 60 days preceding the expiration of the current term the Agency provides written notice of termination to the borrower (such date, the “Expiration Date”);provided that after the Initial Term the IDA Leases will automatically terminate within 60 days after the repayment in full or defeasance of any Hudson Yards revenue bonds issued by HYIC for which an assignment of the PILOT amount payable under the Agency Lease is used to repay the bondholders.
■ | Terrorism Insurance. Terrorism coverage is provided by a stand-alone policy that provides coverage for terrorism in an amount equal to the full replacement cost of the 30 Hudson Yards Property, with limits of $5.5 billion per occurrence and in the aggregate, subject to a $100,000 deductible. Business interruption is provided for an actual loss sustained basis up to the full policy limit for a period of 36 months plus an additional 12-month extended period of indemnity. See “Risk Factors—Terrorism Insurance May Not Be Available for All Mortgaged Properties” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
45
LOAN #2:Millennium park plaza
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
46
LOAN #2:Millennium park plaza
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
47
LOAN #2:Millennium park plaza
Mortgaged Property Information | Mortgage Loan Information | |||||
Number of Mortgaged Properties | 1 | Loan Seller | GSMC | |||
Location (City/State) | Chicago, Illinois | Cut-off Date Principal Balance(2) | $70,000,000 | |||
Property Type | Mixed Use | Cut-off Date Principal Balance per SF(1) | $374.94 | |||
Size (SF) | 560,083 | Percentage of Initial Pool Balance | 5.5% | |||
Total Occupancy as of 5/31/2019 | 99.2% | Number of Related Mortgage Loans | None | |||
Owned Occupancy as of 5/31/2019 | 99.2% | Type of Security | Fee Simple | |||
Year Built / Latest Renovation | 1982 / 2015 | Mortgage Rate | 3.66000% | |||
Appraised Value | $319,000,000 | Original Term to Maturity (Months) | 120 | |||
Appraisal Date | 6/10/2019 | Original Amortization Term (Months) | NAP | |||
Borrower Sponsor | Donal P. Barry, Sr. | Original Interest Only Period (Months) | 120 | |||
Property Management | Millennium Park Living, Inc. | First Payment Date | 9/6/2019 | |||
Maturity Date | 8/6/2029 | |||||
Underwritten Revenues | $22,411,024 | |||||
Underwritten Expenses | $6,752,423 | Escrows | ||||
Underwritten Net Operating Income (NOI) | $15,658,602 | Upfront | Monthly | |||
Underwritten Net Cash Flow (NCF) | $15,647,202 | Taxes | $0 | $0 | ||
Cut-off Date LTV Ratio(1) | 65.8% | Insurance | $0 | $0 | ||
Maturity Date LTV Ratio(1) | 65.8% | Replacement Reserves | $1,000,000 | $0 | ||
DSCR Based on Underwritten NOI / NCF(1) | 2.01x / 2.01x | TI/LC | $0 | $0 | ||
Debt Yield Based on Underwritten NOI / NCF(1) | 7.5% / 7.5% | Other(3) | $77,030 | $0 | ||
Sources and Uses | ||||||
Sources | $ | % | Uses | $ | % | |
Loan Combination Amount | $210,000,000 | 99.7% | Loan Payoff | $206,691,937 | 98.1% | |
Principal’s New Cash Contribution | 609,705 | 0.3 | Origination Costs | 2,840,738 | 1.3 | |
Reserves | 1,077,030 | 0.5 | ||||
Total Sources | $210,609,705 | 100.0% | Total Uses | $210,609,705 | 100.0% |
(1) | Calculated based on the aggregate outstanding balance of the Millennium Park Plaza Loan Combination. |
(2) | The Cut-off Date Principal Balance of $70,000,000 represents the controlling note A-1 of the $210,000,000 Millennium Park Plaza Loan Combination evidenced by fourpari passunotes. See “—The Mortgage Loan” below. |
(3) | Other reserve represents an unfunded obligations reserve for two tenants, Nandos of Michigan Ave LLC (4,055 SF) and Stan’s Donuts (2,058 SF). |
■ | The Mortgage Loan. The mortgage loan (the “Millennium Park Plaza Loan”) is part of a loan combination (the “Millennium Park Plaza Loan Combination”) consisting of fourpari passupromissory notes (note A-1, note A-2, note A-3 and note A-4) with an aggregate original principal balance of $210,000,000 and is secured by fee simple interest in a 38-story, multifamily, office and retail tower located in Chicago, Illinois (the “Millennium Park Plaza Property”). The Millennium Park Plaza Loan, evidenced by controlling note A-1, has an outstanding principal balance as of the Cut-off Date of $70,000,000 and represents approximately 5.5% of the Initial Pool Balance. The relatedpari passu companion loans, evidenced by the non-controlling note A-2, note A-3 and note A-4 are currently held by Goldman Sachs Bank USA and are expected to be contributed to one or more future securitization transactions. |
The Millennium Park Plaza Loan Combination was originated by Goldman Sachs Bank USA on July 19, 2019. The Millennium Park Plaza Loan Combination has an interest rate of 3.66000%per annum. The borrower utilized the proceeds of the Millennium Park Plaza Loan Combination to refinance the existing debt, fund upfront reserves, and pay origination costs.
The Millennium Park Plaza Loan Combination had an initial term of 120 months and has a remaining term of 120 months as of the Cut-off Date. The Millennium Park Plaza Loan Combination requires interest-only payments during its term. The scheduled maturity date of the Millennium Park Plaza Loan Combination is August 6, 2029. The Millennium Park Plaza Loan Combination may be voluntarily prepaid in whole (but not in part) beginning on February 6, 2029. Partial prepayments are also permitted in connection with curing a Millennium Park Plaza Trigger Period as described below under “—Escrows”. In addition, provided that no event of default under the Millennium Park Plaza Loan Combination is continuing, defeasance with direct, non-callable obligations of the United States of America is permitted at any time on or after the first payment date following the earlier of (a) the second anniversary of the closing date of the securitization into which the last piece of the Millennium Park Plaza Loan Combination is deposited or (b) July 19, 2022.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #2:Millennium park plaza
The table below summarizes the promissory notes that comprise the Millennium Park Plaza Loan Combination. The relationship between the holders of the Millennium Park Plaza Loan Combination is governed by a co-lender agreement as described under “Description of the Mortgage Pool—The Loan Combinations—The Serviced Pari Passu Loan Combinations” in the Preliminary Prospectus.
Loan Combination Summary | ||||||||||
Note | Original Balance | Cut-off Date Balance | Note Holder | Controlling Piece | ||||||
Note A-1 | $70,000,000 | $70,000,000 | CGCMT 2019-GC41 | Yes | ||||||
Notes A-2, A-3 and A-4 | 140,000,000 | 140,000,000 | Goldman Sachs Bank USA(1) | No | ||||||
Total | $210,000,000 | $210,000,000 |
(1) | Notes A-2, A-3 and A-4 are currently held by Goldman Sachs Bank USA and are expected to be contributed to one or more future securitization transactions. |
■ | The Mortgaged Property. The Millennium Park Plaza Property is a 38-story, multifamily, office and retail tower located in Chicago, Illinois. The components of the Millennium Park Plaza Property are divided as follows: multifamily (557 units), office (85,017 SF) and retail (18,450 SF). Located at 151-155 North Michigan Avenue in The Loop submarket of Chicago, Illinois, the Millennium Park Plaza Property sits at the intersection of Michigan Avenue and Randolph Street. The Millennium Park Plaza Property was originally developed in 1982 and the borrower sponsor has owned the asset since 2004. |
The residential component of the Millennium Park Plaza Property includes a mix of studios and one, two, and three-bedroom units ranging in size from 304 to 1,300 SF. As of May 31, 2019, the Millennium Park Plaza Property was 99.2% occupied.
The Millennium Park Plaza Property features amenities including a renovated fitness center with locker rooms, an indoor pool on the 38th floor, a rooftop deck, a business center, a tenant lounge, and a concierge service. The Millennium Park Plaza Property has an underground parking garage that offers valet parking and includes 200 parking stalls.
The Millennium Park Plaza Property sits in the Chicago central business district (“CBD”), which is known as The Loop. Situated at the Northwest corner of Millennium Park, the Millennium Park Plaza Property location allows for some multifamily units to have unobstructed views of Millennium Park. The Millennium Park Plaza Property is located within approximately one mile of the Magnificent Mile, the Chicago River, the State Street shopping district, Millennium Station and the downtown subway loop.
The following table presents certain information relating to the multifamily units and rent at the Millennium Park Plaza Property:
Unit Mix(1)
Unit Type | # of Units | Total SF | Average SF per Unit | Monthly UW Rent per Unit | ||||||||
1 Bedroom | 263 | 176,209 | 670 | $1,834 | ||||||||
2 Bedroom | 125 | 122,845 | 983 | 2,665 | ||||||||
3 Bedroom | 103 | 125,440 | 1,218 | 3,373 | ||||||||
Studio | 66 | 32,122 | 487 | 1,648 | ||||||||
Total / Wtd. Avg. | 557 | 456,616 | 820 | $2,283 |
(1) | As provided by the borrower per the underwritten rent roll dated May 31, 2019. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #2:Millennium park plaza
The following table presents certain information relating to the major retail and office tenants (of which, certain tenants may have co-tenancy provisions) at the Millennium Park Plaza Property:
Ten Largest Retail and Office Tenants Based on Underwritten Base Rent
Tenant Name | Credit Rating | Tenant GLA | % of GLA | UW Base Rent | % of Total UW Base Rent | UW Base Rent | Lease Expiration | Renewal / Extension Options | |||||||||||||
Ferrero USA Inc(3) | NR / NR / NR | 2,785 | 2.7 | % | $603,867 | 9.8 | % | $216.83 | 5/31/2027 | 2, 5-year options | |||||||||||
Centurylink, Inc | BB / B2 / BB | 9,558 | 9.2 | 502,200 | 8.1 | 52.54 | Various(4) | 1, 5-year option | |||||||||||||
Broadwing Communications | NR / NR / NR | 6,000 | 5.8 | 428,040 | 6.9 | 71.34 | 7/31/2019 | None | |||||||||||||
Stan’s Donuts | NR / NR / NR | 2,058 | 2.0 | 353,600 | 5.7 | 171.82 | 5/31/2027 | 2, 5-year options | |||||||||||||
Nandos of Michigan Ave LLC | NR / NR / NR | 4,055 | 3.9 | 305,000 | 4.9 | 75.22 | 10/31/2032 | 3, 5-year options | |||||||||||||
GPS Millennium Park LLC Garrett Popcorn | NR / NR / NR | 1,540 | 1.5 | 261,482 | 4.2 | 169.79 | 10/31/2024 | 2, 5-year options | |||||||||||||
PB Restaurants LLC | NR / NR / NR | 1,476 | 1.4 | 198,492 | 3.2 | 134.48 | 12/31/2024 | 2, 5-year options | |||||||||||||
Angelini Ori Abate Law | NR / NR / NR | 3,900 | 3.8 | 142,679 | 2.3 | 36.58 | 11/30/2025 | None | |||||||||||||
Hat World, Inc. | NR / NR / NR | 809 | 0.8 | 141,443 | 2.3 | 174.84 | 12/31/2024 | 2, 5-year options | |||||||||||||
Davids Tea (USA), Inc. | NR / NR / NR | 877 | 0.8 | 141,113 | 2.3 | 160.90 | Various(5) | None | |||||||||||||
Largest Tenants | 33,058 | 32.0 | % | $3,077,915 | 49.9 | % | $93.11 | ||||||||||||||
Remaining Owned Tenants | 65,740 | 63.5 | 3,085,496 | 50.1 | 46.93 | ||||||||||||||||
Vacant Spaces (Owned Space) | 4,669 | 4.5 | 0 | 0.0 | 0.00 | ||||||||||||||||
Totals / Wtd. Avg. Tenants | 103,467 | 100.0 | % | $6,163,411 | 100.0 | % | $62.38 |
(1) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
(2) | UW Base Rent $ per SF includes tenants that do not have any associated SF. |
(3) | Ferrero USA Inc has the right to terminate its lease after May 31, 2020 with three months’ notice and a payment of a termination fee. |
(4) | Centurylink, Inc leases 430 SF of office space scheduled to expire on July 31, 2023 and 9,128 SF of office space scheduled to expire on September 30, 2023. |
(5) | Davids Tea (USA), Inc. leases 777 SF of retail space scheduled to expire on November 30, 2024 and 100 SF of office space scheduled to expire on October 31, 2021. |
The following table presents certain information relating to the lease rollover schedule for the Millennium Park Plaza Property based on initial lease expiration dates:
Lease Expiration Schedule(1)
Year Ending | Expiring Owned GLA | % of Owned GLA | Cumulative % of Owned GLA | UW | % of Total UW Base Rent | UW Base Rent $ per SF(2) | # of Expiring Leases | ||||||||||||||
MTM | 10,552 | 10.2 | % | 10.2 | % | $362,391 | 5.9 | % | $34.34 | 21 | |||||||||||
2019 | 13,187 | 12.7 | 22.9 | % | 875,256 | 14.2 | $66.37 | 29 | |||||||||||||
2020 | 17,282 | 16.7 | 39.6 | % | 822,543 | 13.3 | $47.60 | 37 | |||||||||||||
2021 | 8,148 | 7.9 | 47.5 | % | 348,399 | 5.7 | $42.76 | 16 | |||||||||||||
2022 | 15,186 | 14.7 | 62.2 | % | 775,127 | 12.6 | $51.04 | 18 | |||||||||||||
2023 | 15,448 | 14.9 | 77.1 | % | 757,920 | 12.3 | $49.06 | 8 | |||||||||||||
2024 | 6,197 | 6.0 | 83.1 | % | 816,629 | 13.2 | $131.78 | 6 | |||||||||||||
2025 | 3,900 | 3.8 | 86.9 | % | 142,679 | 2.3 | $36.58 | 1 | |||||||||||||
2026 | 0 | 0.0 | 86.9 | % | 0 | 0.0 | $0.00 | 0 | |||||||||||||
2027 | 4,843 | 4.7 | 91.6 | % | 957,467 | 15.5 | $197.70 | 2 | |||||||||||||
2028 | 0 | 0.0 | 91.6 | % | 0 | 0.0 | $0.00 | 0 | |||||||||||||
2029 | 0 | 0.0 | 91.6 | % | 0 | 0.0 | $0.00 | 0 | |||||||||||||
2030 & Thereafter | 4,055 | 3.9 | 95.5 | % | 305,000 | 4.9 | $75.22 | 1 | |||||||||||||
Vacant | 4,669 | 4.5 | 100.0 | % | NAP | NAP | NAP | NAP | |||||||||||||
Total / Wtd. Avg. | 103,467 | 100.0 | % | $6,163,411 | 100.0 | % | $62.38 | 139 |
(1) | Calculated based on approximate square footage occupied by each Owned Tenant. |
(2) | UW Base Rent $ per SF includes tenants that do not have any associated SF. |
The following table presents certain information relating to the historical leasing at the Millennium Park Plaza Property:
Historical Leased %(1)
2016 | 2017 | 2018 | As of 5/31/2019 | |||
99.0% | 97.8% | 97.4% | 99.2% |
(1) | As provided by the borrower and reflects average occupancy for the indicated year ended December 31 unless specified otherwise. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #2:Millennium park plaza
■ | 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 Millennium Park Plaza Property: |
Cash Flow Analysis(1)
2016 | 2017 | 2018 | TTM (5/31/2019) | Underwritten(2) | Underwritten | |||||||||||||
Effective Rental Revenue | $14,294,293 | $14,499,950 | $15,294,647 | $14,972,622 | $15,260,112 | $27.25 | ||||||||||||
Retail Income | 693,788 | 1,293,179 | 1,586,708 | 2,018,496 | 2,073,872 | 3.70 | ||||||||||||
Office Income | 2,357,420 | 2,446,628 | 2,466,636 | 2,540,208 | 2,667,207 | 4.76 | ||||||||||||
Telecom Income | 1,376,674 | 1,402,323 | 1,488,043 | 1,710,226 | 1,456,707 | 2.60 | ||||||||||||
Miscellaneous Revenue | 754,502 | 767,780 | 939,866 | 953,126 | 953,126 | 1.70 | ||||||||||||
Total Other Revenue | $5,182,384 | $5,909,910 | $6,481,253 | $7,222,056 | $7,150,912 | $12.77 | ||||||||||||
Effective Gross Revenue | $19,476,677 | $20,409,860 | $21,775,900 | $22,194,678 | $22,411,024 | $40.01 | ||||||||||||
Total Operating Expenses | $5,920,924 | $6,198,041 | $6,410,039 | $6,549,845 | $6,752,423 | $12.06 | ||||||||||||
Net Operating Income | $13,555,753 | $14,211,819 | $15,365,861 | $15,644,833 | $15,658,602 | $27.96 | ||||||||||||
Upfront Replacement Reserve | 0 | 0 | 0 | 0 | (100,000 | ) | (0.18 | ) | ||||||||||
Replacement Reserves | 0 | 0 | 0 | 0 | 111,400 | 0.20 | ||||||||||||
Net Cash Flow | $13,555,753 | $14,211,819 | $15,365,861 | $15,644,833 | $15,647,202 | $27.94 | ||||||||||||
Occupancy | 99.0 | % | 97.8 | % | 97.4 | % | 99.2 | % | 99.3 | % | ||||||||
NOI Debt Yield(3) | 6.5 | % | 6.8 | % | 7.3 | % | 7.4 | % | 7.5 | % | ||||||||
NCF DSCR(3) | 1.74 | x | 1.82 | x | 1.97 | x | 2.01 | x | 2.01 | x |
(1) | Certain items such as straight line rent, interest expense, interest income, lease cancellation income, depreciation, amortization, debt service payments and any other non-recurring or non-operating items were excluded from the historical presentation and are not considered for the underwritten cash flow. |
(2) | Underwritten cash flow based on contractual rents as of May 31, 2019 and contractual rent steps through July 31, 2020. |
(3) | Calculated based on the aggregate outstanding balance of the Millennium Park Plaza Loan Combination. |
■ | Appraisal. According to the appraisal, the Millennium Park Plaza Property had an “as-is” appraised value of $319,000,000 as of June 10, 2019. |
Appraisal Approach(1) | Value | Discount Rate | Capitalization Rate | |||
Direct Capitalization Approach | $315,000,000 | N/A | 4.75% |
(1) | Based on the “as-is” appraised value. |
■ | Environmental Matters. According to a Phase I environmental report, dated June 11, 2019, there are no recognized environmental conditions or recommendations for further action at the Millennium Park Plaza Property other than to develop and implement an asbestos operations and maintenance plan. |
■ | Market Overview and Competition. According to the appraisal, theMillennium Park Plaza Propertyis located in downtown Chicago in The Loop neighborhood. The Loop is the CBD and the financial center of the downtown Chicago market area. It is the second largest CBD in the United States after Midtown Manhattan and contains numerous corporate headquarters. It is also home to many of Chicago’s attractions, including the downtown Chicago theater district, the Field Museum, Grant Park, Buckingham Fountain, The Art Institute of Chicago, and Millennium Park. The Loop, along with the adjacent West Loop and South Loop neighborhoods, comprise the primary employment center in the Chicago market area. The aggregated Loop area as a whole contains approximately 150 million square feet of office space. |
According to the appraisal, as the Chicago CBD has transformed into a 24-hour environment, The Loop has experienced a resurgence in the construction of new multifamily towers, retailers, restaurants, theaters, and hotels. This in turn has attracted new renters to the area seeking a diverse amenity base in addition to proximity to employment. The Loop has historically been the business center of the city of Chicago, which in turn, has promoted the financial stability of the market. TheMillennium Park Plaza Propertyis located within approximately one mile of the Daley Center, City Hall, the State of Illinois Courthouse, and the Thompson Center/State of Illinois Building. Furthermore, theMillennium Park Plaza Propertyis located along North Michigan Avenue, which offers a concentration of retailers and draws tourists through the corridor.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #2:Millennium park plaza
Chicago Apartment Market: As of first quarter 2019, the Chicago apartment market contains 484,506 rental units in 2,447 buildings, located in 25 submarkets. The Millennium Park Plaza Property is located in The Loop submarket, which represents 4.3% of the total inventory in the broader market.
As of first quarter 2019, the overall vacancy rate for the region was 4.8%, while The Loop submarket has a current vacancy rate of 7.3%. The Millennium Park Plaza Property dates from the 1980s and the rental rates at the Millennium Park Plaza Property are lower than those quoted at the new Class A luxury towers in the market. The average quoted rental rate for all types of space within the region is $1,443 per month, while The Loop submarket has an average asking rental rate of $2,269 per month. The Loop submarket has the second highest rent in the Chicago CBSA market.
Chicago CBD Office Market: The Chicago-Naperville-Joliet Core Based Statistical Area (the “Chicago CBSA”) contains nearly 233.5 million SF of office space. Historically, the Chicago CBSA has been considered the business center of the Midwest attracting many corporate headquarters operations and regional branches. As a transportation, banking and investment hub, and research and educational center, a wide spectrum of business disciplines evolved in the region to create a critical mass of business-to-business activity. As of first quarter 2019, the overall vacancy of the Chicago CBD office market increased 30 basis points year-over-year.
Chicago Retail Market: The Millennium Park Plaza Property is located within Chicago’s East Loop retail submarket, one of the top retail submarkets in the Chicago metropolitan statistical area (“MSA”). According to the appraisal, the Chicago CBSA retail market totals 560.7 million SF of retail space in 45,416 buildings. The current vacancy rate is 6.0% and the average rent is $19.10 PSF, triple-net. The East Loop submarket totals 1,687,736 SF in 30 buildings. The submarket exhibits a vacancy rate of 4.6% and average rental rate of $37.08 PSF, triple-net. In comparison to the Chicago CBSA retail market, East Loop exhibits a lower vacancy, and the area commands significantly higher rents.
The following table presents certain information relating to the primary competition for the Millennium Park Plaza Property:
Competitive Set(1)
Millennium Park Plaza(2) | 200 Squared | 420 East Ohio | Lake Shore Plaza | McClurg Court | Columbus Plaza | |||||||
Address | 151-155 North Michigan Avenue | 210 N Wells Street | 420 E Ohio Street | 445 E Ohio Street | 333 E Ontario Street | 233 E Wacker Drive | ||||||
City, State | Chicago, IL | Chicago, IL | Chicago, IL | Chicago, IL | Chicago, IL | Chicago, IL | ||||||
Year Built | 1982 | 1964 | 1990 | 1986 | 1972 | 1980 | ||||||
Multifamily Units | 557 | 329 | 263 | 567 | 1,061 | 534 | ||||||
Studio Rent Per Month | $1,648 | $1,849 | $2,007 | $1,616 | $1,784 | $1,690 | ||||||
One-Bedroom Rent Per Month | $1,834 | $2,249 | $2,202 | $1,624 | $1,955 | $1,712 | ||||||
Two-Bedroom Rent Per Month | $2,665 | $2,798 | $3,071 | $2,100 | $3,042 | $2,973 | ||||||
Three-Bedroom Rent Per Month | $3,373 | NAP | $4,241 | NAP | NAP | $3,125 |
(1) | Source: Appraisal. |
(2) | As provided by the borrower per the underwritten rent roll dated May 31, 2019. |
■ | The Borrower. The borrower is Millennium Park Plaza I LLC, a Delaware limited liability company. The borrower sponsor and non-recourse carveout guarantor is Donal P. Barry, Sr., the co-founder and president of BJB Partners. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the Millennium Park Plaza Loan Combination. |
BJB Partners is a family-owned investment management company that offers a range of investment services, including the acquisition, renovation, and repositioning of vintage, multifamily properties throughout the Chicago metropolitan area. BJB Partners’ portfolio consists of approximately $1.7 billion in assets held in over 80 properties, which comprise more than 6,000 apartment units, 200,000 SF of retail and commercial uses, and over 200,000 SF of top-class office space.
■ | Escrows. On the origination date, the borrower funded (i) an unfunded obligations reserve in the amount of $77,030 for free rent attributable to Nandos of Michigan Ave LLC and Stan’s Donuts and (ii) a capital expenditures reserve in the amount of $1,000,000. |
On each due date during a Millennium Park Plaza Trigger Period, the borrower will be required to fund (i) a tax and insurance reserve in an amount equal to one-twelfth of the property taxes and insurance premiums that the lender reasonably estimates will be payable during the next ensuing 12 months, unless in the case of insurance premiums,
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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the borrower is maintaining a blanket policy and no event of default is continuing; (ii) a capital expenditures reserve in the amount of $9,283.33; and (iii) a tenant improvements and leasing commissions reserve in the amount of $12,933.42.
A “Millennium Park Plaza Trigger Period” means each period commencing when the debt yield (as calculated under the loan documents), determined as of the first day of any fiscal quarter, is less than 6.00%, and ending when the debt yield (as calculated under the loan documents), determined as of the first day of a fiscal quarter thereafter is equal to or greater than 6.00%. If a Millennium Park Plaza Trigger Period is in effect or would be in effect as a result of the debt yield being less than 6.00%, then the borrower may avoid the commencement of a Millennium Park Plaza Trigger Period or end a Millennium Park Plaza Trigger Period by either (x) prepaying a portion of the Millennium Park Plaza Loan Combination (together with any applicable yield maintenance premium) such that the resulting debt yield after application of such prepayment exceeds 6.00% or (y) delivering to the lender, as additional collateral, (the “Debt Yield Collateral”), cash or cash equivalents satisfactory to the lender in an amount (the “Debt Yield Cure Amount”) that when subtracted from the outstanding principal balance would result in a debt yield that exceeds 6.00%. Thereafter, if the Debt Yield Cure Amount as of the last day of any fiscal quarter exceeds the aggregate amount of the Debt Yield Collateral held by the lender, then a Millennium Park Plaza Trigger Period will commence unless the borrower increases the amount of the Debt Yield Collateral to the then current Debt Yield Cure Amount. Provided that no event of default is then continuing, following written request from the borrower, the lender is required to return the Debt Yield Collateral when the debt yield, determined as of the first day of a fiscal quarter thereafter, exceeds 6.00% without reducing the aggregate outstanding principal amount of the Millennium Park Plaza Loan Combination by the amount of such Debt Yield Collateral.
■ | Lockbox and Cash Management. The Millennium Park Plaza Loan Combination is structured with a soft lockbox (except with respect to the commercial tenants, for which a hard lockbox is in place) and springing cash management. The borrower was required to deliver tenant direction letters instructing all commercial and retail tenants to deposit rents into a lender-controlled lockbox account. In addition, the borrower is required to cause all cash revenues relating to the Millennium Park Plaza Property and all other money received by the borrower or the property manager with respect to the Millennium Park Plaza Property (other than tenant security deposits) to be deposited into such lockbox account or a lender-controlled cash management account within one business day of receipt thereof. On each business day that no Millennium Park Plaza Trigger Period or event of default under the Millennium Park Plaza Loan Combination is continuing, all funds in the lockbox account are required to be swept into a borrower-controlled operating account. On each business day during a Millennium Park Plaza Trigger Period or during the continuance of an event of default under the Millennium Park Plaza Loan Combination, all funds in the lockbox account are required to be swept into the cash management account. |
During the continuance of a Millennium Park Plaza Trigger Period or, at the lender’s discretion during the continuance of an event of default under the Millennium Park Plaza Loan Combination, all amounts on deposit in the cash management account after payment of debt service, required reserves and budgeted operating expenses are required to be deposited into an excess cash flow reserve account as additional collateral for the Millennium Park Plaza Loan Combination.
■ | Property Management. The Millennium Park Plaza Property is currently managed by Millennium Park Living, Inc. Under the Millennium Park Plaza Loan Combination documents, the Millennium Park Plaza Property is required to be managed by Millennium Park Living, Inc. or any other management company reasonably approved by the lender and with respect to which a Rating Agency Confirmation has been received. The lender has the right to replace, or require the borrower to replace, the property manager with a property manager selected by the borrower (or selected by the lender in the event of an event of default under the Millennium Park Plaza Loan Combination or following any foreclosure, conveyance in lieu of foreclosure or other similar transaction), subject to the lender’s reasonable approval (i) during the continuance of an event of default under the Millennium Park Plaza Loan Combination, (ii) following any foreclosure, conveyance in lieu of foreclosure or other similar transaction, (iii) during the continuance of a material default by the property manager under the management agreement (after the expiration of any applicable notice and/or cure periods), (iv) if the property manager files or is the subject of a petition in bankruptcy or (v) if a trustee or receiver is appointed for the property manager’s assets or the property manager makes an assignment for the benefit of its creditors or is adjudicated insolvent. |
■ | Current Mezzanine or Secured Subordinate Indebtedness. None. |
■ | Permitted Future Mezzanine or Secured Subordinate Indebtedness. Not permitted. |
■ | Release of Collateral.Not permitted. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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■ | Terrorism Insurance. The borrower is required to maintain terrorism insurance in an amount equal to the full replacement cost of the Millennium Park Plaza Property, as well as 18 months of rental loss and/or business interruption coverage, together with a 12-month extended period of indemnity following restoration. If TRIPRA is no longer in effect, then the borrower’s requirement will be capped at insurance premiums equal to two times the amount of the insurance premium payable in respect of the property and business interruption/rental loss insurance required under the related loan documents. See “Risk Factors—Terrorism Insurance May Not Be Available for All Mortgaged Properties” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #3: usaa office portfolio
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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Mortgaged Property Information | Mortgage Loan Information | ||||
Number of Mortgaged Properties | 4 | Loan Seller | GSMC | ||
Location (City/State) | Various / Various | Cut-off Date Principal Balance(2) | $62,400,000 | ||
Property Type | Office | Cut-off Date Principal Balance per SF(1) | $274.99 | ||
Size (SF) | 881,490 | Percentage of Initial Pool Balance | 4.9% | ||
Total Occupancy as of 8/6/2019 | 100.0% | Number of Related Mortgage Loans | None | ||
Owned Occupancy as of 8/6/2019 | 100.0% | Type of Security | Fee Simple | ||
Year Built / Latest Renovation | Various / NAP | Mortgage Rate | 3.37000% | ||
Appraised Value | $380,000,000 | Original Term to Maturity (Months) | 121 | ||
Borrower Sponsor | JDM Real Estate Funds, LLC | Original Amortization Term (Months) | NAP | ||
Property Management | Tenant Managed | Original Interest Only Period (Months) | 121 | ||
First Payment Date | 8/6/2019 | ||||
Final Maturity Date | 8/6/2029 | ||||
Underwritten Revenues | $31,543,524 | ||||
Underwritten Expenses | $7,885,881 | Escrows | |||
Underwritten Net Operating Income (NOI) | $23,657,643 | Upfront | Monthly | ||
Underwritten Net Cash Flow (NCF) | $23,481,345 | Taxes | $0 | $0 | |
Cut-off Date LTV Ratio(1) | 63.8% | Insurance | $0 | $0 | |
Maturity Date LTV Ratio(1) | 63.8% | Replacement Reserves | $0 | $0 | |
DSCR Based on Underwritten NOI / NCF(1) | 2.86x / 2.84x | TI/LC | $0 | $0 | |
Debt Yield Based on Underwritten NOI / NCF(1) | 9.8% / 9.7% | Other | $0 | $0 |
Sources and Uses | ||||||||
Sources | $ | % | Uses | $ | % | |||
Loan Combination Amount | $242,400,000 | 64.6 | % | Purchase Price | $375,000,000 | 99.9 | % | |
Principal's New Cash Contribution | 132,983,640 | 35.4 | Origination Costs | 383,640 | 0.1 | |||
Total Sources | $375,383,640 | 100.0 | % | Total Uses | $375,383,640 | 100.0 | % |
(1) | Calculated based on the aggregate outstanding balance of the USAA Office Portfolio Loan Combination. See “—The Mortgage Loan” below. |
(2) | The Cut-off Date Principal Balance of $62,400,000 represents the controlling note A-1 of the USAA Office Portfolio Loan Combination evidenced by fivepari passu notes. See “—The Mortgage Loan” below. |
■ | The Mortgage Loan. The mortgage loan (the “USAA Office Portfolio Loan”) is part of a loan combination (the “USAA Office Portfolio Loan Combination”) consisting of fivepari passu promissory notes (note A-1, note A-2, note A-3, note A-4 and note A-5) with an aggregate original principal balance of $242,400,000 and is secured by a first mortgage and deed of trust encumbering the borrowers’ respective fee simple interests in a portfolio of four office properties located in Plano, Texas and Tampa, Florida (the “USAA Office Portfolio Properties”). The USAA Office Portfolio Loan, evidenced by controlling note A-1, has an outstanding principal balance as of the Cut-off Date of $62,400,000 and represents approximately 4.9% of the Initial Pool Balance. The relatedpari passu companion loans, evidenced by the non-controlling note A-2, note A-3, note A-4 and note A-5 are currently held by Goldman Sachs Bank USA and are expected to be contributed to one or more future securitization transactions. |
The USAA Office Portfolio Loan Combination was originated by Goldman Sachs Bank USA on July 2, 2019. The USAA Office Portfolio Loan Combination has an interest rate of 3.37000%per annum. The borrowers utilized the proceeds of the USAA Office Portfolio Loan Combination to acquire the USAA Office Portfolio Properties and pay origination costs.
The USAA Office Portfolio Loan Combination had an initial term of 121 months and has a remaining term of 120 months as of the Cut-off Date. The USAA Office Portfolio Loan Combination requires interest-only payments during its term. The scheduled maturity date of the USAA Office Portfolio Loan Combination is August 6, 2029. The USAA Office Portfolio Loan Combination may be voluntarily prepaid in whole (but not in part) beginning on July 6, 2020. Any voluntary prepayments prior to the payment date in May 2029, require a yield maintenance premium, which may be no less than 1% of the amount prepaid.
The table below summarizes the promissory notes that comprise the USAA Office Portfolio Loan Combination. The relationship between the holders of the USAA Office Portfolio Loan Combination is governed by a co-lender agreement as described under “Description of the Mortgage Pool—The Loan Combinations—The Serviced Pari Passu Loan Combinations” in the Preliminary Prospectus.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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Loan Combination Summary | |||||
Note | Original Balance | Cut-off Date Balance | Note Holder | Controlling Piece | |
Note A-1 | $62,400,000 | $62,400,000 | CGCMT 2019-GC41 | Yes | |
Notes A-2, A-3, A-4 and A-5 | 180,000,000 | 180,000,000 | Goldman Sachs Bank USA(1) | No | |
Total | $242,400,000 | $242,400,000 |
(1) | Notes A-2, A-3, A-4 and A-5 are currently held by Goldman Sachs Bank USA and are expected to be contributed to one or more future securitization transactions. |
■ | The Mortgaged Properties. The USAA Office Portfolio Properties are comprised of five office buildings under four leases that are each 100.0% leased to United Services Automobile Association ("USAA"), a financial services and insurance company, on a long term triple-net lease with 3% annual escalations. The credit rating for USAA is AA and Aa1 by S&P and Moodys, respectively. The two buildings comprising Legacy Corporate Centre I & II are on the same lease, while each of the three other USAA Office Portfolio Properties is comprised of one building subject to its own individual lease. There are no termination or contraction options except in the case of a major casualty, and the USAA Office Portfolio Properties have a weighted average remaining lease term of 12.3 years as of the Cut-off Date. |
— | Legacy Corporate Centre I & II and Legacy Corporate Centre III are located in the Upper Tollway/West Plano submarket of Plano, Texas. Legacy Corporate Centre I & II were constructed in 1999 and Legacy Corporate Centre III was constructed in 2019. These host one of USAA’s software and technology innovation centers. |
— | Crosstown Center I and Crosstown Center II are located along the I-75 office corridor in Tampa, Florida. Crosstown Center I was built in 2015 and Crosstown Center II was built in 2018. Tampa serves as a strategic command center for USAA’s customer services operations. |
The following table presents certain information relating to the USAA Office Portfolio Properties:
Portfolio Summary
Property Name | City | State | % of Allocated Loan Amount | Total GLA | Year Built | Appraised Value | UW NCF | |||||||||||
Legacy Corporate Centre I & II | Plano | Texas | 30.2 | % | 238,926 | 1999 | $114,824,056 | $6,547,460 | ||||||||||
Crosstown Center I | Tampa | Florida | 27.9 | 260,869 | 2015 | 106,065,678 | 6,610,104 | |||||||||||
Crosstown Center II | Tampa | Florida | 24.8 | 236,550 | 2018 | 93,934,322 | 6,309,273 | |||||||||||
Legacy Corporate Centre III | Plano | Texas | 17.2 | 145,145 | 2019 | 65,175,943 | 4,014,509 | |||||||||||
Totals | 100.0 | % | 881,490 | $380,000,000 | $23,481,345 |
The following table presents certain information relating to the major tenant (of which, certain tenants may have co-tenancy provisions) at the USAA Office Portfolio Properties:
Largest Tenant Based on Underwritten Base Rent(1)
Tenant Name – Property | Credit Rating (Fitch/MIS/S&P)(2) | Tenant GLA | % of GLA | UW Base Rent | % of Total UW Base Rent | UW Base Rent $ per SF | Lease Expiration | Renewal / Extension Options | ||||||||||||
USAA – Crosstown Center I | NR / Aa1 / AA | 260,869 | 29.6 | % | $6,052,161 | 29.1 | % | $23.20 | 8/31/2030 | 2, 5-year options | ||||||||||
USAA – Legacy Corporate Centre I & II | NR / Aa1 / AA | 238,926 | 27.1 | 5,992,264 | 28.8 | 25.08 | 12/31/2029 | 2, 5-year options | ||||||||||||
USAA – Crosstown Center II | NR / Aa1 / AA | 236,550 | 26.8 | 5,360,223 | 25.8 | 22.66 | 12/31/2033 | 2, 5-year options | ||||||||||||
USAA – Legacy Corporate Centre III | NR / Aa1 / AA | 145,145 | 16.5 | 3,409,456 | 16.4 | 23.49 | 10/31/2033 | 2, 5-year options | ||||||||||||
Totals / Wtd. Avg. Tenants | 881,490 | 100.0 | % | $20,814,104 | 100.0 | % | $23.61 |
(1) | Based on the underwritten rent roll dated August 6, 2019. |
(2) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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The following table presents certain information relating to the lease rollover schedule at the USAA Office Portfolio Properties based on initial lease expiration dates:
Lease Expiration Schedule(1)
Year Ending December 31, | Expiring Owned GLA | % of Owned GLA | Cumulative % of Owned GLA | UW Base Rent | % of Total UW Base Rent | UW Base Rent $ per SF | # of Expiring Leases | ||||||||||||||
MTM | 0 | 0.0 | % | 0.0 | % | $0 | 0.0 | % | $0.00 | 0 | |||||||||||
2019 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2020 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2021 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2022 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2023 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2024 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2025 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2026 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2027 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2028 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2029 | 238,926 | 27.1 | 27.1 | % | 5,992,264 | 28.8 | 25.08 | 1 | |||||||||||||
2030 & Thereafter | 642,564 | 72.9 | 100.0 | % | 14,821,840 | 71.2 | 23.07 | 3 | |||||||||||||
Vacant | 0 | 0.0 | 100.0 | % | NAP | NAP | NAP | NAP | |||||||||||||
Total / Wtd. Avg. | 881,490 | 100.0 | % | $20,814,104 | 100.0 | % | $23.61 | 4 |
(1) | Calculated based on approximate square footage occupied by the sole tenant. |
The following table presents certain information relating to historical occupancy at the USAA Office Portfolio Properties:
Historical Leased %(1)
As of 8/6/2019 |
100.0% |
(1) | Historical leasing information is not available as the USAA Office Portfolio Properties were recently acquired at origination. |
■ | Underwritten Net Cash Flow.The following table presents certain information relating to the performance and the Underwritten Net Cash Flow at the USAA Office Portfolio Properties: |
Cash Flow Analysis(1)
Underwritten(2) | Underwritten $ per SF | |||||
Base Rental Revenue | $20,814,104 | $23.61 | ||||
Contractual Rent Steps | 5,075,757 | 5.76 | ||||
Total Reimbursement Revenue | 6,939,575 | 7.87 | ||||
Gross Revenue | $32,829,436 | $37.24 | ||||
Vacancy Loss | (1,285,912 | ) | (1.46 | ) | ||
Effective Gross Revenue | $31,543,524 | $35.78 | ||||
Total Operating Expenses | $7,885,881 | $8.95 | ||||
Net Operating Income | $23,657,643 | $26.84 | ||||
TI/LC | 0 | 0.00 | ||||
Replacement Reserves | 176,298 | 0.20 | ||||
Net Cash Flow | $23,481,345 | $26.64 | ||||
Occupancy | 100.0% | |||||
NOI Debt Yield(3) | 9.8% | |||||
NCF DSCR(3) | 2.84x |
(1) | Certain items such as straight line rent, interest expense, interest income, lease cancellation income, depreciation, amortization, debt service payments and any other non-recurring or non-operating items were excluded from the historical presentation and are not considered for the underwritten cash flow. |
(2) | Underwritten cash flows are based on contractual rents as of August 6, 2019 and contractual rent steps through August 31, 2020. |
(3) | NOI Debt Yield and NCF DSCR are calculated based on the USAA Office Portfolio Loan Combination. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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■ | Appraisal.According to the appraisals, the USAA Office Portfolio Properties had an aggregate “as-is” appraised value of $380,000,000 as of June 7, 2019. The dark value of Legacy Corporate Centre I & II and Legacy Corporate Centre III combined is $127,000,000, or approximately $331 per SF, and the dark value of Crosstown Center I and Crosstown Center II combined is $143,000,000, or approximately $287 per SF, according to the appraisals. |
Location | Appraisal Approach | Value | Discount Rate | Capitalization Rate | ||||||
Plano, Texas | Direct Capitalization Approach | $180,000,000 | N/A | 5.50 | % | |||||
Tampa, Florida | Direct Capitalization Approach | $196,000,000 | N/A | 5.75 | % | |||||
Discounted Cash Flow Approach | $200,000,000 | 7.00 | % | 6.50 | %(1) |
(1) | Represents the terminal cap rate. |
■ | Environmental Matters. According to the Phase I environmental reports dated June 21, 2019 and provided in connection with the origination of the USAA Office Portfolio Loan Combination, there are no recognized environmental conditions or recommendations for further action at the USAA Office Portfolio Properties. |
■ | Market Overview and Competition. The USAA Office Portfolio Properties total 881,490 SF of Class A office space and are located in Plano, Texas (43.6% of total SF) and Tampa, Florida (56.4% of total SF). Plano and Tampa have highly diversified economies posting significant corporate employment growth. Plano is located 20 miles north of downtown Dallas and is a hub for major corporate employers, such as PepsiCo, Pizza Hut, Toyota, J.P. Morgan, Fannie Mae, FedEx and Liberty Mutual. The Tampa assets are located in Hillsborough County’s I-75 corridor, which is widely regarded as one of the most prestigious office submarkets in the Tampa Bay area. East Tampa’s accessibility and affordability have attracted global and national companies including Johnson & Johnson, J.P. Morgan, Citicorp, Progressive Insurance, Spectrum/Bright House, Verizon and Advent Health. |
The leases on the USAA Office Portfolio Properties are structured as triple-net leases, with the tenant responsible for all associated operating expenses.
Since 2015, Plano’s population grew an estimated 3.3% to 282,700 in 2018. According to residential development projections by the city’s planning department, population is projected to grow to 292,900 by 2028 and to 300,000 by 2038. According to the U.S. Census Bureau, the median household income of Plano is $85,085 as of January 2019. The unemployment rate in Plano for fiscal year 2018 remained at 3.2%.
The Crosstown Center properties are located in the East Tampa submarket and approximately 8.5 miles east of downtown Tampa, Florida. The City of Tampa serves a population of approximately 385,430. Tampa is home to several company headquarters including Publix Supermarkets, Raymond James Financial, Jabil, TECO Energy, Sykes Enterprises, ALDI, HCA West Florida and Tech Data.
■ | The Borrowers.The borrowers are JDM Legacy TX, LLC and JDM Crosstown FL, LLC, each a Delaware limited liability company. Legal counsel to the borrowers delivered a non-consolidation opinion in connection with the origination of the USAA Office Portfolio Loan Combination. The non-recourse carveout guarantor and borrower sponsor under the USAA Office Portfolio Loan Combination is JDM Real Estate Funds, LLC, a Delaware limited liability company. |
The sponsor, JDM Real Estate Funds, LLC, (“JDM REF”) is a real estate investment fund manager that primarily acquires and holds properties leased to credit tenants through triple-net leases throughout the United States. JDM REF focuses on real estate that is operated by a single tenant, and its diversified portfolio of triple-net leased assets includes corporate offices, data centers, and an industrial facility. JDM REF was founded and is controlled by Jerry Colangelo, David Eaton and Mel Shultz, who have led the business together for over 35 years and who collectively possess over 125 years of real estate, sports and entertainment, development and operational experience. As of December 31, 2018, JDM REF manages a portfolio of 24 individual triple-net leased commercial office, data center and industrial properties located in 17 states comprising approximately 8.5 million rentable square feet of operational space.
■ | Escrows.On each payment date during the continuance of a USAA Office Portfolio Trigger Period, the borrowers will be required to fund (i) a tax and insurance reserve in an amount equal to one-twelfth of the property taxes and insurance premiums that will be payable during the next 12 months, (ii) a tenant improvements and leasing commissions reserve in an amount equal to $73,457.50 and (iii) a capital expenditure reserve in an amount equal to $14,691.50. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #3: usaa office portfolio
A “USAA Office Portfolio Trigger Period” means any period during which (i) for any reason other than the continuance of a USAA Office Portfolio Lease Sweep Period, net operating income (as calculated under the loan documents) falls below $17,177,565.85 as of the end of any fiscal quarter, until net operating income (as calculated under the loan documents) exceeds $17,177,565.85 as of the end of two consecutive fiscal quarters thereafter, (ii) a USAA Office Portfolio Lease Sweep Period is continuing or (iii) an event of default is continuing under any mezzanine loan originated in connection with a request by the lender to restructure the USAA Office Portfolio Loan Combination.
A “USAA Office Portfolio Lease Sweep Period” means any period commencing on the date USAA (i) surrenders, cancels, terminates, or materially modifies any of its leases with the borrowers and ending upon a Replacement Lease Cure; (ii) is required to, but has not, exercised any extension option and ending upon the last day for the exercise of such option has lapsed, or the date that is 12 months prior to expiration of such lease (absent a renewal or extension of such lease) and ending upon either (x) USAA renewing or extending the term of the applicable lease for a term of no less than 10 years on arm’s-length prevailing market terms (or on the terms that would have otherwise applied to an extension or renewal if it had been timely renewed or extended) or (y) a Replacement Lease Cure; (iii) defaults in the payment of rent (after any applicable notice and cure periods) under any USAA lease and ending upon either (x) the cure of such default or (y) a Replacement Lease Cure; (iv) files or is the subject of, or its lease guarantor, if any, files or is the subject of, any bankruptcy or similar insolvency proceeding or has its assets made subject to the jurisdiction of a bankruptcy court and ending upon either (x) the assumption by USAA of the applicable USAA lease, or (y) a Replacement Lease Cure; or (v) notifies the borrowers in writing of its election to terminate any lease within the next 12 months in accordance with its terms as a result of the occurrence of a casualty or condemnation and ending upon a Replacement Lease Cure. In addition, a USAA Office Portfolio Lease Sweep Period will be deemed to have ended upon (x) the subaccount of the cash management account known as the excess cash flow reserve account containing funds in the amount of the USAA Office Portfolio Lease Sweep Cap Amount (giving credit for amounts (if any) in the tenant improvements and leasing commissions reserve and the capital expenditure reserve) or (y) the borrowers’ delivery of additional collateral to the lender in the form of cash or a letter of credit reasonably acceptable to the lender in an amount equal to the USAA Office Portfolio Lease Sweep Cap Amount.
A “Replacement Lease Cure” means the borrowers entering into one or more qualified replacement leases for at least 90% of the space demised under the applicable lease or with aggregate net effective rent under such replacement lease(s) of no less than 90% of the net effective rent under the replaced lease.
A “USAA Office Portfolio Lease Sweep Cap Amount” means, with respect to any USAA Office Portfolio Trigger Period caused solely by a USAA Office Portfolio Lease Sweep Period, an amount equal to the product of (x) $30, times (y) the rentable square footage under the applicable lease(s) to USAA and to the extent causing the applicable USAA Office Portfolio Lease Sweep Period.
■ | Lockbox and Cash Management. The USAA Office Portfolio Loan Combination is structured with a hard lockbox and springing cash management. The borrowers are required to direct each tenant at each USAA Office Portfolio Property to deposit rents directly into a lender-controlled lockbox account. In addition, the borrowers are required to cause all cash revenues relating to the USAA Office Portfolio Properties and all other money received by the borrowers or the property manager with respect to the USAA Office Portfolio Properties (other than tenant security deposits) to be deposited into a lender-controlled lockbox account or, during a continuing USAA Office Portfolio Trigger Period or an event of default, a lender-controlled cash management account within one business day of receipt. On each business day during the continuance of a USAA Office Portfolio Trigger Period or an event of default, all amounts in the lockbox account are required to be remitted to the cash management account. On each business day that no USAA Office Portfolio Trigger Period or event of default is continuing, all funds in the lockbox account are required to be swept into a borrower-controlled operating account. |
On each payment date during the continuance of a USAA Office Portfolio Trigger Period or, at the lender’s discretion, during an event of default under the USAA Office Portfolio Loan Combination, all funds on deposit in the cash management account after payment of debt service, required reserves and budgeted operating expenses are required to be reserved as additional collateral for the USAA Office Portfolio Loan Combination, unless such USAA Office Portfolio Trigger Period is solely caused by a USAA Office Portfolio Lease Sweep Period, in which case the amount required to be reserved as additional collateral is equal to the amount necessary to cause the sum of the amounts in the excess cash reserve account, the tenant improvements and leasing commissions reserve account and the capital expenditure reserve account to equal the USAA Office Portfolio Lease Sweep Cap Amount.
■ | Property Management. The USAA Office Portfolio Properties are self-managed by the sole tenant. Under the related loan documents, the USAA Office Portfolio Properties are required to be managed during the term of the USAA Office Portfolio Loan Combination by any of (i) the sole tenant, (ii) JLL, (iii) CBRE, (iv) Cushman & Wakefield, (v) any affiliate |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #3: usaa office portfolio
of the sponsor, (vi) a reputable and experienced owner, operator or manager of commercial properties with at least five years’ experience in the ownership, operation or management of properties similar to the USAA Office Portfolio Properties containing at least 5,000,000 rentable square feet, provided that such property manager is not the subject of bankruptcy or similar proceedings or (vii) any other management company reasonably approved by the lender and with respect to which a Rating Agency Confirmation has been received. |
The lender has the right to replace, or require the borrowers to replace, any property manager appointed by the borrowers with a property manager selected by the borrowers, subject to the lender’s reasonable approval (or, in the event of an event of default under the USAA Office Portfolio Loan Combination or following any foreclosure, conveyance in lieu of foreclosure or other similar transaction, selected by the lender) (i) during the continuance of an event of default under the USAA Office Portfolio Loan Combination, (ii) following any foreclosure, conveyance in lieu of foreclosure or other similar transaction, (iii) during the continuance of a material default by the property manager under the management agreement (after the expiration of any applicable notice and/or cure periods), (iv) if the property manager files or is the subject of a bankruptcy petition, (v) if a trustee or receiver is appointed for the property manager’s assets or the property manager makes an assignment for the benefit of creditors or (vi) if the property manager is adjudicated insolvent.
■ | Release of Collateral. Provided no event of default under the USAA Office Portfolio Loan Combination is continuing, the borrowers have a one-time right at any time from and after July 6, 2020 to obtain the release of a single USAA Office Portfolio Property subject to the satisfaction of certain conditions, including, among others: (i) prepayment (together with any applicable yield maintenance premium) in an amount equal to the greater of (x) 110% of the allocated loan amount for the applicable USAA Office Portfolio Property or (y) the portion of the net proceeds received by the borrowers in connection with the sale of such USAA Office Portfolio Property that when applied to the repayment of the USAA Office Portfolio Loan Combination would result in a loan-to-value ratio of not greater than 60% (based on a newly acquired appraisal of the applicable USAA Office Portfolio Properties), (ii) after giving effect to such release, the debt yield (as calculated under the loan documents) for the 12-month period ending on the last day of the most recent fiscal quarter, is no less than the greater of (x) 8.3% and (y) the debt yield (as calculated under the loan documents) immediately prior to such release, (iii) delivery of a Rating Agency Confirmation and (iv) delivery of a REMIC opinion. |
■ | Current Mezzanine or Secured Subordinate Indebtedness. None. |
■ | Permitted Future Mezzanine or Secured Subordinate Indebtedness. Not permitted. |
■ | Terrorism Insurance. So long as TRIPRA is in effect, the borrowers are required to maintain terrorism insurance in an amount equal to the full replacement cost of the USAA Office Portfolio Properties, as well as 18 months of rental loss and/or business interruption coverage, together with a 12-month extended period of indemnity following restoration. If TRIPRA is no longer in effect, but terrorism insurance is commercially available, then the borrowers’ will be required to maintain terrorism insurance, but will not be required to spend on terrorism insurance coverage more than two times the amount of the insurance premium payable in respect of the property and business interruption/rental loss insurance required under the related loan documents. See “Risk Factors—Terrorism Insurance May Not Be Available for All Mortgaged Properties” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #4: the lincoln apartments
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #4: the lincoln apartments
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #4: the lincoln apartments
Mortgaged Property Information | Mortgage Loan Information | ||||||||||||
Number of Mortgaged Properties | 1 | Loan Seller | CREFI | ||||||||||
Location (City/State) | Brooklyn, New York | Cut-off Date Balance | $60,420,000 | ||||||||||
Property Type | Multifamily | Cut-off Date Balance per Unit | $428,510.64 | ||||||||||
Size (Units) | 141 | Percentage of Initial Pool Balance | 4.7% | ||||||||||
Total Occupancy as of 6/30/2019(1) | 76.6% | Number of Related Mortgage Loans | None | ||||||||||
Owned Occupancy as of 6/30/2019(1) | 76.6% | Type of Security | Fee Simple | ||||||||||
Year Built / Latest Renovation | 2017 / NAP | Mortgage Rate | 3.94000% | ||||||||||
Appraised Value | $105,600,000 | Original Term to Maturity (Months) | 120 | ||||||||||
Appraisal Date | 4/5/2019 | Original Amortization Term (Months) | NAP | ||||||||||
Borrower Sponsor | Aleksander Goldin | Original Interest Only Period (Months) | 120 | ||||||||||
Property Management | Century Management Services, Inc. | First Payment Date | 9/6/2019 | ||||||||||
Maturity Date | 8/6/2029 | ||||||||||||
Underwritten Revenues | $5,139,409 | ||||||||||||
Underwritten Expenses | $1,247,187 | Escrows(3) | |||||||||||
Underwritten Net Operating Income (NOI) | $3,892,222 | Upfront | Monthly | ||||||||||
Underwritten Net Cash Flow (NCF) | $3,819,761 | Taxes | $51,587 | $17,196 | |||||||||
Cut-off Date LTV Ratio | 57.2% | Insurance | $14,660 | $7,330 | |||||||||
Maturity Date LTV Ratio | 57.2% | Replacement Reserve | $0 | $2,664 | |||||||||
DSCR Based on Underwritten NOI / NCF | 1.61x / 1.58x | TI/LC | $0 | $0 | |||||||||
Debt Yield Based on Underwritten NOI / NCF(2) | 6.6% / 6.4% | Other(4) | $1,012,500 | $0 | |||||||||
Sources and Uses | |||||||||||||
Sources | $ | % | Uses | $ | % | ||||||||
Loan Amount | $60,420,000 | 82.8% | Loan Payoff | $66,981,017 | 91.8% | ||||||||
Preferred Equity(5) | 12,580,000 | 17.2 | Return of Sponsor Equity | 3,325,468 | 4.6 | ||||||||
Closing Costs | 1,614,768 | 2.2 | |||||||||||
Upfront Reserves | 1,078,747 | 1.5 | |||||||||||
Total Sources | $73,000,000 | 100.0% | Total Uses | $73,000,000 | 100.0% | ||||||||
(1) | Total Occupancy and Owned Occupancy are based on occupied units as of the underwritten rent roll dated June 30, 2019. |
(2) | The Debt Yield Based on Underwritten NOI / NCF are calculated net of a $1,000,000 holdback reserve. The holdback reserve, which represents approximately one year of rent for the affordable units, will be held by the lender until achievement of a debt yield of at least 7.25%; provided, however, that if The Lincoln Apartments Loan (as defined below) does not achieve a debt yield of at least 7.25% on or before August 6, 2021, such funds will be held as additional collateral for The Lincoln Apartments Loan. The Debt Yield Based on Underwritten NOI / NCF calculated based on the fully funded aggregate Cut-off Date Balance of $60,420,000 is equal to 6.4% and 6.3%, respectively. |
(3) | See“Escrows” below. |
(4) | Upfront Other reserves consist of (i) $1,000,000 for a holdback reserve to be released upon the debt yield reaching 7.25% and (ii) $12,500 for an immediate repairs reserve. |
(5) | See “Preferred Equity” below. |
■ | The Mortgage Loan. The mortgage loan (“The Lincoln Apartments Loan”) is secured by a first mortgage encumbering the borrower’s fee simple interest in two high-rise multifamily buildings consisting of 141 units, located in Brooklyn, New York (“The Lincoln Apartments Property”). The Lincoln Apartments Loan had an original principal balance of $60,420,000, has a Cut-off Date Balance of $60,420,000 and represents approximately 4.7% of the Initial Pool Balance. The Lincoln Apartments Loan, which accrues interest at an interest rate of 3.94000%per annum, was originated by CREFI on July 19, 2019. |
The Lincoln Apartments Loan has an initial term of 120 months and has a remaining term of 120 months as of the Cut-off Date. The Lincoln Apartments Loan requires monthly payments of interest only for the term of The Lincoln Apartments Loan. The scheduled maturity date of The Lincoln Apartments Loan is the due date in August 2029.Provided no event of default has occurred and is continuing, at any time after the second anniversary of the securitization closing date, The Lincoln Apartments Loan may be defeased with certain direct full faith and credit obligations of the United States of America or other obligations which are “government securities” permitted under The Lincoln Apartments Loan documents.Voluntary prepayment of The Lincoln Apartments Loan is permitted on or after the due date occurring in May 2029 without payment of any prepayment premium.
■ | The Mortgaged Property.The Lincoln Apartments Property consists of two nine-story, Class A buildings which are comprised of 141 residential units (98 market rate units and 43 affordable units), two ground-floor retail units (one in each building), two community facility spaces and a two-level below grade parking garage totaling 76 parking spaces. Individual units at The Lincoln Apartments Property feature dark wood flooring, stainless steel kitchen appliances, black granite kitchen countertops and deep soaking bathtubs. Common amenities offered at The Lincoln Apartments Property consist of a full time attended door (Lincoln Road entrance only), roof deck, fitness center, lounge, yoga studio and bicycle storage. |
The buildings are located at 510 Flatbush Avenue (51 residential units) and 31-33 Lincoln Road (90 residential units) in the Prospect-Lefferts Gardens neighborhood of Brooklyn, New York. The market rate unit mix at The Lincoln Apartments Property consists of 27 studio units, 21 one-bedroom units, 48 two-bedroom units and two three-bedroom units. The affordable unit mix at The Lincoln Apartments Property consist of 12 studio units, 10 one-bedroom units and 21 two-bedroom units. The Lincoln Apartments Property was built in two phases: (i) the 510 Flatbush Avenue
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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building was completed in February 2017 and began lease-up in March 2017 and (ii) the 31-33 Lincoln Road building was completed in January 2018 and began its lease-up in February 2018.
As of the underwritten rent roll dated June 30, 2019, The Lincoln Apartments Property was 76.6% occupied (99.0% occupancy for market rate units and 25.6% occupied for affordable units). The 421-a tax abatement program provides that a certain number of affordable units be set aside and leased to persons with visual and/or hearing impairments. The lottery for such affordable units did not yield a sufficient number of eligible applicants to fill the visual and hearing impaired affordable units, therefore the borrower sponsor has requested a waiver of the requirement to set aside affordable units for the visually and/or hearing impaired. There are 16 affordable units in the 510 Flatbush Avenue building and 27 affordable units in the 31-33 Lincoln Road building. In connection with the lease-up of the affordable units, the borrower deposited $1.0 million into a holdback reserve account on the origination date of The Lincoln Apartments Loan. The reserve, which represents approximately one year of rent for the affordable units, will be held by the lender until achievement of a debt yield of at least 7.25%; provided, however, that if The Lincoln Apartments Loan does not achieve a debt yield of at least 7.25% on or before August 6, 2021, such funds will be held as additional collateral for The Lincoln Apartments Loan. Additionally, at closing, the borrower sponsor delivered a limited payment guaranty pursuant to which the borrower sponsor guaranteed payment of a portion of The Lincoln Apartments Loan in the amount of $2.0 million (the “Guaranteed Obligation”). If The Lincoln Apartments Property achieves a debt yield of at least 6.75% prior to August 6, 2020, then the Guaranteed Obligation is terminated.
One retail unit (12,000 SF) fronts Lincoln Road and is occupied by POM Group II, Inc. (d/b/a Lincoln Market) which is designated under the “FRESH” (Food Retail Expansion to Support Health) program. The FRESH program requires this space to be utilized as a grocery store which offers affordable quality food to underserved communities. Lincoln Market (underwritten annual base rent of $59.61 PSF) occupies its space subject to a 25-year lease which expires on November 16, 2041 and has one, five-year renewal option. The second retail unit (5,245 SF) fronts Flatbush Avenue and is occupied by Gaia Nomaya, a restaurant tenant who is currently in the process of building out its space. Gaia Nomaya occupies its space pursuant to a lease with an expiration date of August 31, 2033 and has two, five-year renewal options. The two community facilities (totaling 1,623 SF) are leased to Wellness Womb through August 31, 2033 with two, five-year renewal options.
The following table presents certain information relating to the units and rent at The Lincoln Apartments Property:
Multifamily Unit Mix(1) | |||||||||||||||||||||
Unit Type | # of Units | % of Units | Occupied Units(1) | % Occupied | Average Unit Size (SF) | Average Market Rent per Month(2)(3) | In-Place Average Rent per Month(1)(3) | ||||||||||||||
Studio - Market Rate | 27 | 27.6 | % | 27 | 100.0 | % | 467 | $2,225 | $2,220 | ||||||||||||
1 BR - Market Rate | 21 | 21.4 | 21 | 100.0 | 621 | 2,995 | 2,943 | ||||||||||||||
2 BR - Market Rate | 48 | 49.0 | 47 | 97.9 | 830 | 3,500 | 3,421 | ||||||||||||||
3 BR - Market Rate | 2 | 2.0 | 2 | 100.0 | 1,220 | 5,000 | 5,593 | ||||||||||||||
Subtotal / Wtd. Avg. (Market Rate Units) | 98 | 100.0 | % | 97 | 99.0 | % | 693 | $3,071 | $3,032 | ||||||||||||
Studio – Affordable | 12 | 27.9 | 6 | 50.0 | 480 | 1,807 | 1,807 | ||||||||||||||
1 BR - Affordable | 10 | 23.3 | 4 | 40.0 | 630 | 2,270 | 2,270 | ||||||||||||||
2 BR - Affordable | 21 | 48.8 | 1 | 4.8 | 799 | 2,733 | 2,733 | ||||||||||||||
Subtotal / Wtd. Avg. (Affordable Units) | 43 | 100.0 | % | 11 | 25.6 | % | 671 | $2,367 | $2,367 | ||||||||||||
Total / Wtd. Avg. (All Units) | 141 | 108 | 76.6 | % | 686686 | $2,856 | $2,829 |
(1) | Based on the underwritten rent roll dated June 30, 2019. |
(2) | Source: Appraisal. |
(3) | Weighted based on the number of total units available. |
■ | Tax Abatement.The Lincoln Apartments Property benefits from a 35-year, 421-a tax abatement program under the Affordable New York Program Option C. Under this abatement, the 510 Flatbush Avenue building will receive a 98.19% tax exemption for 25 years (through the 2041/2042 tax year) and the 31-33 Lincoln Road building will receive a 96.5% tax exemption for 25 years (through the 2042/2043 tax year), in each case, on any assessment increase above the base year assessment of $506,867 for the 510 Flatbush Avenue building and $977,879 for the 31-33 Lincoln Road building (total of $1,484,746). In return, The Lincoln Apartments Property must designate 30% of units at each property (43 units in the aggregate) as affordable units at 130% of the Kings County area median income. Following the 2041/2042 or 2042/2043 tax year, as applicable, The Lincoln Apartments Property will receive a 29.56% |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #4: the lincoln apartments
tax exemption through the 2051/2052 tax year with respect to the 510 Flatbush Avenue building and 26.5% tax exemption through the 2052/2053 tax year with respect to the 31-33 Lincoln Road building. |
The following table presents certain information relating to leasing at The Lincoln Apartments Property:
Historical Leased %(1)
As of 6/30/2019 | |
Market Rate Units | 99.0% |
Affordable Units | 25.6% |
All Units | 76.6% |
(1) | The Lincoln Apartments Property was constructed in two phases. The 510 Flatbush Avenue building was completed in February 2017 and began lease-up in March 2017 and the 31-33 Lincoln Road building was completed in January 2018 and began its lease-up in February 2018, therefore, no historical occupancy information was available. |
■ | 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 Lincoln Apartments Property: |
Cash Flow Analysis(1)(2)
TTM 5/31/2019 | Underwritten | Underwritten $ per Unit | Leased Affordable UW | Leased Affordable UW $ per Unit | ||||||||||
Apartment Income | ||||||||||||||
Base Rent(3) | $2,433,564 | $3,796,365 | $26,924.57 | $3,796,365 | $26,924.57 | |||||||||
Potential Income from Vacant Units(4) | 0 | 991,464 | 7,031.66 | 991,464 | 7,031.66 | |||||||||
Gross Potential Rent | $2,433,564 | $4,787,829 | $33,956.23 | $4,787,829 | $33,956.23 | |||||||||
Vacancy & Credit Loss & Concessions(5) | 0 | (991,464 | ) | (7,031.66 | ) | (239,391 | ) | (1697.81 | ) | |||||
Total Rent | $2,433,564 | $3,796,365 | $26,924.57 | $4,548,438 | $32,258.42 | |||||||||
Other Income(6) | 116,528 | 228,477 | 1,620.40 | 228,477 | 1,620.40 | |||||||||
Effective Gross Income – Apartments | $2,550,092 | $4,024,842 | $28,544.98 | $4,776,914 | $33,878.82 | |||||||||
Commercial Income | ||||||||||||||
Commercial Base Rent(7) | $795,072 | $1,114,567 | $7,904.73 | $1,114,567 | $7,904.73 | |||||||||
Vacancy & Credit Loss & Concessions(8) | 0 | 0 | 0 | (55,728 | ) | (395.24 | ) | |||||||
Effective Gross Income – Commercial | $795,072 | $1,114,567 | $7,904.73 | $1,058,839 | $7,509.50 | |||||||||
Total Effective Gross Income | $3,345,164 | $5,139,409 | $36,449.71 | $5,835,753 | $41,388.32 | |||||||||
Real Estate Taxes | $187,260 | $187,256 | $1,328.06 | $187,256 | $1,328.06 | |||||||||
Insurance | 84,799 | 83,773 | 594.13 | 83,773 | 594.13 | |||||||||
Management Fee | 65,731 | 154,182 | 1,093.49 | 175,073 | 1,241.65 | |||||||||
Other Operating Expenses | 773,742 | 821,976 | 5,829.62 | 821,976 | 5,829.62 | |||||||||
Total Operating Expenses | $1,111,532 | $1,247,187 | $8,845.30 | $1,268,078 | $8,993.46 | |||||||||
Net Operating Income | $2,233,631 | $3,892,222 | $27,604.41 | $4,567,676 | $32,394.86 | |||||||||
Replacement Reserves – Apartments | 0 | 35,250 | 250.00 | 35,250 | 250.00 | |||||||||
Replacement Reserves – Commercial | 0 | 3,774 | 0.20 | (9) | 3,774 | 0.20 | (9) | |||||||
TI/LC | 0 | 33,437 | 1.77 | (9) | 31,765 | 1.68 | (9) | |||||||
Net Cash Flow | $2,233,631 | $3,819,761 | $27,090.50 | $4,496,887 | $31,892.81 | |||||||||
Occupancy | NAV | 76.6 | % | 95.0 | % | |||||||||
NOI Debt Yield(10) | 3.7 | % | 6.6 | % | 7.6 | % | ||||||||
NCF DSCR | 0.93 | x | 1.58 | x | 1.86 | x | ||||||||
(1) | The Lincoln Apartments Property was constructed in two phases. The 510 Flatbush Avenue building was completed in February 2017 and began lease-up in March 2017 and the 31-33 Lincoln Road building was completed in January 2018 and began its lease-up in February 2018, therefore, no historical financial information was available. |
(2) | Underwritten cash flows represent the in-place cash flows at The Lincoln Apartments Property (76.6% physical occupancy for the multifamily portion and 100.0% occupancy for the commercial retail space). The Leased Affordable UW cash flows reflect cash flows assuming the vacant affordable units have been leased to eligible tenants at specified affordable rents. On the origination date of The Lincoln Apartments Loan, the borrower deposited $1.0 million into an upfront holdback reserve. The reserve, which represents approximately one year of rent for the affordable units, will be held by the lender until the achievement of a debt yield of 7.25% (which is required to be achieved on or before August 6, 2021). It the reserve is not distributed on or before August 6, 2021, amounts therein will be held as additional collateral for The Lincoln Apartments Loan. |
(3) | Underwritten Base Rent and Leased Affordable UW Base Rent arebased on occupied units as of the underwritten rent roll dated June 30, 2019. |
(4) | Potential Income from Vacant Units represents one market rate two-bedroom unit, six affordable studio units, six affordable one-bedroom units and 20 affordable two-bedroom units at the appraisal’s estimated market rents. |
(5) | Underwritten Vacancy & Credit Loss & Concessions for the multifamily units is underwritten to an economic vacancy of 20.7%. Leased Affordable UW Vacancy & Credit Loss & Concessions for the multifamily units is underwritten to an economic vacancy of 5.0%. |
(6) | Other Income consists of parking income of $105,600, where 32 of the total 76 spaces are currently rented at $275 per month, storage income of $49,800, where 10 of the total 39 apartment storage spaces are rented at $65 per month, and a commercial storage space is rented at $3,500 per month expiring on August 31, 2033, bike storage income of $2,100, where seven of the total 62 racks are rented at $25 per month, electrical charges of $43,484, and laundry income of $27,492. |
(7) | Commercial Base Rent was underwritten based on in-place leases for the retail space at The Lincoln Apartments Property. |
(8) | Underwritten Vacancy & Credit Loss & Concessions for the commercial retail space at The Lincoln Apartments Property of $0 represents physical occupancy of the commercial retail space of 100.0% as of the June 30. 2019 rent roll. Leased Affordable UW Vacancy & Credit Loss & Concessions for the commercial retail space reflects an economic vacancy of 5.0%. |
(9) | Calculated as 3.0% of commercial effective gross income based on the total SF of the commercial retail space at The Lincoln Apartments Property (18,868 SF). |
(10) | The underwritten NOI Debt Yield is adjusted for a $1,000,000 holdback reserve. The holdback reserve, which represents approximately one year of rent for the affordable units, will be held by the lender until the achievement of a debt yield of at least 7.25%; provided, however, that if The Lincoln Apartments Loan does not achieve a debt yield of at least 7.25% on or before August 6, 2021, such funds will be held as additional collateral for The Lincoln Apartments Loan. The underwritten NOI Debt Yield calculated based on the fully funded aggregate Cut-off Date Balance of $60,420,000 is equal to 6.4%. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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■ | Appraisal. According to the appraisal, The Lincoln Apartments Property had an “as-is” appraised value of $105,600,000 as of April 5, 2019. |
Property | Appraisal Approach | Value | Discount Rate | Capitalization Rate |
The Lincoln Apartments | Direct Capitalization Approach | $105,600,000 | N/A | 4.25% |
■ | Environmental Matters. According to a Phase I environmental report, dated June 19, 2019, there are no recognized environmental conditions or recommendations for further action at The Lincoln Apartments Property. |
■ | Market Overview and Competition. The Lincoln Apartments Property is located within Brooklyn in Kings County, New York which is part of the New York-Jersey City-White Plains metro area (“New York MSA”). According to the appraisal, the area has seen significant growth followed by some late-cycle pressures that are leading to jobs being added, but at a slower pace than they are nationally for the first time this cycle. The area also has a tight labor market with above-average wage growth. Per the appraisal, The Lincoln Apartments Property’s local market area is more heavily weighted towards the services, information and finance/insurance/real estate sectors. Major employers in the New York MSA include: Montefiore Health System, Mount Sinai Health System, JPMorgan Chase & Co., Bank of America and New York-Presbyterian Healthcare System. |
The Lincoln Apartments Property is located in the Prospect Lefferts Gardens neighborhood of Brooklyn, New York, which is primarily a residential neighborhood which is centrally located in Brooklyn, New York. Prospect Lefferts Gardens is situated in the Flatbush area of Brooklyn and it is home to a population of approximately 99,000 residents as of 2018. The area is most known for Prospect Park, which is Brooklyn’s second largest park and it sits directly adjacent to The Lincoln Apartments Property. The Prospect Park Zoo is located off Flatbush Avenue on the eastern side of Prospect Park. It spans 12 acres long and is home to 630 animals and averages 300,000 visitors annually. According to the appraisal, as a multifamily apartment building, The Lincoln Apartments Property conforms to its surrounding uses as it is located in a largely residential neighborhood. Primary access to The Lincoln Apartments Property’s neighborhood is provided by the Brooklyn Queens Expressway and major thoroughfares such as Atlantic Avenue, Fulton Street and Flatbush Avenue. The Lincoln Apartments Property is easily accessible via the highway, subway and bus system with the B and Q subway station that provides a 15-minute commute to Manhattan. The Lincoln Apartments Property is an approximately 40-minute drive from John F. Kennedy Airport. According to the appraisal, The Lincoln Apartments Property’s immediate area has experienced positive growth trends that are expected to benefit the property.
According to a third party report, The Lincoln Apartments Property is located in the Prospect Park submarket which is part of the greater New York multifamily market. As of the first quarter of 2019, the submarket reports a total inventory of 52,974 units that are split between 3,956 Class A units, 18,006 Class B units and 31,004 Class C units. Over the last 12 months, 428 new units have been delivered with a reported positive net absorption of 458 units. As of the first quarter of 2019, there are approximately 1,110 units under construction in the submarket. According to a third party report, the majority of new construction has only recently broken ground and are therefore a few years away from opening. As of the first quarter of 2019, the Prospect Park submarket reported a vacancy rate of 1.9% with average monthly rental rates of $2,518. The appraisal identified five comparable leases, consisting of a studio, one-bedroom, two-bedroom and three-bedroom apartments, ranging in size from 500 to 1,200 SF. All of the comparable leases were in similar buildings to The Lincoln Apartments Property and are situated within the Prospect Lefferts Garden neighborhood. The comparable leases exhibited a rental range of $2,130 to $5,500 per month ($40.00 to $64.94 per SF).
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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The following table presents certain information relating to the primary competition for The Lincoln Apartments Property:
Directly Competitive Buildings(1)(2)
The Lincoln Apartments(3) | The Plex | The Parkline | The Parkside Brooklyn | The Clark | Hello Lenox | |
Location | Brooklyn, NY | Brooklyn, NY | Brooklyn, NY | Brooklyn, NY | Brooklyn, NY | Brooklyn, NY |
Year Built | 2017 | 2009 | 2016 | 2014 | 2018 | 2016 |
Number of units | 141 | 98 | 203 | 96 | 170 | 55 |
Occupancy | 76.6% | NAV | NAV | NAV | NAV | NAV |
Unit size (SF): | ||||||
- Studio | 467 | 500 | 500 | 492 | 500 | NAP |
- 1-BR | 621 | 650 | 650 | 624 | 650 | NAP |
- 2-BR | 830 | 1,000 | NAP | 993-1,000 | 1,000 | 850 |
- 3-BR | 1,220 | 1,161 | NAP | 1,161 | 1,200 | 1,200 |
Rent per month: | ||||||
- Studio | $2,220 | $2,600 | $2,600 | $2,600 | $2,130 | NAP |
- 1-BR | $2,943 | $3,225 | $3,225 | $2,925 | $2,825 | NAP |
- 2-BR | $3,421 | $3,425 | NAP | $3,425-$4,100 | $3,600 | $4,600 |
- 3-BR | $5,593 | $4,230 | NAP | $4,250 | $4,000 | $5,500 |
(1) | Source: Appraisal. Occupancy for the competitive set was unavailable. |
(2) | The Directly Competitive Buildings chart represents information for market rate units. |
(3) | The rent per month for the subject property is based off of the underwritten rent roll dated June 30, 2019. |
Unit Rent Conclusions(1)
Unit Type | Appraisal Conclusion |
Studio - Market Rate | $2,225 |
Studio - Affordable | $1,807 |
1-BR - Market Rate | $2,995 |
1-BR - Affordable | $2,270 |
2-BR - Market Rate | $3,500 |
2-BR - Affordable | $2,733 |
3-BR - Market Rate | $5,000 |
(1) | Source: Appraisal. |
The Lincoln Apartments Property is located in the North Brooklyn retail submarket, as defined by a third party report. As of the first quarter of 2019, the submarket consists of a total inventory of 44.5 million SF with a 3.7% vacancy rate, 427,566 SF under construction, 321,310 SF of deliveries and positive absorption of 237,447 SF. The appraisal identified five comparable leases, ranging in size from 2,000 to 10,000 SF, and came up with a rental range of $48.00 to $60.00 per SF. The appraisal concluded a market rent of $60.00 per SF for ground level space and $35.00 per SF for below-grade space.
■ | The Borrower. The borrower is Lincoln Sponsor LLC, a Delaware limited liability company and single-purpose entity. The borrower is 100.0% owned by Lincoln JV LLC, a Delaware limited liability company. Lincoln JV LLC is owned by AG Lincoln Park Partners LLC, a Delaware limited liability company, as the common member and Lincoln Pref Holdco LLC, a Delaware limited liability company, as the preferred member. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of The Lincoln Apartments Loan. The sponsor and guarantor is Aleksander Goldin, who is based in Brooklyn, and is an owner and operator of commercial assets throughout the Tri-State area. In addition to The Lincoln Apartments Property, Aleksander Goldin owns two other multifamily properties in Brooklyn, four retail malls, two retail properties and two land parcels. |
■ | Escrows.On the origination date of The Lincoln Apartments Loan, the borrower funded reserves of (i) $51,587 for real estate taxes, (ii) $14,660 for insurance, (iii) $1,000,000 for a holdback reserve, and (iv) $12,500 for an immediate repair reserve. |
On each due date, the borrower will be required to fund the following reserves (i) one-twelfth of the taxes that the lender estimates will be payable over the next-ensuing 12-month period (initially estimated to be $17,196), (ii) one-twelfth of the amount that the lender estimates will be necessary to pay insurance premiums for the renewal of coverage (initially estimated to be $7,330), (iii) $2,350 for residential replacement reserves and (iv) $314 for commercial replacement reserves.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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■ | Lockbox and Cash Management. The Lincoln Apartments Loan is structured with a springing lockbox and springing cash management. Upon the first occurrence of The Lincoln Apartments Trigger Period (as defined below), the borrower will be required to establish a lockbox account into which all revenue from The Lincoln Apartments Property will be deposited. During the continuance of The Lincoln Apartments Trigger Period, all amounts in the lockbox account are required to be swept into a lender-controlled cash management account on each business day to be applied and disbursed in accordance with The Lincoln Apartments Loan documents and all excess cash flow funds remaining in the cash management account after the application of such funds in accordance with The Lincoln Apartments Loan documents are required to be held by the lender in an excess cash flow reserve account as additional collateral for The Lincoln Apartments Loan. Upon an event of default under The Lincoln Apartments Loan documents, the lender may apply funds in such order of priority as the lender may determine. |
“The Lincoln Apartments Trigger Period” means a period (A) commencing upon the earliest to occur of (i) the occurrence and continuance of an event of default under The Lincoln Apartments Loan documents and (ii) from and after August 6, 2020, the debt yield being less than 6.75%, and expiring upon, (B) with respect to The Lincoln Apartments Trigger Period which commenced in connection with clause (i) above, the cure (if applicable) of such event of default, and (C) with respect to The Lincoln Apartments Trigger Period which commenced in connection with clause (ii) above, the debt yield being equal to or greater than 7.00% for two consecutive calendar quarters.
■ | Property Management. The Lincoln Apartments Property is currently managed by Century Management Services, Inc. Under The Lincoln Apartments Loan documents, the lender has the right to terminate the property management agreement or direct the borrower to terminate the property management agreement and replace the property manager if (i) the property manager becomes insolvent or a debtor in an involuntary bankruptcy or insolvency proceeding not dismissed within 90 days or a debtor in any voluntary bankruptcy or insolvency proceeding, (ii) an event of default exists under The Lincoln Apartments Loan documents, (iii) the property manager has engaged in gross negligence, fraud, willful misconduct or misappropriation of funds, or (iv) a default by the property manager under the property management agreement exists beyond all applicable notice and cure periods. Provided no event of default under The Lincoln Apartments Loan documents has occurred and is continuing, the borrower has the right to replace the property manager with (i) Century Management Services, Inc., Greystar Real Estate Partners, Lincoln Property Company, Pinnacle, Alliance Residential, FPI Management Inc., Douglas Elliman Property Management, FirstService Residential, AKAM Living Services or Metropolitan Property Services, or (ii) a reputable professional property manager (with respect to which the lender has received a rating agency confirmation, if required by the lender) engaged pursuant to a management agreement approved in writing by the lender (which approval may be conditioned on receipt of a rating agency confirmation with respect to such agreement). |
■ | Current Mezzanine or Secured Subordinate Indebtedness. None. |
■ | Preferred Equity. In connection with the origination of The Lincoln Apartments Loan, Lincoln Pref Holdco LLC (the “Preferred Equity Holder”), an entity wholly owned by Kawa Capital Partners LLC, contributed $12,580,000 of preferred equity (the “Preferred Equity Investment”) as a non-managing member of Lincoln JV LLC (the “JV”), an entity that wholly owns the borrower, Lincoln Sponsor LLC. The Preferred Equity Investment provides for a preferred return of 9.75% per annum (or following a “change of control” event, 16% per annum) (the “Preferred Return”), of which 5.00% is required to be paid current monthly and with the remainder payable only to the extent that The Lincoln Apartments Property generates sufficient cash flow for the payment thereof (after payment of debt service and other amounts payable, including reserve payments, pursuant to The Lincoln Apartments Loan documents and operating expenses). Any portion of the preferred return not paid current on the applicable monthly payment date accrues at a rate of 11.00% per annum. The Preferred Equity Investment is required to be redeemed on the earlier to occur of (i) the maturity date of The Lincoln Apartments Loan, (ii) the acceleration of The Lincoln Apartments Loan or (iii) the prepayment or defeasance of The Lincoln Apartments Loan. At any time the Preferred Equity Investment is redeemed, the Preferred Equity Holder is entitled to an amount equal to (i) the Preferred Equity Investment and any other capital contributions made to the JV in accordance with the JV’s operating agreement, (ii) the Preferred Return, and (iii) the Prepayment Premium, if any. |
“Prepayment Premium” means (i) on or prior to July 19, 2026, the present value as of the applicable calculation date of all remaining required scheduled payments of the Preferred Return (computed at a discount rate equal to the semiannual yield to maturity on the U.S. Treasury bond with a maturity date closest to July 19, 2026, plus 50 basis points), (ii) after July 19, 2026 but on or prior to July 19, 2027, an amount equal to 4% of (a) the sum of any unreturned capital contributions made by the Preferred Equity Holder (including, without limitation, the Preferred Equity Investment and any other capital contributions by the Preferred Equity Holder) less (b) the aggregate amount received by the Preferred Equity Holder from the JV, as a return of capital contributions made by Preferred Equity
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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Holder to the JV in accordance with the JV’s operating agreement (the “Investor Unreturned Capital Contribution”), (iii) after July 19, 2027 but on or prior to July 19, 2028, an amount equal to 2% of the Investor Unreturned Capital Contribution, and (iv) after July 19, 2028, zero.
■ | Permitted Future Mezzanine or Secured Subordinate Indebtedness. Not permitted. |
■ | Terrorism Insurance. The borrower is required to maintain an “all-risk” insurance policy that provides coverage for terrorism in an amount equal to the full replacement cost of The Lincoln Apartments Property, plus business interruption coverage in an amount equal to 100% of the projected gross income for The Lincoln Apartments Property for 18 months with 150 days of extended indemnity. The “all-risk” policy containing terrorism insurance is required to contain a deductible that is acceptable to the lender and is no greater than $25,000. See“Risk Factors—Terrorism Insurance May Not Be Available for All Mortgaged Properties” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #5: POST RANCH INN
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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Mortgaged Property Information | Mortgage Loan Information | |||||
Number of Mortgaged Properties | 1 | Loan Seller | GACC | |||
Location (City/State) | Big Sur, California | Cut-off Date Balance | $60,000,000 | |||
Property Type | Hospitality | Cut-off Date Balance per Room | $1,538,462 | |||
Size (Rooms) | 39 | Percentage of Initial Pool Balance | 4.7% | |||
Total Occupancy as of 5/31/2019 | 81.6% | Number of Related Mortgage Loans | None | |||
Owned Occupancy as of 5/31/2019 | 81.6% | Type of Security | Fee Simple | |||
Year Built / Latest Renovation | 1992 / 2007, 2008, 2015-2018 | Mortgage Rate(2) | 3.29000% | |||
Appraised Value(1) | $141,700,000 | Original Term to Maturity (Months)(2) | 120 | |||
Appraisal Date | 6/4/2019 | Original Amortization Term (Months)(2) | NAP | |||
Borrower Sponsors | Peter Heinemann and Michael Freed | Original Interest Only Period (Months)(2) | 120 | |||
Property Management | Post Ranch Management LLC | First Payment Date | 9/6/2019 | |||
Anticipated Repayment Date(2) | 8/6/2029 | |||||
Final Maturity Date | 8/6/2034 | |||||
Underwritten Revenues | $29,758,597 | |||||
Underwritten Expenses | $18,807,717 | |||||
Underwritten Net Operating Income (NOI) | $10,950,880 | Escrows(3) | ||||
Underwritten Net Cash Flow (NCF) | $9,760,536 | Upfront | Monthly | |||
Cut-off Date LTV Ratio | 42.3% | Taxes | $0 | $0 | ||
Maturity Date LTV Ratio | 42.3% | Insurance | $0 | $0 | ||
DSCR Based on Underwritten NOI / NCF | 5.47x / 4.88x | Replacement Reserve | $0 | $0 | ||
Debt Yield Based on Underwritten NOI / NCF | 18.3% / 16.3% | Other | $0 | $0 | ||
Sources and Uses | ||||||
Sources | $ | % | Uses | $ | % | |
Loan Amount | $60,000,000 | 100.0% | Loan Payoff | $50,164,344 | 83.6% | |
Principal Equity Distribution | 9,137,173 | 15.2 | ||||
Closing Costs | 698,483 | 1.2 | ||||
Total Sources | $60,000,000 | 100.0% | Total Uses | $60,000,000 | 100.0% | |
(1) | The appraisal concluded a “When Complete” appraised value of $149,200,000 as of July 1, 2021, which assumes the completion of the borrower sponsors’ two year elective capital improvement plan equal to approximately $6.3 million. The appraisal also concluded a “When Stabilized” appraised value of $153,600,000 as of July 1, 2021, which assumes an increase in RevPAR, ADR and occupancy as a result of the 2018 completion of the borrower sponsor’s capital improvement plan. See “The Mortgage Property” herein. |
(2) | The Mortgage Rate reflects the interest rate before the anticipated repayment date. Original Term to Maturity (Months), Original Amortization Term (Months) and Original Interest Only Period (Months) were calculated through the ARD (as defined below). See “The Mortgage Loan” herein. |
(3) | See “—Escrows” below. |
■ | The Mortgage Loan.The mortgage loan (the “Post Ranch Inn Loan”) is secured by a first mortgage encumbering the borrower’s fee simple interest in a full-service luxury hotel located at 47900 Highway 1 in Big Sur, California (the “Post Ranch Inn Property”). The Post Ranch Inn Loan has an outstanding principal balance as of the Cut-off Date of $60,000,000 and represents approximately 4.7% of the Initial Pool Balance. The Post Ranch Inn Loan was originated by Deutsche Bank AG, New York Branch (an affiliate of German American Capital Corporation) (“DBNY”) on July 12, 2019, had an original principal balance of $60,000,000 and has an outstanding principal balance as of the Cut-off Date of $60,000,000. The Post Ranch Inn Loan accrues interest at an initial interest rate of 3.29000%per annum(the “Initial Interest Rate”) prior to the anticipated repayment date (“ARD”). The proceeds of the Post Ranch Inn Loan were primarily used to refinance the Post Ranch Inn Property, return equity to the borrower sponsors and pay closing costs. The prior financing of the Post Ranch Inn Property was included in the COMM 2014-CCRE19 transaction. |
The Post Ranch Inn Loan is structured with an ARD of August 6, 2029, a final maturity date of August 6, 2034 and will be interest-only for the initial term. From and after the ARD, (i) the Post Ranch Inn Loan accrues interest at a fixed rate per annum (the “Adjusted Interest Rate”) equal to the sum of 300 basis points plus the greater of (a) the Initial Interest Rate and (b) the sum of (1) the lender’s determination as of the ARD (or the preceding business day if the ARD is not a business day) of the sum of (x) the bid side yield to maturity for the “on the run” United States Treasury note with a 10 year maturity plus (y) the mid-market 10 year swap spread, plus (2) 190 basis points and (ii) the borrower is required to make a monthly interest payment amount equal to the interest accrued at the Initial Interest Rate. The portion of the interest at the Adjusted Interest Rate in excess of interest at the Initial Interest Rate (the “Additional Accrued Interest”) will accrue and be payable at maturity.
Provided that no event of default has occurred and is continuing under the Post Ranch Inn Loan documents, at any time on or after August 6, 2022, the Post Ranch Inn Loan may be prepaid in full, provided the applicable prepayment is accompanied by payment of the greater of 1% of the unpaid principal balance or a yield maintenance premium. Provided that no event of default has occurred and is continuing under the Post Ranch Inn Loan documents, voluntary prepayment of the Post Ranch Inn Loan without a prepayment premium or yield maintenance charge is permitted on or after April 6, 2029.
■ | The Mortgaged Property. The Post Ranch Inn Property is a destination luxury resort, overlooking the Pacific Ocean from the cliffs of Big Sur, California. Situated on approximately 90.4 acres, the Post Ranch Inn Property features 39 guestrooms located across 26 one-, two- and three-story buildings, and three guest houses subject to a rental service agreement as described below. The Post Ranch Inn Property features a spa, two cliff-top infinity-edge pools, an |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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outdoor heated lap pool, private hiking trails, yoga and meditation decks, a fitness center and the award winning restaurant, Sierra Mar. The Post Ranch Inn Property was built in 1992 by the borrower sponsors and most recently renovated between 2015 and 2018. Since 2015, the borrower sponsors have invested approximately $9.9 million ($253,846/room) into the Post Ranch Inn Property. Major improvements include the renovation of all 10 Coast Houses guestrooms and seven Tree Houses guestrooms, a full rebuild of the Sierra Mar bar area, refinishing of all outdoor teak furniture, re-grouting and sealing of the meditation pool and the renovation and relocation of the Mercantile retail outlet and fitness center. In addition, the borrower sponsors constructed 12 new units for employee housing, renovated 40 units for employee housing and renovated the old general manager’s quarters. The Post Ranch Inn Property is currently undergoing an estimated $6.345 million two-year capital improvement plan. The capital improvement plan includes upgrades to the Ocean Houses, exterior of the Coast Houses, Butterfly Houses, North Ridge House mechanical and electrical systems, outdoor furniture, maintenance carts/vehicles, laundry equipment, kitchen equipment, wine cellar, wastewater systems and various additional upgrades. |
The northern guestrooms include 29 bungalow-style rooms that are designated as Coast Houses, Tree Houses, Ocean Houses, the Mountain House, and the Butterfly House. All of the Ocean Houses are single-story buildings that include grass-covered roofs, private outdoor decks and ocean views. The Coast Houses are two-story cylindrically shaped buildings that also have private outdoor decks and ocean views. The Tree Houses are built upon stilts nine feet above the ground and offer both ocean and mountainside views. The Butterfly House is a three-story building that is situated in the trees with views to the Ventana Mountains and glimpses of the ocean. The Mountain House is a two-story cylindrically shaped building similar to the Coast Houses, but with views of the Ventana Mountains. The southern guestrooms, added to the Post Ranch Inn Property in 2008, consist of 10 circular-shaped guestrooms with three different styles: Cliff Houses, Peak Houses, and the Pacific Suites properties. All of the Cliff Houses and Pacific Suites offer views of the Pacific Ocean and Big Sur coastline, while the Peak Houses properties offer views of the Ventana Mountains and the Ventana wilderness area. The Pacific Suites and the Peak Houses properties are two-story buildings and the Cliff Houses property is a one-story building.
Each room provides a wood-burning fireplace, indoor spa tub, mini-bar with complimentary snacks and non-alcoholic beverages and private deck. The guest rooms range in size from approximately 685 SF to 960 SF, offering a king bed with furniture custom built by a local craftsman in the hotel’s own woodshop. Guestroom bathrooms feature a granite tub and shower combination and heated floors. Most guestroom bathrooms have direct access onto an outdoor deck overlooking Big Sur's coastline, complete with a two-person hot tub.
The Post Ranch Inn received the following awards in 2018: (i) the Grand Award from Wine Spectator, (ii) #1 Favorite Hotel Hideaway, #1 Hotel with the Best View and #1 Most Romantic Atmosphere from Andrew Harper, (iii) #1 Top Hotel in California and #4 Top Continental US Resort from Travel + Leisure’s Reader’s Choice and (iv) a 4-Star Award for Hotel-Restaurant-Spa from Forbes Travel Guide.
■ | Rental Service Agreement. There are two rental service agreements in place, whereby the Post Ranch Inn Property maintains the right to rent out three homes located on a separate parcel of land adjacent to the Post Ranch Inn Property. The first rental service agreement is between Michael Freed and an unrelated individual, as tenants in common, and the borrower for the right to rent out the South Coast House to guests of the Post Ranch Inn Property. The second rental service agreement is between Onesimo Parcel C LLC, an affiliate of the sponsors, and the borrower for the rights to rent out the Post House and the Callahan Cottage to guests of the Post Ranch Inn Property. These agreements were signed on July 29, 2014. The initial term on both agreements was for one year and can be automatically extended for consecutive one-year periods unless otherwise terminated by either party. Both agreements remain currently active and there are no restrictions on the number of days per year the Post Ranch Inn Property can utilize the homes. In the trailing twelve months ending May 31, 2019, the estimated net income from these houses totaled approximately $194,000 or just less than 2.0% of trailing 12 month net cash flow. Both agreements are expected to remain outstanding for the term of the Post Ranch Inn Loan. |
■ | 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, on an aggregate basis and per room, at the Post Ranch Inn Property: |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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Cash Flow Analysis(1)
2016(2) | 2017(3) | 2018(3)(4) | TTM 5/31/2019(4) | Underwritten | Underwritten $ per Room | |||||||
Room Revenue | $18,244,441 | $10,470,250 | $20,711,444 | $21,043,133 | $21,043,133 | $539,567.51 | ||||||
Food & Beverage Revenue | 6,247,810 | 2,846,839 | 5,593,965 | 5,798,205 | 5,798,205 | 148,672 | ||||||
Other Revenue | 2,384,431 | 1,868,549 | 2,775,327 | 2,917,259 | 2,917,259 | 74,802 | ||||||
Total Revenue | $26,876,682 | $15,185,638 | $29,080,736 | $29,758,597 | $29,758,597 | $763,041 | ||||||
Room Expense | $4,347,049 | $2,872,614 | $4,175,150 | $4,448,647 | $4,448,647 | $114,068 | ||||||
Food & Beverage Expense | 5,425,081 | 2,816,083 | 4,384,526 | 4,856,198 | 4,856,198 | 124,518 | ||||||
Other Expense | 1,493,718 | 1,014,905 | 1,525,435 | 1,701,581 | 1,701,581 | 43,630 | ||||||
Total Departmental Expenses | 11,265,848 | 6,703,602 | 10,085,111 | 11,006,426 | 11,006,426 | 282,216 | ||||||
Total Undistributed Expense | 5,270,451 | 4,327,882 | 5,417,708 | 5,516,319 | 5,516,319 | 141,444 | ||||||
Total Fixed Expenses(5) | 1,381,788 | (1,766,716) | 1,750,090 | 1,839,010 | 2,284,972 | 58,589 | ||||||
Total Operating Expenses | $17,918,087 | $9,264,768 | $17,252,909 | $18,361,755 | $18,807,717 | $482,249 | ||||||
Net Operating Income | $8,958,595 | $5,920,870 | $11,827,827 | $11,396,842 | $10,950,880 | $280,792 | ||||||
FF&E | 1,075,067 | 607,426 | 1,163,229 | 1,190,344 | 1,190,344 | 30,522 | ||||||
Net Cash Flow | $7,883,527 | $5,313,444 | $10,664,597 | $10,206,498 | $9,760,536 | $250,270 | ||||||
Occupancy | 82.8% | 46.1% | 83.0% | 81.6% | 81.6% | |||||||
NOI Debt Yield | 14.9% | 9.9% | 19.7% | 19.0% | 18.3% | |||||||
NCF DSCR | 3.94x | 2.65x | 5.33x | 5.10x | 4.88x |
(1) | Certain items such as interest expense, interest income, depreciation, amortization, debt service payments and any other non-recurring or non-operating items were excluded from the historical presentation and are not considered for the underwritten cash flow. |
(2) | The Soberanes wildfire, spanning from July 22, 2016 through October 12, 2016, caused the Post Ranch Inn Property to shut down for approximately two weeks. The closure was during peak season and resulted in a decline in occupancy for the 2016 year. In addition, 2016 was impacted by harsh winter conditions and heavy rains in Big Sur. |
(3) | In February 2017, the Pfeiffer Canyon Bridge closed after heavy rains caused hillside supports to collapse. The old Pfeiffer Canyon Bridge was demolished in March 2017 and the new bridge opened in October 2017. With the bridge closed, the Post Ranch Inn Property was only accessible via helicopter. While the Post Ranch Inn Property was inaccessible, ownership completed an extensive guestrooms renovation. Although occupancy and ADR increased significantly in 2018, access from the south to Big Sur did not reopen until mid-year 2018. |
(4) | The five Butterfly guestrooms were off-line due to renovations between November 2018 and March 2019. |
(5) | The Total Fixed Expenses include the lot line adjustment fees. See “—Lot Line Adjustment” below. |
■ | Appraisal. According to the appraisal, the Post Ranch Inn Property had an “as-is” appraised value of $141,700,000 as of June 4, 2019. The appraisal concluded a “when complete” appraised value of $149,200,000 as of July 1, 2021, which assumes the completion of the borrower sponsors’ two year elective capital improvement plan equal to approximately $6.3 million. The appraisal also concluded a “when stabilized” appraised value of $153,600,000 as of July 1, 2021, which assumes an increase in RevPAR, ADR and occupancy as a result of the 2018 completion of the borrower sponsor’s capital improvement plan. The “when stabilized” value assumes a projected stabilized ADR of $1,884.25 and a projected stabilized occupancy of 82.0%. |
Appraisal Approach(1) | Value | Discount Rate | Terminal Capitalization Rate |
Income Capitalization Approach | $141,700,000 | 8.29% | 7.0% |
(1) | Based on the “as-is” appraised value. |
■ | Environmental Matters. A Phase I environmental report was completed on June 20, 2019. The environmental consultant did not identify evidence of any recognized environmental conditions or recommendations for further action at the Post Ranch Inn Property. |
■ | Market Overview and Competition. The Post Ranch Inn Property is centrally located to major demand generators in both Northern and Southern California. The Post Ranch Inn Property is located in Big Sur of Monterey County, approximately 30 miles south of Monterey on the central California coast. Fewer than 300 hotel rooms are located on the 90-mile stretch of Highway 1 between Carmel and San Simeon with no new supply coming on-line due to limited development opportunities along the coast. Big Sur’s distinctive topography offers stunning views, making it one of California’s most popular tourist destinations. The Post Ranch Inn Property is situated approximately 150 miles south of San Francisco, approximately 100 miles south of San Jose, and 300 miles north of Los Angeles. The Post Ranch Inn Property is accessible from San Francisco and Los Angeles via Highway 101 and via air, with the San Jose International Airport and Monterey Peninsula Airport approximately 100 miles and 30 miles north, respectively. Big Sur is established as a premier California destination, offering a variety of attractions from luxury hotels, spas, shops and art galleries, to rustic campgrounds, beaches and hiking trails. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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The following table presents certain information relating to historical occupancy, ADR and RevPAR at the Post Ranch Inn Property:
Historical Statistics(1)
2015 | 2016(2) | 2017(3) | 2018(3)(4) | TTM 5/31/2019(4) | |
Occupancy | 90.1% | 82.8% | 46.1% | 83.0% | 81.6% |
ADR | $1,471.06 | $1,547.58 | $1,592.19 | $1,754.02 | $1,810.63 |
RevPAR | $1,325.86 | $1,281.66 | $733.52 | $1,454.97 | $1,478.27 |
(1) | Source: Borrower. |
(2) | The Soberanes wildfire, spanning from July 22 through October 12, 2016, caused the Post Ranch Inn Property to shut down for approximately two weeks. The closure was during peak season and resulted in a decline in occupancy for the 2016 year. In addition, 2016 was impacted by harsh winter conditions and heavy rains in Big Sur. |
(3) | In February 2017, the Pfeiffer Canyon Bridge closed after heavy rains caused hillside supports to collapse. The old Pfeiffer Canyon Bridge was demolished in March 2017 and the new bridge opened in October 2017. With the bridge closed, the Post Ranch Inn Property was only accessible via helicopter. While the Post Ranch Inn Property was in accessible, ownership completed an extensive guestrooms renovation. Although occupancy and ADR increased significantly in 2018, access from the south to Big Sur did not reopen until mid-year 2018. |
(4) | The five Butterfly guestrooms were off-line due to renovations between November 2018 and March 2019. |
The following table presents certain information relating to the primary competition for the Post Ranch Inn Property:
Post Ranch Inn Property Competitive Set(1)
Property | City | Number of Rooms | Year Opened | |||||
Post Ranch Inn | Big Sur | 39 | 1992 | |||||
Auberge du Soleil | Rutherford | 50 | 1984 | |||||
Calistoga Ranch | Calistoga | 50 | 2004 | |||||
Casa Palmero Pebble Beach | Pebble Beach | 24 | 1999 | |||||
Ventana Big Sur | Big Sur | 59 | 1975 | |||||
Total(2) | 183 |
(1) | Source: Appraisal. |
(2) | Total excludes the Post Ranch Inn Property. |
■ | The Borrower. The borrower is Post Ranch Inn LLC, a single-purpose, single-asset entity with two independent directors. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the Post Ranch Inn Loan. |
The borrower sponsors and nonrecourse carve-out guarantors are Michael Freed and Peter Heinemann. Michael Freed and Peter Heinemann have been business partners for over 30 years and developed the Post Ranch Inn Property in 1992. They are the co-founders and managing directors of Passport Resorts LLC, a hotel management and marketing company that develops and operates award-winning resorts.
Passport Resorts LLC, has owned or managed many award winning resorts including Cavallo Point, a 142-room hotel located at the foot of the Golden Gate Bridge in Fort Baker and the Hotel Hana-Maui, a 67-room resort located in Maui, Hawaii. Passport Resorts LLC also acquired the Jean-Michel Cousteau Fiji Island Resort, a 25-room resort located on the island of Vanua Levu on 17 acres of a coconut plantation, on Savusavu Bay, and the Sea Ranch Lodge, a 19-room coastal resort 100 miles north of San Francisco.
■ | Escrows. In the event that (a) the debt yield is not at least 8.0%, (b) an event of default is continuing or (c) the ARD has occurred, the borrower is required to deposit on each due date, (i) one-twelfth of the estimated annual real estate taxes into a tax reserve account, (ii) one-twelfth of the annual insurance premiums into an insurance reserve account and (iii) 4.0% of gross revenues for the prior month into an FF&E reserve account. With respect to reserves triggered due to the failure of the debt yield to be at least 8.0%, amounts in such reserves will, provided no Trigger Period (as defined below) is continuing, be disbursed to the borrower once the property achieves a debt yield of at least 8.0% as of the last day of any calendar quarter. |
■ | Lockbox and Cash Management. The Post Ranch Inn Loan is structured with a springing lockbox and springing cash management. Upon the occurrence of a Trigger Period, a clearing account will be opened and maintained at a financial institution acceptable to the lender and all revenues and sums payable by issuers of credit cards are required to be transmitted directly by such issuer into the clearing account. During any Trigger Period, funds deposited into the clearing account will be swept by the clearing bank on a daily basis into the deposit account held by the lender. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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A “Trigger Period” will commence (i) upon the ARD, (ii) upon an event of default, (iii) during a Low Debt Service Period (as defined herein) or (iv) during a Mezzanine Trigger Period.
A “Low Debt Service Period” will occur if the debt service coverage ratio is less than 1.30x, based on the scheduled interest only payments due under the Post Ranch Inn Loan documents, on the last day of the calendar quarter and will end if the debt service coverage ratio is at least 1.35x for two consecutive quarters.
■ | Property Management.The Post Ranch Inn Property is managed by Post Ranch Management LLC, a borrower affiliate. The property manager of the Post Ranch Inn Property may be removed from and after the date of a “notice of sale” for foreclosure of the Post Ranch Inn Property by the lender or for certain other circumstances described in the loan documents. |
■ | Lot Line Adjustment. In 2008, when the 10 southern ridge guestrooms were added to the Post Ranch Inn Property, the property line was adjusted to facilitate the addition. In connection with the lot line adjustments, the predecessor company of the borrower agreed to pay two unrelated individuals (the owners of the adjacent land) an annual fee equal to the greater of (a) $25,000 or (b) 1.25% of gross revenue attributed to the 10 new units on the southern ridge, until their death. The agreement was subsequently assigned to the borrower.The fee is payable in two parts, a base fee of $25,000 payable each January, with the true-up to the 1.25% due in December. The fees are subject to a lifetime minimum payout of $400,000. The fee, structured as an operating expense of the borrower, is reimbursed by the borrower to the parent company. Underwritten fees due to the owners of the adjacent land in connection with the lot line adjustments were $97,000, equal to the borrower’s budgeted amount and 0.3% of total revenues at the Post Ranch Inn Property. |
■ | Current Mezzanine or Secured Subordinate Indebtedness. None. |
■ | Permitted Future Mezzanine or Secured Subordinate Indebtedness. The borrower is permitted to incur mezzanine financing (the “Mezzanine Loan”) secured by the 100% direct or indirect equity ownership interest held in the borrower;provided, that certain conditions set forth in the Post Ranch Inn Loan documents are satisfied, which include (without limitation): (i) no event of default exists; (ii) after giving effect to the Mezzanine Loan, (a) the combined debt yield on the Post Ranch Inn Loan and the Mezzanine Loan is equal to or greater than 13.5%, and (b) the combined debt service coverage ratio on the Post Ranch Inn Loan and the Mezzanine Loan is equal to or greater than 3.60x, on an interest only basis, and the combined loan-to-value ratio is equal to or less than 55.0%; (iii) the holder of the Mezzanine Loan enters into a mezzanine intercreditor agreement with the lender in form and substance acceptable to the lender and the rating agencies; (iv) the holder of the Mezzanine Loan is a “qualified equityholder” (as such term is defined in the Post Ranch Inn Loan documents); (v) a rating agency confirmation is delivered in connection with the consummation of the Mezzanine Loan and (vi) the Mezzanine Loan is co-terminous with the maturity date of the Post Ranch Inn Loan. |
■ | Release of Collateral. Not permitted. |
■ | Terrorism Insurance. The Post Ranch Inn 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 Post Ranch Inn Property with a deductible not in excess of $25,000. See “Risk Factors—Terrorism Insurance May Not Be Available for All Mortgaged Properties” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #6: GRAND CANAL SHOPPES
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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Mortgaged Property Information | Mortgage Loan Information | |||||||
Number of Mortgaged Properties | 1 | Loan Seller(3) | GSMC | |||||
Location (City/State) | Las Vegas, Nevada | Cut-off Date Principal Balance(4) | $60,000,000 | |||||
Property Type | Retail | Cut-off Date Principal Balance per SF(2) | $1,000.14 | |||||
Size (SF)(1) | 759,891 | Percentage of Initial Pool Balance | 4.7% | |||||
Total Occupancy as of 5/31/2019 | 94.0% | Number of Related Mortgage Loans | None | |||||
Owned Occupancy as of 5/31/2019 | 94.0% | Type of Security | Fee Simple / Leasehold | |||||
Year Built / Latest Renovation | 1999 / 2007 | Mortgage Rate(5) | 3.74080% | |||||
Appraised Value | $1,640,000,000 | Original Term to Maturity (Months) | 120 | |||||
Borrower Sponsors | Brookfield Properties REIT Inc. and Nuveen Real Estate | Original Amortization Term (Months) | NAP | |||||
Property Management | Brookfield Properties Retail Inc. | Original Interest Only Period (Months) | 120 | |||||
First Payment Date | 8/1/2019 | |||||||
Maturity Date | 7/1/2029 | |||||||
Underwritten Revenues | $104,029,334 | |||||||
Underwritten Expenses | $31,007,624 | Escrows | ||||||
Underwritten Net Operating Income (NOI) | $73,021,709 | Upfront | Monthly | |||||
Underwritten Net Cash Flow (NCF) | $70,997,903 | Taxes | $0 | $0 | ||||
Cut-off Date LTV Ratio(2) | 46.3% | Insurance | $0 | $0 | ||||
Maturity Date LTV Ratio(2) | 46.3% | Replacement Reserves | $0 | $0 | ||||
DSCR Based on Underwritten NOI / NCF(2) | 2.53x / 2.46x | TI/LC | $12,309,694 | $0 | ||||
Debt Yield Based on Underwritten NOI / NCF(2) | 9.6% / 9.3% | Other(6) | $1,218,246 | $0 | ||||
Sources and Uses | ||||||||
Sources | $ | % | Uses | $ | % | |||
Senior Loan Combination Amount | $760,000,000 | 77.9% | Loan Payoff | $627,284,452 | 64.3% | |||
Subordinate Loan Amount | 215,000,000 | 22.1 | Principal Equity Distribution | 333,044,567 | 34.2 | |||
Reserves | 13,527,940 | 1.4 | ||||||
Closing Costs | 1,143,041 | 0.1 | ||||||
Total Sources | $975,000,000 | 100.0% | Total Uses | $975,000,000 | 100.0% | |||
(1) | Size (SF) excludes the 84,743 SF space currently leased to Barneys New York. This space is included in the collateral; however, the borrowers have the right to obtain a free release with respect to such space. As such, no value or rental income has been attributed to this space. |
(2) | Calculated based on the aggregate outstanding principal balance of the Grand Canal Shoppes Senior Loans. |
(3) | The Grand Canal Shoppes Loan Combination was co-originated by MSBNA, WFB, JPMCB and GS Bank. |
(4) | The Cut-off Date Principal Balance represents the non-controlling note A-4-1 of the $975,000,000 Grand Canal Shoppes Loan Combination. |
(5) | Reflects the Grand Canal Shoppes Senior Loans only. The Grand Canal Shoppes Subordinate Loans accrue interest at the rate of 6.25000%per annum. |
(6) | Other escrows represent the $1,218,246 reserved for gap rent associated with five tenants. |
■ | The Mortgage Loan. The mortgage loan (the “Grand Canal Shoppes Loan”) is part of a loan combination (the “Grand Canal Shoppes Loan Combination”) consisting of 23 seniorpari passu promissory notes (note A-1-1, note A-1-2, note A-1-3, note A-1-4, note A-1-5, note A-1-6, note A-1-7, note A-1-8, note A-2-1, note A-2-2, note A-2-3, note A-2-4, note A-2-5, note A-3-1, note A-3-2, note A-3-3, note A-3-4, note A-3-5, note A-4-1, note A-4-2, note A-4-3, note A-4-4 and note A-4-5) with an aggregate original principal balance of $760,000,000 (the “Grand Canal Shoppes Senior Loans”) and four subordinatepari passu promissory notes (note B-1, note B-2, note B-3 and note B-4) with an aggregate original principal balance of $215,000,000 (the “Grand Canal Shoppes Subordinate Loans”). The Grand Canal Shoppes Loan Combination has an aggregate original principal balance of $975,000,000 and is secured by a first mortgage encumbering the borrowers’ fee simple and leasehold interests in a 759,891 SF specialty retail center that predominantly comprises the first-, second-, and third-levels of the Venetian Hotel and Casino and Palazzo Resort and Casino located in Las Vegas, Nevada (the “Grand Canal Shoppes Property”). The Grand Canal Shoppes Loan, which will be included in the CGCMT 2019-GC41 securitization transaction, is evidenced by the non-controlling note A-4-1, has an outstanding principal balance as of the Cut-off Date of $60,000,000 and represents approximately 4.7% of the Initial Pool Balance. |
The Grand Canal Shoppes Loan Combination was co-originated by Morgan Stanley Bank, N.A. (“MSBNA”), Wells Fargo Bank, N.A. (“WFB”), JPMorgan Chase Bank, National Association (“JPMCB”) and Goldman Sachs Bank USA (“GS Bank”) on June 3, 2019. The non-controlling notes A-1-1 and A-1-6 were included in the MSC 2019-H7 securitization transaction. The non-controlling notes A-1-2 and A-2-1 were included in the BANK 2019-BNK19 securitization transaction. The non-controlling note A-3-1 is expected to be included in the Benchmark 2019-B12 securitization transaction. The other note holders are set forth in the Loan Combination Summary below. The Grand Canal Shoppes Loan received a credit assessment of BBB-sf by Fitch and BBB (high)(sf) by DBRS.
The Grand Canal Shoppes Senior Loans (including the Grand Canal Shoppes Loan) have an interest rate of 3.74080%per annum and the Grand Canal Shoppes Subordinate Loans have an interest rate of 6.25000%per annum, resulting in an initial weighted average interest rate of approximately 4.29411076923077%per annum on the Grand Canal Shoppes Loan Combination. The borrowers utilized the proceeds of the Grand Canal Shoppes Loan Combination to refinance existing securitized debt on the Grand Canal Shoppes Property, pay closing costs, fund reserves and return equity to the borrower sponsor.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #6: GRAND CANAL SHOPPES
The Grand Canal Shoppes Loan Combination had an initial term of 120 months and has a remaining term of 119 months as of the Cut-off Date. The Grand Canal Shoppes Loan Combination requires interest-only payments during its term. The scheduled maturity date of the Grand Canal Shoppes Loan Combination is July 1, 2029. The Grand Canal Shoppes Loan Combination may be voluntarily prepaid in whole (but not in part) at any time from and after March 1, 2029. In addition, prior to March 1, 2029 and provided that no event of default is continuing, defeasance with direct, non-callable obligations of the United States of America is permitted at any time after the earlier of (a) the second anniversary of the closing date of the securitization into which the last piece of the Grand Canal Shoppes Loan Combination is deposited and (b) June 3, 2022.
The table below summarizes the promissory notes that comprise the Grand Canal Shoppes Loan Combination. The relationship between the holders of the Grand Canal Shoppes Loan Combination is governed by a co-lender agreement as described under “Description of the Mortgage Pool—The Loan Combinations—The Grand Canal Shoppes Pari Passu-AB Loan Combination” in the Preliminary Prospectus.
Loan Combination Summary | ||||||||||
Note | Original Balance | Cut-off Date Balance | Note Holder(s) | Controlling Piece | ||||||
Note A-1-1 | $60,000,000 | $60,000,000 | MSC 2019-H7 | Yes(1) | ||||||
Note A-1-2 | 50,000,000 | 50,000,000 | BANK 2019-BNK19 | No | ||||||
Note A-1-3 | 40,000,000 | 40,000,000 | MSBNA(2) | No | ||||||
Note A-1-4 | 40,000,000 | 40,000,000 | MSBNA(2) | No | ||||||
Note A-1-5 | 13,846,154 | 13,846,154 | MSBNA(2) | No | ||||||
Note A-1-6 | 10,000,000 | 10,000,000 | MSC 2019-H7 | No | ||||||
Note A-1-7 | 10,000,000 | 10,000,000 | MSBNA(2) | No | ||||||
Note A-1-8 | 10,000,000 | 10,000,000 | MSBNA(2) | No | ||||||
Note A-2-1 | 50,000,000 | 50,000,000 | BANK 2019-BNK19 | No | ||||||
Note A-2-2 | 50,000,000 | 50,000,000 | WFB(3) | No | ||||||
Note A-2-3 | 40,000,000 | 40,000,000 | WFB(3) | No | ||||||
Note A-2-4 | 25,000,000 | 25,000,000 | WFB(3) | No | ||||||
Note A-2-5 | 10,384,615 | 10,384,615 | WFB(3) | No | ||||||
Note A-3-1 | 50,000,000 | 50,000,000 | Benchmark 2019-B12(4) | No | ||||||
Note A-3-2 | 50,000,000 | 50,000,000 | JPMCB(5) | No | ||||||
Note A-3-3 | 40,000,000 | 40,000,000 | JPMCB(5) | No | ||||||
Note A-3-4 | 25,000,000 | 25,000,000 | JPMCB(5) | No | ||||||
Note A-3-5 | 10,384,615 | 10,384,615 | JPMCB(5) | No | ||||||
Note A-4-1 | 60,000,000 | 60,000,000 | CGCMT 2019-GC41 | No | ||||||
Note A-4-2 | 60,000,000 | 60,000,000 | GS Bank(6) | No | ||||||
Note A-4-3 | 20,000,000 | 20,000,000 | GS Bank(6) | No | ||||||
Note A-4-4 | 25,000,000 | 25,000,000 | GS Bank(6) | No | ||||||
Note A-4-5 | 10,384,615 | 10,384,615 | GS Bank(6) | No | ||||||
B notes | 215,000,000 | 215,000,000 | CPPIB Credit Investments II Inc. | Yes(1) | ||||||
Total | $975,000,000 | $975,000,000 |
(1) | The initial controlling noteholder is the holder or holders of a majority of the Grand Canal Shoppes Subordinate Loans (by principal balance).The holder of the Grand Canal Shoppes Subordinate Companion Loans will have the right to appoint the special servicer of the Grand Canal Shoppes Loan Combination and to direct certain decisions with respect to the Grand Canal Shoppes Loan Combination, unless a control appraisal event exists under the related co-lender agreement, upon which note A-1-1 will be the controlling note. The Grand Canal Shoppes Loan Combination will be serviced pursuant to the pooling and servicing agreement for the MSC 2019-H7 securitization from and after the anticipated closing date of such securitization on July 25, 2019. |
(2) | Notes A-1-3, A-1-4, A-1-5, A-1-7 and A-1-8 are currently held by MSBNA and are expected to be contributed to one or more future securitization trusts. |
(3) | Notes A-2-2, A-2-3, A-2-4 and A-2-5 are currently held by WFB and are expected to be contributed to one or more future securitization trusts. |
(4) | Note A-3-1 is currently held by JPMCB and is expected to be contributed to the Benchmark 2019-B12 securitization transaction. |
(5) | Notes A-3-2, A-3-3, A-3-4 and A-3-5 are currently held by JPMCB and are expected to be contributed to one or more future securitization trusts. |
(6) | Notes A-4-2, A-4-3, A-4-4 and A-4-5 are currently held by GS Bank and are expected to be contributed to one or more future securitization trusts. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #6: GRAND CANAL SHOPPES
The Grand Canal Shoppes Loan Combination capital structure is shown below:
Grand Canal Shoppes Loan Combination Capital Structure
(1) | The initial weighted average interest rate of the notes comprising the Grand Canal Shoppes Loan Combination is 4.29411076923077%. The interest rate on the Grand Canal Shoppes Loan Combination as of any date of determination will be the weighted average interest rate of the notes comprising the Grand Canal Shoppes Loan Combination. |
(2) | Based on the “as-is” appraised value of $1,640,000,000 as of April 3, 2019. |
(3) | Based on the UW NOI of $73,021,709 and the UW NCF of $70,997,903. |
(4) | Based on the “as-is” appraised value of $1,640,000,000, the Implied Borrower Sponsor Equity is $665,000,000. |
■ | The Mortgaged Property:The Grand Canal Shoppes Property is a 759,891 SF specialty retail center that predominantly comprises the first-, second- and third-level of the Venetian Hotel and Casino and Palazzo Resort and Casino. The Grand Canal Shoppes Property opened in 1999, with an expansion in conjunction with the completion of the Palazzo Resort and Casino (“The Palazzo”) in 2007, and is anchored by an 84,743 SF, three-level Barneys New York, currently slated to close by January 2020. Barneys New York will be part of the collateral for the Grand Canal Shoppes Loan Combination at loan origination, but the borrowers have the right to obtain a release of the Barneys Parcel without any payment of a release price. At origination, no value or rental income was attributed to the Barneys Parcel. |
The Venetian Hotel and Casino and The Palazzo are luxury hotels and casino resorts situated within the southeast quadrant of Las Vegas Boulevard and Sands Avenue. The Venetian Hotel and Casino and The Palazzo are owned and operated by Las Vegas Sands. The overall resort complex is the largest on The Strip, and includes 4,049 rooms within the Venetian Hotel and Casino, 3,068 rooms/suites within The Palazzo, and 225,000 SF of gaming space (combined), none of which are collateral for the Grand Canal Shoppes Loan Combination. The Grand Canal Shoppes Property is physically connected to the Venetian Hotel and Casino and The Palazzo, which combine to create a large hotel and resort complex with over 7,000 hotel rooms, 2.3 million SF of meeting space, one million SF of retail space and more than 30 restaurants. In addition, the Grand Canal Shoppes Property is within walking distance to over 140,000 hotel rooms.
The Grand Canal Shoppes Property is situated across 21.1 acres of land along the central portion of Las Vegas Boulevard (“The Strip”). The Grand Canal Shoppes Property is a premier shopping, entertainment and dining venue in Las Vegas featuring a unique Venetian-inspired setting with luxury retailers and restaurant concepts. Attractions include a gondola ride through the canals of the Grand Canal Shoppes Property as well as showroom/theater space for live performances.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #6: GRAND CANAL SHOPPES
The Grand Canal Shoppes Property is currently 94.0% leased as of May 31, 2019. According to the appraisal, the Grand Canal Shoppes Property generates average mall shop sales of over $1,000 PSF. The Grand Canal Shoppes Property generated $427.6 million in gross sales with comparable in line sales inclusive of the food court of $1,182 PSF as of TTM February 2019. The Grand Canal Shoppes Property generates over 60% of its top line revenue from food and entertainment offerings, including restaurants such as TAO Asian Bistro, which features a night and beach club, Grand Lux Café, Sushi Samba, Delmonico Steakhouse, CUT by Wolfgang Puck, Smith & Wollensky, Verdugo West Brewery, Xiang Tian Xia Chinese Hot Pot and Recital Karaoke, among others. Noteworthy luxury retailers at the Grand Canal Shoppes Property include Louis Vuitton, Salvatore Ferragamo, Fendi and Jimmy Choo.
From 2015 through January 2019, capital expenditures, inclusive of development capital and landlord work, of approximately $20.3 million ($26.70 PSF) were invested in the Grand Canal Shoppes Property. In addition, there is a planned renovation and redevelopment of the common areas within the shopping areas above The Palazzo. Ownership is budgeting an approximately $12.0 million plan to improve lighting and finishes, in an attempt to maintain existing tenants and attract new tenants to this portion of the Grand Canal Shoppes Property. According to management, renovations are expected to begin in September 2019. In addition, new finishes and lighting are expected to be completed in conjunction with a proposed 27,422 SF international food hall expected to be completed in 2020. Such renovation and redevelopment, as well as development of the new food hall, are not required by or reserved for under the Grand Canal Shoppes Loan Combination documents, and we cannot assure you that any such renovation, redevelopment, or food hall development will be completed.
The following table presents a summary of historical tenant sales at the Grand Canal Shoppes Property:
Historical Tenant Sales Summary(1)
2015 | 2016 | 2017 | 2018 | TTM February 2019 Sales | TTM February 2019 Sales PSF | |||||||||||||
Anchor / Major Sales | $129,599,970 | $129,282,829 | $130,862,228 | $138,705,093 | $140,317,346 | $1,046 | ||||||||||||
Comparable In-Line Sales | $200,973,916 | $207,912,708 | $223,524,143 | $244,916,086 | $244,795,176 | $1,154 | ||||||||||||
Comparable Food Court Sales | $17,055,210 | $19,744,070 | $21,275,466 | $23,538,795 | $23,688,945 | $1,580 |
(1) | Information as provided by the borrower sponsors and only includes tenants reporting sales. |
The first floor of Barneys New York and the casino level (ground floor) space are leased by the borrowers, pursuant to air rights ground leases, which do not include the underlying land. The casino level space consists of restaurants and retail shops contained on the casino levels (ground floor) of the Venetian Hotel and Casino and The Palazzo Resort. The ground lease for the casino level of the Venetian Hotel and Casino portion of the Grand Canal Shoppes Property expires in 2093, and the ground lease for the casino level of The Palazzo Resort portion of the Grand Canal Shoppes Property expires in 2097. Each of the annual rents for these leases is $1 and the borrowers have the option to purchase the premises for $1 on the respective expiration dates. The remaining collateral, except for the Walgreens air rights lease space, is owned in fee. A portion of the fee is located at the ground level (the retail annex), with the majority fee located on levels 2 and 3. The collateral is vertically subdivided;i.e., the fee ownership is solely of the designated space on the ground level and levels 2 and 3. A reciprocal easement agreement governs the relationship among the owner of the Grand Canal Shoppes Property, and the owners of other interests in the complex that includes the Venetian Hotel and Casino and The Palazzo Resort. The Walgreens air rights lease space refers to the air rights above the Walgreens space (the Walgreens space itself is owned by a third party), for which the lease expires in 2064 with one, 40-year extension option. The Walgreens air rights space is currently occupied by Buddy V's Ristorante and Carlo’s Bakery (12,839 SF, 1.5% of underwritten base rent). The Venetian Hotel and Casino subleases a portion of the air rights parcel from the borrowers pursuant to a separate sublease. The Venetian Hotel and Casino is responsible under its sublease for an amount equal to 80.68% of the ground rent under the Walgreens lease.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #6: GRAND CANAL SHOPPES
The following table presents certain information relating to the major tenants (of which, certain tenants may have co-tenancy provisions) at the Grand Canal Shoppes Property:
Ten Largest Tenants Based on Underwritten Base Rent
Tenant Name | Credit Rating (Fitch/MIS/S&P)(1) | Tenant GLA | % of GLA | UW Base Rent(2) | % of Total UW Base Rent | UW Base Rent $ per SF | Lease Expiration | Renewal / Extension Options | |||||||||||||
Venetian Casino Resort(3) | NR / NR / BBB- | 81,105 | 10.7 | % | $4,598,023 | 6.9 | % | $56.69 | 5/31/2029 | 1, 8-year option | |||||||||||
Emporio D’Gondola(4) | NR / NR / NR | 922 | 0.1 | 4,051,692 | 6.0 | 4,394.46 | 5/31/2029 | 10, 5-year options | |||||||||||||
Regis Galerie(5) | NR / NR / NR | 28,099 | 3.7 | 2,367,955 | 3.5 | 84.27 | 5/31/2025 | 1, 5-year option | |||||||||||||
Sephora | NR / A1 / A+ | 10,074 | 1.3 | 2,299,995 | 3.4 | 228.31 | 7/31/2021 | None | |||||||||||||
Welcome to Las Vegas(6) | NR / NR / NR | 14,234 | 1.9 | 2,000,502 | 3.0 | 140.54 | 12/31/2020 | None | |||||||||||||
TAO(7) | NR / NR / NR | 49,441 | 6.5 | 1,576,386 | 2.4 | 31.88 | 1/31/2025 | 1, 5-year option | |||||||||||||
Grand Lux Cafe | NR / NR / NR | 19,100 | 2.5 | 1,463,633 | 2.2 | 76.63 | 12/31/2029 | None | |||||||||||||
CUT By Wolfgang Puck | NR / NR / NR | 12,247 | 1.6 | 1,261,441 | 1.9 | 103.00 | 5/31/2028 | 1, 5-year option | |||||||||||||
Mercato Della Pescheria | NR / NR / NR | 16,479 | 2.2 | 1,131,448 | 1.7 | 68.66 | 11/30/2025 | 2, 5-year options | |||||||||||||
Bellusso Jewelry | NR / NR / NR | 2,999 | 0.4 | 1,068,964 | 1.6 | 356.44 | 11/30/2022 | 1, 5-year option | |||||||||||||
Largest Tenants | 234,700 | 30.9 | % | $21,820,039 | 32.6 | % | $92.97 | ||||||||||||||
Remaining Owned Tenants | 479,928 | 63.2 | 45,214,842 | 67.4 | 94.21 | ||||||||||||||||
Vacant Spaces (Owned Space) | 45,263 | 6.0 | 0 | 0.0 | 0.00 | ||||||||||||||||
Totals / Wtd. Avg. Tenants | 759,891 | 100.0 | % | $67,034,881 | 100.0 | % | $93.80 |
(1) | Certainratings are those of the parent company whether or not the parent guarantees the lease. |
(2) | UW Base Rent reflectsthe following: (a) in-place leases based on the May 2019 rent roll and (b) contractual rent steps of $2,184,628 through May 31, 2020. |
(3) | Venetian Casino Resort has (i) 34,088 SF expiring on July 31, 2025, (ii) 38,920 SF expiring on May 31, 2029, (iii) 8,096 SF expiring on September 30, 2033 and (iv) 1 SF expiring on December 31, 2019 that collectively generates $60,991 in underwritten base rent. |
(4) | Emporio D’Gondola operates as the gondola attraction at the Grand Canal Shoppes Property. |
(5) | Regis Galerie has 8,406 SF expiring on December 31, 2020, 4,654 SF expiring on February 29, 2020 and 15,039 SF expiring on May 31, 2025. |
(6) | Welcome to Las Vegas has an additional lease that is expected to commence in February 1, 2020. Gap rent was reserved by the lender at origination. 10,239 SF is expiring on December 31, 2020 and the remaining 3,995 SF is expiring on January 31, 2030. |
(7) | TAO has 39,553 SF expiring on January 31, 2025, 8,800 SF expiring on May 31, 2029 and 1,088 SF expiring on January 31, 2020. |
The following table presents certain information relating to the lease rollover schedule at the Grand Canal Shoppes Property based on initial lease expiration dates:
Lease Expiration Schedule(1)(2)
Year Ending December 31, | Expiring Owned GLA | % of Owned GLA | Cumulative % of Owned GLA | UW Base Rent(3) | % of Total UW Base Rent | UW Base Rent $ per SF | # of Expiring leases | ||||||||||||||
MTM | 2,080 | 0.3 | % | 0.3 | % | $0 | 0.0 | % | $0.00 | 3 | |||||||||||
2019 | 39,567 | 5.2 | 5.5 | % | 2,436,560 | 3.6 | 61.58 | 17 | |||||||||||||
2020 | 80,052 | 10.5 | 16.0 | % | 4,475,224 | 6.7 | 55.90 | 29 | |||||||||||||
2021 | 28,634 | 3.8 | 19.8 | % | 5,748,002 | 8.6 | 200.74 | 16 | |||||||||||||
2022 | 35,084 | 4.6 | 24.4 | % | 4,683,674 | 7.0 | 133.50 | 13 | |||||||||||||
2023 | 41,038 | 5.4 | 29.8 | % | 5,490,655 | 8.2 | 133.79 | 20 | |||||||||||||
2024 | 60,412 | 8.0 | 37.8 | % | 6,381,261 | 9.5 | 105.63 | 24 | |||||||||||||
2025 | 146,378 | 19.3 | 57.0 | % | 10,519,793 | 15.7 | 71.87 | 20 | |||||||||||||
2026 | 29,721 | 3.9 | 60.9 | % | 2,751,933 | 4.1 | 92.59 | 9 | |||||||||||||
2027 | 6,142 | 0.8 | 61.7 | % | 859,431 | 1.3 | 139.93 | 3 | |||||||||||||
2028 | 48,011 | 6.3 | 68.1 | % | 4,940,574 | 7.4 | 102.91 | 9 | |||||||||||||
2029 | 185,418 | 24.4 | 92.5 | % | 18,048,649 | 26.9 | 97.34 | 27 | |||||||||||||
2030 & Thereafter | 12,091 | 1.6 | 94.0 | % | 699,125 | 1.0 | 57.82 | 2 | |||||||||||||
Vacant | 45,263 | 6.0 | 100.0 | % | NAP | NAP | NAP | NAP | |||||||||||||
Total / Wtd. Avg. | 759,891 | 100.0 | % | $67,034,881 | 100.0 | % | $93.80 | 192 |
(1) | Calculated based on approximate square footage occupied by each Owned Tenant. |
(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 rollover schedule. |
(3) | UW Base Rent reflects the following: (a) in-place leases based on the May 2019 rent roll and (b) contractual rent steps of $2,184,628 through May 31, 2020. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
91
LOAN #6: GRAND CANAL SHOPPES
The following table presents certain information relating to historical occupancy at the Grand Canal Shoppes Property:
Historical Leased %(1)
2014 | 2015 | 2016 | 2017 | 2018 | As of 5/31/2019 | |||||||||||||
The Venetian Hotel and Casino | 95.1 | % | 92.6 | % | 98.3 | % | 95.7 | % | 99.1 | % | 97.1 | % | ||||||
Palazzo Resort and Casino | 88.2 | % | 89.5 | % | 86.2 | % | 88.4 | % | 83.0 | % | 86.2 | % | ||||||
Total / Wtd. Avg. | 92.6 | % | 91.5 | % | 93.9 | % | 93.0 | % | 93.3 | % | 94.0 | % |
(1) | As provided by the borrowers and reflects average occupancy for the indicated year ended December 31 unless specified otherwise. |
■ | 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 Grand Canal Shoppes Property: |
Cash Flow Analysis(1)
2016 | 2017 | 2018 | TTM 3/31/2019 | Underwritten(2) | Underwritten $ per SF | |||||||||||||
Base Rent(2) | $68,255,204 | $67,507,328 | $66,471,558 | $66,941,590 | $67,034,881 | $88.22 | ||||||||||||
Total Recoveries | 31,633,869 | 27,875,777 | 25,766,223 | 25,166,107 | 26,539,087 | 34.92 | ||||||||||||
Other Income(3) | 12,765,993 | 12,203,223 | 10,872,872 | 10,365,738 | 10,455,366 | 13.76 | ||||||||||||
Less Vacancy & Credit Loss | 0 | 0 | 0 | 0 | 0 | 0.00 | ||||||||||||
Effective Gross Income | $112,655,066 | $107,586,327 | $103,110,653 | $102,473,435 | $104,029,334 | $136.90 | ||||||||||||
Real Estate Taxes | $1,952,631 | $1,995,183 | $2,076,447 | $2,102,023 | $2,102,023 | $2.77 | ||||||||||||
Insurance | 268,881 | 248,826 | 253,530 | 260,040 | 260,040 | 0.34 | ||||||||||||
Other Operating Expenses(4) | 31,074,924 | 30,916,371 | 29,454,203 | 28,645,562 | 28,645,562 | 37.70 | ||||||||||||
Total Expenses | $33,296,436 | $33,160,381 | $31,784,180 | $31,007,624 | $31,007,624 | $40.81 | ||||||||||||
Net Operating Income(2) | $79,358,630 | $74,425,947 | $71,326,473 | $71,465,811 | $73,021,709 | $96.09 | ||||||||||||
Capital Expenditures | 0 | 0 | 0 | 0 | 0 | 0.00 | ||||||||||||
TI/LC | 0 | 0 | 0 | 0 | 2,023,806 | 2.66 | ||||||||||||
Net Cash Flow | $79,358,630 | $74,425,947 | $71,326,473 | $71,465,811 | $70,997,903 | $93.43 | ||||||||||||
Occupancy(5) | 93.9% | 93.0% | 93.3% | 93.9% | 94.0% | |||||||||||||
NOI Debt Yield(6) | 10.4% | 9.8% | 9.4% | 9.4% | 9.6% | |||||||||||||
NCF DSCR(6) | 2.75x | 2.58x | 2.47x | 2.48x | 2.46x |
(1) | Certain items such as straight line rent, interest expense, interest income, lease cancellation income, depreciation, amortization, debt service payments and any other non-recurring or non-operating items were excluded from the historical presentation and are not considered for the underwritten cash flow. |
(2) | Underwritten Base Rent reflects the following: (a) in-place leases based on the May 2019 rent roll and (b) contractual rent steps of $2,184,628 through May 31, 2020 and excludes any rent associated with the Barneys New York space. The increase from TTM 3/31/2019 to Underwritten Base Rent and Net Operating Income is due to recent leasing activity. |
(3) | Other Income includes vending income, enterprise income, advertising revenue sponsorship income, specialty leasing income, overage rent and percent in lieu. |
(4) | Other Operating Expenses includes the Walgreens ground/air rights lease rent of which $113,475, 19.32% of the annual ground lease payment, was underwritten. The Venetian Hotel and Casino is responsible under its sublease for the remaining 80.68% of the ground rent under the Walgreens lease. |
(5) | 2016, 2017 and 2018 occupancy reflects average occupancy for the indicated year ended December 31. Underwritten Occupancy is based on the underwritten rent roll dated May 31, 2019. |
(6) | NOI Debt Yield and NCF DSCR are based on the Grand Canal Shoppes Senior Loans and exclude the Grand Canal Shoppes Subordinate Loans. |
■ | Appraisal. According to the appraisal, the Grand Canal Shoppes Property had an “as-is” appraised value of $1,640,000,000 as of April 3, 2019, which excludes an 84,743 SF space currently leased to Barneys New York (the “Barneys Parcel”) that is subject to a free release under the loan documents as described under “—Release of Collateral” below. The “as-is” appraised value including the Barneys Parcel is $1,680,000,000 as of April 3, 2019. |
Appraisal Approach(1) | Value | Discount Rate | Capitalization Rate |
Direct Capitalization Approach | $1,640,000,000 | N/A | 4.50% |
Discounted Cash Flow Approach | $1,682,600,000 | 6.25% | 5.00%(2) |
(1) | Based on the “as-is” appraised value, excluding the Barney’s space. |
(2) | Represents the terminal cap rate. |
■ | Environmental Matters. According to a Phase I environmental report, dated May 15, 2019, there are no recognized environmental conditions or recommendations for further action at the Grand Canal Shoppes Property other than to continue implementation of the existing asbestos operations and maintenance plan. |
■ | Market Overview and Competition. The Grand Canal Shoppes Property is located in Las Vegas, Nevada along The Strip. The Grand Canal Shoppes Property’s tenant mix of retail, restaurants, and entertainment offerings benefits from Las Vegas’s tourists, convention center attendees, and residents. The Grand Canal Shoppes Property is adjacent to the Sands Expo Convention Center, a 1.8 million SF meeting and convention center. Additionally, Las Vegas has various developments in process that are expected to be completed in 2020 and beyond. The most notable of these developments is the MSG Sphere, an 18,000 seat performance venue being developed by Madison Square Garden and Las Vegas Sands just east of the Grand Canal Shoppes Property, the construction of the 65,000 seat Las Vegas |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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Stadium, the new home of the NFL’s Oakland Raiders, which is expected to also double as a live entertainment and convention venue, and the Las Vegas Convention Center District is under redevelopment with a 1.4 million SF expansion. We cannot assure you as to whether or when such developments will be completed. |
Primary access to the Grand Canal Shoppes Property is provided by Interstate 15, the region’s primary north-south route, which is situated approximately one mile west of the Grand Canal Shoppes Property, with access gained via Spring Mountain Road/Sands Avenue. The Grand Canal Shoppes Property is located approximately three miles north of the McCarran International Airport and has direct access to Citizen Area Transit, which has over 41 routes running throughout the region. According to the appraisal, there were over 42.1 million visitors traveling to Las Vegas, and convention visitors exceeding 6.5 million in 2018. According to the appraisal, the estimated 2018 population within a five-, seven- and ten-mile radius of the Grand Canal Shoppes Property was 410,151, 911,414 and 1,661,641, respectively. The estimated 2018 average household income within a five-, seven- and ten-mile radius was $54,257, $60,146 and $70,983, respectively.
The Grand Canal Shoppes Property is located in the Southeast submarket of the Las Vegas retail market. According to the appraisal, as of the fourth quarter of 2018, the vacancy rate in the Southeast submarket was approximately 14.5%, with average asking rents of $19.41 PSF and inventory of approximately 5.1 million SF. According to the appraisal, as of the fourth quarter of 2018, the vacancy rate in the Las Vegas retail market was approximately 13.4%, with average asking rents of $22.34 PSF and inventory of approximately 29.9 million SF. The appraiser concluded a market rent of $98.23 PSF for the space at the Grand Canal Shoppes Property.
The following table presents certain information relating to the primary competition for the Grand Canal Shoppes Property:
Competitive Set(1)
Property, Location | Type | Year Built / Renovated | Size (SF) | Occupancy | Sales per SF | Anchor Tenants | Distance to |
Grand Canal Shoppes Property Las Vegas, NV | Specialty Retail | 1999/2007 | 759,891 | 94.0%(2) | $1,182(3) | TAO Nightclub, Theater, Grand Lux Café, Mercato Della Pescheria, TAO Asian Bistro, Recital Karaoke, Madame Tussaud Las Vegas, Verdugo West Brewery, Golden Gai | N/A |
Primary Competition | |||||||
Forum Shops at Caesars Las Vegas, NV | Fashion/ Specialty | 1992/1997, 2004 | 650,000 | 99% | $1,400 - $1,700 | Upscale/themed retail project at Caesars with 1-2 levels | 0.5 |
Wynn Las Vegas Retail Las Vegas, NV | Fashion/ Specialty | 2005/2008 | 150,000 | 95% | $2,000 - $3,000 | Upscale retail areas located within The Wynn Las Vegas and Wynn Encore | 0.3 |
The Shops at Crystals Las Vegas, NV | Fashion/ Specialty | 2009/NAP | 360,000 | 94% | $1,200 - $1,400 | Upscale specialty retail center with 3-levels on Las Vegas Strip part of City Center | 1.1 |
Miracle Mile Shops Las Vegas, NV | Fashion/ Specialty | 2000/2008, 2016 | 494,000 | 93% | $825 - $875 | Mid-Tier specialty retail center with 1 and 2 stories at Planet Hollywood | 1.0 |
Fashion Show Mall Las Vegas, NV | Super-Regional Center | 1981/Various | 1,875,400 | 95% | $825 - $875 | Neiman Marcus, Dillard’s, Macy’s, Saks, Forever 21, Nordstrom, Dick’s Sporting Goods | 0.3 |
Secondary Competition | |||||||
The Linq Promenade Las Vegas, NV | Fashion/ Specialty | 2014/NAP | 268,000 | 93% | - - - | Retail and entertainment specialty center including a number of restaurants and performance venues | 0.4 |
Bellagio Shops Las Vegas, NV | Fashion/ Specialty | 1998/NAP | - | 100% | - - - | Upscale shopping area located within Bellagio Resort and Casino | 0.8 |
The Showcase Las Vegas, NV | Specialty Retail | 1997/2003, 2009 | 347,281 | 97% | - - - | Coca-Cola, Ross, Hard Rock, M&M’s, Adidas | 1.6 |
Las Vegas Premium Outlets Las Vegas, NV | Outlet Center | 2003/NAP | 676,113 | 100% | $1,400 - $1,600 | Last Call Neiman Marcus, Off 5th Saks 5th Avenue, Nike | 3.5 |
(1) | Source: Appraisal |
(2) | Based on underwritten rent roll dated May 31, 2019. |
(3) | Comparable in-line sales shown as of February 28, 2019. |
■ | The Borrowers. The borrowers are Grand Canal Shops II, LLC and The Shoppes at the Palazzo, LLC, each a Delaware limited liability company that is structured to be bankruptcy remote with two independent directors. The borrower sponsors are Brookfield Properties REIT Inc. and Nuveen Real Estate. The nonrecourse carveout guarantor is BPR Nimbus LLC, an affiliate of Brookfield Properties REIT Inc. Legal counsel to the borrowers delivered a non-consolidation opinion in connection with the origination of the Grand Canal Shoppes Loan Combination. |
Brookfield Properties REIT Inc. (“Brookfield”) ranks among the largest retail real estate companies in the United States. Its portfolio of mall properties spans the nation, encompassing 170 locations across 42 states and representing over 146 million SF of retail space. Brookfield is focused on managing, leasing and redeveloping retail properties. Nuveen Real Estate is the investment management arm of Teachers Insurance and Annuity Association. Nuveen Real Estate manages various funds and mandates, across both public and private investments, and spanning both debt and equity and has over 80 years of real estate investing experience and more than 500 employees located across over 20 cities throughout the United States, Europe and Asia Pacific.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #6: GRAND CANAL SHOPPES
■ | Escrows.On the origination date, the borrowers funded (i) a tenant improvements and leasing commissions reserve in the amount of $12,309,694 and (ii) a gap rent reserve in the amount of $1,218,246. |
On each due date during a Grand Canal Shoppes Cash Management Period, the borrowers will be required to fund (i) a tax and insurance reserve in an amount equal to one-twelfth of the property taxes and insurance premiums that the lender reasonably estimates will be payable during the next ensuing 12 months, unless in the case of insurance premiums, the borrowers is maintaining a blanket policy; (ii) a replacement reserve in the amount of $16,122 (subject to an aggregate cap of $386,928); (iii) a tenant improvements and leasing commissions reserve in the amount of $96,731 (subject to an aggregate cap of $2,321,544); and (iv) a ground rents reserve in an amount equal to one-twelfth of the annual amounts payable by each of the borrowers, as applicable, pursuant to the two ground leases and the air rights lease described under “—Ground Leases” below.
A “Grand Canal Shoppes Cash Management Period” means a period (i) commencing upon an event of default under the Grand Canal Shoppes Loan Combination and ending when such event of default is cured or waived or (ii) commencing on the date that that the debt yield (as calculated under the loan documents) is less than 6.5% as of the end of any calendar year and ending on the date that the debt yield is greater than or equal to 6.5% for two consecutive calendar quarters.
■ | Lockbox and Cash Management. The Grand Canal Shoppes Loan Combination is structured with a hard lockbox and springing cash management. The borrowers are required to deliver tenant direction letters instructing all tenants to deposit rents into a lender-controlled lockbox account. In addition, the borrowers are required to cause all cash revenues relating to the Grand Canal Shoppes Property and all other money received by the borrowers or the property manager with respect to the Grand Canal Shoppes Property (other than tenant security deposits) to be deposited into such lockbox account or a lender-controlled cash management account within two business days of receipt thereof. On each business day that no Grand Canal Shoppes Cash Management Period or event of default under the Grand Canal Shoppes Loan Combination is continuing, all funds in the lockbox account are required to be swept into a borrower-controlled operating account. On each second business day during a Grand Canal Shoppes Cash Management Period or during the continuance of an event of default under the Grand Canal Shoppes Loan Combination, all funds in the lockbox account are required to be swept into the cash management account. |
During the continuance of a Grand Canal Shoppes Cash Management Period and so long as no event of default is continuing, all amounts on deposit in the cash management account after payment of debt service, required reserves and budgeted operating expenses are required to be swept into a borrower-controlled operating account, unless a Grand Canal Shoppes Cash Sweep Period is continuing, in which case such amounts are required to be deposited into an excess cash flow reserve account as additional collateral for the Grand Canal Shoppes Loan Combination.
A “Grand Canal Shoppes Cash Sweep Period” means a period (i) commencing upon an event of default under the Grand Canal Shoppes Loan Combination and ending when such event of default is cured or waived or (ii) commencing on the date that that the debt yield (as calculated under the loan documents) is less than 6.0% as of the end of any calendar year and ending on the date that the debt yield is greater than or equal to 6.0% for two consecutive calendar quarters.
■ | Property Management. The Grand Canal Shoppes Property is currently managed by Brookfield Properties Retail Inc. pursuant to a management agreement. Under the related loan documents, the Grand Canal Shoppes Property is required to be managed by Brookfield Properties Retail Inc., any affiliate of the borrower sponsor or Brookfield, or a reputable and experienced management organization that manages at least five shopping centers in the United States having an aggregate square footage of at least 3,750,000 square feet and has a net worth greater than one billion dollars. The lender has the right to require the borrowers to replace the property manager with a property manager selected by the borrowers (i) during the continuance of an event of default under the Grand Canal Shoppes Loan Combination, (ii) if such property manager becomes bankrupt or insolvent or (iii) if a default occurs under the related management agreement that would allow the borrowers to terminate such management agreement. |
■ | Release of Collateral. Provided that no event of default is continuing, the borrowers may obtain the release of a portion of Grand Canal Shoppes Property consisting of the Barneys Parcel without defeasance or prepayment (except as required by REMIC regulations) upon a bona fide sale to an unaffiliated third party and subject to the satisfaction of certain conditions, including, among others: (i) the lender receives reasonably satisfactory evidence that all portions of the Barneys Parcel owned by the borrowers in fee simple have been legally subdivided from all portions of the Grand Canal Shoppes Property remaining after the release, (ii) the loan-to-value ratio following such release is less than or equal to 125% (provided that the borrowers may prepay the “qualified amount” as defined in Internal Revenue Service Revenue Procedure 2010-30, in order to satisfy such requirement, together with any applicable yield maintenance premium) and (iii) delivery of a REMIC opinion. From and after the release of the Barneys Parcel, without the prior |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #6: GRAND CANAL SHOPPES
consent of the lender, neither the borrowers nor any of their affiliates may solicit, cause or facilitate the relocation of any existing tenant at the Grand Canal Shoppes Property to the Barneys Parcel. |
■ | Reciprocal Easement Agreement.The borrowers are a party to a reciprocal easement agreement with respect to the Grand Canal Shoppes Property which governs the interrelationship between the Grand Canal Shoppes Property and the owners of other interests in the complex that includes the Venetian Hotel and Casino and The Palazzo Resort. Under the reciprocal easement agreement, the borrowers covenant to continuously operate the Grand Canal Shoppes Property and have agreed to maintain the quality standards of the tenant mix at the Grand Canal Shoppes Property. In addition, the borrowers are prohibited from leasing space to competitors of Venetian Casino Resort, LLC. Casualty and business interruption insurance coverage for the Grand Canal Shoppes Property is currently provided by a blanket insurance policy meeting the requirements under the reciprocal easement agreement. Proceeds of such insurance, as well as condemnation proceeds, are required to be administered in accordance with the provisions of the reciprocal easement agreement. Under the reciprocal easement agreement, a transfer of the Grand Canal Shoppes Property (other than to a lender (or a subsequent transferee) in connection with foreclosure of a mortgage secured by the property) is subject to a right of first offer in favor of Venetian Casino Resort, LLC. If the subsequent transfer is not for at least 95% of the price of the offer to Venetian Casino Resort, LLC, Venetian Casino Resort, LLC would be entitled to purchase the property at such lower sales price. |
Additionally, Venetian Casino Resort, LLC has the right to cure certain defaults of the borrowers under the Grand Canal Shoppes Loan Combination and, in the case of acceleration of the Grand Canal Shoppes Loan Combination, has the right, subject to the satisfaction of certain financial covenants, to purchase the Grand Canal Shoppes Loan Combination at a price equal to (a) the principal balance (b) accrued and unpaid interest up to (but excluding) the date of purchase, (c) all other amounts owed under the loan documents, including, without limitation (but only to the extent so owed) (1) any unreimbursed advances made by the servicer, with interest at the applicable rate, (2) any servicing and special servicing fees, (3) any exit fees, (4) any prepayment, yield maintenance or similar premiums and (5) if the date of purchase is not a scheduled payment date, accrued and unpaid interest, from the date of purchase up to (but excluding) the scheduled payment date next succeeding the date of purchase and (d) all reasonable fees and expenses incurred by the lender in connection with the purchase.
■ | Mezzanine or Subordinate Secured Indebtedness. Not permitted. |
■ | Ground/Air Rights Leases. The borrowers are tenants under two ground leases and an air rights lease at the Grand Canal Shoppes Property. One ground lease is for the retail and restaurant space on the casino level of the Venetian Hotel and Casino and expires on May 14, 2093 with no extension options. The other ground lease is for the retail and restaurant space on the casino level of The Palazzo and expires on February 28, 2097 with no extension options. The annual rent under each ground lease is $1 and the borrowers have the option to purchase the applicable premises for $1 on their respective expiration dates. |
The air rights above the space leased to Walgreens Co. and used as a Walgreen’s store are leased by a third party to the borrowers. The air rights lease expires on February 28, 2064 and has one 40-year extension option. The annual ground rent under the air rights lease was initially $600,000. As of March 1, 2011, such rent is subject to annual increases in an amount equal to the percentage increase in the consumer price index during the corresponding period, subject to a cap of 2.0%. The underwritten ground rent expense is $133,475. The borrowers sublease a portion of the air rights to The Venetian Casino Resort, LLC who pays 80.68% of the rent payable under the air rights lease, with the borrowers responsible for the remaining 19.32%.
■ | TerrorismInsurance. The borrowers are required to maintain terrorism insurance in an amount equal to the full replacement cost of the Grand Canal Shoppes Property, as well as 24 months of rental loss and/or business interruption coverage, together with a 12-month extended period of indemnity following restoration. If TRIPRA is no longer in effect, then the borrowers’ requirement will be capped at insurance premiums equal to two times the amount of the insurance premium payable in respect of the property and business interruption/rental loss insurance required under the related loan documents. See “Risk Factors—Terrorism Insurance May Not Be Available for All Mortgaged Properties” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #7: MOFFETT TOWERS II BUILDINGS 3 & 4
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
96
LOAN #7: MOFFETT TOWERS II BUILDINGS 3 & 4
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
97
LOAN #7: MOFFETT TOWERS II BUILDINGS 3 & 4
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #7: moffett towers ii buildings 3 & 4
Mortgaged Property Information | Mortgage Loan Information | |||||||||
Number of Mortgaged Properties | 1 | Loan Seller | GSMC, GACC | |||||||
Location (City/State) | Sunnyvale, California | Cut-off Date Principal Balance(8) | $55,250,000 | |||||||
Property Type | Office | Cut-off Date Principal Balance per SF(4) | $499.10 | |||||||
Size (SF)(1) | 701,266 | Percentage of Initial Pool Balance | 4.3% | |||||||
Total Occupancy as of 8/6/2019(2) | 100.0% | Number of Related Mortgage Loans | None | |||||||
Owned Occupancy as of 8/6/2019(2) | 100.0% | Type of Security | Fee Simple | |||||||
Year Built / Latest Renovation | 2019 / NAP | Mortgage Rate | 3.76386% | |||||||
Appraised Value(3) | $790,000,000 | Original Term to Maturity (Months)(7) | 120 | |||||||
Borrower Sponsor | Jay Paul Company | Original Amortization Term (Months) | NAP | |||||||
Property Management | Paul Holdings, Inc., d/b/a Jay Paul Company | Original Interest Only Period (Months) | 120 | |||||||
First Payment Date | 8/6/2019 | |||||||||
Anticipated Repayment Date | 7/6/2029 | |||||||||
Final Maturity Date | 6/6/2034 | |||||||||
Underwritten Revenues | $57,629,637 | |||||||||
Underwritten Expenses | $11,259,997 | Escrows | ||||||||
Underwritten Net Operating Income (NOI) | $46,369,641 | Upfront | Monthly | |||||||
Underwritten Net Cash Flow (NCF) | $46,224,616 | Taxes | $525,523 | $87,587 | ||||||
Cut-off Date LTV Ratio(4)(5) | 44.3% | Insurance | $0 | $0 | ||||||
LTV Ratio at ARD(4)(6)(7) | 44.3% | Replacement Reserves | $0 | $0 | ||||||
DSCR Based on Underwritten NOI / NCF(4) | 3.47x / 3.46x | TI/LC(2) | $39,293,262 | $0 | ||||||
Debt Yield Based on Underwritten NOI / NCF(4) | 13.2% / 13.2% | Other | $0 | $0 | ||||||
Sources and Uses | ||||||||||
Sources | $ | % | Uses | $ | % | |||||
Senior Loan Amount | $350,000,000 | 59.3% | Loan Payoff(9) | $408,943,870 | 69.3% | |||||
Subordinate Loan Amount | 155,000,000 | 26.3 | Principal Equity Distribution | 114,264,733 | 19.4 | |||||
Mezzanine Loan | 85,000,000 | 14.4 | Reserves | 39,818,785 | 6.7 | |||||
Origination Costs | 26,972,612 | 4.6 | ||||||||
Total Sources | $590,000,000 | 100.0% | Total Uses | $590,000,000 | 100.0% | |||||
(1) | The Moffett Towers II Buildings 3 & 4 Property is part of the Moffett Towers II Campus. The campus shares 59,648 SF of common area amenities, of which 23,860 SF were allocated to the Moffett Towers II Buildings 3 & 4 Property. These 23,860 SF are not included in the collateral. |
(2) | Facebook has taken possession of its space and has commenced with the design of the build out of the spaces. Facebook is currently in a free rent period at Building 3 and is anticipated to begin paying rent in January 2020. Facebook is also currently in a free rent period at Building 4 and is anticipated to begin paying rent in December 2019. We cannot assure you that this tenant will begin paying rent as anticipated or at all. All contractual TI/LC obligations and free rent were reserved at the origination of the Moffett Towers II Buildings 3 & 4 Loan Combination. See “—Escrows” below. |
(3) | See “—Appraisal” below. |
(4) | Calculated based on the aggregate outstanding principal balance of the Moffett Towers II Buildings 3 & 4 Senior Loans and excludes the Moffett Towers II Buildings 3 & 4 Subordinate Loans unless otherwise specified. See “—The Mortgage Loan” below. |
(5) | The Cut-off Date LTV Ratio is calculated utilizing the “prospective stabilized” appraised value of $790,000,000. The Cut-off Date LTV Ratio calculated based on the “as-is” appraised value is 48.2%. See “—Appraisal” below. |
(6) | The LTV Ratio at ARD is calculated utilizing the “prospective stabilized” appraised value of $790,000,000. The LTV Ratio calculated based on the “as-is” appraised value is 48.2%. See “—Appraisal” below. |
(7) | The Moffett Towers II Buildings 3 & 4 Loan Combination has an anticipated repayment date (the “ARD”) of July 6, 2029 and a stated maturity date of June 6, 2034. |
(8) | The Cut-off Date Principal Balance represents the non-controlling note A-2-C and note A-3-C of the $505,000,000 Moffett Towers II Buildings 3 & 4 Loan Combination. See “—The Mortgage Loan” below. |
(9) | In May 2018, GS Bank funded a $795.0 million loan to an affiliate of the borrower to construct the Moffett Towers II Buildings 3 & 4 Property. GS Bank subsequently syndicated $690.0 million of such loan to third parties, including one syndication partner who placed its $100.0 million allocation on a warehouse line with GS Bank. GS Bank retained $105.0 million of such loan on its balance sheet. The Moffett Towers II Buildings 3 & 4 Loan Combination was used in part to pay off the existing GS Bank loan. |
■ | The Mortgage Loan. The mortgage loan (the “Moffett Towers II Buildings 3 & 4 Loan”) is part of a loan combination (the “Moffett Towers II Buildings 3 & 4 Loan Combination”) consisting of 11 seniorpari passu promissory notes (note A-1-A, note A-1-B, note A-1-C, note A-1-D, note A-1-E, note A-2-A, note A-2-B, note A-2-C, note A-3-A, note A-3-B and note A-3-C) with an aggregate original principal balance of $350,000,000 (the “Moffett Towers II Buildings 3 & 4 Senior Loans”) and three subordinatepari passu promissory notes (note B-1, note B-2 and note B-3) with an aggregate original principal balance of $155,000,000 (the “Moffett Towers II Buildings 3 & 4 Subordinate Loans”). The Moffett Towers II Buildings 3 & 4 Loan Combination has an aggregate original principal balance of $505,000,000 and is secured by a first mortgage encumbering the borrower’s fee simple interest in two office buildings located in Sunnyvale, California (collectively, the “Moffett Towers II Buildings 3 & 4 Property”). The Moffett Towers II Buildings 3 & 4 Loan, which will be included in the CGCMT 2019-GC41 securitization transaction, is evidenced by the non-controlling note A-2-C and note A-3-C, has an outstanding principal balance as of the Cut-off Date of $55,250,000 and represents approximately 4.3% of the Initial Pool Balance. |
The Moffett Towers II Buildings 3 & 4 Loan Combination was co-originated by Goldman Sachs Bank USA (“GS Bank”), Deutsche Bank AG, New York Branch (“DBNY”) and Barclays Capital Real Estate Inc. (“BCREI”) on June 19, 2019. The Moffett Towers II Buildings 3 & 4 Senior Loans (including the Moffett Towers II Buildings 3 & 4 Loan) and the Moffett Towers II Buildings 3 & 4 Subordinate Loans have aper annum interest rate equal to (i) prior to the ARD, 3.76386% and (ii) from and after the ARD, the sum of (a) 3.76386% plus (b) the positive difference between the Moffett Towers II Buildings 3 & 4 Adjusted Blended Interest Rate and 3.76386%. The “Moffett Towers II Buildings 3 & 4 Adjusted Blended Interest Rate” means a rateper annum equal to the greater of (a) 5.26386% or (b) the rate
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #7: MOFFETT TOWERS II BUILDINGS 3 & 4
for U.S. dollar swaps with a 10-year maturity, as of the ARD, plus 1.50%. The Moffett Towers II Buildings 3 & 4 Loan received a credit assessment of BBB-sf by Fitch and AA (sf) by DBRS.
The Moffett Towers II Buildings 3 & 4 Loan Combination had an initial term of 120 months to the ARD and has a remaining term of 119 months to the ARD as of the Cut-off Date. The stated maturity date is June 6, 2034 (the “Moffett Towers II Buildings 3 & 4 Stated Maturity Date”). The Moffett Towers II Buildings 3 & 4 Loan Combination requires interest-only payments during its term until the ARD. From the first due date after the ARD until the Moffett Towers II Buildings 3 & 4 Stated Maturity Date, the Moffett Towers II Buildings 3 & 4 Loan Combination will amortize on a 30-year schedule.
The Moffett Towers II Buildings 3 & 4 Loan Combination may be voluntarily prepaid in whole (but not in part) beginning on August 6, 2021. Any voluntary prepayments prior to January 6, 2029 require a yield maintenance premium, which may be no less than 1% of the amount prepaid. In addition, provided that no event of default under the Moffett Towers II Buildings 3 & 4 Loan Combination is continuing, defeasance with direct, non-callable obligations of the United States of America is permitted at any time on or after the earlier of (a) the second anniversary of the closing date of the securitization into which the last piece of the Moffett Towers II Buildings 3 & 4 Loan Combination is deposited or (b) June 19, 2022.
The table below summarizes the promissory notes that comprise the Moffett Towers II Buildings 3 & 4 Loan Combination. The relationship between the holders of the Moffett Towers II Buildings 3 & 4 Loan Combination is governed by a co-lender agreement as described under “Description of the Mortgage Pool—The Loan Combinations—The Moffett Towers II Buildings 3 & 4 Pari Passu-AB Loan Combination” in the Preliminary Prospectus.
Loan Combination Summary | |||||
Note | Original Balance | Cut-off Date Balance | Note Holder | Controlling Piece | |
Note A-1-A | $2,750,000 | $2,750,000 | MFTII 2019-B3B4 | No | |
Note A-1-B | 65,000,000 | 65,000,000 | BCREI(1) | Yes(2) | |
Note A-1-C | 50,000,000 | 50,000,000 | BANK 2019-BNK19 | No | |
Note A-1-D | 49,750,0000 | 49,750,0000 | BCREI(1) | No | |
Note A-1-E | 25,000,000 | 25,000,000 | BCREI(1) | No | |
Note A-2-A | 1,125,000 | 1,125,000 | MFTII 2019-B3B4 | No | |
Note A-2-B | 34,450,000 | 34,450,000 | DBNY(3) | No | |
Note A-2-C | 43,175,000 | 43,175,000 | CGCMT 2019-GC41 | No | |
Note A-3-A | 1,125,000 | 1,125,000 | MFTII 2019-B3B4 | No | |
Note A-3-B | 65,550,000 | 65,550,000 | GS Bank(4) | No | |
Note A-3-C | 12,075,000 | 12,075,000 | CGCMT 2019-GC41 | No | |
Note B-1 | 85,250,000 | 85,250,000 | MFTII 2019-B3B4 | Yes(2) | |
Note B-2 | 34,875,000 | 34,875,000 | MFTII 2019-B3B4 | Yes(2) | |
Note B-3 | 34,875,000 | 34,875,000 | MFTII 2019-B3B4 | Yes(2) | |
Total | $505,000,000 | $505,000,000 |
(1) | Notes A-1-B, A-1-D and A-1-E are currently held by BCREI and are expected to be contributed to one or more future securitization transactions. |
(2) | During the continuance of a control appraisal period relating to the B notes, Note A-1-B will be the controlling piece. See “Description of the Mortgage Pool—The Loan Combinations—The Moffett Towers II Buildings 3 & 4 Pari Passu-AB Loan Combination” in the Preliminary Prospectus. |
(3) | DBNY expects to transfer Note A-2-B to DBR Investments Co. Limited and contribute such note to one or more future securitization transactions. |
(4) | Note A-3-B is currently held by GS Bank and is expected to be contributed to one or more future securitization transactions. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
100
LOAN #7: MOFFETT TOWERS II BUILDINGS 3 & 4
The Moffett Towers II Buildings 3 & 4 total debt capital structure is shown below:
Moffett Towers II Buildings 3 & 4 Total Debt Capital Structure
(1) | The initial weighted average interest rate of the notes comprising the Moffett Towers II Buildings 3 & 4 Loan Combination is 3.76386%. The interest rate on the Moffett Towers II Buildings 3 & 4 Loan Combination as of any date of determination will be the weighted average interest rate of the notes comprising the Moffett Towers II Buildings 3 & 4 Loan Combination. |
(2) | Based on the “prospective stabilized” appraised value of $790,000,000 as of December 1, 2019 and January 1, 2020. |
(3) | Based on the UW NOI of $46,369,641 and the UW NCF of $46,224,616. |
(4) | Based on the “prospective stabilized” appraised value of $790,000,000, the Implied Borrower Sponsor Equity is $200,000,000. |
■ | The Mortgaged Property.The Moffett Towers II Buildings 3 & 4 Property consists of two identical, newly-constructed, eight-story Class A office buildings totaling 701,266 SF located in Sunnyvale, California. The Moffett Towers II Buildings 3 & 4 Property is 100.0% leased to Facebook on two separate 350,633 SF triple-net, substantially identical leases through May 31, 2034, each with two, seven-year extension options and no early termination rights. |
Facebook has a right of first refusal to purchase the Moffett Towers II Buildings 3 & 4 Property if the borrower is willing and able to accept an offer to sell the Moffett Towers II Buildings 3 & 4 Property to one of Facebook’s competitors (currently defined as Alphabet Inc., Amazon, Inc., Apple Inc. and Microsoft Corporation) that remains active so long as Facebook has not assigned its leases to an unaffiliated third party and is not in material monetary default under its leases.
The Moffett Towers II Buildings 3 & 4 Property comprises a portion of the approximately 1.8 million SF, five-building Moffett Towers II office campus (the “Moffett Towers II Campus”) located on 47.4 acres in Sunnyvale, California. The first phase of the Moffett Towers II Campus development included Moffett Towers II Building 1, Moffett Towers II Building 2, an enclosed parking structure, an adjacent surface parking lot, and a 59,648 SF fitness/amenities building. The second phase of the Moffett Towers II Campus development consists of Moffett Towers II Building 5 and an enclosed parking structure. The third and final phase consists of Moffett Towers II Building 4 (“Building 4”) (completed in May 2019), Moffett Towers II Building 3 (“Building 3”) (completed in June 2019), and an additional parking structure (expected completion in 2019). The Moffett Towers II Buildings 3 & 4 Property will feature access to the fitness/amenities building and the enclosed parking structure pursuant to a declaration of covenants, conditions, restrictions and easement and charges agreement. There are 1,068 total parking spaces dedicated to Facebook pursuant to its leases, resulting in a parking ratio of approximately 3.3 spaces per 1,000 SF.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
101
LOAN #7: MOFFETT TOWERS II BUILDINGS 3 & 4
The following table presents certain information relating to the sole tenant at theMoffett Towers II Buildings 3 & 4 Property:
Largest Tenant Based on Underwritten Base Rent
Building | Tenant Name | Credit Rating (Fitch/MIS/S&P)(1) | Tenant | % of GLA | UW Base | % of Total UW Base Rent | UW Base Rent | Lease Expiration | Renewal / Extension Options | ||||||||||||
3 | Facebook(3) | NR / NR / NR | 350,633 | 50.0 | % | $19,493,562 | 50.0 | % | $55.60 | 5/31/2034 | 2, 7-year options | ||||||||||
4 | Facebook(3) | NR / NR / NR | 350,633 | 50.0 | 19,493,562 | 50.0 | $55.60 | 5/31/2034 | 2, 7-year options | ||||||||||||
Total | 701,266 | 100.0 | % | $38,987,125 | 100.0 | % | $55.60 |
(1) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
(2) | UW Base Rent and UW Base Rent $ per SF reflect the contractual base rent for the office portion as of May 1, 2019 for Building 4 and June 1, 2019 for Building 3 as well as the tenant'spro rata share of the amenity facility ($1,282,857 or $641,428 per building) and contractual rent steps through May 1, 2020 for Building 4 and June 1, 2020 for Building 3. Facebook is currently in a free rent period, described below, and will begin paying annual base rent of $52.20 per SF in December 2019 and January 2020 for Building 4 and Building 3, respectively. |
(3) | Facebook has taken possession of both its spaces and has commenced with the design of the build out of the spaces. Facebook took occupancy of Building 3 in June 2019, is currently in a free rent period, and is anticipated to begin paying rent in January 2020. Facebook took occupancy of Building 4 in May 2019, is also currently in a free rent period, and is anticipated to begin paying rent in December 2019. We cannot assure you that this tenant will begin paying rent as anticipated or at all. See “—Escrows” below |
The following table presents certain information relating to the lease rollover schedule at the Moffett Towers II Buildings 3 & 4 Property based on initial lease expiration dates:
Lease Expiration Schedule(1)
Year Ending December 31, | Expiring | % of Owned | Cumulative % of Owned GLA | UW Base | % of Total | UW Base Rent $ | # of Expiring | |||||||||||||||
MTM | 0 | 0.0 | % | 0.0 | % | $0 | 0.0 | % | $0.00 | 0 | ||||||||||||
2019 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||||
2020 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||||
2021 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||||
2022 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||||
2023 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||||
2024 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||||
2025 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||||
2026 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||||
2027 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||||
2028 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||||
2029 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||||
2030 & Thereafter | 701,266 | 100.0 | 100.0 | % | 38,987,125 | 100.0 | 55.60 | 2 | ||||||||||||||
Vacant | 0 | 0.0 | 100.0 | % | NAP | NAP | NAP | NAP | ||||||||||||||
Total | 701,266 | 100.0 | % | $38,987,125 | 100.0 | % | $55.60 | 2 |
(1) | Calculated based on approximate square footage occupied by the sole tenant. |
(2) | UW Base Rent and UW Base Rent $ per SF reflect the contractual base rent for the office portion as of May 1, 2019 for Building 4 and June 1, 2019 for Building 3 as well as the tenant'spro rata share of the amenity facility ($1,282,857 or $641,428 per building) and contractual rent steps through May 1, 2020 for Building 4 and June 1, 2020 for Building 3. Facebook is currently in a free rent period, described below, and will begin paying annual base rent of $52.20 per SF in December 2019 and January 2020 for Building 4 and Building 3, respectively. |
The following table presents certain information relating to historical occupancy at the Moffett Towers II Buildings 3 & 4 Property:
Historical Leased %(1)
As of 8/6/2019 |
100.0% |
(1) | As provided by the borrower. The Moffett Towers II Buildings 3 & 4 Property was constructed in 2019 and has been fully leased since June 1, 2019. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
102
LOAN #7: MOFFETT TOWERS II BUILDINGS 3 & 4
■ | Underwritten Net Cash Flow. The following table presents certain information relating to the Underwritten Net Cash Flow at the Moffett Towers II Buildings 3 & 4 Property: |
Cash Flow Analysis(1)(2)
Underwritten(3) | Underwritten $ per SF(3)(4) | |||||
In-Place Rent | $37,708,475 | $52.00 | ||||
In-Place UW Amenities Rent | 1,282,857 | 1.77 | ||||
Straight-Line Office Rent | 8,564,468 | 11.81 | ||||
Straight-Line Amenities Rent | 291,524 | 0.40 | ||||
Total Rental Revenue | $47,847,323 | $65.98 | ||||
Reimbursements | 11,259,997 | 15.53 | ||||
Vacancy Loss | (1,477,683 | ) | (2.04 | ) | ||
Effective Gross Income | $57,629,637 | $79.48 | ||||
Total Expenses | $11,259,997 | $15.53 | ||||
Net Operating Income | $46,369,641 | $63.95 | ||||
TI/LC | 145,025 | 0.20 | ||||
Net Cash Flow | $46,224,616 | $63.75 | ||||
Occupancy | 100 | % | ||||
NOI Debt Yield(5) | 13.2 | % | ||||
NCF DSCR(5) | 3.46 | x |
(1) | Certain items such as straight line rent, interest income, lease cancellation income, depreciation, amortization, debt service payments and any other non-recurring or non-operating items are not considered for the underwritten cash flow. |
(2) | Historical operating statements are not available, as the Moffett Towers II Buildings 3 & 4 Property was built in 2019. |
(3) | Underwritten Base Rent and Underwritten Base Rent $ per SF reflect the contractual base rent for the office portion as of May 1, 2019 for Building 4 and June 1, 2019 for Building 3 as well as the tenant'spro rata share of the amenity facility ($1,282,857 or $641,428 per building) and contractual rent steps through May 1, 2020 for Building 4 and June 1, 2020 for Building 3. Facebook is currently in a free rent period at both buildings and will begin paying annual base rent of $52.20 per SF in December 2019 and January 2020 for Building 4 and Building 3, respectively. |
(4) | Based on 725,126 SF, which includes 23,860 SF of the tenant’spro rata share of the amenity facility. |
(5) | Calculated based on the aggregate outstanding principal balance of the Moffett Towers II Buildings 3 & 4 Senior Loans and excludes the Moffett Towers II Buildings 3 & 4 Subordinate Loans unless otherwise specified. |
■ | Appraisal. According to the appraisal, the Moffett Towers II Buildings 3 & 4 Property had an “as-is” appraised value of $726,000,000 ($363,000,000 for Building 3 and $363,000,000 for Building 4), as of May 3, 2019. The appraisal also provided a “prospective market value upon stabilization” of $790,000,000 ($395,000,000 for Building 3 and $395,000,000 for Building 4) as of January 1, 2020 for Building 3 and December 1, 2019 for Building 4. This value assumes that Facebook takes occupancy, construction is complete and Facebook begins paying rent for Building 3 on January 1, 2020 and Building 4 on December 1, 2019. The appraisal also concluded to an “as dark” value of $610,000,000 ($305,000,000 for Building 3 and $305,000,000 for Building 4) as of May 3, 2019. |
Appraisal Approach(1) | Value | Discount Rate | Capitalization Rate |
Direct Capitalization Approach | $726,000,000 | N/A | 5.00% |
(1) | Based on the “as-is” appraised value. |
■ | Environmental Matters. According to Phase I environmental reports, each dated May 13, 2019, there are no recognized environmental conditions or recommendations for further action at the Moffett Towers II Buildings 3 & 4 Property. |
■ | Market Overview and Competition. The Moffett Towers II Buildings 3 & 4 Property is located in Moffett Park, in the Sunnyvale submarket within Silicon Valley. Moffett Park is a 519-acre area comprised of recently developed office spaces and research and development buildings. Notable technology firms currently in Moffett Park include Google Inc., Hewlett Packard, Juniper Networks, Amazon.com, Lockheed-Martin, Microsoft, Motorola, NetApp and Rambus. The Moffett Towers II Buildings 3 & 4 Property is north of State Highway 237, which forms the southern border of the Moffett Park area and provides access from Interstate 680 and Interstate 280 to the northeast and U.S. Highway 101 in Sunnyvale to the southwest. U.S. Highway 101 runs northward through San Francisco and southward through San Jose, terminating in the City of Los Angeles. The Santa Clara County Transit System station is located across the street from the Moffett Towers II Campus and services the surrounding residential communities. |
According to the appraisal, the Moffett Towers II Buildings 3 & 4 Property is located in the Moffett Park office submarket of Silicon Valley. The appraisal notes that at the end of the first quarter of 2019, this submarket contained about 10.3 million SF of office inventory, or about 11.9% of the entire Silicon Valley office inventory of approximately 86.8 million SF. The appraisal concluded overall vacancy in the Moffett Park office submarket was 0.8% as of the first quarter of 2019. The appraisal concludes that the overall average asking rental rate for office space in Sunnyvale, which includes the Moffett Park submarket, is $6.55 per square foot per month.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
103
LOAN #7: MOFFETT TOWERS II BUILDINGS 3 & 4
Competitive Set – Comparable Leases(1)
Location | Total GLA (SF) | Tenant Name | Lease Date / | Lease Area (SF) | Monthly Base Rent PSF | Lease Type |
Moffett Towers II Buildings 3 & 4 1190 Discovery Way and 900 5th Avenue Sunnyvale, CA | 701,266 | Various / Various(2) | 701,266 | $4.35 | NNN | |
1001 N. Shoreline Blvd. Mountain View, CA | 132,960 | April 2018 / 144 Mos. | 132,960 | $5.60 | NNN | |
221 N. Mathilda Ave. Sunnyvale, CA | 154,987 | 23 and ME | May 2019 / 144 Mos. | 154,987 | $5.80 | NNN |
520 Almanor Ave. Sunnyvale, CA | 231,000 | Nokia Inc. | April 2019 / 150 Mos. | 231,000 | $4.84 | NNN |
1111 Lockheed Martin Way Sunnyvale, CA | 350,633 | Amazon | November 2017 / 126 Mos. | 350,633 | $4.30 | NNN |
599 North Mathilda Ave. Sunnyvale, CA | 76,031 | January 2019 / 63 Mos. | 76,031 | $4.18 | NNN |
(1) | Source: Appraisal. |
(2) | Facebook’s lease began in May 2019 for Building 4 and June 2019 for Building 3. The lease terms for Building 3 and Building 4 are 180 months and 181 months, respectively. |
■ | The Borrower. The borrower is MT2 B3-4 LLC, a Delaware limited liability company. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the Moffett Towers II Buildings 3 & 4 Loan Combination. The non-recourse carveout guarantor under the Moffett Towers II Buildings 3 & 4 Loan Combination is Paul Guarantor LLC. Paul Guarantor LLC is wholly owned by the Jay Paul Revocable Living Trust, of which Joseph K. Paul is trustee and grantor. |
Joseph K. Paul is the founder of The Jay Paul Company, a privately held real estate firm based in San Francisco, California. Founded in 1975, The Jay Paul Company concentrates on the acquisition, development and management of commercial properties throughout California. The Jay Paul Company has developed over 11.0 million SF of institutional quality space. The Jay Paul Company’s portfolio includes other properties in Moffett Park, including Moffett Gateway, Moffett Towers, Moffett Towers II and Moffett Place.
■ | Escrows.On the origination date, the borrower funded (i) a tenant improvements and leasing commissions reserve equal to approximately $23,165,933 for Facebook leasing expenses, (ii) a free rent reserve equal to $16,127,329 and (iii) a tax reserve equal to approximately $525,523. |
On each due date, the borrower will be required to fund (i) a tax and insurance reserve in an amount equal to one-twelfth of the taxes and insurance premiums that the lender estimates will be payable during the next ensuing 12 months, unless in the case of insurance premiums, the borrower is maintaining a blanket policy in accordance with the related loan documents, (ii) during the continuance of a Moffett Towers II Buildings 3 & 4 Trigger Period, a capital expenditure reserve in the amount of approximately $12,085, and (iii) during the continuance of a Moffett Towers II Buildings 3 & 4 Lease Sweep Period, a lease sweep account in an amount equal to approximately $1,031,600 and any excess cash described under “—Lockbox and Cash Management” below (subject to a cap equal to the applicable Moffett Towers II Buildings 3 & 4 Lease Sweep Reserve Threshold, in which case any amounts exceeding such cap will be used to fund a debt service reserve, unless the amount on reserve in either such account equals the reserved amount described in the definition of “Moffett Towers II Buildings 3 & 4 Lease Sweep Period” below).
A“Moffett Towers II Buildings 3 & 4 Lease Sweep Reserve Threshold”means (a) with respect to a Moffett Towers II Buildings 3 & 4 Lease Sweep Period continuing under clauses (iii) and/or (v) of the definition thereof, $21,037,980 or (b) with respect to a Moffett Towers II Buildings 3 & 4 Lease Sweep Period continuing under clauses (i) and/or (ii) of the definition thereof, $30 per rentable square foot of dark space and/or terminated space, as applicable.
A“Moffett Towers II Buildings 3 & 4 Trigger Period”means each period (i) during the continuance of an event of default under the Moffett Towers II Buildings 3 & 4 Loan Combination or the Moffett Towers II Buildings 3 & 4 Mezzanine Loan, (ii) commencing when both (a) the entire Moffett Towers II Buildings 3 & 4 Property is not leased to Facebook or a subsequent investment grade tenant and (b) either (1) the debt service coverage ratio (as calculated under the loan documents) of the Moffett Towers II Buildings 3 & 4 Loan, determined as of the last day of any fiscal quarter, is less than 1.90x, or (2) the aggregate debt service coverage ratio (as calculated under the loan documents) of the Moffett Towers II Buildings 3 & 4 Loan and the Moffett Towers II Buildings 3 & 4 Mezzanine Loan, determined as of the last day of any fiscal quarter, is less than 1.50x, and ending when either (A) the debt service coverage ratio (as calculated under the loan documents) of the Moffett Towers II Buildings 3 & 4 Loan and the aggregate debt service coverage ratio (as calculated under the loan documents) of the Moffett Towers II Buildings 3 & 4 Loan and the
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
104
LOAN #7: MOFFETT TOWERS II BUILDINGS 3 & 4
Moffett Towers II Buildings 3 & 4 Mezzanine Loan, in each case determined as of the last day of any two consecutive fiscal quarters, is at least 1.90x and 1.50x, respectively, or (B) at least $35,063,300 is reserved as excess collateral, (iii) during the continuance of a Moffett Towers II Buildings 3 & 4 Lease Sweep Period, or (iv) from and after the ARD.
A“Moffett Towers II Buildings 3 & 4 Lease Sweep Period”means, prior to the ARD, any period (i) commencing upon the date that Facebook (or any replacement tenant) cancels, terminates or delivers notice of cancellation or termination of any of its leases with respect to all or a material portion of the related space (at least 40,000 or more SF of space (or, if a full floor of space is less than 40,000 SF of space, a full floor of space)) and ending when (a) both (1) one or more replacement tenants acceptable to the lender is in occupancy and paying rent under one or more qualified replacement leases and (2) each of the debt service coverage ratio (as calculated under the loan documents) of the Moffett Towers II Buildings 3 & 4 Loan and the aggregate debt service coverage ratio (as calculated under the loan documents) of the Moffett Towers II Buildings 3 & 4 Loan and the Moffett Towers II Buildings 3 & 4 Mezzanine Loan is at least equal to the respective debt service coverage ratio immediately prior to such period or (b) $35.00 per SF for the applicable terminated space has been reserved, (ii) commencing upon the date that Facebook (or any replacement tenant) goes dark at 20% or more of one of its leased spaces (unless such tenant or replacement tenant is an investment grade entity) and ending when (a) one or more replacement tenants acceptable to the lender is in occupancy of such space and paying rent under a qualified replacement lease or an investment grade subtenant has assumed such lease or (b) $50.00 per SF for the applicable terminated space has been reserved, (iii) during the continuance of a default of a lease of Facebook (or any replacement tenant) beyond any applicable notice and cure period and ending when (a) such default is cured and no other default occurs for three consecutive months following such cure or (b) $35.00 per SF for the applicable terminated space has been reserved, (iv) commencing upon the occurrence of an insolvency proceeding involving Facebook (or any replacement tenant) and ending when such insolvency proceedings have been terminated and each applicable lease has been affirmed, assumed or assigned in a manner satisfactory to the lender, or (v) commencing upon the date on which Facebook becomes rated by at least two of Fitch, Moody’s and S&P and is subsequently downgraded below investment grade and ending when (a) one or more replacement tenants acceptable to the lender is in occupancy and paying rent under one or more qualified replacement leases or an investment grade subtenant has assumed each applicable lease, (b) Facebook (or its parent) is restored as an investment grade entity or (c) $50.00 per SF for the applicable terminated space has been reserved.
■ | Lockbox and Cash Management. The Moffett Towers II Buildings 3 & 4 Loan Combination is structured with a hard lockbox and in-place cash management. The borrower is required to cause tenants to deposit rents directly into a lender-controlled lockbox account. In addition, the borrower and the property manager are required to deposit all rents and gross revenue from the Moffett Towers II Buildings 3 & 4 Property into such lockbox account within one business day of receipt. On each business day, all funds in the lockbox account are required to be swept into a lender-controlled cash management account. |
On each due date, all amounts in the cash management account are required to be applied to the payment of debt service on the Moffett Towers II Buildings 3 & 4 Loan Combination, the funding of required reserves, operating expenses, the payment of debt service on the Moffett Towers II Buildings 3 & 4 Mezzanine Loan, and payment of the property manager’s fees (subject to an annual fee cap of 3% of rents per calendar year), with any remaining amounts to be applied as follows:
(i) | prior to the ARD: |
(a) | for so long as no Moffett Towers II Buildings 3 & 4 Trigger Period is continuing, to the property manager and the borrower; |
(b) | during the continuance of a Moffett Towers II Buildings 3 & 4 Lease Sweep Period, (1) to the lease sweepaccount(subject to a cap equal to the applicable Moffett Towers II Buildings 3 & 4 Lease Sweep Reserve Threshold, in which case any amounts exceeding such cap will be used to fund a debt service reserve, until (except in the case of an insolvency proceeding involving Facebook) the aggregate amount on reserve in such accounts equals the applicable reserved amount described in the definition of “Moffett Towers II Buildings 3 & 4 Lease Sweep Period”) and (2) any remaining amounts, (x) ifno other Moffett Towers II Buildings 3 & 4 Trigger Period is continuing, to the property manager and the borrower, and (y) if anotherMoffett Towers II Buildings 3 & 4 Trigger Period is continuing, as set forth in clause (c) below; and |
(c) | during the continuance of a Moffett Towers II Buildings 3 & 4 Trigger Period (other than a Moffett Towers II – Buildings 3 & 4 Lease Sweep Period), to an excess cash flow reserve to be held as additional |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #7: MOFFETT TOWERS II BUILDINGS 3 & 4
collateral for the Moffett Towers II Buildings 3 & 4 Loan Combination (in the case of a Moffett Towers II Buildings 3 & 4 Trigger Period as described in clause (ii) of the definition thereof), subject to a cap of $35,063,300, with any excess amounts disbursed to the property manager and the borrower; and
(ii) | fromand after the ARD, (a) first, to the outstanding principal of the Moffett Towers II Buildings 3 & 4 Senior Loans, on apro rata basis, until such amounts are reduced to zero, (b) second, to the outstanding principal of the Moffett Towers II Buildings 3 & 4 Subordinate Loans, on apro rata basis, until such amounts are reduced to zero, (c) third, to the outstanding accrued excess interest under the Moffett Towers II Buildings 3 & 4 Senior Loans, on apro rata basis, until such amounts are reduced to zero, and (d) fourth, to the outstanding accrued excess interest under the Moffett Towers II Buildings 3 & 4 Subordinate Loans, on apro rata basis, until such amounts are reduced to zero. |
■ | Property Management. The Moffett Towers II Buildings 3 & 4 Property is currently managed by Paul Holdings, Inc., d/b/a Jay Paul Company, an affiliate of the borrower, pursuant to a management agreement. Under the related loan documents, the Moffett Towers II Buildings 3 & 4 Property is required to remain managed by (i) Paul Holdings, Inc., (ii) so long as the borrower is controlled by Joseph K. Paul, a property management company owned and/or controlled by him, (iii) a property manager that is a reputable, nationally or regionally recognized management company having at least five years’ experience in the management of similar type properties and has leasable square footage of the same property type equal to the lesser of 3,000,000 leasable square feet and five times the leasable square feet of the Moffett Towers II Buildings 3 & 4 Property, or (iv) any other management company reasonably approved by the lender and with respect to which a Rating Agency Confirmation has been received. The lender has the right to require the borrower to replace the property manager with a property manager selected by the borrower (i) during the continuance of an event of default under the Moffett Towers II Buildings 3 & 4 Loan Combination, (ii) during the continuance of a default by the property manager under the management agreement (after the expiration of any applicable notice and/or cure periods), (iii) if the property manager becomes insolvent or a debtor in any bankruptcy or insolvency proceeding, or (iv) if the property manager engages in gross negligence, fraud, willful misconduct or misappropriation of funds. |
■ | Mezzanine or Secured Subordinate Indebtedness. Concurrently with the origination of the Moffett Towers II Buildings 3 & 4 Loan Combination, GS Bank, DBNY and BCREI made an $85,000,000 mezzanine loan (the “Moffett Towers II Buildings 3 & 4 Mezzanine Loan”) to MT2 B3-4 Mezz LLC, the sole member of the borrower, which is secured by a pledge of the sole member’s ownership interest in the borrower. The Moffett Towers II Buildings 3 & 4 Mezzanine Loan is coterminous with the Moffett Towers II Buildings 3 & 4 Loan Combination and accrues interest at aper annum rate equal to (i) prior to the ARD, 5.75% and (ii) from and after the ARD, the greater of (a) 7.25% and (b) the rate for U.S. dollar swaps with a 10-year maturity, as of two business days prior to the ARD, plus 1.50%. The lenders of the Moffett Towers II Buildings 3 & 4 Loan Combination and the Moffett Towers II Buildings 3 & 4 Mezzanine Loan entered into an intercreditor agreement that provides for customary consent rights, cure rights and the right to purchase the defaulted mortgage loan. See “Description of the Mortgage Pool—Additional Indebtedness—Existing Mezzanine Debt” in the Preliminary Prospectus. |
■ | Terrorism Insurance.The borrower is required to maintain terrorism insurance in an amount equal to the full replacement cost of the Moffett Towers II Buildings 3 & 4 Property, as well as 24 months of rental loss and/or business interruption coverage, together with a 12-month extended period of indemnity following restoration. See “Risk Factors—Terrorism Insurance May Not Be Available for All Mortgaged Properties” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #8: the zappettini portfolio
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #8: the zappettini portfolio
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #8: the zappettini portfolio
Mortgaged Property Information | Mortgage Loan Information | |||||
Number of Mortgaged Properties | 10 | Loan Seller | CREFI | |||
Location (City/State) | Mountain View, California | Cut-off Date Balance(4) | $55,000,000 | |||
Property Type | Office | Cut-off Date Balance per SF(3) | $476.99 | |||
Size (SF) | 251,575 | Percentage of Initial Pool Balance | 4.3% | |||
Total Occupancy as of 8/6/2019(1) | 100.0% | Number of Related Mortgage Loans | None | |||
Owned Occupancy as of 8/6/2019(1) | 100.0% | Type of Security | Fee Simple | |||
Year Built / Latest Renovation | Various / Various | Mortgage Rate | 4.30000% | |||
Appraised Value(2) | $187,400,000 | Original Term to Maturity (Months) | 60 | |||
Appraisal Date | 5/7/2019 | Original Amortization Term (Months) | NAP | |||
Borrower Sponsors | John Zappettini and | Original Interest Only Period (Months) | 60 | |||
Zappettini Investment Company, LLC | First Payment Date | 7/6/2019 | ||||
Property Management | Zappettini Capital Terra Bella LLC | Maturity Date | 6/6/2024 | |||
Underwritten Revenues | $10,955,024 | |||||
Underwritten Expenses | $1,364,472 | Escrows(5) | ||||
Underwritten Net Operating Income (NOI) | $9,590,551 | Upfront | Monthly | |||
Underwritten Net Cash Flow (NCF) | $9,555,142 | Taxes | $347,991 | $57,999 | ||
Cut-off Date LTV Ratio(3) | 64.0% | Insurance | $34,225 | $5,704 | ||
Maturity Date LTV Ratio(3) | 64.0% | Replacement Reserve(6) | $150,000 | $0 | ||
DSCR Based on Underwritten NOI / NCF(3) | 1.83x / 1.83x | TI/LC | $1,667,365 | $0 | ||
Debt Yield Based on Underwritten NOI / NCF(3) | 8.0% / 8.0% | Other | $0 | $0 | ||
Sources and Uses | |||||||||||
Sources | $ | % | Uses | $ | % | ||||||
Loan Combination | $120,000,000 | 100.0% | Loan Payoff | $76,803,012 | 64.0 | % | |||||
Partner Buyout(7) | 33,675,264 | 28.1 | |||||||||
Principal Equity Distribution | 6,650,690 | 5.5 | |||||||||
Upfront Reserves | 2,199,581 | 1.8 | |||||||||
Closing Costs | 671,453 | 0.6 | |||||||||
Total Sources | $120,000,000 | 100.0% | Total Uses | $120,000,000 | 100.0 | % |
(1) | Total Occupancy and Owned Occupancy as of 8/6/2019 are based on the underwritten rent rolls dated as of May 21, 2019 for the 850 – 900 North Shoreline property and the underwritten rent roll dated as of August 6, 2019 for the remaining properties. |
(2) | Appraised Value is based on the sum of the “as-is” values of all the properties in the portfolio. See “The Mortgaged Properties” below. |
(3) | Calculated based on the aggregate outstanding principal balance as of the Cut-off Date of The Zappettini Portfolio Loan Combination (as defined below). |
(4) | The Cut-off Date Balance of $55,000,000 represents the non-controlling note A-2, which is part of a larger loan combination evidenced by twopari passu notes having an aggregate outstanding principal balance as of the Cut-off Date of $120,000,000. The related companion loan, which is evidenced by the controlling note A-1 ($65,000,000), is expected to be contributed to the Benchmark 2019-B12 transaction. See“The Mortgage Loan”below. |
(5) | See “Escrows” below. |
(6) | Monthly deposits into the replacement reserve account are waived so long as the balance in the replacement reserve account remains greater than or equal to $150,000. If the balance in the replacement reserve account falls below $150,000, the borrowers are required to deposit a monthly amount equal to $5,451 until the balance reaches the cap of $150,000. |
(7) | A portion of loan proceeds were used to fund the buyout of previous partners’ interests. |
■ | The Mortgage Loan. The mortgage loan (“The Zappettini Portfolio Loan”) is part of a loan combination (“The Zappettini Portfolio Loan Combination”) evidenced by twopari passu notes that are together secured by a first mortgage encumbering the borrowers’ fee simple interest in a 10 property office portfolio located in Mountain View, California, comprising 251,575 SF of net rentable area (each, a “Zappettini Portfolio Property”and together “Zappettini Portfolio Properties”). The Zappettini Portfolio Loan, which is evidenced by the non-controlling note A-2, had an original principal balance of $55,000,000, has a Cut-off Date Balance of $55,000,000 and represents approximately 4.3% of the Initial Pool Balance. The Zappettini Portfolio Loan Combination had an original principal balance of $120,000,000 and has an outstanding principal balance as of the Cut-off Date of $120,000,000. The controlling note A-1, which had an original principal balance of $65,000,000 and has an outstanding principal balance as of the Cut-off Date of $65,000,000, is expected to be contributed to the Benchmark 2019-B12 transaction. The Zappettini Portfolio Loan Combination, which accrues interest at a fixed rate of 4.30000%per annum, was originated by CREFI on May 31, 2019. The proceeds of The Zappettini Portfolio Loan Combination were primarily used to pay off existing debt, fund the buyout of previous partners’ interests, return equity to the sponsor, fund upfront reserves and pay closing costs. |
The Zappettini Portfolio Loan Combination had an initial term of 60 months and has a remaining term of 58 months as of the Cut-off Date. The Zappettini Portfolio Loan Combination requires monthly payments of interest only for the term of The Zappettini Portfolio Loan Combination. The scheduled maturity date of The Zappettini Portfolio Loan Combination is the due date in June 2024.Provided no event of default has occurred and is continuing, at any time after the earlier to occur of (i) May 31, 2022 and (ii) the second anniversary of the last securitization of a note comprising part of The Zappettini Portfolio Loan Combination (the “Release Date”), The Zappettini Portfolio Loan Combination may be defeased with certain direct full faith and credit obligations of the United States of America or other obligations which are “government securities” permitted under The Zappettini Portfolio Loan Combination documents. TheZappettini Portfolio Loan Combination may be prepaid with payment of a yield maintenance premium at any time prior to the due date occurring in December 2023. Voluntary prepayment of The Zappettini Portfolio Loan Combination is permitted on or after the due date occurring in December 2023 without payment of any prepayment premium.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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Loan Combination Summary | |||||
Note | Original Balance | Cut-off Date Balance | Note Holder | Controlling Piece | |
A-2 | $55,000,000 | $55,000,000 | CGCMT 2019-GC41 | No | |
A-1 | $65,000,000 | $65,000,000 | Benchmark 2019-B12(1) | Yes | |
Total | $120,000,000 | $120,000,000 |
(1) | The controlling note A-1 is expected to be contributed to the Benchmark 2019-B12 transaction. |
■ | The Mortgaged Properties.The Zappettini Portfolio Properties are comprised of 251,575 SF of suburban office space across 10 buildings all of which are located in Mountain View, California. |
Portfolio Summary(1)
Property Name | Year Built / Renovated | SF | Allocated Loan Combination Cut-off Date Balance | % Allocated Loan Combination Original Balance | Appraisal Date(2) | Appraised Value(2) | % Appraised Value(2) | UW NCF | % of UW NCF | |||||||||||||||
1350 West Middlefield | 1975 / NAP | 29,670 | $7,700,000 | 14.0 | % | 5/7/2019 | $22,700,000 | 12.1 | % | $1,435,544 | 15.0 | % | ||||||||||||
1212 Terra Bella | 1976 / NAP | 37,166 | 7,443,333 | 13.5 | 5/7/2019 | 26,500,000 | 14.1 | 1,273,068 | 13.3 | |||||||||||||||
850 – 900 North Shoreline | 1969 / NAP | 31,347 | 7,425,000 | 13.5 | 5/7/2019 | 24,300,000 | 13.0 | 1,287,244 | 13.5 | |||||||||||||||
1277 Terra Bella | 1962 / 2017 | 24,000 | 7,333,333 | 13.3 | 5/7/2019 | 22,000,000 | 11.7 | 1,281,065 | 13.4 | |||||||||||||||
1215 Terra Bella | 1974 / NAP | 25,000 | 5,343,708 | 9.7 | 5/7/2019 | 17,800,000 | 9.5 | 915,046 | 9.6 | |||||||||||||||
1340 West Middlefield | 1977 / NAP | 25,000 | 5,074,667 | 9.2 | 5/7/2019 | 17,300,000 | 9.2 | 856,630 | 9.0 | |||||||||||||||
1255 Terra Bella | 1990 / NAP | 17,980 | 4,136,458 | 7.5 | 5/7/2019 | 14,100,000 | 7.5 | 695,611 | 7.3 | |||||||||||||||
1305 Terra Bella | 1977 / NAP | 20,732 | 3,588,750 | 6.5 | 5/7/2019 | 14,100,000 | 7.5 | 631,417 | 6.6 | |||||||||||||||
1330 West Middlefield | 1975 / NAP | 25,000 | 3,552,083 | 6.5 | 5/7/2019 | 17,000,000 | 9.1 | 572,850 | 6.0 | |||||||||||||||
1245 Terra Bella | 1965 / NAP | 15,680 | 3,402,667 | 6.2 | 5/7/2019 | 11,600,000 | 6.2 | 606,667 | 6.3 | |||||||||||||||
Total | 251,575 | $55,000,000 | 100.0 | % | $187,400,000 | 100.0 | % | $9,555,142 | 100.0 | % |
(1) | Based on the underwritten rent rolls dated as of May 21, 2019 for the 850 – 900 North Shoreline property and as of August 6, 2019 for the remaining properties. |
(2) | Source: Appraisal. |
The Zappettini Portfolio Properties are 100% occupied by tenants, including Google, Inc. (“Google”), The County of Santa Clara, and Elementum SCM, Inc. (“Elementum”) amongst others. The Zappettini Portfolio Properties are located directly across Freeway 101 from Google’s global headquarters and Microsoft’s Silicon Valley campus. The City of Mountain View is currently developing a growth plan, known as the Terra Bella Vision Plan, which is aimed at a complete redevelopment of a 110-acre area which includes the area where the Zappettini Portfolio Properties are located. According to the City of Mountain View’s planning personnel, the overall planned changes are expected to take place in the next three to five years and it is expected that this will have a positive value impact on the Zappettini Portfolio Properties.
Six of the 10 properties were developed by the sponsor for The Zappettini Portfolio Loan Combination and the remaining four properties were acquired between 2016 and 2018. Each building is occupied by a single tenant other than the 850 – 900 North Shoreline property, which is occupied by two tenants. Across the portfolio, tenants have been at the Zappettini Portfolio Properties for a weighted average lease term of approximately 9.1 years. Additionally, approximately 42.8% of the Zappettini Portfolio Properties is leased to investment grade tenants, which include Elementum, Google and The County of Santa Clara. According to the appraisal, the leases at the Zappettini Portfolio Properties range from 0.5% above to 51.1% below market rent with a weighted average below market rent of 21.5%.
Elementum
Elementum leases a total of 49,000 SF in two buildings within the Zappettini Portfolio Properties. Elementum leases and occupies the entire 24,000 SF at the 1277 Terra Bella property pursuant to a lease that commenced in September 2017 and expires in December 2024. At any time on or after December 31, 2020, Elementum may terminate its lease at the 1277 Terra Bella property with written notice at least nine months prior to the effective date of termination. Elementum also leases the entire 25,000 SF at the 1215 Terra Bella property pursuant to a lease that commenced in February 2018 and expires in January 2023. At any time after January 31, 2021, Elementum may terminate its lease at the 1215 Terra Bella property with written notice at least nine months prior to the effective date of termination. However, Elementum currently subleases its space at the 1215 Terra Bella property to two tenants. Firewood Marketing, Inc., which occupies 12,861 SF of space with a sublease dated July 31, 2018 that expires on January 31, 2021 and Glowlink Communications Technology, Inc., which occupies 12,139 SF of space with a sublease dated October 25, 2018 that also expires on January 31, 2021. Elementum's short term plan is to sublease this space until they require more space in the future. Elementum provides mobile platform development
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #8: the zappettini portfolio
services. It offers data, cloud, and mobile technology solutions for supply chain management to automotive, healthcare, industrial and technology clients throughout the United States.
Egnyte, Inc.
Egnyte, Inc. occupies the entire 29,670 SF at the 1350 West Middlefield property, on a triple-net lease that commenced in March 2014 and expires in April 2024. The tenant does not have any renewal options under the lease. Egnyte, Inc. can terminate its lease at any time after April 30, 2022 with at least nine months’ written notice. The 1350 West Middlefield property is the location of its headquarters. Egnyte, Inc.is a privately held company, founded in 2007, which provides content collaboration, data protection and infrastructure modernization services to customers in various industries.
Google (Planet Labs, Inc.)
Google occupies the entire 17,980 SF at the 1255 Terra Bella property. Planet Labs, Inc. occupies the entire 15,680 SF at the 1245 Terra Bella property on a sublease with Google that commenced in April 2017 and expires in March 2021. Google guarantees Planet Labs, Inc.’s sublease and is a shareholder of Planet Labs, Inc. Planet Labs, Inc. is a private Earth imaging company based in San Francisco, California. The company’s goal is to image the entirety of the planet daily to monitor changes and pinpoint trends.
The following table presents certain information relating to the major tenants (of which certain tenants may have co-tenancy provisions) at the Zappettini Portfolio Properties:
Largest Owned Tenants by Underwritten Base Rent(1)
Tenant Name | Credit Rating (Fitch/MIS/S&P)(2) | Tenant GLA | % of GLA | UW Base Rent(3) | % of Total UW Base Rent(3) | UW Base Rent $ per SF(3) | Lease Expiration | Renewal / Extension Options | |||||||||||
Elementum SCM, Inc.(4)(6) | BBB- / Baa3 / BBB- | 49,000 | 19.5 | % | $2,345,760 | 22.8 | % | $47.87 | 1/31/2023 | One, Five-year extension | |||||||||
Egnyte, Inc.(5) | BB / B2 / BB | 29,670 | 11.8 | 1,520,291 | 14.8 | 51.24 | 4/30/2024 | NAP | |||||||||||
Google, Inc.(6) | NR / Aa2 / AA+ | 33,660 | 13.4 | 1,395,669 | 13.6 | 41.46 | 3/10/2021 | NAP | |||||||||||
Iridex Corporation | NR / NR / NR | 37,166 | 14.8 | 1,355,147 | 13.2 | 36.46 | 2/28/2022 | NAP | |||||||||||
Nuro, Inc.(7) | NR / NR / NR | 25,000 | 9.9 | 911,550 | 8.9 | 36.46 | 8/15/2023 | NAP | |||||||||||
Zendesk (X Motors)(6) | NR / NR / NR | 16,613 | 6.6 | 867,199 | 8.4 | 52.20 | 12/31/2021 | NAP | |||||||||||
Vimo, Inc. | NR / NR / NR | 20,732 | 8.2 | 671,717 | 6.5 | 32.40 | 6/30/2023 | NAP | |||||||||||
The County of Santa Clara | AA+ / NR / AAA | 25,000 | 9.9 | 623,099 | 6.1 | 24.92 | 9/30/2021 | One, Two-year extension | |||||||||||
Vita Insurance Associates, Inc.(8) | NR / NR / NR | 14,734 | 5.9 | 592,846 | 5.8 | 40.24 | 12/31/2026 | One, Three-year extension | |||||||||||
Largest Owned Tenants | 251,575 | 100.0 | % | $10,283,276 | 100.0 | % | $40.88 | ||||||||||||
Vacant | 0 | 0.0 | 0 | 0.0 | 0.00 | ||||||||||||||
Total / Wtd. Avg. All Tenants | 251,575 | 100.0 | % | $10,283,276 | 100.0 | % | $40.88 | ||||||||||||
(1) | Based on the underwritten rent rolls dated as of May 21, 2019 for the 850 – 900 North Shoreline property and as of August 6, 2019 for the remaining properties. |
(2) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
(3) | UW Base Rent, % of Total UW Base Rent and UW Base Rent $ per SF includes approximately $262,799 in contractual rent steps through May 2020 and $32,099 which represents the present value of rent steps for The County of Santa Clara. |
(4) | At any time after January 31, 2021, Elementum may terminate its lease at the 1215 Terra Bella property with written notice at least nine months prior to the effective date of termination. At any time on or after December 31, 2020, Elementum may terminate its lease at the 1277 Terra Bella property with written notice at least nine months prior to the effective date of termination. |
(5) | At any time after April 30, 2022, Egnyte, Inc. may terminate its lease at the 1350 West Middlefield property with written notice at least nine months prior to the effective date of termination. |
(6) | Several of the properties are subleased. Google is currently subleasing the 1245 Terra Bella property (15,680 SF) to Planet Labs, Inc. Google guarantees the sublease and currently is a shareholder in Planet Labs, Inc. Elementum is currently subleasing the 1215 Terra Bella property to Firewood Marketing, Inc and Glowlink, with a plan to move into these properties once they require the space and have to expand. Zendesk is currently subleasing the 850 – 900 North Shoreline property to XMotors. XMotors will take over the lease officially in 2020 with an expiration of 2021 |
(7) | At any time after February 1, 2022, Nuro, Inc. may terminate its lease at the 1340 West Middlefield property with written notice at least nine months prior to the effective date of termination. |
(8) | At any time after December 31, 2020, Vita Insurance Associates, Inc. may terminate its lease at the 850 – 900 North Shoreline property with written notice at least six months prior to the effective date of termination. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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The following table presents certain information relating to the lease rollover schedule at the Zappettini Portfolio Properties, based on initial lease expiration dates:
Lease Expiration Schedule(1)(2)
Year Ending December 31 | Expiring Owned GLA | % of Owned GLA | Cumulative % of Owned GLA | UW Base Rent(3) | % of Total UW Base Rent(3) | UW Base Rent $ per SF(3) | # of Expiring Tenants | ||||||||||||||
MTM | 0 | 0.0 | % | 0.0 | % | $0 | 0.0 | % | $0.00 | 0 | |||||||||||
2019 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | $0.00 | 0 | |||||||||||||
2020 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | $0.00 | 0 | |||||||||||||
2021 | 75,273 | 29.9 | 29.9 | % | 2,885,966 | 28.1 | $38.34 | 3 | |||||||||||||
2022 | 37,166 | 14.8 | 44.7 | % | 1,355,147 | 13.2 | $36.46 | 1 | |||||||||||||
2023 | 70,732 | 28.1 | 72.8 | % | 2,555,267 | 24.8 | $36.13 | 3 | |||||||||||||
2024 | 53,670 | 21.3 | 94.1 | % | 2,894,051 | 28.1 | $53.92 | 2 | |||||||||||||
2025 | 0 | 0.0 | 94.1 | % | 0 | 0.0 | $0.00 | 0 | |||||||||||||
2026 | 14,734 | 5.9 | 100.0 | % | 592,846 | 5.8 | $40.24 | 1 | |||||||||||||
2027 | 0 | 0.0 | 100.0 | % | 0 | 0.0 | $0.00 | 0 | |||||||||||||
2028 | 0 | 0.0 | 100.0 | % | 0 | 0.0 | $0.00 | 0 | |||||||||||||
2029 | 0 | 0.0 | 100.0 | % | 0 | 0.0 | $0.00 | 0 | |||||||||||||
2030 & Beyond | 0 | 0.0 | 100.0 | % | 0 | 0.0 | $0.00 | 0 | |||||||||||||
Vacant | 0 | 0.0 | 100.0 | % | NAP | NAP | NAP | NAP | |||||||||||||
Total / Wtd. Avg. | 251,575 | 100.0 | % | $10,283,276 | 100.0 | % | $40.88 | 10 |
(1) | Calculated based on the approximate square footage occupied by each collateral tenant. |
(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) | UW Base Rent, % of Total UW Base Rent and UW Base Rent $ per SF includes approximately $262,799 in contractual rent steps through May 2020 and $32,099 which represents the present value of rent steps for The County of Santa Clara. |
The following table presents certain information relating to historical leasing at the Zappettini Portfolio Properties:
Historical Leased %(1)
Property | 2016 | 2017 | 2018 | Most Recent(2) | ||||
1350 West Middlefield | 100.0% | 100.0% | 100.0% | 100.0% | ||||
1212 Terra Bella | 100.0% | 100.0% | 100.0% | 100.0% | ||||
850 - 900 North Shoreline | NAV | 100.0% | 100.0% | 100.0% | ||||
1277 Terra Bella | NAV | NAV | 100.0% | 100.0% | ||||
1215 Terra Bella | 100.0% | NAV | 100.0% | 100.0% | ||||
1340 West Middlefield | 100.0% | 100.0% | NAV | 100.0% | ||||
1255 Terra Bella | 83.3% | 100.0% | 100.0% | 100.0% | ||||
1305 Terra Bella | 100.0% | 100.0% | 100.0% | 100.0% | ||||
1330 West Middlefield | 100.0% | 100.0% | 100.0% | 100.0% | ||||
1245 Terra Bella | 83.3% | 100.0% | 100.0% | 100.0% |
(1) | Historical occupancies are as of December 31 of each respective year. |
(2) | Most Recent occupancy is based on the underwritten rent roll dated as of May 21, 2019 for the 850 – 900 North Shoreline property and as of August 6, 2019 for the remaining properties. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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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 Zappettini Portfolio Properties: |
Cash Flow Analysis(1)
2016 | 2017 | 2018 | TTM 3/31/19 | Underwritten | Underwritten $ per SF | ||||||||
Base Rent(2) | $6,674,789 | $6,294,118 | $8,083,005 | $8,499,156 | $9,988,378 | $39.70 | |||||||
Rent Steps(3) | 0 | 0 | 0 | 0 | 294,898 | 1.17 | |||||||
Potential Income from Vacant Space | 0 | 0 | 0 | 0 | 0 | 0.00 | |||||||
Reimbursements | 894,460 | 933,417 | 1,569,368 | 1,697,995 | 1,248,327 | 4.96 | |||||||
Gross Potential Rent | $7,569,249 | $7,227,536 | $9,652,372 | $10,197,152 | $11,531,604 | $45.84 | |||||||
Economic Vacancy & Credit Loss(4) | 0.00 | 0 | 0 | 0 | (576,580) | (2.29 | ) | ||||||
Effective Gross Income | $7,569,249 | $7,227,536 | $9,652,372 | $10,197,152 | $10,955,024 | $43.55 | |||||||
Real Estate Taxes | $285,882 | $410,259 | $727,851 | $725,322 | $662,841 | $2.63 | |||||||
Insurance | 241,961 | 285,943 | 476,533 | 545,963 | 65,190 | 0.26 | |||||||
Management Fee | 227,077 | 216,826 | 289,571 | 305,915 | 328,651 | 1.31 | |||||||
Other Operating Expenses | 311,281 | 419,377 | 353,489 | 340,306 | 307,791 | 1.22 | |||||||
Total Operating Expenses | $1,066,201 | $1,332,405 | $1,847,444 | $1,917,505 | $1,364,472 | $5.42 | |||||||
Net Operating Income(5) | $6,503,048 | $5,895,131 | $7,804,928 | $8,279,647 | $9,590,551 | $38.12 | |||||||
Replacement Reserves | 0 | 0 | 0 | 0 | 35,410 | 0.14 | |||||||
TI/LC | 0 | 0 | 0 | 0 | 0 | 0.00 | |||||||
Net Cash Flow | $6,503,048 | $5,895,131 | $7,804,928 | $8,279,647 | $9,555,142 | $37.98 | |||||||
Occupancy | 97.1% | 91.3% | 90.1% | 100.0%(6) | 95.0%(4) | ||||||||
NOI Debt Yield(7) | 5.4% | 4.9% | 6.5% | 6.9% | 8.0% | ||||||||
NCF DSCR(7) | 1.24x | 1.13x | 1.49x | 1.58x | 1.83x |
(1) | Certain items such as straight line rent, interest expense, interest income, lease cancellation income, depreciation, amortization, debt service payments and any other non-recurring or non-operating items are not considered for the underwritten cash flow. |
(2) | Base Rent is based on the underwritten rent rolls dated as of May 21, 2019 for the 850 – 900 North Shoreline property and the underwritten rent roll dated as of August 6, 2019 for the remaining properties. |
(3) | Rent Steps represents approximately $262,799 in contractual rent steps through May 2020 and $32,099 which represents the present value of rent steps for The County of Santa Clara. |
(4) | Underwritten Economic Vacancy & Credit Loss represents the economic vacancy of 5.0%. |
(5) | 2016 and 2017 cash flows were not provided for the 1277 Terra Bella property because the property was renovated in 2017. Overall, the increase from 2016 Net Operating Income to TTM 3/31/19 Net Operating Income as well as the increase from TTM 3/31/19 Net Operating Income to Underwritten Net Operating Income is primarily attributable to recent leasing at the properties. The 1215 Terra Bella property was vacant in 2017 and Elementum executed a lease that commenced in February 2018 accounting for $972,000 of Underwritten Base Rent. The 1340 West Middlefield property was vacant in 2018 and Nuro, Inc. executed a lease that commenced in February 2019 accounting for $911,950 of Underwritten Base Rent. In addition, rent steps were underwritten at $294,898 (inclusive of contractual rent steps through 2020 and present value rent steps for The County of Santa Clara). Earthquake insurance was also required in the past at the Zappettini Portfolio Properties, however going forward, the borrowers are not required to maintain earthquake insurance, which is why the Underwritten Insurance expense is lower than historical Insurance expense. |
(6) | TTM 3/31/19 Occupancy is based on underwritten rent roll as of May 21, 2019 for the 850 – 900 North Shore property and August 6, 2019 for the remaining properties. |
(7) | Metrics are calculated based on The Zappettini Portfolio Loan Combination. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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■ | Appraisal. According to the appraisal, the Zappettini Portfolio Properties had an aggregate “as-is” appraised value of $187,400,000 as of May 7, 2019. |
Property | Appraisal Approach | Value | Discount Rate | Capitalization Rate | ||||||
1350 West Middlefield | Direct Capitalization Approach | $23,000,000 | N/A | 6.00 | % | |||||
�� | Discounted Cash Flow Approach(1) | $22,500,000 | 8.00% | 6.50 | %(1) | |||||
1212 Terra Bella | Direct Capitalization Approach | $25,900,000 | N/A | 4.75 | % | |||||
Discounted Cash Flow Approach(1) | $26,400,000 | 8.00% | 6.50 | %(1) | ||||||
850 - 900 North Shoreline | Direct Capitalization Approach | $24,400,000 | N/A | 5.50 | % | |||||
Discounted Cash Flow Approach(1) | $24,100,000 | 8.00% | 6.50 | %(1) | ||||||
1277 Terra Bella | Direct Capitalization Approach | $22,200,000 | N/A | 5.75 | % | |||||
Discounted Cash Flow Approach(1) | $21,800,000 | 7.50% | 6.50 | % | ||||||
1215 Terra Bella | Direct Capitalization Approach | $17,700,000 | N/A | 5.00 | % | |||||
Discounted Cash Flow Approach(1) | $17,800,000 | 8.00% | 6.50 | % | ||||||
1340 West Middlefield | Direct Capitalization Approach | $17,400,000 | N/A | 4.75 | % | |||||
Discounted Cash Flow Approach(1) | $17,200,000 | 8.00% | 6.50 | % | ||||||
1255 Terra Bella | Direct Capitalization Approach | $14,300,000 | N/A | 4.75 | % | |||||
Discounted Cash Flow Approach(1) | $14,000,000 | 7.00% | 6.50 | % | ||||||
1305 Terra Bella | Direct Capitalization Approach | $14,000,000 | N/A | 4.50 | % | |||||
Discounted Cash Flow Approach(1) | $14,200,000 | 8.00% | 6.50 | % | ||||||
1330 West Middlefield | Direct Capitalization Approach | $17,200,000 | N/A | 3.00 | % | |||||
Discounted Cash Flow Approach(1) | $17,000,000 | 8.00% | 6.50 | % | ||||||
1245 Terra Bella | Direct Capitalization Approach | $11,800,000 | N/A | 5.00 | % | |||||
Discounted Cash Flow Approach(1) | $11,500,000 | 7.50% | 6.50 | %(1) |
(1) | Represents the terminal cap rate. |
■ | Environmental Matters. The Phase I environmental reports, dated on May 20, 2019, identify as a REC for the following properties their location within a National Priorities List (“NPL”) site groundwater plume: 1212 Terra Bella, 1277 Terra Bella, 1215 Terra Bella, 1340 West Middlefield, 1255 Terra Bella, 1305 Terra Bella, 1330 West Middlefield, and 1245 Terra Bella (collectively, the “Zappettini NPL Properties”). According to the Phase I ESA consultant, groundwater remediation activities have been and are continuing to be performed by the responsible party identified as Thermo Fisher (formerly Spectra Physics). As part of the remediation, soil vapor extraction/mitigation systems have been installed at 1245 Terra Bella and the 1277 Terra Bella properties, and a system has been proposed at the 1255 Terra Bella property. The identified responsible party is also conducting vapor intrusion investigations and monitoring activities at certain properties within the area overlying the groundwater plume. While Thermo Fisher remains responsible and liable for investigation and remediation of the groundwater plume underlying the properties, the Regional Water Quality Control Board (“RWQCB”) has recommended that the borrowers share in the cost of the soil vapor mitigation at 1277 Terra Bella due to a low concentration of a Halogenated Volatile Organic Compound identified in the soil in such property, the source of which is unknown and possibly not related to the Thermo Fisher plume. Subject to this cost sharing with respect to the 1277 Terra Bella property, and subject to the continued remediation of the properties by Thermo Fisher (who has been conducting remediation activities at the NPL site, including the Zappettini NPL Properties, since the late 1980s), the Phase I ESA consultant concluded that United States Environmental Protection Agency and the RWQCB are unlikely to seek any enforcement against or require action by the related borrower. |
■ | Market Overview and Competition.All 10 properties comprising the Zappettini Portfolio Properties are located in Mountain View, California, which is part of the San Jose-Sunnyvale-Santa Clara metropolitan statistical area. According to the appraisal, the local market area is somewhat more heavily weighted toward the manufacturing, services and information sectors and the immediate area consists almost entirely of good-quality office and research and development buildings. Land uses in the Zappettini Portfolio Properties’ immediate area consist of a mixture of retail and commercial uses along the major arterials with residential uses located on secondary streets to the south and northeast. According to the appraisal, major employers in the area include, Apple Inc., Alphabet Inc., Stanford University, Cisco Systems Inc. and Kaiser Permanente, to name a few. |
The Zappettini Portfolio Properties are located in the western-most portion of Mountain View. The immediate area has access to U.S. Highway 101, which serves most Santa Clara cities, and is located one block north of the Zappettini Portfolio Properties. Additionally, a Santa Clara Valley light rail station, Middlefield Station, is proximate to the Zappettini Portfolio Properties and a bus stop is also located near the light rail station. Additionally, the San Jose Airport is approximately 10 miles and the San Francisco International Airport is approximately 25 miles from the Zappettini Portfolio Properties. Notable high-technology firms in the immediate area include: Clontech Laboratories, Google, Microsoft, Omnicell Inc., Symantec and Teledyne Microwave Solutions. According to the appraisal, the Zappettini Portfolio Properties are located in the Mountain View R&D submarket of Silicon Valley. At the end of the first quarter of 2019, the Mountain View R&D submarket contained approximately 10.8 million SF of R&D inventory with 6.9% vacancy and asking rents of $54.84 per SF. According to a third party report, the population as of January
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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1, 2019 within a one-, three- and five-mile radius of the Zappettini Portfolio Properties is 23,149, 140,987 and 326,309, respectively, and the average household income within a one-, three- and five-mile radius of the Zappettini Portfolio Properties is $144,299, $180,837 and $190,189, respectively.
The appraisal also identified seven properties that are located within a five-mile radius of the Zappettini Portfolio Properties and are considered to be the competitive set for all of the properties in the portfolio. The seven comparable properties range from 25,000 SF to 114,175 SF and were constructed between 1961 and 1983. The competitive set reported a rental range of $49.80 per SF to $58.80 per SF on a triple-net basis. The appraiser concluded that the market rent for the Zappettini Portfolio Properties ranges between $51.00 per SF to $58.20 per SF on a triple-net basis. As of the current rent roll, the Zappettini Portfolio Properties have a physical occupancy of 100%.
The following table presents certain information relating to the primary competition for the Zappettini Portfolio Properties:
Directly Competitive Buildings(1)
Property Name | Office Area (NRA) | Year Built | City, State | Vacancy(2) | NOI PSF |
1212 Terra Bella | 37,166 | 1976 | Mountain View, CA | 0.00% | $33.07 |
1350 West Middlefield Road | 29,670 | 1975 | Mountain View, CA | 0.00% | $46.58 |
1215 Terra Bella | 25,000 | 1974 | Mountain View, CA | 0.00% | $35.44 |
410-430 N. Mary Ave | 349,758 | 1989 | Sunnyvale, CA | 0.00% | $42.57 |
10900 N. Tantau Ave | 100,481 | 2009 | Cupertino, CA | 0.00% | $38.81 |
10201 Torre Ave | 88,580 | 1983 | Cupertino, CA | 0.00% | $44.58 |
590 E. Middlefield Rd | 99,880 | 2012 | Mountain View, CA | 0.00% | $37.00 |
470 Potrero Ave | 58,190 | 1979 | Sunnyvale, CA | 0.00% | $37.68 |
650 Clyde Court | 34,606 | 1977 | Mountain View, CA | 100.00% | N/A |
(1) | Source: Appraisals. |
(2) | Vacancy as of August 6, 2019 for the Zappettini Portfolio Properties. |
■ | The Borrowers. The borrowers are ZIC 1212 Terra Bella LLC, ZIC 1215 Terra Bella LLC, ZIC 1245 Terra Bella LLC, ZIC 1255 Terra Bella LLC, ZIC 1305 Terra Bella LLC, ZIC 1330 W Middlefield LLC, ZIC 1340 W Middlefield LLC, ZIC 1350 W Middlefield LLC, ZCTB 1277 Terra Bella LLC and ZCTB 850 N Shoreline LLC, each a Delaware limited liability company and single purpose entity with at least one independent director. Legal counsel to the borrowers delivered a non-consolidation opinion in connection with the origination of The Zappettini Portfolio Loan Combination. Founded in 1921, Zappettini Capital is a private real estate firm that has focused on investing, managing and developing real estate in San Francisco and Silicon Valley for over three generations. The firm has completed over $600 million in real estate financing and investment transactions since 2008 and has commercial assets spanning over 500,000 SF in investments. John Zappettini serves as the President and CEO of Zappettini Capital, with over 30 years of experience in the corporate finance, private equity and commercial real estate industries and has led or advised on over $850 million of transactions in the United States and Europe. |
■ | Escrows. On the origination date of The Zappettini Portfolio Loan Combination, the borrowers funded reserves of (i) $347,991 for real estate taxes, (ii) $34,225 for insurance, (iii) $1,667,365 for tenant improvements and leasing commissions and (iv) $150,000 for replacement reserves. |
On each due date, the borrowers will be required to fund the following reserves with respect to The Zappettini Portfolio Loan Combination: (i) unless the tax reserve waiver conditions under The Zappettini Portfolio Loan Combination documents are satisfied with respect to any individual property (which tax reserve waiver conditions are currently not satisfied for all of the Zappettini Portfolio Properties), one-twelfth of the taxes that the lender estimates will be payable over the next-ensuing 12-month period for each such property (initially estimated at $57,999 per month for all of the Zappettini Portfolio Properties), (ii) unless the insurance reserve waiver conditions under The Zappettini Portfolio Loan Combination documents are satisfied with respect to any individual property, (which insurance reserve waiver conditions are currently not satisfied for all of the Zappettini Portfolio Properties), one-twelfth of the amount that the lender estimates will be necessary to pay insurance premiums for the renewal of coverage for each such property (initially estimated at $5,704 per month for all of the Zappettini Portfolio Properties), and (iii) provided that the replacement reserve falls below the cap of $150,000, an amount equal to $5,451.
■ | Lockbox and Cash Management. The Zappettini Portfolio Loan Combination documents require a springing lockbox account with springing cash management. After the occurrence of a Zappettini Portfolio Trigger Period (as defined below), the borrowers are required to deliver tenant direction letters to each existing tenant at the Zappettini |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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Portfolio Properties directing each of them to remit their rent payments directly to the lender-controlled lockbox. The borrowers are also required to deliver a tenant direction letter to all future tenants after the occurrence of a Zappettini Portfolio Trigger Period. The borrowers are required to (and are required to cause the property manager to) deposit all revenue derived from the Zappettini Portfolio Properties into the lockbox account. Upon the occurrence and during the continuance of a Zappettini Portfolio Trigger Period, all funds in the lockbox account are required to be swept on each business day to a cash management account under the control of the lender to be applied and disbursed in accordance with The Zappettini Portfolio Loan Combination documents. Upon an event of default under The Zappettini Portfolio Loan Combination documents, the lender may apply funds in such order of priority as it may determine. The borrowers are entitled to a one-time right to revert back to a springing lockbox account with springing cash management upon the cure of the first Zappettini Portfolio Trigger Period. Following the second occurrence of a Zappettini Portfolio Trigger Period, the lockbox account and the cash management account remain in place with all rents being deposited in the lockbox account and transferred to the cash management account during the existence of a Zappettini Portfolio Trigger Period or otherwise remitted to the borrowers if no Zappettini Portfolio Trigger Period exists.
A “Zappettini Portfolio Trigger Period” means a period commencing upon (i) the occurrence and continuance of an event of default under The Zappettini Portfolio Loan Combination documents or (ii) the debt yield falling below 6.00%.
A Zappettini Portfolio Trigger Period caused by the event described in clause (i) above will expire upon the cure (if applicable) of such event of default. In the case of a Zappettini Portfolio Trigger Period caused by the event described in clause (ii) above, such Zappettini Portfolio Trigger Period will expire on the date that the debt yield is equal to or greater than 6.25% for two consecutive calendar quarters.
■ | Property Management. The Zappettini Portfolio Properties are currently managed by Zappettini Capital Terra Bella LLC, an affiliate of the borrower. Under The Zappettini Portfolio Loan Combination documents, the lender has the right to terminate the property management agreement or direct the borrowers to terminate the property management agreement and replace the property manager if (i) the property manager becomes insolvent or a debtor in (x) an involuntary bankruptcy or insolvency proceeding not dismissed within 90 days or (y) any voluntary bankruptcy or insolvency proceeding, (ii) a Zappettini Portfolio Trigger Period exists, (iii) the property manager has engaged in gross negligence, fraud, willful misconduct or misappropriation of funds, or (iv) a default by the property manager under the property management agreement has occurred and is continuing beyond all applicable notice and cure periods. Provided that no event of default has occurred and is continuing under The Zappettini Portfolio Loan Combination documents, the borrowers have the right to replace the property manager with a property manager approved in writing by the lender (which approval may be conditioned on receipt of a rating agency confirmation). |
■ | Current Mezzanine or Secured Subordinate Indebtedness. None. |
■ | Permitted Future Mezzanine or Secured Subordinate Indebtedness. Not permitted. |
■ | Release of Collateral. Provided that no event of default is then continuing under The Zappettini Portfolio Loan Combination, The Zappettini Portfolio Loan Combination documents permit a partial release of one or more of the individual Zappettini Portfolio Properties (A) at any time, if the borrowers are partially prepaying the loan as described below, or (B) at any time after the Release Date if the borrowers partially defease a portion of The Zappettini Portfolio Loan Combination as described below, in each case, subject to certain conditions, including, without limitation, the following: (i) delivery of the partial defeasance collateral or the prepayment of a portion of The Zappettini Portfolio Loan Combination, in each case, in accordance with The Zappettini Portfolio Loan Combination documents and in an amount equal to 120% of the allocated loan amount for the individual Zappettini Portfolio Property to be released, (ii) as of each of the release date and the date of notice of such release, after giving effect to the release, the debt yield for the remaining individual Zappettini Portfolio Properties is greater than the greater of (x) the debt yield for all individual Zappettini Portfolio Properties securing The Zappettini Portfolio Loan Combination immediately prior to the release or the date of such notice, as applicable, and (y) 7.70%, (iii) as of each of the release date and the date of notice of such release, after giving effect to the release, the debt yield for the remaining Zappettini Portfolio Properties (which will be calculated solely with respect to this clause (iii) by excluding any gross rents on any leases that are scheduled to expire or terminate within 18 months from the consummation of the release) is greater than 6.00%, (iv) as of each of the release date and the date of notice of such release, after giving effect to the release, the loan-to-value ratio for the remaining individual Zappettini Portfolio Properties is no greater than the lesser of (a) 64.0%, and (b) the loan-to-value ratio for the individual Zappettini Portfolio Properties securing The Zappettini Portfolio Loan Combination immediately prior to the release date or the date of such notice, as applicable, (v) as of each of the release date and the date of notice of such release, after giving effect to the release, the debt service coverage ratio |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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for the remaining individual Zappettini Portfolio Properties is greater than the greater of (a) 1.80x, and (b) the debt service coverage ratio for the individual Zappettini Portfolio Properties securing The Zappettini Portfolio Loan Combination immediately prior to the release date or the date of such notice, as applicable, (vi) delivery to the lender of a REMIC opinion and (vii) delivery to the lender (in the case of a partial prepayment, if requested by the lender) of a rating agency confirmation.
■ | Terrorism Insurance. The borrowers are required to maintain an “all-risk” insurance policy without an exclusion of terrorism in an amount equal to the full replacement cost of the Zappettini Portfolio Properties, plus business interruption coverage in an amount equal to 100% of the projected gross income for the applicable property until the completion of restoration or the expiration of 18 months, with a six-month extended period of indemnity. The “all-risk” policy containing terrorism insurance is required to contain a deductible that is no greater than $25,000. See“Risk Factors—Terrorism Insurance May Not Be Available for All Mortgaged Properties” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #9: delong self storage
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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Mortgaged Property Information | Mortgage Loan Information | ||||||
Number of Mortgaged Properties | 1 | Loan Seller | GACC | ||||
Location (City/State) | Flushing, New York | Cut-off Date Balance | $54,300,000 | ||||
Property Type | Mixed Use | Cut-off Date Principal Balance per SF | $326.53 | ||||
Size (SF)(1) | 166,294 | Percentage of Initial Pool Balance | 4.3% | ||||
Total Occupancy as of 6/19/2019(1) | 89.9% | Number of Related Mortgage Loans | None | ||||
Owned Occupancy as of 6/19/2019(1) | 89.9% | Type of Security | Fee Simple | ||||
Year Built / Latest Renovation | 2014 / NAP | Mortgage Rate | 4.17500% | ||||
Appraised Value(2) | $90,000,000 | Original Term to Maturity (Months) | 120 | ||||
Borrower Sponsor | Steven J. Guttman | Original Amortization Term (Months) | NAP | ||||
Property Management | Storage Deluxe Management Company, LLC | Original Interest Only Period (Months) | 120 | ||||
and CubeSmart Asset Management, LLC | First Payment Date | 8/6/2019 | |||||
Maturity Date | 7/6/2019 | ||||||
Underwritten Revenues | $6,013,422 | ||||||
Underwritten Expenses | $1,361,026 | Escrows(3) | |||||
Underwritten Net Operating Income (NOI) | $4,652,396 | Upfront | Monthly | ||||
Underwritten Net Cash Flow (NCF) | $4,626,015 | Taxes | $28,868 | $28,868 | |||
Cut-off Date LTV Ratio(2) | 60.3% | Insurance | $1,090 | $0 | |||
Maturity Date LTV Ratio(2) | 60.3% | Replacement Reserve | $0 | $328 | |||
DSCR Based on Underwritten NOI / NCF | 2.02x / 2.01x | TI/LC | $0 | $2,038 | |||
Debt Yield Based on Underwritten NOI / NCF | 8.6% / 8.5% | Other | $0 | $0 | |||
Sources and Uses | |||||
Sources | $ | % | Uses | $ | % |
Loan Amount | $54,300,000 | 99.7% | Loan Payoff | $54,089,708 | 99.3% |
Principal Equity Contribution | 170,000 | 0.3 | Origination Costs | 350,334 | 0.6 |
Reserves | 29,958 | 0.1 | |||
Total Sources | $54,470,000 | 100.0% | Total Uses | $54,470,000 | 100.0% |
(1) | The Delong Self Storage Property (as defined below) is comprised of 133,694 SF of self storage space consisting of 2,623 units and 32,600 SF of retail space. Total Occupancy and Owned Occupancy for the self storage space based on SF is 87.4% as of June 19, 2019 and 100.0% for the retail space as of June 7, 2019. |
(2) | The Appraised Value is comprised of (i) an “as is” appraised value of $65,000,000 for the storage component and (ii) an “as-is” appraised value of $25,000,000 for the retail component. The appraisal also provided an “as-stabilized” appraised value for the storage component of $72,000,000 as of May 1, 2021, which assumes the self storage space is leased out at market level rents. Based on the aggregate of the “as-stabilized” appraised value for the storage component and the “as-is” appraised value for the retail component, equal to $97,000,000, the Cut-off Date LTV Ratio and Maturity Date LTV Ratio are 56.0% and 56.0%, respectively. |
(3) | See“—Escrows” below. |
■ | The Mortgage Loan. The mortgage loan (the “Delong Self Storage Loan”) is secured by a first mortgage encumbering the borrower’s fee simple interest in a 166,294 SF mixed use property located in Flushing, New York (the “Delong Self Storage Property”). The Delong Self Storage Loan has an outstanding principal balance as of the Cut-off Date of $54,300,000 and represents approximately 4.3% of the Initial Pool Balance. The Delong Self Storage Loan was originated by DBR Investments Co. Limited (“DBRI”) on July 2, 2019 and accrues interest at an interest rate of 4.17500%per annum. The proceeds of the Delong Self Storage Loan were primarily used to refinance prior debt secured by the Delong Self Storage Property, pay origination costs and fund upfront reserves. |
The Delong Self Storage Loan had an initial term of 120 months, has a remaining term of 119 months as of the Cut-off Date and requires monthly payments of interest only for the term of the Delong Self Storage Loan. The scheduled maturity date of the Delong Self Storage Loan is the due date in July 2029. Provided no event of default has occurred and is continuing under the Delong Self Storage Loan documents, at any time after the second anniversary of the securitization closing date, the Delong Self Storage Loan may be defeased with certain direct full faith and credit obligations of the United States of America or other obligations which are “government securities” permitted under the Delong Self Storage Loan documents. Voluntary prepayment of the Delong Self Storage Loan is permitted on or after the due date in April 2029 without payment of any prepayment premium.
■ | The Mortgaged Property. The Delong Self Storage Property is a mixed use property consisting of 133,694 SF of self storage space consisting of 2,623 units (the “Storage Condo”), 25,710 SF of retail space (the “Retail Condo”) and a 6,890 SF pad site (the “Retail-Pad Condo”) located in Flushing, Queens, New York. The Delong Self Storage Property was built in 2014 and is adjacent to a Home Depot and the Van Wyck Expressway, providing visibility from the Home Depot parking lot, which helps to drive traffic to the area. The Delong Self Storage Property has 105 parking spaces, which equates to 0.63 spaces per 1,000 SF. |
The Storage Condo opened in June 2015 and as of June 19, 2019 is 87.4% occupied on a SF basis and 85.0% on a per unit basis. The Storage Condo consists of seven stories of all interior, climate-controlled units. Security features include keypad entry to the building, keypad entry to interior units, keypad entry to access the elevator (only to the tenant’s respective floor) and closed circuit cameras throughout the building. Additionally, covered loading space is provided.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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The Retail Condo is located on the ground floor of the Storage Condo and is 100.0% leased to six tenants as of June 7, 2019. The tenancy includes a mix of service providers with a weighted average remaining lease term of 8.6 years as of the Cut-off Date. The Retail-Pad Condo is 100.0% leased to a Chinese supermarket tenant, Gold City, through April 2037.
The Storage Condo benefits from a 25-year Industrial Commercial Abatement Program (“ICAP”) with inflation protection that maintains real estate taxes for the Storage Condo at approximately 19.3% of unabated real estate taxes. For the first 16 years the Storage Condo will benefit from 100% of the exemption, with the exemption decreasing by 10% annually for the following 10 years. The abatement for the Storage Condo went into effect in the 2016/17 tax year. The Storage Condo will be fully taxable in the 2041/42 tax year.
The Retail Condo and Retail-Pad Condo benefit from 15-year ICAP with inflation protection for 10% of the Retail Condo and Retail-Pad Condo that maintains real estate taxes on the Retail Condo and Retail-Pad Condo at approximately 12.6% and 6.3%, respectively, of unabated real estate taxes. For the first 11 years, the property will benefit from 100% of the exemption, with the exemption decreasing by 20% annually for the following five years. The abatement for the Retail Condo went into effect in the 2016/17 tax year and will be fully taxable in the 2031/32 tax year. The abatement for the Retail-Pad Condo went into effect in the 2019/2020 tax year and will be fully taxable in the 2034/2035 tax year.
The following table presents certain information relating to the self storage units at the Delong Self Storage Property:
Self Storage Unit Mix(1)
Unit Type | # of Units | Occupancy | Occupancy | Avg SF per Unit | Average | Average Monthly |
5x5 | 1,287 | 83.4% | 83.4% | 25 | $58.47 | $2.34 |
5x7.5 | 315 | 66.0% | 66.0% | 38 | $121.89 | $3.25 |
5x10 | 417 | 94.5% | 94.5% | 50 | $154.84 | $3.10 |
5x15 | 6 | 100.0% | 100.0% | 75 | $206.01 | $2.75 |
7.5x7.5 | 1 | 100.0% | 100.0% | 56 | $153.00 | $2.72 |
7.5x10 | 174 | 96.0% | 96.0% | 75 | $199.16 | $2.66 |
10x10 | 254 | 89.0% | 89.0% | 100 | $267.62 | $2.68 |
10x15 | 107 | 96.3% | 96.3% | 150 | $360.50 | $2.40 |
10x20 | 42 | 81.0% | 81.0% | 200 | $561.27 | $2.81 |
10x25 | 11 | 72.7% | 72.7% | 250 | $816.43 | $3.27 |
10x30 | 9 | 100.0% | 100.0% | 300 | $835.49 | $2.78 |
Total / Wtd. Avg. | 2,623 | 85.0% | 87.4% | 51 | $141.09 | $2.69 |
(1) Based on the rent roll dated June 19, 2019.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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The following table presents certain information relating to the major retail tenants at the Delong Self Storage Property:
Largest Owned Commercial Tenants by Underwritten Base Rent(1)
Tenant Name | Credit Rating | Tenant GLA | % of Owned GLA | UW Base Rent | % of Total UW | UW | Lease | Renewal / |
Gold City (Pad Site) | NR / NR / NR | 6,890 | 21.1% | $448,056 | 23.9% | $65.03 | 4/30/2037 | NAP |
Tristar Plumbing | NR / NR / NR | 8,250 | 25.3 | 437,748 | 23.4 | 53.06 | 9/30/2030 | NAP |
YY Lighting & Décor | NR / NR / NR | 6,070 | 18.6 | 344,172 | 18.4 | 56.70 | 9/30/2025 | NAP |
Iris Bakery | NR / NR / NR | 3,030 | 9.3 | 171,866 | 9.2 | 56.72 | 9/30/2031 | NAP |
WFL International | NR / NR / NR | 2,810 | 8.6 | 163,968 | 8.8 | 58.35 | 8/31/2026 | NAP |
GS Beauty | NR / NR / NR | 2,740 | 8.4 | 159,878 | 8.5 | 58.35 | 3/31/2026 | NAP |
Desire Kitchen | NR / NR / NR | 2,810 | 8.6 | 147,528 | 7.9 | 52.50 | 9/30/2025 | NAP |
Largest Owned Tenants | 32,600 | 100.0% | $1,873,215 | 100.0% | $57.46 | |||
Vacant | 0 | 0.0 | 0 | 0.0 | 0.0 | |||
Total / Wtd. Avg. | 32,600 | 100.0% | $1,873,215 | 100.0% | $57.46 | |||
(1) | Based on the underwritten rent roll dated as of June 7, 2019. |
The following table presents certain information relating to the retail lease rollover schedule at the Delong Self Storage Property, based on initial lease expiration dates:
Lease Expiration Schedule(1)
Year Ending December 31 | Expiring Owned GLA | % of Owned GLA | Cumulative % of | UW Base Rent | % of Total UW | UW Base Rent $ | # of Expiring Tenants |
MTM | 0 | 0.0% | 0.0% | $0 | 0.0% | $0.00 | 0 |
2019 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 |
2020 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 |
2021 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 |
2022 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 |
2023 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 |
2024 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 |
2025 | 8,880 | 27.2 | 27.2% | 491,700 | 26.2 | 55.37 | 2 |
2026 | 5,550 | 17.0 | 44.3% | 323,846 | 17.3 | 58.35 | 2 |
2027 | 0 | 0.0 | 44.3% | 0 | 0.0 | 0.00 | 0 |
2028 | 0 | 0.0 | 44.3% | 0 | 0.0 | 0.00 | 0 |
2029 | 0 | 0.0 | 44.3% | 0 | 0.0 | 0.00 | 0 |
2030 & Thereafter | 18,170 | 55.7 | 100.0% | 1,057,670 | 56.5 | 58.21 | 3 |
Vacant | 0 | 0.0 | 100.0% | NAP | NAP | NAP | NAP |
Total / Wtd. Avg. | 32,600 | 100.0% | $1,873,215 | 100.0% | $57.46 | 7 | |
(1) | 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 certain information relating to historical leasing at the Delong Self Storage Property:
Historical Leased%(1)
2016 | 2017 | 2018 | Most Recent | |||||||||
Self Storage Owned Space(2)(3) | 57.4 | % | 68.8 | % | 79.4 | % | 87.4 | % | ||||
Retail Owned Space(4) | 78.9 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||
(1) | As provided by the borrower, which represents occupancy as of December 31 for the indicated year, unless otherwise specified. |
(2) | The Self Storage Owned Space occupancy is on a SF basis and the Most Recent Occupancy is based on the rent roll dated June 19, 2019. |
(3) | The Storage Condo opened in June 2015, and as a result has been on a steady upward occupancy trend during its stabilization period. |
(4) | The Retail Owned Space Most Recent Occupancy is based on the underwritten rent roll dated June 7, 2019. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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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 Delong Self Storage Property: |
Cash Flow Analysis(1)
2016 | 2017 | 2018 | TTM 5/31/2019 | Underwritten | Underwritten $ per SF | |||||||
Base Rent - Storage | $4,426,655 | $4,554,422 | $4,539,253 | $4,366,737 | $4,531,080 | $27.25 | ||||||
Base Rent - Retail | 902,349 | 1,332,216 | 1,780,332 | 1,810,818 | 1,873,215 | $11.26 | ||||||
Rent Steps(2) | 0 | 0 | 0 | 0 | 57,172 | $0.34 | ||||||
Reimbursements | 14,647 | 43,329 | 51,089 | 49,339 | 49,339 | $0.30 | ||||||
Other Income | 256,084 | 331,257 | 381,987 | 417,318 | 456,856 | $2.75 | ||||||
Vacancy & Loss(3) | (3,051,538) | (2,071,407) | (1,418,851) | (1,035,877) | (954,241) | ($5.74) | ||||||
Total Effective Gross Income | $2,548,198 | $4,189,817 | $5,333,810 | $5,608,334 | $6,013,422 | $36.16 | ||||||
Real Estate Taxes(4) | 104,805 | 139,575 | 225,023 | 310,587 | 214,399 | $1.29 | ||||||
Insurance | 83,980 | 85,813 | 54,990 | 81,214 | 67,140 | $0.40 | ||||||
Management Fee | 123,100 | 207,809 | 264,002 | 279,371 | 299,550 | $1.80 | ||||||
Other Operating Expenses | 702,841 | 929,228 | 856,306 | 812,840 | 779,937 | $4.69 | ||||||
Total Expenses | 1,014,725 | 1,362,425 | 1,400,321 | 1,484,012 | 1,361,026 | $8.18 | ||||||
Net Operating Income(5) | $1,533,473 | $2,827,392 | $3,933,489 | $4,124,323 | $4,652,396 | $27.98 | ||||||
TI/LC | 0 | 0 | 0 | 0 | 24,450 | $0.15 | ||||||
Capital Expenditures | 0 | 0 | 0 | 0 | 1,931 | $0.01 | ||||||
Net Cash Flow | $1,533,473 | $2,827,392 | $3,933,489 | $4,124,323 | $4,626,015 | $27.82 | ||||||
Occupancy(6) | 61.6% | 74.9% | 83.4% | 89.9% | 85.1% | |||||||
NOI Debt Yield | 2.8% | 5.2% | 7.2% | 7.6% | 8.6% | |||||||
NCF DSCR | 0.67x | 1.23x | 1.71x | 1.79x | 2.01x | |||||||
(1) | Interest income, lease cancellation income, depreciation, amortization, debt service payments and any other non-recurring or non-operating items were excluded from the historical presentation and are not considered for the underwritten cash flow. |
(2) | Underwritten Rent Steps include rent steps through April 2020. |
(3) | Vacancy & Loss is underwritten to in place vacancy for each of the Storage Condo, Retail Condo and Retail-Pad Condo spaces. |
(4) | Underwritten Real Estate Taxes are based on (i) the 2018/2019 tax bills for the Storage Condo and Retail Condo, which reflect the ICAP abatement, and (ii) the estimated abated taxes for the Retail-Pad Condo, once the ICAP final certificate of eligibility is obtained. The unabated tax bill for the Retail-Pad Condo is $136,120 or $127,494 higher than the estimated tax expense with the ICAP. |
(5) | The Storage Condo opened in June 2015, and as a result has been on a steady upward occupancy trend during its stabilization period. |
(6) | As of June 19, 2019, the Storage Condo is 87.4% occupied based on SF. As of June 7, 2019, the Retail Condo and Retail-Pad Condos are each 100.0% occupied. |
■ | Appraisal. According to the appraisal, the Delong Self Storage Property had an “as-is” appraised value of $65,000,000 for the Storage Condo and $25,000,000 for the Retail Condo and Retail-Pad Condo as of May 24, 2019. In addition, the appraisal concluded to an “as-stabilized” appraised value for the Storage Condo of $72,000,000 as of May 1, 2021, which assumes the Storage Condo achieves market level rents. |
Appraisal Approach | Value | Discount Rate | Capitalization Rate |
Discounted Cash Flow Approach – Storage Condo | $65,000,000 | 8.50%(1) | 5.50%(2) |
Direct Capitalization Approach – Retail Condo | $25,000,000 | NAP | 5.50% |
(1) | Represents the internal rate of return. |
(2) | Represents the terminal capitalization rate. |
■ | Environmental Matters. A Phase I environmental report was completed on June 6, 2019. The environmental consultant did not identify evidence of any recognized environmental conditions or recommendations for further action at the Delong Self Storage Property. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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■ | Market Overview and Competition. The Delong Self Storage Property is located along the western side of Delong Street between Sanford and 41st Avenues in the Downtown Flushing neighborhood of Queens County. The Delong Self Storage Property is served by the No. 7 train located at the corner of Main Street and Roosevelt Avenue, 0.5 miles northeast. According to the appraisal, the subway stop is the twelfth busiest subway station in New York City providing service to 18,746,832 passengers in 2017. The Delong Self Storage Property is adjacent to a Home Depot and is visible from its parking lot. The Home Depot helps to drive traffic to the area. The total population within a 1-, 1.5- and 2-mile radius of the Delong Self Storage Property is estimated to be 90,218, 204,893 and 380,107, respectively. The average household income within a 1-, 1.5- and 2-mile radius of the Delong Self Storage Property is estimated to be $59,286, $65,348 and $69,331, respectively. |
The following table presents certain information relating to comparable self storage buildings for the Delong Self Storage Property:
Self Storage Comparables(1)
Property Name | Distance from Property (miles) | Year Built | Total Units | NRA | Avg. Unit Size (SF) | Occupancy | ||||||
Delong Self Storage | NAP | 2014 | 2,623 | 133,694 | 51 | 85.0% | ||||||
U-Haul, 3630 College Point Boulevard, Flushing, NY | 0.5 | 1928/2011 | 1,400 | 84,000 | 60 | 90.0% | ||||||
Cubesmart, 31-40 Whitestone Expressway, Flushing, NY | 0.9 | 1920 | 1,258 | 69,197 | 55 | 95.0% | ||||||
Cubesmart, 124-16 31St Avenue, Flushing, NY | 1.1 | 2010 | 1,055 | 58,007 | 55 | 92.0% | ||||||
City Closet Self Storage, 20-20 129Th Street, College Point, NY | 1.8 | 1941 | 2,075 | 114,100 | 55 | 92.0% | ||||||
Stop & Stor, 74-04 Grand Avenue, Elmhurst, NY | 3.0 | 1995 | 1,964 | 108,036 | 55 | 92.0% | ||||||
Public Storage, 2401 Brooklyn Queens Expy, Woodside, NY | 3.5 | 1987 | 1,560 | 85,826 | 55 | 92.0% | ||||||
Total / Wtd. Avg.(2) | 9,312 | 519,166 | 56 | 92.1% |
(1) | Source: Appraisal. |
(2) | Excludes the Delong Self Storage Property. |
The following table presents certain information relating to comparable self storage buildings for the Delong Self Storage Property:
Self Storage Rent Comparables(1)
Property Name | 5x5 | 5x10 | 5x15 | 10x10 | 10x15 | 10x20 | 10x25 | |||||||
Delong Self Storage | $58.47 | $154.84 | $206.01 | $267.62 | $360.50 | $561.27 | $816.43 | |||||||
U-Haul, 3630 College Point Boulevard, Flushing, NY | $140.00 | 190 | N/A | 220 | 300 | N/A | N/A | |||||||
Cubesmart, 31-40 Whitestone Expressway, Flushing, NY | $92.00 | 201 | N/A | 405 | 495 | 525 | 883 | |||||||
Cubesmart, 124-16 31St Avenue, Flushing, NY | $89.50 | 232 | 324 | 400 | 515 | 1,009 | 1,188 | |||||||
City Closet Self Storage, 20-20 129th Street, College Point, NY | $90.00 | 145 | N/A | 265 | 435 | 550 | N/A | |||||||
Stop & Stor, 74-04 Grand Avenue, Elmhurst, NY | $87.00 | 155 | 235 | 289 | 350 | 410 | 479 | |||||||
Public Storage, 2401 Brooklyn Queens Expressway, Woodside, NY | $81.00 | 182 | N/A | 250 | N/A | 510 | N/A | |||||||
Total / Wtd. Avg.(2) | $95.59 | $177.49 | $266.10 | $294.99 | $409.71 | $564.59 | $772.72 |
(1) | Source: Appraisal. |
(2) | Excludes the Delong Self Storage Property. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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The following table presents certain information relating to comparable retail buildings for the Delong Self Storage Property:
Retail Comparables(1)
Property Address | Tenant Name | Lease Date | NRA | Term | Rent PSF | Lease Type | ||||||
Delong Self Storage(2) | Various | Various | 32,600 | Various | $57.46 | Gross | ||||||
2407-2411 150th Street | Met Fresh Supermarket | 3/2019 | 12,000 | 20 | $40.00 | Net | ||||||
134-16-134-36 Northern Boulevard | Confidential | 3/2019 | 1,100 | 10 | $34.91 | Modified | ||||||
103-12-103-26A Roosevelt Avenue | Sprint Store | 4/2018 | 700 | 10 | $100.00 | Modified | ||||||
10423 Roosevelt Avenue | Tortilleria Nixtamal | 3/2018 | 1,000 | 5 | $61.20 | Modified | ||||||
136-04-136-08 Northern Boulevard | Confidential | 1/2018 | 1,492 | 5 | $84.45 | Modified | ||||||
135-18 Northern Boulevard | Ham | 11/2017 | 1,800 | 10 | $73.33 | Net | ||||||
35-38 Junction Boulevard | Kidz Fun Palace | 11/2017 | 4,025 | 10 | $60.00 | Modified | ||||||
13613-13617 37th Avenue | Confidential | 10/2017 | 800 | 5 | $48.00 | Modified | ||||||
Total / Wtd. Avg.(3) | 22,917 | 14.5 | $51.82 |
(1) | Source: Appraisal. |
(2) | Based on the rent roll dated June 7, 2019. |
(3) | Excludes the Delong Self Storage Property. |
■ | The Borrower. The borrowing entities for the Delong Self Storage Loan are SD Flushing DE LLC and SD Flushing Retail LLC each a Delaware limited liability company and a single-purpose entity structured to be bankruptcy remote with two independent directors. The borrower sponsor and nonrecourse carve-out guarantor is Steven J. Guttman. |
Steven J. Guttman is the founder of Storage Deluxe Management Company, LLC (“Storage Deluxe”), which is fully vertically-integrated real estate company specializing in acquisitions, development, construction, construction management, property management, asset management, capital formation, and retail leasing. Founded in 1998, Storage Deluxe is a self storage developer in the New York City metropolitan area. Headquartered in Manhattan, the company has 65 projects either completed or in development, totaling seven million SF for a total investment in excess of $1.5 billion.
■ | Escrows. At loan origination, the borrowers deposited approximately $28,868 into a tax reserve and $1,090 into an insurance reserve. |
On each due date, the borrowers are required to fund the following reserves with respect to the Delong Self Storage Loan: (i) a tax reserve in an amount equal to one-twelfth of the amount that the lender estimates will be necessary to pay taxes over the then succeeding 12-month period (initially estimated to be $28,867.81 per month), (ii) a replacement reserve in an amount equal to one-twelfth of $0.0237 multiplied by the aggregate number of SF of the Delong Self Storage Property (initially $328.13 based on 166,294 SF) and (iii) a tenant improvements and leasing commission reserve in an amount equal to $2,038. The Delong Self Storage Loan documents require monthly deposits into the insurance reserve account in the amount of one-twelfth of the annual insurance premiums (a) upon an event of default or (b) if an acceptable blanket insurance policy is not in place.
■ | Lockbox and CashManagement. The Delong Self Storage Loan is structured with a springing lockbox and springing cash management. Upon a Cash Management Trigger Period (as defined below), a lender controlled clearing account is required to be established by the borrowers and the borrowers are required to cause all rents to be transmitted directly into the clearing account and, during the continuance of a Trigger Period (as defined below), funds in such clearing account are required to be transferred on a daily basis to a cash management account controlled by the lender to be applied and disbursed according to the Delong Self Storage Loan documents. |
A “Cash Management Trigger Period” commences upon the occurrence of (i) an event of default or (ii) the debt service coverage ratio, based on underwritten net cash flow, falling below 1.35x at the end of any calendar quarter.
A “Trigger Period” commences upon the occurrence of (i) an event of default or (ii) the debt service coverage ratio, based on underwritten net cash flow, falling below 1.25x at the end of any calendar quarter and ends upon, (a) with respect to clause (i) above, a cure of such default or (b) with respect to clause (ii) above, the property achieving a debt service coverage ratio of at least 1.30x for two consecutive calendar quarters.
■ | Property Management. The Delong Self Storage Property is managed by Storage Deluxe (Retail Condo and Retail-Pad Condo) and CubeSmart Asset Management, LLC (Storage Condo). |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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■ | Current Mezzanine or Secured Subordinate Indebtedness. None. |
■ | Permitted Future Mezzanine or Secured Subordinate Indebtedness. Not permitted. |
■ | Release of Collateral. After the defeasance lockout expiration date, either (a) the Retail Condo borrower may obtain the release of both the Retail Condo and Retail-Pad Condo or (b) the Storage Condo borrower may obtain the release of the Storage Condo upon a bona fide third-party sale, provided the following conditions are satisfied: (i) no event of default is then continuing under the Delong Self Storage Loan documents, (ii) by defeasing the greater of (x) 125% of the allocated loan amount of the subject condominium unit, or (y) 100% of the net sales proceeds of the condominium unit in an arm's length sale to an unrelated third party, which in no event will be less than 94% of the gross sales price of the condominium unit, (iii) the debt service coverage ratio after giving effect to such release is at least the greater of (x) 1.85x and (y) the debt service coverage ratio immediately prior to such sale, (iv) the loan-to-value ratio after giving effect to such release is no more than the lesser of (x) 60.3% and (y) the loan-to-value ratio immediately prior to such release, (v) the debt yield after giving effect to such release is at least the greater of (x) 8.0% and (y) the debt yield immediately prior to such sale and (vi) there is compliance with REMIC-related requirements. The allocated loan amount for the Storage Condo is $40,305,155 and the combined allocated loan amount for the Retail Condo and Retail-Pad Condo is $13,994,845. |
■ | Terrorism Insurance. The Delong Self Storage Loan documents require that the “all-risk” insurance policy required to be maintained by the borrowers provide coverage for terrorism in an amount equal to the full replacement cost of the Delong Self Storage Property. The “all-risk” policy containing terrorism insurance is required to contain a deductible that is no greater than $25,000. See “Risk Factors—Terrorism Insurance May Not Be Available for All Mortgaged Properties” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #10:powered shell portfolio - manassas
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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Mortgaged Property Information | Mortgage Loan Information | ||||||||||||
Number of Mortgaged Properties | 4 | Loan Seller | GSMC | ||||||||||
Location (City/State) | Manassas, Virginia | Cut-off Date Principal Balance(2) | $51,550,000 | ||||||||||
Property Type | Industrial | Cut-off Date Principal Balance per SF(1) | $115.04 | ||||||||||
Size (SF) | 728,460 | Percentage of Initial Pool Balance | 4.0% | ||||||||||
Total Occupancy as of 8/1/2019 | 100.0% | Number of Related Mortgage Loans(3) | 2 | ||||||||||
Owned Occupancy as of 8/1/2019 | 100.0% | Type of Security | Fee Simple | ||||||||||
Year Built / Latest Renovation | 2017, 2019 / NAP | Mortgage Rate | 3.63730% | ||||||||||
Appraised Value | $150,000,000 | Original Term to Maturity (Months) | 120 | ||||||||||
Appraisal Date | 6/24/2019 | Original Amortization Term (Months) | NAP | ||||||||||
Borrower Sponsor | BREIT Operating Partnership, L.P. | Original Interest Only Period (Months) | 120 | ||||||||||
Property Management | COPT Property Management Services, LLC | First Payment Date | 8/1/2019 | ||||||||||
Maturity Date | 7/6/2029 | ||||||||||||
Underwritten Revenues | $8,383,057 | ||||||||||||
Underwritten Expenses | $85,615 | Escrows | |||||||||||
Underwritten Net Operating Income (NOI) | $8,297,442 | Upfront | Monthly | ||||||||||
Underwritten Net Cash Flow (NCF) | $8,078,671 | Taxes | $0 | $0 | |||||||||
Cut-off Date LTV Ratio(1) | 55.9% | Insurance | $0 | $0 | |||||||||
Maturity Date LTV Ratio(1) | 55.9% | Replacement Reserves | $0 | $0 | |||||||||
DSCR Based on Underwritten NOI / NCF(1) | 2.68x / 2.61x | TI/LC | $0 | $0 | |||||||||
Debt Yield Based on Underwritten NOI / NCF(1) | 9.9% / 9.6% | Other | $0 | $0 | |||||||||
Sources and Uses | |||||||||||||
Sources | $ | % | Uses | $ | % | ||||||||
Loan Combination Amount | $83,800,000 | 57.3% | Purchase Price | $144,932,315 | 99.1% | ||||||||
Principal’s New Cash Contribution | 62,482,431 | 42.7 | Origination Costs | 1,350,116 | 0.9 | ||||||||
Total Sources | $146,282,431 | 100.0% | Total Uses | $146,282,431 | 100.0% | ||||||||
(1) | Calculated based on the aggregate outstanding principal balance of the Powered Shell Portfolio – Manassas Loan Combination. |
(2) | The Cut-off Date Principal Balance of $51,550,000 represents the controlling note A-1 of the $83,800,000 Powered Shell Portfolio – Manassas Loan Combination evidenced by twopari passu notes. See “—The Mortgage Loan” below. |
(3) | The borrower sponsor for the Powered Shell Portfolio – Manassas Loan Combination is also the borrower sponsor for the Powered Shell Portfolio – Ashburn mortgage loan. |
■ | The Mortgage Loan. The mortgage loan (the “Powered Shell Portfolio - Manassas Loan”) is part of a loan combination (the “Powered Shell Portfolio - Manassas Loan Combination”) consisting of twopari passu notes (note A-1 and note A-2) with an aggregate original principal balance of $83,800,000 and is secured by a deed of trust encumbering the borrower’s fee simple interest in a portfolio of four Tier III+ powered shell buildings located in Manassas, Virginia (the “Powered Shell Portfolio - Manassas Properties”). The Powered Shell Portfolio - Manassas Loan, evidenced by controlling note A-1, has an outstanding principal balance as of the Cut-off Date of $51,550,000 and represents approximately 4.0% of the Initial Pool Balance. The relatedpari passu companion loan, evidenced by the non-controlling note A-2 is currently held by Goldman Sachs Bank USA and is expected to be contributed to one or more future securitizations. |
The Powered Shell Portfolio - Manassas Loan Combination was originated by Goldman Sachs Bank USA on July 1, 2019. The Powered Shell Portfolio - Manassas Loan Combination has an interest rate of 3.63730%per annum. The borrower utilized the proceeds of the Powered Shell Portfolio - Manassas Loan Combination to finance the acquisition of the Powered Shell Portfolio - Manassas Properties and pay origination costs.
The Powered Shell Portfolio - Manassas Loan Combination had an initial term of 120 months and has a remaining term of 119 months as of the Cut-off Date. The Powered Shell Portfolio - Manassas Loan Combination requires interest-only payments during its term. The scheduled maturity date of the Powered Shell Portfolio - Manassas Loan Combination is July 6, 2029. The Powered Shell Portfolio – Manassas Loan Combination (other than portions previously defeased) may be voluntarily prepaid at any time in whole or in part upon 10 days’ prior written notice to the lender. Any voluntary prepayments prior to January 6, 2029, require a yield maintenance premium, which may be no less than 0.5% of the amount prepaid. In addition, provided that no event of default under the Powered Shell Portfolio – Manassas Loan Combination is continuing, defeasance with direct, non-callable obligations of the United States of America is permitted at any time after the earlier to occur of (i) July 6, 2022 and (ii) the sixth day of the month following the second anniversary of the closing date of the securitization into which the last piece of the Powered Shell Portfolio – Manassas Loan Combination is deposited.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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The table below summarizes the notes that comprise the Powered Shell Portfolio – Manassas Loan Combination. The relationship between the holders of the Powered Shell Portfolio – Manassas Loan Combination is governed by a co-lender agreement as described under “Description of the Mortgage Pool–The Loan Combinations–The Outside Serviced Pari Passu Loan Combinations” in the Preliminary Prospectus.
Loan Combination Summary | |||||
Note | Original Balance | Cut-off Date Balance | Note Holder | Controlling Piece | |
Note A-1 | $51,550,000 | $51,550,000 | CGCMT 2019-GC41 | Yes | |
Note A-2 | 32,250,000 | 32,250,000 | GSBI(1) | No | |
Total | $83,800,000 | $83,800,000 |
(1) | Note A-2 is currently held by GSBI and is expected to be contributed to one or more future securitization transactions. |
■ | The Mortgaged Property.The Powered Shell Portfolio – Manassas Properties consist of four Tier III+ powered shell buildings under four leases located in Manassas, Virginia, which total 728,460 SF. The Powered Shell Portfolio – Manassas Properties were built to suit for the sole tenant, Vadata, Inc., a wholly owned subsidiary of Amazon.com, Inc., by Corporate Offices Properties Trust and are fully utilized by the tenant with four triple-net lease structures in place.“Powered shells” are upgraded industrial properties with access to power and fiber optics that are utilized as data centers. The landlord only initially invests in the industrial properties and the tenant invests all additional capital required to convert the asset into a fully operational data center with tenant specific specifications. |
Three of thePowered Shell Portfolio – Manassas Properties were built in 2017 and the fourth Powered Shell Portfolio – Manassas Property was built in 2019. Once the Powered Shell Portfolio – Manassas Properties were leased to the tenant, the tenant invested in permanent improvements to the properties including improvements to the HVAC systems, fiber connectivity, UPS batteries and power generators. Additionally, the tenant invested in temporary improvements that are the tenant’s personal property such as racks, servers and cabling.
The following table presents certain information relating to the Powered Shell Portfolio – Manassas Properties:
Property Name | City | State | % of Allocated Loan Amount | Total GLA | Year Built | As-Is Appraised Value | UW NCF | ||||||||||
Powered Shell Portfolio – Manassas DC-18 | Manassas | Virginia | 30.2 | % | 215,650 | 2017 | $44,300,000 | $2,448,285 | |||||||||
Powered Shell Portfolio – Manassas DC-20 | Manassas | Virginia | 28.3 | 215,650 | 2017 | 44,000,000 | 2,254,411 | ||||||||||
Powered Shell Portfolio – Manassas DC-19 | Manassas | Virginia | 20.7 | 148,580 | 2017 | 31,100,000 | 1,677,639 | ||||||||||
Powered Shell Portfolio – Manassas DC-23 | Manassas | Virginia | 20.7 | 148,580 | 2019 | 30,600,000 | 1,698,335 | ||||||||||
Total | 100.0 | % | 728,460 | $150,000,000 | $8,078,671 |
The following table presents certain information relating to the major tenants for the Powered Shell Portfolio – Manassas Properties:
Four Largest Tenants Based on Underwritten Base Rent
Tenant Name - Property | Credit Rating | Tenant GLA | % of GLA | UW Base Rent | % of Total UW Base Rent | UW Base Rent | Lease Expiration | Renewal / Extension Options | |||||||||||||
Vadata, Inc. - Powered Shell Portfolio – Manassas DC-18 | A+ / A3 / AA- | 215,650 | 29.6 | % | $2,313,684 | 30.2 | % | $10.73 | 12/31/2027 | 4, 5-year options | |||||||||||
Vadata, Inc. - Powered Shell Portfolio – Manassas DC-20 | A+ / A3 / AA- | 215,650 | 29.6 | 2,166,858 | 28.3 | 10.05 | 4/30/2027 | 4, 5-year options | |||||||||||||
Vadata, Inc. - Powered Shell Portfolio – Manassas DC-19 | A+ / A3 / AA- | 148,580 | 20.4 | 1,586,268 | 20.7 | 10.68 | 4/30/2027 | 4, 5-year options | |||||||||||||
Vadata, Inc. - Powered Shell Portfolio – Manassas DC-23 | A+ / A3 / AA- | 148,580 | 20.4 | 1,582,463 | 20.7 | 10.65 | 4/30/2029 | 4, 5-year options | |||||||||||||
Four Largest Tenants | 728,460 | 100.0 | % | $7,649,273 | 100.0 | % | $10.50 | ||||||||||||||
Vacant Spaces (Owned Space) | 0 | 0.0 | 0 | 0.0 | 0.00 | ||||||||||||||||
Totals / Wtd. Avg. Tenants | 728,460 | 100.0 | % | $7,649,273 | 100.0 | % | $10.50 |
(1) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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The following table presents certain information relating to the lease rollover schedule for the Powered Shell Portfolio – Manassas Properties based on initial lease expiration dates:
Lease Expiration Schedule(1)
Year Ending December 31, | Expiring Owned GLA | % of Owned GLA | Cumulative % of Owned GLA | UW | % of Total UW Base Rent | UW Base Rent $ per SF | # of Expiring Leases | ||||||||||||||
MTM | 0 | 0.0 | % | 0.0 | % | $0 | 0.0 | % | $0.00 | 0 | |||||||||||
2019 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2020 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2021 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2022 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2023 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2024 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2025 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2026 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2027 | 579,880 | 79.6 | 79.6 | % | 6,066,810 | 79.3 | 10.46 | 3 | |||||||||||||
2028 | 0 | 0.0 | 79.6 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2029 | 148,580 | 20.4 | 100.0 | % | 1,582,463 | 20.7 | 10.65 | 1 | |||||||||||||
2030 & Thereafter | 0 | 0.0 | 100.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
Vacant | 0 | 0.0 | 100.0 | % | NAP | NAP | NAP | NAP | |||||||||||||
Total / Wtd. Avg. | 728,460 | 100.0 | % | $7,649,273 | 100.0 | % | $10.50 | 4 |
(1) | Calculated based on approximate square footage occupied by each Owned Tenant. |
The following table presents certain information relating to historical occupancy for the Powered Shell Portfolio – Manassas Properties:
Historical Leased %(1)
As of 8/1/2019 |
100.0% |
(1) | There are no historical occupancy figures as the Powered Shell Portfolio – Manassas Properties were built in 2017 and 2019 and went through individual periods of tenant specific build-outs. |
■ | Underwritten Net Cash Flow. The following table presents certain information relating to the Underwritten Net Cash Flow for the Powered Shell Portfolio – Manassas Properties: |
Cash Flow Analysis(1)(2)
Underwritten(3) | Underwritten $ per SF | |||||
Base Rental Revenue | $7,649,273 | $10.50 | ||||
Contractual Rent Steps | 912,267 | 1.25 | ||||
Reimbursement Revenue | 85,615 | 0.12 | ||||
Gross Revenue | $8,647,156 | $11.87 | ||||
Vacancy Loss | (264,099 | ) | (0.36 | ) | ||
Effective Gross Revenue | $8,383,057 | $11.51 | ||||
Management Fee | 85,615 | 0.12 | ||||
Net Operating Income | $8,297,442 | $11.39 | ||||
TI/LC | 176,549 | 0.24 | ||||
Replacement Reserves | 42,222 | 0.06 | ||||
Net Cash Flow | $8,078,671 | $11.09 | ||||
Occupancy | 100.0 | % | ||||
NOI Debt Yield(4) | 9.9 | % | ||||
NCF DSCR(4) | 2.61 | x |
(1) | Certain items such as straight line rent, interest expense, interest income, lease cancellation income, depreciation, amortization, debt service payments and any other non-recurring or non-operating items were excluded from the historical presentation and are not considered for the underwritten cash flow. |
(2) | There are no historical cash flow figures as the Powered Shell Portfolio – Manassas Properties were built in 2017 and 2019 and went through individual periods of tenant specific build-outs. |
(3) | Underwritten cash flow based on contractual rents as of August 1, 2019 and contractual rent steps through July 31, 2020. |
(4) | NOI Debt Yield and NCF DSCR are calculated based on the aggregate outstanding principal balance of the Powered Shell Portfolio – Manassas Loan Combination. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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■ | Appraisals. According to the appraisal, the Powered Shell Portfolio - Manassas Properties had an aggregate “as-is” appraised value of $150,000,000 as of June 24, 2019. The appraisal also concluded to an aggregate “go dark” value of $96,000,000 as of June 24, 2019. The Cut-off Date LTV Ratio calculated utilizing the dark value is 87.3%. |
Appraisal Approach(1) | Value | Discount Rate | Capitalization Rate | |||
Direct Capitalization Approach | $150,000,000 | N/A | 5.00% |
(1) | Based on the “as-is” appraised value. |
■ | Environmental Matters. According to a Phase I environmental report dated May 28, 2019, there are no recognized environmental conditions or recommendations for further action at the Powered Shell Portfolio - Manassas Properties. |
■ | Market Overview and Competition. The Powered Shell Portfolio - Manassas Properties consist of four buildings in Northern Virginia. Northern Virginia is the largest multi-tenant data center market in the United States, with over 4.8 million square feet of space currently in operation. Northern Virginia's history as one of the main internet exchange points on the East Coast, plus its available land, relatively low power rates and tax breaks available for some large data center owners and their tenants, have encouraged the development of large campuses, particularly in Loudon County (adjacent to the Powered Shell Portfolio - Manassas Properties). Loudoun County is commonly referred to as Data Center Alley and serves as the home to cloud market leaders such as Amazon.com, Inc., Google LLC, Microsoft Corporation, Facebook, Inc., and Alibaba Group Holding Limited. The region contributes more than 70% of the globe's total internet traffic and is the first gigawatt market in the world due to its low-latency connections to the national fiber network backbone, access to low-cost power, and the area's low overall risk to natural disasters. Amazon.com, Inc., utilizes multiple data center properties throughout Northern Virginia in addition to the Powered Shell Portfolio – Manassas Properties and according to data center specialists, is the largest data center user in Northern Virginia. According to the appraisal, the market rent was concluded to be $12.00 PSF. |
The following table presents select comparable recent industrial property sales for the Powered Shell Portfolio - Manassas Properties:
Sales Comparables(1)
Property Name | Region | Date of Sale | Year Built | Total GLA | Sales Price | Sales Price PSF | Occupancy | ||||||||||||
Powered Shell Portfolio – Manassas(2) | East Coast | Jun-19 | 2017, 2019 | 728,460 | $144,932,315 | $198.96 | 100 | % | |||||||||||
A Powered Shell | California | Nov-18 | 2016 | 145,850 | $34,975,000 | $239.80 | 100 | % | |||||||||||
Secure Data 365 | Midwest | Oct-18 | 2008 | 29,960 | $9,425,000 | $314.59 | 100 | % | |||||||||||
A Powered Shell | East Coast | Apr-18 | 1950 | 73,000 | $9,200,000 | $126.03 | 100 | % | |||||||||||
Skybox Legacy | Texas | Mar-18 | 2017 | 149,200 | $55,000,000 | $368.63 | 100 | % | |||||||||||
Pathfinder Plaza | East Coast | Mar-18 | 2017 | 446,811 | $111,577,310 | $249.72 | 100 | % | |||||||||||
InfoCrossing | Midwest | Mar-18 | 1988 / Ren. 1995 | 85,200 | $16,400,000 | $192.49 | 100 | % | |||||||||||
Raging Wire | East Coast | Jan-18 | 1990 / Ren. 2012 | 150,000 | $18,725,000 | $124.83 | 100 | % | |||||||||||
Aligned Energy | Southwest | Jan-18 | 1978 | 550,000 | $58,500,000 | $106.36 | 100 | % | |||||||||||
Coca-Cola | Southeast | May-17 | 1986 | 88,000 | $19,000,000 | $215.91 | 100 | % | |||||||||||
Comparable Property Total / Wtd. Avg.(3) | 1,718,021 | $59,468,468 | $193.71 |
(1) | Source: Appraisal. |
(2) | Source: Purchase and Sale Agreement. |
(3) | Excludes the Powered Shell Portfolio - Manassas Properties. |
■ | The Borrower. The borrower is BCORE COPT DC-19 LLC, a Delaware limited liability company. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the Powered Shell Portfolio – Manassas Loan Combination. BREIT Operating Partnership, L.P., the non-recourse carveout guarantor and borrower sponsor, is also the non-recourse carveout guarantor and borrower sponsor of the Powered Shell Portfolio – Ashburn mortgage loan, which is also being contributed to the CGCMT 2019-GC41 transaction. The guarantor’s liability under the non-recourse guaranty with respect to the bankruptcy-related carve-outs is limited to 20% of the then-current outstanding principal balance of the Powered Shell Portfolio – Manassas Loan Combination. |
The general partner of the non-recourse carveout guarantor is Blackstone Real Estate Income Trust, Inc. (“BREIT”), a real estate investment trust, that seeks to directly own stabilized income generating U.S. commercial real estate across key property types, including industrial, data center, multifamily, hospitality and retail properties. As of June 30, 2019, BREIT had a net asset value of approximately $7.8 billion and total asset value of approximately $16.5 billion.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #10:powered shell portfolio - manassas
■ | Escrows.On each due date during the continuance of a Powered Shell Portfolio - Manassas Trigger Period or an event of default under the Powered Shell Portfolio - Manassas Loan Combination, the borrower is required to fund a tax and insurance reserve in an amount equal to one-twelfth of the property taxes and insurance premiums that the lender reasonably estimates will be payable during the next ensuing 12 months, unless (a) the tenant at a Powered Shell Portfolio - Manassas Property is paying the related property taxes and insurance premiums pursuant to the terms of its lease and the tenant is not in monetary or other material default under its lease or (b) in the case of insurance premiums, the borrower is maintaining a blanket policy in accordance with the Powered Shell Portfolio - Manassas Loan Combination documents. |
A “Powered Shell Portfolio - Manassas Trigger Period” means each period: (i) commencing when the debt service coverage ratio (as calculated under the loan documents), determined as of the last day of each of two consecutive fiscal quarters, is less than 1.20x, and ending when the debt service coverage ratio (as calculated under the loan documents), determined as of the last day of each of two consecutive fiscal quarters, is at least 1.20x; and (ii) deemed commencing upon the borrower’s failure to deliver required annual, quarterly or monthly financial reports and ending when such reports are delivered and indicate that no other Powered Shell Portfolio - Manassas Trigger Period is ongoing.
■ | Lockbox and Cash Management. The Powered Shell Portfolio - Manassas Loan Combination is structured with a hard lockbox and springing cash management. The borrower delivered notice to the tenant that payments under each lease are required to be remitted directly to the lockbox account and is required to cause all cash revenues relating to the Powered Shell Portfolio - Manassas Properties and all other money received by the borrower or the property manager with respect to the Powered Shell Portfolio - Manassas Properties (other than tenant security deposits required to be held in escrow accounts) to be deposited into a lender-controlled lockbox account. On each business day during the continuance of a Powered Shell Portfolio - Manassas Trigger Period or an event of default under the Powered Shell Portfolio - Manassas Loan Combination, all amounts in the lockbox account are required to be remitted to the cash management account. On each business day (or at such frequency as the borrower may request in its discretion) that no Powered Shell Portfolio - Manassas Trigger Period or event of default under the Powered Shell Portfolio - Manassas Loan Combination is continuing, all funds in the lockbox account are required to be swept into a borrower-controlled operating account. |
During the continuance of a Powered Shell Portfolio - Manassas Trigger Period or, at the lender’s discretion, during an event of default under the Powered Shell Portfolio - Manassas Loan Combination, all amounts on deposit in the cash management account after payment of required reserves, debt service and budgeted operating expenses are required to be reserved as additional collateral for the Powered Shell Portfolio - Manassas Loan Combination, unless an excess cash flow guaranty that guarantees all such amounts that would have been reserved by the lender as additional collateral for the Powered Shell Portfolio - Manassas Loan Combination has been entered into by BREIT Operating Partnership L.P. in accordance with the loan documents and delivered to the lender, in which case such amounts will be disbursed to the borrower. Upon the earliest to occur of (i) a monetary event of default, (ii) the acceleration of the Powered-Shell Portfolio – Manassas Loan Combination during an event of default, (iii) the initiation of foreclosure proceedings or similar judicial proceedings or (iv) the delivery of a deed in lieu of foreclosure, BREIT Operating Partnership L.P. will be required to remit to the lender an amount equal to all such amounts that would have been reserved by the lender as additional collateral during the continuance of a Powered Shell Portfolio - Manassas Trigger Period. Notwithstanding the foregoing, the lender will not be obligated to disburse such amounts to the borrower (i) during an event of default under the Powered Shell Portfolio - Manassas Loan Combination or (ii) unless the borrower has delivered an additional nonconsolidation opinion in respect of such excess cash flow guaranty in form and substance reasonably satisfactory to the lender, if disbursement of such amounts would cause the aggregate amount of obligations of the excess cash flow guaranty to exceed 15% of the then outstanding principal balance of the Powered Shell Portfolio – Manassas Loan Combination.
■ | Property Management. The Powered Shell Portfolio - Manassas Properties are currently managed by COPT Property Management Services, LLC, an affiliate of the borrower, pursuant to a management agreement. Under the related loan documents, the Powered Shell Portfolio - Manassas Properties are required to remain managed by COPT Property Management Services, LLC, or any other property manager pre-approved by the lender (pursuant to the loan documents), or otherwise approved by the lender, which approval may be subject to receipt of a Rating Agency Confirmation. The lender has the right to replace, or require the borrower to replace, the property manager with a property manager selected by the borrower, subject to the lender’s reasonable approval (or, in the event of an event of default under the Powered Shell Portfolio - Manassas Loan Combination or following any foreclosure, conveyance in lieu of foreclosure or other similar transaction, selected by the lender upon at least 30 days’ notice to the borrower) (i) during the continuance of an event of default under the Powered Shell Portfolio - Manassas Loan |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #10:powered shell portfolio - manassas
Combination, (ii) following any foreclosure, conveyance in lieu of foreclosure or other similar transaction, (iii) during the continuance of a material default by the property manager under the management agreement (after the expiration of any applicable notice and/or cure periods), (iv) if the property manager files or is the subject of a bankruptcy petition, (v) if a trustee or receiver is appointed for the property manager’s assets or the property manager makes an assignment for the benefit of creditors or (vi) if the property manager is adjudicated insolvent.
■ | Right of First Offer. Pursuant to a ROFO, ROFR and Development Agreement between the borrower and the sole tenant, Vadata, Inc., so long as none of the leases with Vadata, Inc. have been terminated due to an event of default beyond all applicable cure and notice periods by Vadata, Inc., assigned to an unaffiliated third party or reduced to less than 75% of the rentable square feet occupied by Vadata, Inc. or an affiliate of Vadata, Inc., a transfer of the Powered Shell Portfolio - Manassas Properties (other than collateral security transfers in connection with any debt or equity financing, or transfers pursuant to a foreclosure or a deed in lieu of foreclosure) is subject to a right of first offer in favor of Vadata, Inc. If the subsequent transfer is not for at least 95% of the price of the offer to Vadata, Inc., Vadata, Inc. would be entitled to purchase the property at such lower sales price. |
■ | Release of Collateral. Provided no event of default under the Powered Shell Portfolio - Manassas Loan Combination is continuing, the borrower has the right to obtain the release of one or more of the Powered Shell Portfolio - Manassas Properties subject to the satisfaction of certain conditions, including, among others: (i) prepayment, together with any applicable yield maintenance premium (or, after the earlier to occur of (i) July 6, 2022 and (ii) the second anniversary of the closing date of the securitization into which the last piece of the Powered Shell Portfolio – Manassas Loan Combination is deposited,delivery of defeasance collateral) in an amount equal to the Powered Shell Portfolio – Manassas Minimum Release Price; (ii) after giving effect to such release, either (a) the debt yield (as calculated under the loan documents) is at least 9.13% or (b) if each applicable property is being sold to an unaffiliated third party, the aggregate amount of the reduction of the outstanding principal balance pursuant to clause (i) (inclusive of the Powered Shell Portfolio – Manassas Minimum Release Price) is not less than the greater of (1) such property’s Powered Shell Portfolio – Manassas Minimum Release Price and (2) the lesser of (x) the gross sales proceeds actually received by the borrower from such sale of such property or (y) the amount necessary to achieve a debt yield (as calculated under the loan documents) of 9.13%; (iii) delivery of a Rating Agency Confirmation; and (iv) delivery of a REMIC opinion. The borrower is also permitted to obtain the release of a property in connection with curing an event of default with respect to such property by defeasance or prepayment of the Powered Shell Portfolio – Manassas Minimum Release Price without meeting the requirements of clause (ii) above if the borrower has demonstrated in good faith to the lender that it has pursued a cure of such event of default, and such cure does not require any capital contribution to the borrower or any obligation of the borrower or the non-recourse carveout guarantor to use revenues from any property other than the property that is the subject of such event of default to effectuate such cure and such release cures such event of default. |
A “Powered Shell Portfolio – Manassas Minimum Release Price” means with respect to each Powered Shell Portfolio - Manassas Property, the product of its amortized allocated loan amount times either (x) 105% (if the outstanding principal balance of the Powered Shell Portfolio – Manassas Loan Combination is greater than $62,850,000) or (y) 110% (if the outstanding principal balance of the Powered Shell Portfolio – Manassas Loan Combination is less than or equal to $62,850,000).
■ | Current Mezzanine or Secured Subordinate Indebtedness.None. |
■ | Permitted Future Mezzanine or Secured Subordinate Indebtedness.Not permitted. |
■ | Terrorism Insurance. The borrower is required to maintain terrorism insurance in an amount equal to the full replacement cost of the Powered Shell Portfolio - Manassas Property, as well as 18 months of rental loss and/or business interruption coverage (covering actual loss sustained during restoration), together with a 12-month extended period of indemnity following restoration. If TRIPRA or a similar or subsequent statute is no longer in effect or there is a disruption in the terrorism insurance marketplace as the result of a terrorism event which results in a material increase in terrorism insurance premiums, then provided that terrorism insurance is commercially available, the borrower’s requirement will be capped at insurance premiums equal to two times the amount of the insurance premium payable at such time in respect of the property and business interruption/rental loss insurance required under the related loan documents. See “Risk Factors—Terrorism Insurance May Not Be Available for All Mortgaged Properties” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #11: SUMMIT TECHNOLOGY CENTER
Mortgaged Property Information | Mortgage Loan Information | |||||
Number of Mortgaged Properties | 1 | Loan Seller | CREFI | |||
Location (City/State) | Lee’s Summit, Missouri | Cut-off Date Balance | $51,500,000 | |||
Property Type | Office | Cut-off Date Balance per SF | $104.16 | |||
Size (SF) | 494,449 | Percentage of Initial Pool Balance | 4.0% | |||
Total Occupancy as of 6/1/2019 | 96.5% | Number of Related Mortgage Loans | None | |||
Owned Occupancy as of 6/1/2019 | 96.5% | Type of Security | Leasehold | |||
Year Built / Latest Renovation | 1961 / 1997 | Mortgage Rate | 3.67500% | |||
Appraised Value | $102,000,000 | Original Term to Maturity (Months) | 60 | |||
Appraisal Date | 6/10/2019 | Original Amortization Term (Months) | NAP | |||
Borrower Sponsor | Jacob Weinreb | Original Interest Only Period (Months) | 60 | |||
Property Management | Weinreb Management KC LLC and | First Payment Date | 9/6/2019 | |||
US Asset Services, LLC | Maturity Date | 8/6/2024 | ||||
Underwritten Revenues | $10,532,516 | |||||
Underwritten Expenses | $3,884,425 | Escrows | ||||
Underwritten Net Operating Income (NOI) | $6,648,092 | Upfront | Monthly | |||
Underwritten Net Cash Flow (NCF) | $6,127,699 | Taxes | $378,903 | $47,363 | ||
Cut-off Date LTV Ratio | 50.5% | Insurance | $81,625 | $10,203 | ||
Maturity Date LTV Ratio | 50.5% | Replacement Reserve(1) | $1,750,000 | $22,622 | ||
DSCR Based on Underwritten NOI / NCF | 3.46x / 3.19x | TI/LC(2) | $0 | $31,250 | ||
Debt Yield Based on Underwritten NOI / NCF | 12.9% / 11.9% | Other(3) | $1,174,226 | $0 | ||
Sources and Uses | |||||
Sources | $ | % | Uses | $ | % |
Loan Amount | $51,500,000 | 99.1% | Loan Payoff | $47,975,146 | 92.3% |
Principal’s New Cash Contribution | 457,058 | 0.9 | Reserves | 3,384,754 | 6.5 |
Closing Costs | 597,157 | 1.1 | |||
Total Sources | $51,957,058 | 100.0% | Total Uses | $51,957,058 | 100.0% |
(1) | The monthly replacement reserve will be reduced to $4,120 on the monthly payment date in September 2021 for the remainder of the Summit Technology Center Loan term. |
(2) | The TI/LC reserve is subject to a cap of $1,125,000. |
(3) | Other reserves consist of $1,015,875 for unfunded tenant obligations and $158,351 for a free rent reserve. |
The following table presents certain information relating to the major tenants (of which certain tenants may have co-tenancy provisions) at the Summit Technology Center property:
Largest Owned Tenants Based on Underwritten Base Rent(1)
Tenant Name | Credit Rating (Fitch/MIS/S&P)(2) | Tenant GLA | % of | UW Base | % of | UW Base | Lease Expiration | Renewal / Extension Options | |||||||||||||
GSA(4) | AAA / Aaa / AA+ | 313,209 | 63.3 | % | $4,604,140 | 60.9 | % | $14.70 | 2/19/2022 | NAP | |||||||||||
ExamOne, Inc.(5) | BBB / Baa2 / BBB+ | 58,347 | 11.8 | 1,033,503 | 13.7 | 17.71 | 5/31/2024 | 2, 5-year options | |||||||||||||
Caremark, Inc.(6) | NR / Baa2 / BBB | 60,324 | 12.2 | 1,031,791 | 13.7 | 17.10 | 5/31/2025 | 2, 5-year options | |||||||||||||
St. Luke’s Health System | NR / NR / NR | 32,043 | 6.5 | 667,441 | 8.8 | 20.83 | 12/31/2026 | 1, 5-year option | |||||||||||||
Bluebird Network | NR / NR / NR | 13,221 | 2.7 | 206,618 | 2.7 | 15.63 | 7/31/2024 | 2, 3-year options | |||||||||||||
Teleport Communications | NR / NR / NR | 176 | 0.0 | 14,080 | 0.2 | 80.00 | 1/31/2020 | NAP | |||||||||||||
Largest Owned Tenants | 477,320 | 96.5 | % | $7,557,573 | 100.0 | % | $15.83 | ||||||||||||||
Vacant | 17,129 | 3.5 | 0 | 0.0 | 0.00 | ||||||||||||||||
Total / Wtd. Avg. All Owned Tenants | 494,449 | 100.0 | % | $7,557,573 | 100.0 | % | $15.83 | ||||||||||||||
(1) | Based on the underwritten rent roll dated June 1, 2019. |
(2) | Certain ratings are those of the parent company or the United States Government whether or not the parent or government guarantees the lease. |
(3) | UW Base Rent, % of Total UW Base Rent and UW Base Rent $ per SF include present value contractual rent steps for Caremark, Inc., ExamOne, Inc., and St. Luke’s Health System. |
(4) | GSA has the option to terminate at any time after April 30, 2021 upon 120 days’ notice for no penalty. |
(5) | A portion of ExamOne Inc.’s space which represents 14.1% of its rented area, will terminate upon the earlier of the related borrower finding a replacement tenant and March 31, 2021. |
(6) | Caremark, Inc. has the option to terminate effective on May 31, 2023 with 12 months notice and payment of unamortized leasing commissions, free rent, and landlord’s work cost of $1,002,876. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #11: SUMMIT TECHNOLOGY CENTER
The following table presents certain information relating to the lease rollover schedule at the Summit Technology Center property, based on initial lease expiration dates:
Lease Expiration Schedule(1)(2)
Year Ending December 31 | Expiring Owned GLA | % of Owned GLA | Cumulative % of Owned GLA | UW Base Rent(3) | % of Total UW Base Rent(3) | UW Base Rent $ | # of Expiring | ||||||||||||||
MTM | 0 | 0.0 | % | 0.0 | % | $0 | 0.0 | % | $0.00 | 0 | |||||||||||
2019 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | $0.00 | 0 | |||||||||||||
2020 | 176 | 0.0 | 0.0 | % | 14,080 | 0.2 | $80.00 | 1 | |||||||||||||
2021 | 8,242 | 1.7 | 1.7 | % | 111,267 | 1.5 | $13.50 | 1 | |||||||||||||
2022 | 313,209 | 63.3 | 65.0 | % | 4,604,140 | 60.9 | $14.70 | 2 | |||||||||||||
2023 | 0 | 0.0 | 65.0 | % | 0 | 0.0 | $0.00 | 0 | |||||||||||||
2024 | 63,326 | 12.8 | 77.9 | % | 1,128,854 | 14.9 | $17.83 | 2 | |||||||||||||
2025 | 60,324 | 12.2 | 90.1 | % | 1,031,791 | 13.7 | $17.10 | 1 | |||||||||||||
2026 | 32,043 | 6.5 | 96.5 | % | 667,441 | 8.8 | $20.83 | 1 | |||||||||||||
2027 | 0 | 0.0 | 96.5 | % | 0 | 0.0 | $0.00 | 0 | |||||||||||||
2028 | 0 | 0.0 | 96.5 | % | 0 | 0.0 | $0.00 | 0 | |||||||||||||
2029 | 0 | 0.0 | 96.5 | % | 0 | 0.0 | $0.00 | 0 | |||||||||||||
2030 & Thereafter | 0 | 0.0 | 96.5 | % | 0 | 0.0 | $0.00 | 0 | |||||||||||||
Vacant | 17,129 | 3.5 | 100.0 | % | NAP | NAP | NAP | NAP | |||||||||||||
Total / Wtd. Avg. | 494,449 | 100.0 | % | $7,557,573 | 100.0 | % | $15.83 | 8 |
(1) | Calculated based on the approximate square footage occupied by each collateral tenant. |
(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) | UW Base Rent, % of Total UW Base Rent and UW Base Rent $ per SF include present value contractual rent steps for Caremark, Inc., ExamOne, Inc. and St. Luke’s Health System. |
The following table presents certain information relating to historical leasing at the Summit Technology Center property:
Historical Leased %(1)
2016 | 2017 | 2018 | As of 6/1/2019(2) |
97.8% | 98.0% | 89.9% | 96.5% |
(1) | Represents the average annual occupancy as of December 31 for each respective year unless otherwise indicated. |
(2) | Based on the underwritten rent roll dated June 1, 2019. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #11: SUMMIT TECHNOLOGY 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 Summit Technology Center property: |
Cash Flow Analysis(1)
2016 | 2017 | 2018 | TTM 4/30/2019 | Underwritten | Underwritten $ per SF | |||||||||||||
Base Rent(2) | $6,069,703 | $6,603,787 | $6,180,274 | $6,404,408 | $7,373,640 | $14.91 | ||||||||||||
Contractual Rent Steps(3) | 0 | 0 | 0 | 0 | 183,933 | 0.37 | ||||||||||||
Vacant Income | 0 | 0 | 0 | 0 | 299,758 | 0.61 | ||||||||||||
Reimbursements | 1,894,297 | 1,833,329 | 1,781,604 | 1,710,805 | 1,934,683 | 3.91 | ||||||||||||
Other Income(4) | 1,846,217 | 1,264,843 | 1,329,936 | 1,431,356 | 1,230,104 | 2.49 | ||||||||||||
Vacancy & Credit Loss(5) | 0 | 0 | 0 | 0 | (489,601 | ) | (0.99 | ) | ||||||||||
Effective Gross Income | $9,810,217 | $9,701,960 | $9,291,814 | $9,546,568 | $10,532,516 | $21.30 | ||||||||||||
Real Estate Taxes | $289,112 | $296,053 | $304,935 | $392,742 | $568,355 | $1.15 | ||||||||||||
Insurance | 86,081 | 87,917 | 100,504 | 106,452 | 116,607 | 0.24 | ||||||||||||
Management Fee | 294,307 | 291,059 | 278,754 | 286,397 | 315,975 | 0.64 | ||||||||||||
Other Operating Expenses | 2,970,362 | 2,855,066 | 3,186,038 | 3,021,632 | 2,883,487 | 5.83 | ||||||||||||
Total Operating Expenses | $3,639,861 | $3,530,095 | $3,870,231 | $3,807,223 | $3,884,425 | $7.86 | ||||||||||||
Net Operating Income | $6,170,356 | $6,171,865 | $5,421,583 | $5,739,346 | $6,648,092 | $13.45 | ||||||||||||
TI/LC | 0 | 0 | 0 | 0 | 381,947 | 0.77 | ||||||||||||
Replacement Reserves | 0 | 0 | 0 | 0 | 138,446 | 0.28 | ||||||||||||
Net Cash Flow | $6,170,356 | $6,171,865 | $5,421,583 | $5,739,346 | $6,127,699 | $12.39 | ||||||||||||
Occupancy | 97.8% | 98.0% | 89.9% | 89.9% | 95.0% | (4) | ||||||||||||
NOI Debt Yield | 12.0% | 12.0% | 10.5% | 11.1% | 12.9% | |||||||||||||
NCF DSCR | 3.22x | 3.22x | 2.83x | 2.99x | 3.19x |
(1) | Certain items such as straight line rent, interest expense, interest income, lease cancellation income, depreciation, amortization, debt service payments and any other non-recurring or non-operating items were excluded from the historical presentation and are not considered for the underwritten cash flow. |
(2) | The increase from TTM 4/30/2019 Base Rent to Underwritten Base Rent is primarily attributable to the property lease-up and expected rent increases from extensions, including Caremark, Inc. executing lease extensions and GSA signing an expansion lease at the property. |
(3) | Includes the present value of future rent steps for Caremark, Inc., ExamOne, Inc., and St. Luke’s Health System. |
(4) | Other Income includes tenant utility recoveries, and amortized tenant improvements that are paid from the GSA lease and other miscellaneous income. |
(5) | Represents an underwritten economic vacancy of 5.0%. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #12: U.S. INDUSTRIAL PORTFOLIO V
Mortgaged Property Information | Mortgage Loan Information | |||||
Number of Mortgaged Properties | 30 | Loan Seller | GSMC | |||
Location (City/State) | Various / Various | Cut-off Date Principal Balance(3) | $50,000,000 | |||
Property Type | Industrial | Cut-off Date Principal Balance per SF(2) | $36.36 | |||
Size (SF) | 3,585,623 | Percentage of Initial Pool Balance | 3.9% | |||
Total Occupancy as of 8/6/2019 | 100.0% | Number of Related Mortgage Loans | None | |||
Owned Occupancy as of 8/6/2019 | 100.0% | Type of Security | Fee Simple | |||
Year Built / Latest Renovation | Various / Various | Mortgage Rate | 3.78000% | |||
Appraised Value(1) | $202,500,000 | Original Term to Maturity (Months) | 120 | |||
Appraisal Date | 6/1/2019 | Original Amortization Term (Months) | NAP | |||
Borrower Sponsor | BIG SC-USIP30P LLC | Original Interest Only Period (Months) | 120 | |||
Property Management | Brennan Management, LLC | First Payment Date | 9/6/2019 | |||
Maturity Date | 8/6/2029 | |||||
Underwritten Revenues | $13,695,724 | |||||
Underwritten Expenses | $273,914 | Escrows | ||||
Underwritten Net Operating Income (NOI) | $13,421,810 | Upfront | Monthly | |||
Underwritten Net Cash Flow (NCF) | $12,440,535 | Taxes | $0 | $0 | ||
Cut-off Date LTV Ratio(1)(2) | 64.4% | Insurance | $0 | $0 | ||
Maturity Date LTV Ratio(2) | 64.4% | Replacement Reserves | $50,000 | $0 | ||
DSCR Based on Underwritten NOI / NCF(2) | 2.69x / 2.49x | TI/LC | $0 | $0 | ||
Debt Yield Based on Underwritten NOI / NCF(2) | 10.3% / 9.5% | Other(4) | $194,450 | $0 | ||
Sources and Uses | |||||
Sources | $ | % | Uses | $ | % |
Loan Combination Amount | $130,358,000 | 66.2% | Purchase Price | $195,250,000 | 99.2% |
Principal’s New Cash Contribution | 69,425,420 | 33.8 | Closing Costs | 1,288,970 | 0.7 |
Reserves | 244,450 | 0.1 | |||
Total Sources | $196,783,420 | 100.0% | Total Uses | $196,783,420 | 100.0% |
(1) | The Appraised Value represents the aggregate “as-is” appraised value of the U.S. Industrial Portfolio V Properties of $194,670,000 plus an approximately 4.02% portfolio premium. The Cut-off Date LTV Ratio for the U.S. Industrial Portfolio V Loan Combination calculated on the basis of the aggregate “as-is” appraised value without the portfolio premium is 67.0%. |
(2) | Calculated based on the aggregate outstanding balance of the U.S. Industrial Portfolio V Loan Combination. |
(3) | The Cut-off Date Principal Balance of $50,000,000 represents the controlling note A-1 of the $130,358,000 U.S. Industrial Portfolio V Loan Combination evidenced by threepari passu notes. |
(4) | Other upfront escrows include $172,450 of deferred maintenance related to roof work at the Sherwood Foods Cleveland property and $22,000 of environmental reserve related to vapor at the Gem City property. |
The table below summarizes the promissory notes that comprise the U.S. Industrial Portfolio V Loan Combination. The relationship between the holders of the U.S. Industrial Portfolio V Loan Combination is governed by a co-lender agreement as described under “Description of the Mortgage Pool—The Loan Combinations—The Serviced Pari Passu Loan Combinations” in the Preliminary Prospectus.
Loan Combination Summary | ||||
Note | Original Balance | Cut-off Date Balance | Note Holder(s) | Controlling Piece |
Note A-1 | $50,000,000 | $50,000,000 | CGCMT 2019-GC41 | Yes |
Note A-2 | 50,000,000 | 50,000,000 | GSBI(1) | No |
Note A-3 | 30,358,000 | 30,358,000 | GSBI(1) | No |
Total | $130,358,000 | $130,358,000 |
(1) | Expected to be contributed to one or more future securitization transactions. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
142
LOAN #12: U.S. INDUSTRIAL PORTFOLIO V
The following table presents certain information relating to the U.S. Industrial Portfolio V Properties:
Property Name | City | State | % of Allocated | Total GLA | Year Built | As-Is Appraised Value | UW NCF | |||||||||||
Cast Aluminum Solutions | Batavia | IL | 1.9 | % | 59,719 | 1988 | $3,780,000 | $223,758 | ||||||||||
CECO - Indianapolis | Indianapolis | IN | 2.1 | 66,000 | 1971 | 4,100,000 | 238,527 | |||||||||||
Cedar Creek Brooklyn Park | Brooklyn Park | MN | 4.8 | 136,167 | 1978, 2000 | 9,300,000 | 594,250 | |||||||||||
Cedar Creek Little Rock | North Little Rock | AR | 1.4 | 82,959 | 1971 | 2,750,000 | 178,691 | |||||||||||
Cedar Creek Gulfport | Long Beach | MS | 1.3 | 88,061 | 1965 | 2,475,000 | 173,603 | |||||||||||
Chemcore Austin | Austin | TX | 2.9 | 40,662 | 1982 | 5,580,000 | 334,980 | |||||||||||
Chemcore Elk Grove | Elk Grove Village | IL | 1.3 | 25,576 | 1966 | 2,475,000 | 155,301 | |||||||||||
Custom Extrusions Rome | Rome | GA | 2.4 | 151,693 | 1960 | 4,745,000 | 305,992 | |||||||||||
Dirksen Screws Canton | Canton | MI | 2.7 | 55,118 | 1994 | 5,300,000 | 330,031 | |||||||||||
Dirksen Screws Shelby | Shelby Township | MI | 3.9 | 80,967 | 1988, 1998 | 7,550,000 | 472,717 | |||||||||||
Dreison | Cleveland | OH | 3.3 | 206,471 | 1955 | 6,460,000 | 477,862 | |||||||||||
Exec Cabinetry SC | Simpsonville | SC | 4.7 | 205,912 | 1964-1993 | 9,220,000 | 590,895 | |||||||||||
Design Cabinetry TGK | Rockledge | FL | 2.5 | 92,367 | 1998 | 4,900,000 | 315,403 | |||||||||||
Design Cabinetry Barnes | Rockledge | FL | 0.6 | 21,572 | 1987 | 1,165,000 | 75,184 | |||||||||||
Gem City | Dayton | OH | 3.2 | 147,847 | 1941 | 6,270,000 | 385,477 | |||||||||||
Hunter Defense Tech | Florence | KY | 6.4 | 260,366 | 1962 | 12,450,000 | 764,620 | |||||||||||
Metalex (Jason Industries) | Libertyville | IL | 4.3 | 155,799 | 1924 | 8,400,000 | 518,579 | |||||||||||
Owens Corning | Tallmadge | OH | 7.0 | 222,900 | 1989 | 13,660,000 | 1,002,726 | |||||||||||
Polartec | Cleveland | TN | 2.6 | 175,306 | 1986 | 5,100,000 | 315,916 | |||||||||||
Pyramyd Air | Solon | OH | 1.9 | 70,867 | 1970 | 3,720,000 | 225,793 | |||||||||||
Sterling Jewelers | Barberton | OH | 6.2 | 134,565 | 2002 | 12,000,000 | 780,264 | |||||||||||
Techniks | Indianapolis | IN | 1.4 | 40,418 | 2005 | 2,800,000 | 165,198 | |||||||||||
Techniplas | Nashotah | WI | 4.6 | 137,206 | 1964-1995 | 9,000,000 | 587,254 | |||||||||||
Nyloncraft | Mishawaka | IN | 4.0 | 185,631 | 1961 | 7,700,000 | 451,281 | |||||||||||
Workstream | Fairfield | OH | 1.8 | 76,893 | 1973, 1988 | 3,540,000 | 218,006 | |||||||||||
Global Flooring | Kentwood | MI | 3.7 | 121,464 | 1984 | 7,170,000 | 479,289 | |||||||||||
Sherwood Foods Cleveland | Maple Heights | OH | 11.2 | 345,009 | 1967 | 21,750,000 | 1,261,216 | |||||||||||
Total Plastics | Wyoming | MI | 1.2 | 44,033 | 1999 | 2,410,000 | 160,445 | |||||||||||
LMI Aerospace - 3600 Mueller | Saint Charles | MO | 2.1 | 62,712 | 1973, 1989 | 4,100,000 | 276,188 | |||||||||||
LMI Aerospace - 3030 N. Highway 94 | Saint Charles | MO | 2.5 | 91,363 | 1966, 2000 | 4,800,000 | 381,088 | |||||||||||
Total | 100.0 | % | 3,585,623 | $194,670,000 | $12,440,535 |
The following table presents certain information relating to the major tenants for the U.S. Industrial Portfolio V Properties:
Ten Largest Tenants Based on Underwritten Base Rent
Tenant Name | Credit Rating (Fitch/MIS/S&P)(1) | Tenant GLA | % of GLA | UW Base Rent | % of Total UW Base Rent | UW Base Rent $ per SF | Lease Expiration | Renewal / Extension Options | |||||||||||||
Sherwood Food Distributors, LLC | NR / NR / NR | 345,009 | 9.6 | % | $1,524,720 | 10.7 | % | $4.42 | 3/31/2032 | 2, 5-year options | |||||||||||
Techniplas, LLC | NR / NR / NR | 322,837 | 9.0 | 1,206,774 | 8.5 | 3.74 | 12/31/2032 | None | |||||||||||||
Essential Cabinetry Holdings, LLC. | NR / NR / NR | 319,851 | 8.9 | 1,109,197 | 7.8 | 3.47 | 8/31/2036 | None | |||||||||||||
Cedar Creek, LLC | NR / NR / NR | 307,187 | 8.6 | 1,076,003 | 7.6 | 3.50 | Various(2) | None | |||||||||||||
Owens Corning Foam Insulation, LLC | BBB- / Ba1 / BBB | 222,900 | 6.2 | 975,844 | 6.9 | 4.38 | 3/31/2031 | 2, 5-year options | |||||||||||||
Dirksen Screw Products Co. | NR / NR / NR | 136,085 | 3.8 | 943,883 | 6.6 | 6.94 | Various(3) | 2, 5-year options | |||||||||||||
HDT Expeditionary Systems, Inc. | NR / NR / NR | 260,366 | 7.3 | 893,819 | 6.3 | 3.43 | 12/31/2031 | None | |||||||||||||
Sterling Jewelers, Inc. | NR / NR / NR | 134,565 | 3.8 | 848,710 | 6.0 | 6.31 | 2/29/2032 | 3, 5-year options | |||||||||||||
Leonard’s Metal, Inc. | NR / NR / NR | 154,075 | 4.3 | 744,175 | 5.2 | 4.83 | 10/31/2030 | 2, 5-year options | |||||||||||||
Metalex Corporation | NR / NR / NR | 155,799 | 4.3 | 613,828 | 4.3 | 3.94 | 4/30/2032 | None | |||||||||||||
Ten Largest Tenants | 2,358,674 | 65.8 | % | $9,936,953 | 70.0 | % | $4.21 | ||||||||||||||
Remaining Tenants | 1,226,949 | 34.2 | 4,262,750 | 30.0 | 3.47 | ||||||||||||||||
Vacant Spaces (Owned Space) | 0 | 0.0 | 0 | 0.0 | 0.00 | ||||||||||||||||
Totals / Wtd. Avg. Tenants | 3,585,623 | 100.0 | % | $14,199,704 | 100.0 | % | $3.96 |
(1) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
(2) | Cedar Creek, LLC leases 219,126 SF of industrial space scheduled to expire on June 30, 2031 and 88,061 SF of industrial space scheduled to expire on May 31, 2031. |
(3) | Dirksen Screw Products Co. leases 80,967 SF of industrial space scheduled to expire on April 30, 2033 and 55,118 SF of industrial space scheduled to expire on February 28, 2033. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
143
LOAN #12: U.S. INDUSTRIAL PORTFOLIO V
The following table presents certain information relating to the lease rollover schedule for the U.S. Industrial Portfolio V Properties based on initial lease expiration dates:
Lease Expiration Schedule(1)
Year Ending December 31, | Expiring Owned GLA | % of Owned GLA | Cumulative % of Owned GLA | UW Base Rent | % of Total UW Base Rent | UW Base Rent $ per SF | # of Expiring Leases | ||||||||||||||
MTM | 0 | 0.0 | % | 0.0 | % | $0 | 0.0 | % | $0.00 | 0 | |||||||||||
2019 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2020 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2021 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2022 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2023 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2024 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2025 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2026 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2027 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2028 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2029 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2030 | 543,228 | 15.2 | 15.2 | % | 1,843,563 | 13.0 | 3.39 | 5 | |||||||||||||
2031 | 850,172 | 23.7 | 38.9 | % | 3,214,889 | 22.6 | 3.78 | 6 | |||||||||||||
2032 | 1,024,448 | 28.6 | 67.4 | % | 4,765,965 | 33.6 | 4.65 | 7 | |||||||||||||
2033 | 427,007 | 11.9 | 79.3 | % | 1,885,145 | 13.3 | 4.41 | 5 | |||||||||||||
2034 | 0 | 0.0 | 79.3 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2035 | 0 | 0.0 | 79.3 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2036 | 319,851 | 8.9 | 88.3 | % | 1,109,197 | 7.8 | 3.47 | 3 | |||||||||||||
2037 | 147,760 | 4.1 | 92.4 | % | 522,844 | 3.7 | 3.54 | 2 | |||||||||||||
2038 | 273,157 | 7.6 | 100.0 | % | 858,100 | 6.0 | 3.14 | 2 | |||||||||||||
2039 | 0 | 0.0 | 100.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
2040 & Thereafter | 0 | 0.0 | 100.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||||
Vacant | 0 | 0.0 | 100.0 | % | NAP | NAP | NAP | NAP | |||||||||||||
Total | 3,585,623 | 100.0 | % | $14,199,704 | 100.0 | % | $3.96 | 30 |
(1) | Calculated based on approximate square footage occupied by each Owned Tenant. |
The following table presents certain information relating to historical occupancy for the U.S. Industrial Portfolio V Properties:
Historical Leased %(1)
As of 8/6/2019 |
100.0% |
(1) | The U.S. Industrial Portfolio V Properties were acquired in 2019 and no historical occupancy figures were available. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
144
LOAN #12: U.S. INDUSTRIAL PORTFOLIO V
■ | Underwritten Net Cash Flow. The following table presents certain information relating to the Underwritten Net Cash Flow for the U.S. Industrial Portfolio V Properties: |
Cash Flow Analysis(1)(2)
Underwritten(3)(4) | Underwritten $ per SF | |||||
Base Rental Revenue | $14,291,882 | $3.99 | ||||
Reimbursement Revenue | 246,043 | 0.07 | ||||
Gross Revenue | $14,537,924 | $4.05 | ||||
Vacancy Loss | (842,200 | ) | (0.23 | ) | ||
Effective Gross Revenue | $13,695,724 | $3.82 | ||||
Expenses | $0 | $0.00 | ||||
Management Fee | 273,914 | 0.08 | ||||
Total Operating Expenses | $273,914 | $0.08 | ||||
Net Operating Income | $13,421,810 | $3.74 | ||||
TI/LC | 622,712 | 0.17 | ||||
Replacement Reserves | 358,562 | 0.10 | ||||
Net Cash Flow | $12,440,535 | $3.47 | ||||
Occupancy | 100.0% | |||||
NOI Debt Yield(5) | 10.3% | |||||
NCF DSCR(5) | 2.49x |
(1) | Certain items such as straight line rent, interest expense, interest income, lease cancellation income, depreciation, amortization, debt service payments and any other non-recurring or non-operating items were excluded from the historical presentation and are not considered for the underwritten cash flow. |
(2) | The U.S. Industrial Portfolio V Properties were acquired in 2019 and no historical financials were available. |
(3) | Underwritten cash flow based on contractual rents as of August 6, 2019 and contractual rent steps ($92,178) through June 30, 2020. |
(4) | Underwritten cash flow assumes market vacancy for the submarkets in which the properties are located. |
(5) | Calculated based on the aggregate outstanding balance of the U.S. Industrial Portfolio V Loan Combination. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
145
LOAN #13: City center plaza
Mortgaged Property Information | Mortgage Loan Information | ||||||||||
Number of Mortgaged Properties | 1 | Loan Seller | GSMC | ||||||||
Location (City/State) | Boise, Idaho | Cut-off Date Principal Balance | $46,850,000 | ||||||||
Property Type | Office | Cut-off Date Principal Balance per SF | $120.94 | ||||||||
Size (SF) | 387,371 | Percentage of Initial Pool Balance | 3.7% | ||||||||
Total Occupancy as of 6/19/2019 | 92.1% | Number of Related Mortgage Loans | None | ||||||||
Owned Occupancy as of 6/19/2019 | 92.1% | Type of Security(2) | Fee Simple | ||||||||
Year Built / Latest Renovation | 1978, 2016 / NAP | Mortgage Rate | 3.80000% | ||||||||
Appraised Value | $84,900,000 | Original Term to Maturity (Months) | 120 | ||||||||
Appraisal Date | 4/4/2019 | Original Amortization Term (Months) | NAP | ||||||||
Borrower Sponsor(1) | LNRED Investments LLC | Original Interest Only Period (Months) | 120 | ||||||||
Property Management | KC Gardner Company, L.C. | First Payment Date | 8/6/2019 | ||||||||
Maturity Date | 7/6/2029 | ||||||||||
Underwritten Revenues | $10,499,782 | ||||||||||
Underwritten Expenses | $4,582,209 | Escrows | |||||||||
Underwritten Net Operating Income (NOI) | $5,917,574 | Upfront | Monthly | ||||||||
Underwritten Net Cash Flow (NCF) | $5,500,271 | Taxes | $309,374 | $103,125 | |||||||
Cut-off Date LTV Ratio | 55.2% | Insurance | $0 | $0 | |||||||
Maturity Date LTV Ratio | 55.2% | Replacement Reserves | $0 | $8,070 | |||||||
DSCR Based on Underwritten NOI / NCF | 3.28x / 3.05x | TI/LC | $0 | $32,281 | |||||||
Debt Yield Based on Underwritten NOI / NCF | 12.6% / 11.7% | Other(3) | $71,500 | $0 | |||||||
Sources and Uses | |||||||||||
Sources | $ | % | Uses | $ | % | ||||||
Loan Amount | $46,850,000 | 56.6% | Purchase Price | $81,950,000 | 99.1% | ||||||
Principal’s New Cash Contribution | 35,885,772 | 43.4 | Closing Costs | 404,899 | 0.5 | ||||||
Reserves | 380,874 | 0.5 | |||||||||
Total Sources | $82,735,772 | 100.0% | Total Uses | $82,735,772 | 100.0% | ||||||
(1) | LNRED Investments LLC is the non-recourse carveout guarantor under the City Center Plaza Loan. |
(2) | Borrower's fee interest is in the following condominium units that are part of the US Bank Plaza Condominium: Units A, 1A, 1B, 1C, 5A, 6A, 7A, 8A, 9A, 1H, 1K, 1L, 2C and 3C. |
(3) | Other escrows represent the amount for boiler replacement. |
■ | The Mortgage Loan. The City Center Plaza mortgage loan (the “City Center Plaza Loan”) is evidenced by a note in the original principal amount of $46,850,000 and is secured by borrower’s fee simple interest an office property in Boise, Idaho (the “City Center Plaza Property”).The City Center Plaza Loan was originated by Goldman Sachs Bank USA on June 26, 2019 and is approximately 3.7% of the Initial Pool Balance. The borrower utilized the proceeds of the City Center Plaza Loan to acquire the City Center Plaza Property, fund upfront reserves and pay closing costs. |
■ | The Mortgaged Property.The City Center Plaza Property is comprised of (1) the US Bank Building property and (2) the Clearwater & Centre Buildings property. The US Bank Building is a 260,515 SF office building located at 101 South Capitol Boulevard in Boise, Idaho. The borrower's interest in the Clearwater & Centre Buildings includes 119,986 SF of the Clearwater office building and 6,870 SF of the Centre office building. The Clearwater & Centre Buildings were built in 2016 and are located at 777 West Main Street and 195 South Capitol Boulevard, respectively, in Boise, Idaho. According to the appraisal, the US Bank Building had an “as-is”appraised value of $47,400,000 as of April 4, 2019, and the Clearwater & Centre Buildings had an “as-is” appraised value of $37,800,000 as of April 4, 2019. Underwritten Net Operating Income ($) and Underwritten Net Cash Flow ($) are (1) $3,692,709 and $3,421,291, respectively, at the US Bank Building and (2) $2,224,864 and $2,078,980, respectively, at the Clearwater & Centre Buildings. |
The following table presents certain information relating to the City Center Plaza Property:
Property Name | City | State | % of Allocated Loan Amount | Total GLA | Year Built | As-Is Appraised Value(1) | UW NCF |
US Bank Building | Boise | ID | 55.9% | 260,515 | 1978 | $47,400,000 | $3,421,291 |
Clearwater & Centre Buildings | Boise | ID | 44.1% | 126,856 | 2016 | $37,800,000 | $2,078,980 |
(1) | The “As-Is” Appraised Values for the US Bank Building and Clearwater & Centre Buildings were calculated using different capitalization rates. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
146
LOAN #13: City center plaza
The following table presents certain information relating to the major tenants (of which, certain tenants may have co-tenancy provisions) at the City Center Plaza Property:
Ten Largest Tenants Based on Underwritten Base Rent(1)
Tenant Name | Credit Rating (Fitch/MIS/S&P)(2) | Tenant | % of | UW Base | % of Total | UW Base | Lease | Renewal / Extension |
Clearwater Analytics(3) | NR / NR / NR | 107,809 | 27.8% | $1,993,946 | 25.7% | $18.50 | 10/31/2026 | 2, 5-year options |
US Bank(4) | AA- / A1 / A+ | 34,421 | 8.9 | 954,150 | 12.3 | 27.72 | 3/31/2025 | 2, 5-year options |
US Ecology(5) | NR / NR / BB | 28,460 | 7.3 | 626,120 | 8.1 | 22.00 | 7/31/2025 | 2, 5-year options |
Stoel Rives(6) | NR / NR / NR | 25,974 | 6.7 | 511,503 | 6.6 | 19.69 | 6/30/2028 | 2, 5-year options |
PCA(7) | NR / NR / NR | 21,435 | 5.5 | 487,646 | 6.3 | 22.75 | 8/31/2025 | 2, 5-year options |
Wells Fargo Advisors(8) | NR / NR / NR | 11,988 | 3.1 | 267,157 | 3.4 | 22.29 | 4/30/2024 | 3, 5-year options |
Morgan Stanley | A / A3 / BBB+ | 11,352 | 2.9 | 264,956 | 3.4 | 23.34 | 9/30/2022 | 2, 5-year options |
Andersen Schwartzman | NR / NR / NR | 9,635 | 2.5 | 226,423 | 2.9 | 23.50 | 6/30/2020 | 2, 5-year options |
CliftonLarsonAllen LLP(9) | NR / NR / NR | 6,835 | 1.8 | 171,644 | 2.2 | 25.11 | 5/31/2029 | 2, 5-year options |
Macy's.com (Intel sublease)(10) | BBB / Baa3 / BBB- | 7,569 | 2.0 | 165,988 | 2.1 | 21.93 | 7/1/2020 | NAP |
Largest Tenants | 265,478 | 68.5% | $5,669,533 | 73.0% | $21.36 | |||
Remaining Owned Tenants | 91,137 | 23.5 | 2,099,742 | 27.0 | 23.04 | |||
Vacant Spaces (Owned Space) | 30,756 | 7.9 | 0 | 0.0 | 0.00 | |||
Totals / Wtd. Avg. Tenants | 387,371 | 100.0% | $7,769,274 | 100.0% | $21.79 |
(1) | Based on the underwritten rent roll dated June 19, 2019. |
(2) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
(3) | Clearwater Analytics leases 106,780 SF of office space with $18.57 annual base rent per SF and 1,029 SF of storage space with $10.61 annual base rent per SF. |
(4) | US Bank may terminate the portion of its lease related to its 2,461 SF of storage space at any time upon 30 day notice. |
(5) | US Ecology has a one-time right to surrender a minimum of 2,000 SF and a maximum of 14,230 SF from and after November 30, 2021. |
(6) | Stoel Rives (i) leases 17,810 SF of office space with $24.19 annual base rent per SF and lease expiration on June 30, 2028, and 8,164 SF of storage space with $9.88 annual base rent per SF and lease expiration on October 31, 2028, (ii) at any time after April 1, 2023, may surrender up to 3,581 SF and (iii) at any time, may surrender all or part of its storage space (8,164 SF). |
(7) | PCA has a one-time right to terminate its lease on July 1, 2023, with 12 months’ notice and payment of a termination fee. |
(8) | Wells Fargo Advisors has a one-time right to terminate its lease on April 30, 2022, with nine months’ notice and payment of a termination fee. |
(9) | CliftonLarsonAllen LLP has a one-time right to terminate its lease any time after June 1, 2026, with nine months’ notice and payment of a termination fee. |
(10) | Macy’s.com subleases its space to Intel. The lease terms noted above represent both Macy’s.com original lease and the Intel sublease. |
The following table presents certain information relating to the lease rollover schedule at the City Center Plaza Property based on initial lease expiration dates:
Lease Expiration Schedule(1)(2)
Year Ending December 31, | Expiring Owned | % of Owned GLA | Cumulative % of Owned GLA | UW Base Rent | % of Total UW | UW Base Rent $ | # of Expiring Leases |
MTM | 5,598 | 1.4% | 1.4% | $116,064 | 1.5% | $20.73 | 2 |
2019 | 5,135 | 1.3 | 2.8% | 111,575 | 1.4 | 21.73 | 2 |
2020 | 24,363 | 6.3 | 9.1% | 528,353 | 6.8 | 21.69 | 5 |
2021 | 15,842 | 4.1 | 13.1% | 354,419 | 4.6 | 22.37 | 4 |
2022 | 30,405 | 7.8 | 21.0% | 711,811 | 9.2 | 23.41 | 7 |
2023 | 2,900 | 0.7 | 21.7% | 79,199 | 1.0 | 27.31 | 1 |
2024 | 31,022 | 8.0 | 29.8% | 697,632 | 9.0 | 22.49 | 7 |
2025 | 89,994 | 23.2 | 53.0% | 2,204,428 | 28.4 | 24.50 | 5 |
2026 | 109,096 | 28.2 | 81.2% | 2,026,989 | 26.1 | 18.58 | 3 |
2027 | 1,040 | 0.3 | 81.4% | 26,000 | 0.3 | 25.00 | 1 |
2028 | 25,974 | 6.7 | 88.1% | 511,503 | 6.6 | 19.69 | 2 |
2029 | 6,835 | 1.8 | 89.9% | 171,644 | 2.2 | 25.11 | 1 |
2030 & Thereafter | 8,411 | 2.2 | 92.1% | 229,658 | 3.0 | 27.30 | 2 |
Vacant | 30,756 | 7.9 | 100.0% | NAP | NAP | NAP | NAP |
Total / Wtd. Avg. | 387,371 | 100.0% | $7,769,274 | 100.0% | $21.79 | 42 |
(1) | Calculated based on approximate square footage occupied by each Owned Tenant. |
(2) | Certain tenants may have lease termination options that are exercisable prior to the originally stated expiration date of their lease and are not considered in the lease rollover schedule. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #13: City center plaza
The following table presents certain information relating to historical occupancy at the City Center Plaza Property:
Historical Leased %(1)(2)
As of 6/19/2019 |
92.1% |
(1) | Based on the underwritten rent roll dated June 19, 2019. |
(2) | Historical occupancy was not provided by the borrower. |
■ | 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 City Center Plaza Property: |
Cash Flow Analysis(1)
2017 | 2018 | Underwritten(2) | Underwritten $ per SF | |||||
Base Rent(3) | $6,255,378 | $6,449,983 | $7,915,583 | $20.43 | ||||
Total Reimbursement Revenue | 1,810,682 | 1,847,956 | 2,045,704 | 5.28 | ||||
Market Revenue from Vacant Units | 0 | 0 | 822,385 | 2.12 | ||||
Parking Revenue | 260,518 | 326,792 | 452,384 | 1.17 | ||||
Other Revenue | 92,856 | 104,071 | 104,071 | 0.27 | ||||
Gross Revenue | $8,419,434 | $8,728,802 | $11,340,127 | $29.27 | ||||
Less Vacancy Loss | (103,350) | (463,893) | (840,345) | (2.17) | ||||
Effective Gross Income | $8,316,084 | $8,264,909 | $10,499,782 | $27.11 | ||||
Total Operating Expenses | $4,397,411 | $4,271,282 | $4,582,209 | $11.83 | ||||
Net Operating Income | $3,918,673 | $3,993,627 | $5,917,574 | $15.28 | ||||
TI/LC | 0 | 0 | 339,829 | 0.88 | ||||
Replacement Reserves | 0 | 0 | 77,474 | 0.20 | ||||
Net Cash Flow | $3,918,673 | $3,993,627 | $5,500,271 | $14.20 | ||||
Occupancy | NAV | NAV | 92.1% | |||||
NOI Debt Yield | 8.4% | 8.5% | 12.6% | |||||
NCF DSCR | 2.17x | 2.21x | 3.05x |
|
(1) | Certain items such as straight line rent, interest expense, interest income, lease cancellation income, depreciation, amortization, debt service payments and any other non-recurring or non-operating items were excluded from the historical presentation and are not considered for the underwritten cash flow. |
(2) | Underwritten cash flow based on contractual rents as of June 19, 2019 and contractual rent steps of approximately $189,087 through August 31, 2020. |
(3) | Base Rent also includes the present value of rent steps for credit tenants of approximately $146,308. |
■ | Release of Collateral. Provided that no event of default under the City Center Plaza Loan documents is continuing, from and after the first payment date following the second anniversary of the securitization closing date, the borrower has the right to obtain the release of either the US Bank Building or the Clearwater & Centre Buildings from the lien in connection with a sale of the US Bank Building or the Clearwater & Centre Buildings to an unaffiliated third party, subject to the satisfaction of certain conditions, including, among others: (i) delivery of defeasance collateral in an amount equal to (a) with respect to a sale of the US Bank Building, the greater of (x) 90% of the net sales proceeds and (y) $31,411,920 or (b) with respect to a sale of the Clearwater & Centre Buildings, $22,740,740 (ii) the aggregate portfolio debt yield after giving effect to such release must be at least equal to the greater of (x) 10.93% and (y) the aggregate portfolio debt yield immediately prior to such sale, (iii) delivery of a REMIC opinion, (iv) delivery of a rating agency confirmation and (v) payment of customary defeasance fees, subject to a cap of $35,000. See “Description of the Mortgage Pool—Certain Terms of the Mortgage Loans—Partial Releases” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #14: 505 fulton street |
Mortgaged Property Information | Mortgage Loan Information | |||||||||||||
Number of Mortgaged Properties | 1 | Loan Seller | CREFI | |||||||||||
Location (City/State) | Brooklyn, New York | Cut-off Date Balance(2) | $45,000,000 | |||||||||||
Property Type | Retail | Cut-off Date Balance per SF(1) | $744.25 | |||||||||||
Size (SF) | 114,209 | Percentage of Initial Pool Balance | 3.5% | |||||||||||
Total Occupancy as of 7/1/2019 | 100.0% | Number of Related Mortgage Loans(3) | 3 | |||||||||||
Owned Occupancy as of 7/1/2019 | 100.0% | Type of Security | Fee Simple | |||||||||||
Year Built / Latest Renovation | 1890 / 2013 | Mortgage Rate | 3.53000% | |||||||||||
Appraised Value | $175,000,000 | Original Term to Maturity (Months) | 120 | |||||||||||
Appraisal Date | 6/18/2019 | Original Amortization Term (Months) | NAP | |||||||||||
Borrower Sponsors | Albert Laboz, Jason Laboz and | Original Interest Only Period (Months) | 120 | |||||||||||
Joseph Jody Laboz | First Payment Date | 8/6/2019 | ||||||||||||
Property Management | Self-Managed | Maturity Date | 7/6/2029
| |||||||||||
Underwritten Revenues | $9,606,189 | |||||||||||||
Underwritten Expenses | $1,161,763 | Escrows | ||||||||||||
Underwritten Net Operating Income (NOI) | $8,444,426 | Upfront | Monthly | |||||||||||
Underwritten Net Cash Flow (NCF) | $8,134,071 | Taxes | $77,234 | $38,617 | ||||||||||
Cut-off Date LTV Ratio(1) | 48.6% | Insurance | $0 | $0 | ||||||||||
Maturity Date LTV Ratio(1) | 48.6% | Replacement Reserve(4) | $0 | $1,428 | ||||||||||
DSCR Based on Underwritten NOI / NCF(1) | 2.78x / 2.67x | TI/LC | $0 | $0 | ||||||||||
Debt Yield Based on Underwritten NOI / NCF(1) | 9.9% / 9.6% | Other | $0 | $0 | ||||||||||
Sources and Uses | ||||||||||||||
Sources | $ | % | Uses | $ | % | |||||||||
Loan Combination Amount | $85,000,000 | 100.0% | Loan Payoff | $64,909,586 | 76.4% | |||||||||
Principal Equity Distribution | 18,118,300 | 21.3 | ||||||||||||
Closing Costs | 1,894,880 | 2.2 | ||||||||||||
Reserves | 77,234 | 0.1 | ||||||||||||
Total Sources | $85,000,000 | 100.0% | Total Uses | $85,000,000 | 100.0% | |||||||||
(1) | Calculated based on the aggregate outstanding balance of the 505 Fulton Street Loan Combination. |
(2) | The Cut-off Date Balance of $45,000,000 represents the controlling Note A-2, which is part of a larger loan combination evidenced by twopari passu notes having an aggregate outstanding principal balance as of the Cut-off Date of $85,000,000 (the “505 Fulton Street Loan Combination”) also consisting of one non-controlling Note A-1 with an original principal balance of $40,000,000 which is currently held by CREFI and is expected to be contributed to one or more future commercial mortgage securitization transactions. |
(3) | The borrower sponsors for the 505 Fulton Street Loan Combination are also the borrower sponsors for the 34 Howard mortgage loan and the 309 Canal Street mortgage loan. |
(4) | The Replacement reserve is subject to a cap of $17,131. |
Loan Combination Summary | |||||
Note | Original Balance | Cut-off Date Balance | Note Holder | Controlling Piece | |
A-2 | $45,000,000 | $45,000,000 | CGCMT 2019-GC41 | Yes | |
A-1 | $40,000,000 | $40,000,000 | CREFI(1) | No | |
Total | $85,000,000 | $85,000,000 |
(1) | The non-controlling note A-1 is currently held by CREFI and is expected to be contributed to one or more future commercial mortgage securitization transactions. |
The following table presents certain information relating to the major tenants (of which certain tenants may have co-tenancy provisions) at the 505 Fulton Street property:
Largest Owned Tenants Based on Underwritten Base Rent(1)
Tenant Name | Credit Rating (Fitch/MIS/S&P)(2) | Tenant GLA | % of | UW Base | % of Total | UW Base Rent $ | Lease Expiration | Renewal / | ||
Old Navy | NR / Baa2 / BB+ | 22,477 | 19.7% | $3,277,778 | 35.7% | $145.83 | 6/30/2025 | 2, 5-year options | ||
H&M | NR / NR / NR | 29,600 | 25.9 | 2,970,250 | 32.3 | 100.35 | 1/31/2029 | NAP | ||
Nordstrom Rack | BBB+ / Baa1 / BBB+ | 40,523 | 35.5 | 2,117,500 | 23.0 | 52.25 | 4/30/2024 | 4, 5-year options | ||
TJ Maxx | NR / A2 / A+ | 21,609 | 18.9 | 825,000 | 9.0 | 38.18 | 4/30/2024 | 3, 5-year options | ||
Largest Owned Tenants | 114,209 | 100.0% | $9,190,528 | 100.0% | $80.47 | |||||
Vacant | 0 | 0.0 | 0 | 0.0 | 0.00 | |||||
Total / Wtd. Avg. All Owned Tenants | 114,209 | 100.0% | $9,190,528 | 100.0% | $80.47 | |||||
(1) | Based on the underwritten rent roll dated July 1, 2019. |
(2) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
(3) | UW Base Rent, % of Total UW Base Rent and UW Base Rent $ per SF includes the present value of rent steps for Old Navy ($277,778) and contractual rent steps through September 1, 2019 for H&M ($245,250). |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
150
LOAN #14: 505 fulton street |
The following table presents certain information relating to the lease rollover schedule at the 505 Fulton Street property, based on initial lease expiration dates:
Lease Expiration Schedule(1)
Year Ending December 31 | Expiring Owned GLA | % of Owned GLA | Cumulative % of | UW Base Rent(2) | % of Total UW | UW Base Rent $ | # of Expiring Leases | ||
MTM | 0 | 0.0% | 0.0% | $0 | 0.0% | $0.00 | 0 | ||
2019 | 0 | 0.0 | 0.0% | 0 | 0.0 | $0.00 | 0 | ||
2020 | 0 | 0.0 | 0.0% | 0 | 0.0 | $0.00 | 0 | ||
2021 | 0 | 0.0 | 0.0% | 0 | 0.0 | $0.00 | 0 | ||
2022 | 0 | 0.0 | 0.0% | 0 | 0.0 | $0.00 | 0 | ||
2023 | 0 | 0.0 | 0.0% | 0 | 0.0 | $0.00 | 0 | ||
2024 | 62,132 | 54.4 | 54.4% | 2,942,500 | 32.0 | $47.36 | 2 | ||
2025 | 22,477 | 19.7 | 74.1% | 3,277,778 | 35.7 | $145.83 | 1 | ||
2026 | 0 | 0.0 | 74.1% | 0 | 0.0 | $0.00 | 0 | ||
2027 | 0 | 0.0 | 74.1% | 0 | 0.0 | $0.00 | 0 | ||
2028 | 0 | 0.0 | 74.1% | 0 | 0.0 | $0.00 | 0 | ||
2029 | 29,600 | 25.9 | 100.0% | 2,970,250 | 32.3 | $100.35 | 1 | ||
2030 & Thereafter | 0 | 0.0 | 100.0% | 0 | 0.0 | $0.00 | 0 | ||
Vacant | 0 | 0.0 | 100.0% | NAP | NAP | NAP | NAP | ||
Total / Wtd. Avg. | 114,209 | 100.0% | $9,190,528 |
| 100.0% | $80.47 | 4 |
(1) | Calculated based on the approximate square footage occupied by each collateral tenant. |
(2) | UW Base Rent, % of Total UW Base Rent and UW Base Rent $ per SF includes the present value of rent steps for Old Navy ($277,778) and contractual rent steps through September 1, 2019 for H&M ($245,250). |
The following table presents certain information relating to historical leasing at the 505 Fulton Street property:
Historical Leased %(1)
2016 | 2017 | 2018 | As of 7/1/2019(2) |
100.0% | 100.0% | 100.0% | 100.0% |
(1) | Represents the average annual occupancy as of December 31 for each respective year unless otherwise indicated. |
(2) | Based on the underwritten rent roll dated July 1, 2019. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
151
LOAN #14: 505 fulton street |
■ | 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 505 Fulton Street property: |
Cash Flow Analysis(1)
2016 | 2017 | 2018 | TTM 5/31/2019 | Underwritten | Underwritten $ per SF | |||||||
Base Rent | $8,250,000 | $8,345,245 | $8,185,283 | $7,475,799 | $8,667,500 | $75.89 | ||||||
Contractual Rent Steps | 0 | 0 | 0 | 0 | 523,028 | 4.58 | ||||||
Vacant Income | 0 | 0 | 0 | 0 | 0 | 0.00 | ||||||
Reimbursements | 701,691 | 713,737 | 807,699 | 806,637 | 836,982 | 7.33 | ||||||
Other Income(2) | 629,147 | 629,147 | 576,718 | 0 | 0 | 0.00 | ||||||
Vacancy & Credit Loss(3) | 0 | 0 | 0 | 0 | (421,320) | (3.69) | ||||||
Effective Gross Income | $9,580,838 | $9,688,129 | $9,569,700 | $8,282,436 | $9,606,189 | $84.11 | ||||||
Real Estate Taxes | $372,565 | $413,005 | $442,239 | $442,238 | $443,682 | $3.88 | ||||||
Insurance | 113,090 | 113,090 | 63,007 | 63,007 | 77,937 | 0.68 | ||||||
Management Fee | 0 | 0 | 0 | 0 | 288,186 | 2.52 | ||||||
Other Operating Expenses | 258,185 | 357,580 | 326,861 | 319,883 | 351,958 | 3.08 | ||||||
Total Operating Expenses | $743,840 | $883,675 | $832,107 | $825,128 | $1,161,763 | $10.17 | ||||||
Net Operating Income(4) | $8,836,998 | $8,804,454 | $8,737,593 | $7,457,308 | $8,444,426 | $73.94 | ||||||
TI/LC | 0 | 0 | 0 | 0 | 293,224 | 2.57 | ||||||
Replacement Reserves | 0 | 0 | 0 | 0 | 17,131 | 0.15 | ||||||
Net Cash Flow | $8,836,998 | $8,804,454 | $8,737,593 | $7,457,308 | 8,134,071 | $71.22 | ||||||
Occupancy | 100.0% | 100.0% | 100.0% | 100.0% | 95.8%(3) | |||||||
NOI Debt Yield(5) | 10.4% | 10.4% | 10.3% | 8.8% | 9.9% | |||||||
NCF DSCR(5) | 2.90x | 2.89x | 2.87x | 2.45x | 2.67X |
(1) | Certain items such as straight line rent, interest expense, interest income, lease cancellation income, depreciation, amortization, debt service payments and any other non-recurring or non-operating items were excluded from the historical presentation and are not considered for the underwritten cash flow. |
(2) | Other Income includes percentage rent. |
(3) | Represents an underwritten economic vacancy of 4.2%. |
(4) | The increase from TTM 5/31/2019 Net Operating Income to Underwritten Net Operating Income is attributable to $245,250 of contractual rent steps through September 1, 2019 for H&M and $277,778 which represents the present value of rent steps for Old Navy. In addition, in December of 2018, H&M discovered that they had overpaid their percentage rent by $708,739. Subsequently, the landlord gave them a credit for $227,083 in December. In 2019, after further review, they discovered that they had overpaid their percentage rent by an additional $236,754 which they received a credit for from January-April 2019, which represents the decrease in Base Rent in TTM 5/31/2019. The credit for their overpaid percentage rent is fully used and they are not currently paying percentage rent. |
(5) | Debt metrics calculated based on the 505 Fulton Street Loan Combination. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #15: WIND CREEK LEASED FEE |
Mortgaged Property Information | Mortgage Loan Information | ||||||||||||
Number of Mortgaged Properties | 1 | Loan Seller | GACC | ||||||||||
Location (City/State) | Bethlehem, Pennsylvania | Cut-off Date Balance(4) | $45,000,000 | ||||||||||
Property Type(1) | Land | Cut-off Date Balance per SF(1)(3) | $56.20 | ||||||||||
Size (SF)(1) | 2,608,541 | Percentage of Initial Pool Balance | 3.5% | ||||||||||
Total Occupancy(1) | NAP | Number of Related Mortgage Loans | None | ||||||||||
Owned Occupancy(1) | NAP | Type of Security(5) | Fee Simple | ||||||||||
Year Built / Latest Renovation(1) | NAP / NAP | Mortgage Rate | 4.38000% | ||||||||||
Appraised Value(2) | $172,500,000 | Original Term to Maturity (Months) | 120 | ||||||||||
Appraisal Date | 4/23/2019 | Original Amortization Term (Months) | 420 | ||||||||||
Borrower Sponsor | Jeffrey Gural, Barry Gosin, James Kuhn, Michael | Original Interest Only Period (Months) | NAP | ||||||||||
Perrucci and Richard Fischbein | First Payment Date | 9/6/2019 | |||||||||||
Property Management | Self-Managed | Maturity Date | 8/6/2029 | ||||||||||
Underwritten Revenues | $10,402,235 | ||||||||||||
Underwritten Expenses | $0 | Escrows | |||||||||||
Underwritten Net Operating Income (NOI) | $10,402,235 | Upfront | Monthly | ||||||||||
Underwritten Net Cash Flow (NCF) | $10,402,235 | Taxes | $0 | $0 | |||||||||
Cut-off Date LTV Ratio(2)(3) | 85.0% | Insurance | $0 | $0 | |||||||||
Maturity Date LTV Ratio(3) | 72.8% | Replacement Reserve | $0 | $0 | |||||||||
DSCR Based on Underwritten NOI / NCF(3) | 1.27x / 1.27x | TI/LC | $0 | $0 | |||||||||
Debt Yield Based on Underwritten NOI / NCF(3) | 7.1% / 7.1% | Other(6) | $1,365,880 | $0 | |||||||||
Sources and Uses | |||||||||||||
Sources | $ | % | Uses | $ | % | ||||||||
Loan Combination | $146,600,000 | 100.0% | Equity Recapitalization | $142,698,954 | 97.3% | ||||||||
Closing Costs | 2,535,166 | 1.7 | |||||||||||
Reserves | 1,365,880 | 0.9 | |||||||||||
Total Sources | $146,600,000 | 100.0% | Total Uses | $146,600,000 | 100.0% | ||||||||
(1) | The Wind Creek Leased Fee Loan Combination is secured by the borrower’s fee simple interest in a ground lease to the owners of the Wind Creek Casino and Resort Bethlehem, a gaming, hotel, retail and dining resort located in Bethlehem, Pennsylvania. The improvements are comprised of approximately 146,000 SF of gaming space (the “Casino”), a 282-room hotel (the “Hotel”) and a 151,029 SF indoor shopping mall (the “Outlets”). The Casino was completed in 2009 and the Hotel and Outlets were completed in 2011. The Size (SF) represents the total SF of the land of the Wind Creek Leased Fee property. |
(2) | Based on the “as is” appraised value of the leased fee interest. The “as is” appraised value, inclusive of the Wind Creek Casino and Resort Bethlehem improvements is $1.14 billion, which results in a Cut-off Date LTV Ratio of 12.9%. |
(3) | Calculated based on the aggregate outstanding principal balance as of the Cut-off Date of the Wind Creek Leased Fee Loan Combination. |
(4) | The Cut-off Date Balance of $45,000,000 represents the non-controlling note A-3 (“Wind Creek Leased Fee Loan”), which is part of a loan combination (“Wind Creek Leased Fee Loan Combination”) evidenced by sixpari passu notes with an aggregate outstanding principal balance as of the Cut-off Date of $146,600,000. S&P confirmed that the Wind Creek Leased Fee Loan exhibits credit characteristics that are consistent with investment grade credit. |
(5) | The collateral for the Wind Creek Leased Fee Loan is the leased fee interest, which will be subject to a 40-year ground lease that generates $9.5 million in annual ground rent with annual consumer price index increases in an amount no greater than 2.0%. The ground lease has eight consecutive, 25-year extension options, with a fully extended maturity date in 2259. See the “Land (Leased Fee) Properties” section in the Preliminary Prospectus. |
(6) | Upfront Other reserves represent a debt service reserve equal to two months of debt service reserve payments. |
The table below summarizes the promissory notes that comprise the Wind Creek Leased Fee Loan Combination. The relationship between the holders of the Wind Creek Leased Fee Loan Combination is governed by a co-lender agreement described under “Description of the Mortgage Pool–The Loan Combinations–The Serviced Pari Passu Loan Combinations”in the Preliminary Prospectus.
Loan Combination Summary | |||||
Note | Original Balance | Cut-off Date Balance | Note Holder | Controlling Note | |
A-3 | $45,000,000 | $45,000,000 | CGCMT 2019-GC41 | No | |
A-1 | $30,000,000 | $30,000,000 | CCRE(1)(2) | Yes | |
A-2, A-4, A-5, A-6 | $71,600,000 | $71,600,000 | DBRI(1) | No | |
Total | $146,600,000 | $146,600,000 |
(1) | Expected to be contributed to one or more future securitization transactions. |
(2) | Jeffrey Gural, Barry Gosin and James Kuhn, three of the borrower sponsors, are in senior management positions at Newmark Group, Inc. (“Newmark”) or an affiliate of Newmark, which entities are affiliated with CCRE. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
154
LOAN #15: WIND CREEK LEASED FEE |
■ | Underwritten Net Cash Flow. The following table presents certain information relating to the Underwritten Net Cash Flow at the Wind Creek Leased Fee Property: |
Cash Flow Analysis(1)
Underwritten | Underwritten $ per SF | |||
Base Rent | $9,500,000 | $3.64 | ||
Rent Steps(2) | 902,235 | 0.35 | ||
Gross Potential Rent | $10,402,235 | $3.99 | ||
Vacancy & Credit Loss | 0 | 0.00 | ||
Other Income | 0 | 0.00 | ||
Effective Gross Income | $10,402,235 | $3.99 | ||
Total Operating Expenses(3) | $0 | $0.00 | ||
Net Operating Income | $10,402,235 | $3.99 | ||
Replacement Reserves | 0 | 0.00 | ||
TI/LC | 0 | 0.00 | ||
Net Cash Flow | $10,402,235 | $3.99 | ||
Occupancy | NAP | |||
NOI Debt Yield(4) | 7.1% | |||
NCF DSCR(4) | 1.27x | |||
(1) | See the “Land(Leased Fee) Properties” section in the Preliminary Prospectus. |
(2) | Rent Steps represent the average increase in the annual base rent over the life of the Wind Creek Leased Fee Loan Combination, which assumes contractual consumer price index increases of 2.0% annually. |
(3) | The tenant leasing the improvements located at the Wind Creek Leased Fee Property is responsible for all expenses. |
(4) | Calculated based on the Wind Creek Leased Fee Loan Combination. |
■ | Ground Lease. In May 2019, the borrower sponsors entered into a 40-year ground lease with Sands Bethworks Gaming LLC (the “Ground Lessee”). The Wind Creek Casino and Resort Bethlehem is managed by Wind Creek Hospitality (“Wind Creek”), the principal gaming and hospitality entity for the Poarch Band of Creek Indians. In connection with the origination of the Wind Creek Leased Fee Loan Combination, the borrower sponsors transferred its interest in the ground lease to the borrower. The ground lease has a 40-year term and includes eight, 25-year extension options, resulting in a fully-extended maturity date of 2259. The annual rent is $9.5 million, with contractual CPI increases of up to 2.0% annually (the “Base Rent”). The Base Rent will decrease in the following two scenarios: |
If Base Rent exceeds 3.0% of gross slot machine revenue and gross table game revenue from all of the Ground Lessee’s, its subtenants’, operators’ and affiliates’ within a 50-mile radius (as determined in accordance with Pennsylvania Gaming Law as of the date of the ground lease and as reported to the Pennsylvania Gaming Control Board) (the “Wind Creek Gaming Proceeds”) for the immediately preceding year, then the Base Rent will be adjusted to 3.0% of the Wind Creek Gaming Proceeds.
During a period after the commencement date where (i) Wind Creek Gaming Proceeds decrease below $475,439,460 for a trailing four-quarter period and (ii) any of the following events occurs: (a) the addition of live table games or internet gaming at the Resorts World Casino in New York, New York; (b) the addition of live table games or internet gaming at the Empire City Casino in Yonkers, New York; (c) the opening of any new gaming or internet gaming facility in the following regions: New York City, Westchester County, Rockland County, Suffolk County, or Nassau County; (d) the opening of any gaming facility anywhere in the state of New Jersey outside of Atlantic County; (e) the opening of any gaming facility in Pennsylvania within 50 miles of the Wind Creek Casino Resort Bethlehem premises; and (f) the opening of any internet gaming facility in Pennsylvania (in each case with respect to items (c)-(f), by an entity that is not the Ground Lessee or an affiliate of the Ground Lessee) (a “Competitive Gaming Period”), base rent will be adjusted to 90% of the then-applicable Base Rent; provided that Base Rent will only be adjusted one time during the term of the lease as a result of a Competitive Gaming Period.
In no event will the Base Rent decrease below $8,500,000 (the “Base Rent Floor”). Additionally, in no event will the Base Rent be reduced if such reduction is solely attributable to casualty, condemnation and/or a temporary closure in furtherance of a capital improvement. See “Description of the Mortgage Pool—Tenant Issues-- Rights to Terminate Lease or Abate or Reduce Rent Triggered by Failure to Meet Business Objectives or Actions of Other Tenants” in the Preliminary Prospectus.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-228597) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Deutsche Bank Securities Inc., Bancroft Capital, LLC, Drexel Hamilton, LLC or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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