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JPMCC Commercial Mortgage Securities Trust 2017-JP5

Filed: 26 Feb 17, 7:00pm

  FREE WRITING PROSPECTUS
  FILED PURSUANT TO RULE 433
  REGISTRATION FILE NO.: 333-206361-08
   

 

 

February [24], 2017JPMCC 2017-JP5

 

Free Writing Prospectus 

Structural and Collateral Term Sheet 

 

JPMCC 2017-JP5

 

 

 
 
 
 
 
 
 

This material is for your information, and none of J.P. Morgan Securities LLC (“JPMS”), Drexel Hamilton, LLC and Academy Securities, Inc. (each individually, an “Underwriter”, and together, the ‘‘Underwriters’’) are soliciting any action based upon it. This material is not to be construed as an offer to sell or the solicitation of any offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal.

 

The depositor has filed a registration statement (including a prospectus) with the SEC (SEC File No. 333-206361) for the offering to which this free writing prospectus 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 Web site at www.sec.gov. Alternatively, the depositor, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling (866) 669-7629 or by emailing the ABS Syndicate Desk atabs_synd@jpmorgan.com.

 

Neither this document nor anything contained in this document shall form the basis for any contract or commitment whatsoever. The information contained in this document is preliminary as of the date of this document, supersedes any previous such information delivered to you and will be superseded by any such information subsequently delivered prior to the time of sale. These materials are subject to change, completion or amendment from time to time.

 

This information is based upon management forecasts and reflects prevailing conditions and management's views as of this date, all of which are subject to change.

 

J.P. Morgan is the marketing name for the investment banking businesses of JPMorgan Chase & Co. and its subsidiaries worldwide. Securities, syndicated loan arranging, financial advisory and other investment banking activities are performed by JPMS and its securities affiliates, and lending, derivatives and other commercial banking activities are performed by JPMorgan Chase Bank, National Association and its banking affiliates. JPMS is a member of SIPC and the NYSE.

 

THE UNDERWRITERS MAY FROM TIME TO TIME PERFORM INVESTMENT BANKING SERVICES FOR, OR SOLICIT INVESTMENT BANKING BUSINESS FROM, ANY COMPANY NAMED IN THESE MATERIALS. THE UNDERWRITERS AND/OR THEIR AFFILIATES OR RESPECTIVE EMPLOYEES MAY FROM TIME TO TIME HAVE A LONG OR SHORT POSITION IN ANY CERTIFICATE OR CONTRACT DISCUSSED IN THESE MATERIALS.

 

   

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

 

February [24], 2017JPMCC 2017-JP5

 

THE REPUBLIC OF KOREA

 

THIS PROSPECTUS IS NOT, AND UNDER NO CIRCUMSTANCES IS THIS PROSPECTUS TO BE CONSTRUED AS, A PUBLIC OFFERING OF SECURITIES IN KOREA. NEITHER THE ISSUER NOR ANY OF ITS AGENTS MAKE ANY REPRESENTATION WITH RESPECT TO THE ELIGIBILITY OF ANY RECIPIENTS OF THIS PROSPECTUS TO ACQUIRE THE OFFERED CERTIFICATES UNDER THE LAWS OF KOREA, INCLUDING, BUT WITHOUT LIMITATION, THE FOREIGN EXCHANGE TRANSACTION LAW AND REGULATIONS THEREUNDER (THE “FETL”). THE OFFERED CERTIFICATES HAVE NOT BEEN REGISTERED WITH THE FINANCIAL SERVICES COMMISSION OF KOREA FOR PUBLIC OFFERING IN KOREA, AND NONE OF THE OFFERED CERTIFICATES MAY BE OFFERED, SOLD OR DELIVERED, DIRECTLY OR INDIRECTLY, OR OFFERED OR SOLD TO ANY PERSON FOR RE-OFFERING OR RESALE, DIRECTLY OR INDIRECTLY IN KOREA OR TO ANY RESIDENT OF KOREA EXCEPT PURSUANT TO THE FINANCIAL INVESTMENT SERVICES AND CAPITAL MARKETS ACT AND THE DECREES AND REGULATIONS THEREUNDER (THE “FSCMA”), THE FETL AND ANY OTHER APPLICABLE LAWS, REGULATIONS AND MINISTERIAL GUIDELINES IN KOREA. WITHOUT PREJUDICE TO THE FOREGOING, THE NUMBER OF OFFERED CERTIFICATES OFFERED IN KOREA OR TO A RESIDENT OF KOREA SHALL BE LESS THAN FIFTY AND FOR A PERIOD OF ONE YEAR FROM THE ISSUE DATE OF THE OFFERED CERTIFICATES, NONE OF THE OFFERED CERTIFICATES MAY BE DIVIDED RESULTING IN AN INCREASED NUMBER OF OFFERED CERTIFICATES. FURTHERMORE, THE OFFERED CERTIFICATES MAY NOT BE RESOLD TO KOREAN RESIDENTS UNLESS THE PURCHASER OF THE OFFERED CERTIFICATES COMPLIES WITH ALL APPLICABLE REGULATORY REQUIREMENTS (INCLUDING, BUT NOT LIMITED TO, GOVERNMENT REPORTING APPROVAL REQUIREMENTS UNDER THE FETL AND ITS SUBORDINATE DECREES AND REGULATIONS) IN CONNECTION WITH THE PURCHASE OF THE OFFERED CERTIFICATES.

 

JAPAN

 

THE OFFERED CERTIFICATES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE FINANCIAL INSTRUMENTS AND EXCHANGE LAW OF JAPAN, AS AMENDED (THE “FIEL”), AND DISCLOSURE UNDER THE FIEL HAS NOT BEEN AND WILL NOT BE MADE WITH RESPECT TO THE OFFERED CERTIFICATES. ACCORDINGLY, EACH UNDERWRITER HAS REPRESENTED AND AGREED THAT IT HAS NOT, DIRECTLY OR INDIRECTLY, OFFERED OR SOLD AND WILL NOT, DIRECTLY OR INDIRECTLY, OFFER OR SELL ANY OFFERED CERTIFICATES IN JAPAN OR TO, OR FOR THE BENEFIT OF, ANY RESIDENT OF JAPAN (WHICH TERM AS USED IN THIS PROSPECTUS MEANS ANY PERSON RESIDENT IN JAPAN, INCLUDING ANY CORPORATION OR OTHER ENTITY ORGANIZED UNDER THE LAWS OF JAPAN) OR TO OTHERS FOR REOFFERING OR RE-SALE, DIRECTLY OR INDIRECTLY, IN JAPAN OR TO, OR FOR THE BENEFIT OF, ANY RESIDENT OF JAPAN EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF, AND OTHERWISE IN COMPLIANCE WITH, THE FIEL AND OTHER RELEVANT LAWS, REGULATIONS AND MINISTERIAL GUIDELINES OF JAPAN. AS PART OF THIS OFFERING OF THE OFFERED CERTIFICATES, THE UNDERWRITERS MAY OFFER THE OFFERED CERTIFICATES IN JAPAN TO UP TO 49 OFFEREES IN ACCORDANCE WITH THE ABOVE PROVISIONS. 

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Collateral Characteristics

 

Loan Pool 
 Initial Pool Balance (“IPB”):$1,092,982,047
 Number of Mortgage Loans:43
 Number of Mortgaged Properties:59
 Average Cut-off Date Balance per Mortgage Loan:$25,418,187
 Weighted Average Current Mortgage Rate:4.67097%
 10 Largest Mortgage Loans as % of IPB:56.6%
 Weighted Average Remaining Term to Maturity:112 months
 Weighted Average Seasoning:2 months
   
Credit Statistics 
 Weighted Average UW NCF DSCR(1)(2):1.97x
 Weighted Average UW NOI Debt Yield(1):11.7%
 Weighted Average Cut-off Date Loan-to-Value Ratio (“LTV”)(1)(3):59.1%
 Weighted Average Maturity Date LTV(1)(2)(3):52.5%
   
Other Statistics 
 % of Mortgage Loans with Additional Debt:18.3%
 % of Mortgaged Properties with Single Tenants:13.5%
   
Amortization 
 Weighted Average Original Amortization Term(4):355 months
 Weighted Average Remaining Amortization Term(4):354 months
 % of Mortgage Loans with Amortizing Balloon:39.2%
 % of Mortgage Loans with Partial Interest-Only followed by Amortizing Balloon:32.0%
 % of Mortgage Loans with Interest-Only:28.2%
 % of Mortgage Loans with Amortizing, Interest-Only followed by Balloon:0.6%
   
Cash Management(5) 
 % of Mortgage Loans with In-Place, CMA Lockboxes:54.7%
 % of Mortgage Loans with In-Place, Hard Lockboxes:20.7%
 % of Mortgage Loans with Springing Lockboxes:23.2%
 % of Mortgage Loans with No Lockboxes:1.4%
   
Reserves 
 % of Mortgage Loans Requiring Monthly Tax Reserves:77.3%
 % of Mortgage Loans Requiring Monthly Insurance Reserves:21.7%
 % of Mortgage Loans Requiring Monthly CapEx Reserves(6):59.0%
 % of Mortgage Loans Requiring Monthly TI/LC Reserves(7):45.1%
   
(1)In the case of Loan Nos. 1, 2, 3, 4, 5 and 8, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations include the related Pari Passu Companion Loan(s). In the case of Loan Nos. 1, 2 and 10, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations exclude the related Subordinate Companion Loan(s).

(2)In the case of Loan No. 2, the UW NCF DSCR and Maturity Date LTV are calculated using the average of principal and interest payments over the first 12 months following the expiration of the interest-only period based on the assumed principal payment schedule provided on Annex G to the Preliminary Prospectus. Additionally, in the case of Loan No. 10, the UW NCF DSCR and Maturity Date LTV are calculated in accordance with the amortization schedule set forth in Annex [  ] to the Preliminary Prospectus.

(3)In the case of Loan Nos. 2, 12 and 21, the Cut-off Date LTV and the Maturity Date LTV are calculated by using an appraised value based on certain hypothetical assumptions. Refer to “Description of the Mortgage Pool—Assessments of Property Value and Condition” and “—Appraised Value” in the Preliminary Prospectus for additional details.

(4)Excludes seven mortgage loans that are interest-only for the entire term or until the anticipated repayment date.

(5)For a more detailed description of Cash Management, refer to “Description of the Mortgage Pool—Certain Terms of the Mortgage Loans—Mortgaged Property Accounts” in the Preliminary Prospectus.

(6)CapEx Reserves include FF&E reserves for hotel properties.

(7)Calculated only with respect to the Cut-off Date Balance of mortgage loans secured or partially secured by mixed use, retail, industrial and office properties.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Collateral Characteristics

 

Mortgage Loan Seller 

Number of
Mortgage Loans 

Number of
Mortgaged
Properties 

Aggregate
Cut-off Date
Balance 

% of 

IPB 

JPMCB(1)2222$924,280,10084.6%
SMF VI2137168,701,94715.4
Total:4359$1,092,982,047100.0%
(1)In the case of Loan No. 1, the whole loan was co-originated by JPMCB, Deutsche Bank AG, New York Branch, Goldman Sachs Mortgage Company, Barclays Bank PLC and Morgan Stanley Bank, N.A. In the case of Loan No. 4, the whole loan was co-originated by JPMCB and Société Générale.

            
Ten Largest Mortgage Loans
 
No.Loan NameMortgage
Loan Seller
No.
of
Prop.
Cut-off Date
Balance
% of
IPB
SF/Units/
Rooms/Beds
Property
Type
UW
NCF
DSCR(1)
UW NOI
Debt
Yield(1)
Cut-off
Date
LTV(1)(2)
Maturity
Date
LTV(1)(2)
1Hilton Hawaiian VillageJPMCB1$80,000,0007.3%2,860Hotel4.47x19.0%31.2%31.2%
2Moffett GatewayJPMCB1$80,000,0007.3%612,691Office1.95x11.9%46.3%39.3%
3Dallas Design DistrictJPMCB1$75,000,0006.9%728,452Industrial1.28x9.4%62.1%55.3%
4Fresno Fashion Fair MallJPMCB1$69,000,0006.3%536,106Retail2.19x8.3%57.5%57.5%
5RiverwayJPMCB1$64,763,1235.9%869,120Office1.42x10.3%72.4%59.6%
655 HawthorneJPMCB1$61,500,0005.6%136,432Office2.61x11.8%50.0%50.0%
7Bardmoor PalmsJPMCB1$55,352,6485.1%553,485Mixed Use1.39x9.4%73.8%60.3%
8Landmark SquareJPMCB1$51,000,0004.7%757,917Mixed Use2.19x12.0%56.9%56.9%
9Centre Market BuildingJPMCB1$41,842,0743.8%388,122Office2.48x18.2%47.0%34.6%
10Courtyard Marriott - King KamehamehaJPMCB1$39,945,0583.7%452Hotel3.06x18.6%30.0%25.3%
            
 Top 3 Total/Weighted Average3$235,000,00021.5%  2.59x13.5%46.2%41.6%
 Top 5 Total/Weighted Average5$368,763,12333.7%  2.31x12.0%52.9%47.8%
 Top 10 Total/Weighted Average10$618,402,90356.6%  2.31x12.6%52.9%47.5%

(1)In the case of Loan Nos. 1, 2, 3, 4, 5 and 8, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations include the related Pari Passu Companion Loan(s). In the case of Loan Nos. 1, 2 and 10, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations exclude the related Subordinate Companion Loan(s).
(2)In the case of Loan No. 2, the Cut-off Date LTV and the Maturity Date LTV are calculated by using an appraised value based on certain hypothetical assumptions. Refer to “Description of the Mortgage Pool—Assessments of Property Value and Condition” and “—Appraised Value” in the Preliminary Prospectus for additional details.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Collateral Characteristics

 

Mortgaged Properties by Type(1)
 
      

Weighted Average

Property Type Property SubtypeNumber of PropertiesCut-off Date Principal
Balance
% of
IPB
OccupancyUW
NCF
DSCR(2)(3)
UW
NOI Debt Yield(2)
Cut-off
Date
LTV(2)(4)
Maturity
Date
LTV(2)(3)(4)
OfficeCBD9$313,488,123  28.7%90.4%1.65x10.8%63.1%55.6%
 Suburban2103,342,074  9.5 95.2%2.56x14.4%48.8%43.8%
 Subtotal:11$416,830,197  38.1%91.6%1.87x11.7%59.5%52.7%
          
RetailAnchored6$121,813,314  11.1%94.3%1.35x9.3%68.4%58.0%
 Super Regional Mall169,000,000  6.3  89.3%2.19x8.3%57.5%57.5%
 Unanchored27,731,809  0.7  100.0%1.32x9.9%71.1%59.5%
 Shadow Anchored16,581,000  0.6  93.9%1.51x10.5%74.9%66.1%
 Freestanding26,086,930  0.6  100.0%1.54x9.9%56.2%49.3%
 Subtotal:12$211,213,053  19.3%93.0%1.63x9.1%64.8%57.9%
          
HotelFull Service5$183,287,842  16.8%82.9%3.20x16.1%42.1%38.3%
 Limited Service212,505,845  1.1   71.9%1.87x13.2%65.3%52.1%
 Extended Stay111,882,296  1.1   76.7%1.70x10.9%66.7%54.8%
 Subtotal:8$207,675,983  19.0%81.9%3.03x15.7%44.9%40.1%
          
Mixed UseOffice/Retail3$61,442,484  5.6%87.1%2.05x11.6%58.9%57.0%
 Office/Industrial155,352,648  5.1   100.0%1.39x9.4%73.8%60.3%
 Subtotal:4$116,795,132  10.7%93.2%1.74x10.6%66.0%58.6%
          
IndustrialFlex3$85,950,000  7.9%98.1%1.36x9.8%62.5%56.1%
 Warehouse114,215,053  1.3   90.7%1.39x11.5%72.3%60.1%
 Subtotal:4$100,165,053  9.2%97.1%1.36x10.0%63.9%56.7%
          
MultifamilyGarden18$31,064,623  2.8%95.6%1.52x11.0%68.4%61.4%
 Mid-Rise16,438,005  0.6   95.5%1.70x14.0%55.1%42.0%
 Subtotal:19$37,502,628  3.4%95.6%1.55x11.5%66.1%58.1%
          
Manufactured HousingManufactured Housing1$2,800,000  0.3%77.4%1.48x10.1%71.4%60.7%
          
 Total / Weighted59$1,092,982,047  100.0%90.8%1.97x11.7%59.1%52.5%
(1)Because this table presents information relating to the mortgaged properties and not mortgage loans, the information for mortgage loans secured by more than one mortgaged property is based on allocated loan amounts.

(2)In the case of Loan Nos. 1, 2, 3, 4, 5 and 8, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations include the related Pari Passu Companion Loan(s). In the case of Loan Nos. 1, 2 and 10, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations exclude the related Subordinate Companion Loan(s).

(3)In the case of Loan No. 2, the UW NCF DSCR and Maturity Date LTV are calculated using the average of principal and interest payments over the first 12 months following the expiration of the interest-only period based on the assumed principal payment schedule provided on Annex G to the Preliminary Prospectus. Additionally, in the case of Loan No. 10, the UW NCF DSCR and Maturity Date LTV are calculated in accordance with the amortization schedule set forth in Annex [ ] to the Preliminary Prospectus.

(4)In the case of Loan Nos. 2, 12 and 21, the Cut-off Date LTV and the Maturity Date LTV are calculated by using an appraised value based on certain hypothetical assumptions. Refer to “Description of the Mortgage Pool—Assessments of Property Value and Condition” and “—Appraised Value” in the Preliminary Prospectus for additional details.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Collateral Characteristics

 

(MAP)

 

Mortgaged Properties by Location(1)

 

    

Weighted Average 

State 

Number of
Properties 

Cut-off Date
Principal
Balance 

% of
IPB 

Occupancy 

UW
NCF DSCR(2)(3) 

UW
NOI Debt
Yield(2) 

Cut-off Date
LTV(2)(4) 

Maturity Date
LTV(2)(3)(4) 

California4$222,350,00020.3%   96.4%2.18x10.6%51.8%48.6%
Texas9180,293,50216.5   89.3%1.40x9.9%66.0%58.4%
Hawaii2119,945,05811.0   91.4%4.00x18.9%30.8%29.2%
Florida494,306,2218.6   95.5%1.50x9.9%67.7%56.2%
Georgia476,332,1657.0   82.2%1.45x10.6%67.6%61.2%
Illinois1773,763,1236.7   95.1%1.47x10.6%70.5%58.8%
Connecticut151,000,0004.7   84.9%2.19x12.0%56.9%56.9%
New Jersey141,842,0743.8   88.1%2.48x18.2%47.0%34.6%
Virginia138,000,0003.5   85.6%2.18x10.4%62.1%62.1%
Massachusetts133,424,5893.1   98.1%1.21x8.6%71.0%59.9%
Maryland133,250,0003.0   79.0%1.45x10.1%73.7%64.9%
Ohio328,102,5002.6   93.9%1.47x11.6%67.6%55.4%
Michigan121,100,0001.9   71.7%1.50x12.0%63.9%55.6%
Nevada119,750,0001.8   100.0%1.33x9.3%64.8%56.1%
North Carolina116,475,6541.5   69.2%1.89x12.2%65.1%53.6%
Alabama18,850,0000.8   94.5%1.34x9.8%74.5%65.1%
Oklahoma16,581,0000.6   93.9%1.51x10.5%74.9%66.1%
Pennsylvania26,385,1570.6   97.8%1.33x10.0%66.4%55.7%
Wisconsin16,335,1520.6   100.0%1.28x9.3%73.1%64.2%
South Carolina16,170,8520.6   79.2%1.91x14.1%68.6%52.4%
Total / Weighted Average:59$1,092,982,047100.0%90.8%1.97x11.7%59.1%52.5%

(1)Because this table presents information relating to the mortgaged properties and not mortgage loans, the information for mortgage loans secured by more than one mortgaged property is based on allocated loan amounts.

(2)In the case of Loan Nos. 1, 2, 3, 4, 5 and 8, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations include the related Pari Passu Companion Loan(s). In the case of Loan Nos. 1, 2 and 10, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations exclude the related Subordinate Companion Loan(s).

(3)In the case of Loan No. 2, the UW NCF DSCR and Maturity Date LTV are calculated using the average of principal and interest payments over the first 12 months following the expiration of the interest-only period based on the assumed principal payment schedule provided on Annex G to the Preliminary Prospectus. Additionally, in the case of Loan No. 10, the UW NCF DSCR and Maturity Date LTV are calculated in accordance with the amortization schedule set forth in Annex [ ] to the Preliminary Prospectus.

(4)In the case of Loan Nos. 2, 12 and 21, the Cut-off Date LTV and the Maturity Date LTV are calculated by using an appraised value based on certain hypothetical assumptions. Refer to “Description of the Mortgage Pool—Assessments of Property Value and Condition” and “—Appraised Value” in the Preliminary Prospectus for additional details.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Collateral Characteristics

 

Cut-off Date Principal Balance

 

    

Weighted Average

Range of Cut-off Date
Principal Balances
Number of LoansCut-off Date
Principal
Balance
% of
IPB
Mortgage RateRemaining Loan TermUW
NCF
DSCR(1)(2)
UW
NOI
DY(1)
Cut-off
Date
LTV(2)(3)
Maturity
Date
LTV(1)(2)(3)
$2,786,930 -$9,999,99917$99,526,2929.1%5.32565%1181.58x11.3%66.7%57.1%
$10,000,000 -$19,999,9998124,002,79611.35.04839%1101.53x10.7%67.3%57.5%
$20,000,000 -$24,999,999244,600,0004.14.98130%1191.39x10.4%69.6%60.2%
$25,000,000 -$49,999,9998288,237,18826.44.83256%981.90x12.3%58.7%51.8%
$50,000,000 -$80,000,0008536,615,77149.14.34975%1182.24x11.7%55.1%50.2%
Total / Weighted Average:43$1,092,982,047100.0%4.67097%1121.97x11.7%59.1%52.5%

 

Mortgage Interest Rates

 

    

Weighted Average

Range of
Mortgage Interest Rates
Number
of Loans
Cut-off Date
Principal
Balance
% of
IPB
Mortgage RateRemaining
Loan Term
UW
NCF
DSCR(1)(2)
UW
NOI
DY(1)
Cut-off
Date LTV(2)(3)
Maturity Date LTV(1)(2)(3)
3.31940% -3.99999%2$149,000,00013.6%3.44332%1192.06x10.2%51.5%47.7%
4.00000% -4.49999%4221,342,07420.34.23041%1113.18x15.4%44.7%42.4%
4.50000% -4.99999%14406,872,93337.24.84369%1121.70x11.2%64.6%56.1%
5.00000% -5.75200%23315,767,04028.95.33653%1091.44x10.3%65.7%57.2%
Total / Weighted Average:43$1,092,982,047100.0%4.67097%1121.97x11.7%59.1%52.5%

 

Original Term to Maturity in Months

 

    

Weighted Average

Original Term to
Maturity in Months
Number of LoansCut-off Date Principal Balance% of IPBMortgage RateRemaining Loan TermUW
NCF DSCR(1)(2)
UW
NOI
DY(1)
Cut-off
Date LTV(2)(3)
Maturity Date LTV(1)(2)(3)
603$88,006,4518.1%5.17654%581.41x10.0%68.0%64.0%
84138,000,0003.54.20000%812.18x10.4%62.1%62.1%
12038886,975,59681.24.76289%1182.02x11.9%59.2%52.1%
126180,000,0007.33.31940%1211.95x11.9%46.3%39.3%
Total / Weighted Average:43$1,092,982,047100.0%4.67097%1121.97x11.7%59.1%52.5%
          
Remaining Term to Maturity in Months

 

 Weighted Average
Range of Remaining Term to
Maturity in Months
Number
of Loans
Cut-off Date Principal
Balance
% of
IPB
Mortgage RateRemaining Loan TermUW
NCF
DSCR(1)(2)
UW
NOI
DY(1)
Cut-off
Date
LTV(2)(3)
Maturity
Date
LTV(1)(2)(3)
58 -1144$126,006,45111.5%4.88204%651.64x10.1%66.2%63.4%
115 -12139966,975,59688.54.64347%1182.02x11.9%58.2%51.1%
Total / Weighted Average:43$1,092,982,047100.0%4.67097%1121.97x11.7%59.1%52.5%
                
(1)In the case of Loan Nos. 1, 2, 3, 4, 5 and 8, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations include the related Pari Passu Companion Loan(s). In the case of Loan Nos. 1, 2 and 10, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations exclude the related Subordinate Companion Loan(s).
(2)In the case of Loan No. 2, the UW NCF DSCR and Maturity Date LTV are calculated using the average of principal and interest payments over the first 12 months following the expiration of the interest-only period based on the assumed principal payment schedule provided on Annex G to the Preliminary Prospectus. Additionally, in the case of Loan No. 10, the UW NCF DSCR and Maturity Date LTV are calculated in accordance with the amortization schedule set forth in Annex [ ] to the Preliminary Prospectus.
(3)In the case of Loan Nos. 2, 12 and 21, the Cut-off Date LTV and the Maturity Date LTV are calculated by using an appraised value based on certain hypothetical assumptions. Refer to “Description of the Mortgage Pool—Assessments of Property Value and Condition” and “—Appraised Value” in the Preliminary Prospectus for additional details.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Collateral Characteristics

 

Original Amortization Term in Months

 

    Weighted Average
Original
Amortization
Term in Months
Number of LoansCut-off Date Principal
Balance
% of
IPB
Mortgage RateRemaining Loan TermUW
NCF
DSCR(1)(2)
UW
NOI
DY(1)
Cut-off
Date
LTV(2)(3)
Maturity
Date
LTV(1)(2)(3)
Interest Only7$308,500,00028.2%4.20527%1122.86x12.7%49.6%49.6%
300563,117,9275.84.80092%1182.21x16.5%52.7%39.3%
36031721,364,11966.04.85877%1111.58x10.8%63.7%54.9%
Total / Weighted Average:43$1,092,982,047100.0%4.67097%1121.97x11.7%59.1%52.5%

 

Remaining Amortization Term in Months

 

    Weighted Average
Range of Remaining
Amortization Term in Months
Number
of Loans
Cut-off Date Principal
Balance
% of
IPB
Mortgage RateRemaining Loan TermUW
NCF
DSCR(1)(2)
UW
NOI
DY(1)
Cut-off
Date
LTV(2)(3)
Maturity
Date
LTV(1)(2)(3)
Interest Only7$308,500,00028.2%4.20527%1122.86x12.7%49.6%49.6%
297-356563,117,9275.84.80092%1182.21x16.5%52.7%39.3%
357-36031721,364,11966.04.85877%1111.58x10.8%63.7%54.9%
Total / Weighted Average:43$1,092,982,047100.0%4.67097%1121.97x11.7%59.1%52.5%

 

Amortization Types

 

    

Weighted Average

Amortization TypesNumber
of Loans
Cut-off Date Principal
Balance
% of
IPB
Mortgage RateRemaining Loan TermUW
NCF
DSCR(1)(2)
UW
NOI
DY(1)
Cut-off
Date
LTV(2)(3)
Maturity
Date
LTV(1)(2)(3)
Balloon21$428,540,89539.2%5.01381%1111.72x11.9%62.9%52.1%
IO-Balloon14349,606,00032.04.64629%1121.51x10.5%62.6%55.4%
Interest Only7308,500,00028.24.20527%1122.86x12.7%49.6%49.6%
Amortizing-IO-Balloon16,335,1520.65.52000%1181.28x9.3%73.1%64.2%
Total / Weighted Average:43$1,092,982,047100.0%4.67097%1121.97x11.7%59.1%52.5%

 

Underwritten Net Cash Flow Debt Service Coverage Ratios(1)(2)

 

    Weighted Average
Range of Underwritten Net
Cash Flow Debt Service
Coverage Ratios
Number
of Loans
Cut-off Date Principal
Balance
% of
IPB
Mortgage RateRemaining Loan TermUW
NCF
DSCR(1)(2)
UW
NOI
DY(1)
Cut-off
Date
LTV(2)(3)
Maturity
Date
LTV(1)(2)(3)
1.21x -1.24x1$33,424,5893.1%5.75200%1181.21x8.6%71.0%59.9%
1.25x -1.74x28539,643,59149.45.03256%1081.41x10.1%68.3%59.0%
1.75x -2.24x10296,626,73527.14.14102%1142.06x11.0%56.0%52.3%
2.25x -2.74x2103,342,0749.54.26552%1182.56x14.4%48.8%43.8%
2.75x -4.47x2119,945,05811.04.40281%1174.00x18.9%30.8%29.2%
Total / Weighted Average:43$1,092,982,047100.0%4.67097%1121.97x11.7%59.1%52.5%
(1)In the case of Loan Nos. 1, 2, 3, 4, 5 and 8, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations include the related Pari Passu Companion Loan(s). In the case of Loan Nos. 1, 2 and 10, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations exclude the related Subordinate Companion Loan(s).
(2)In the case of Loan No. 2, the UW NCF DSCR and Maturity Date LTV are calculated using the average of principal and interest payments over the first 12 months following the expiration of the interest-only period based on the assumed principal payment schedule provided on Annex G to the Preliminary Prospectus. Additionally, in the case of Loan No. 10, the UW NCF DSCR and Maturity Date LTV are calculated in accordance with the amortization schedule set forth in Annex [ ] to the Preliminary Prospectus.
(3)In the case of Loan Nos. 2, 12 and 21, the Cut-off Date LTV and the Maturity Date LTV are calculated by using an appraised value based on certain hypothetical assumptions. Refer to “Description of the Mortgage Pool—Assessments of Property Value and Condition” and “—Appraised Value” in the Preliminary Prospectus for additional details.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Collateral Characteristics

 

LTV Ratios as of the Cut-off Date(1)(3)

 

    Weighted Average
Range of
Cut-off Date LTVs
Number of LoansCut-off Date
Principal
Balance
% of
IPB
Mortgage
Rate
Remaining
Loan Term
UW
NCF
DSCR(1)(2)
UW
NOI
DY(1)
Cut-off
Date
LTV(2)(3)
Maturity
Date
LTV(1)(2)(3)
30.0% -49.9%5$245,087,13222.4%4.07363%1183.04x16.4%38.9%33.7%
50.0% -59.9%6226,891,57820.84.29886%1182.19x10.7%55.6%53.5%
60.0% -64.9%10227,389,05320.85.02665%1041.57x10.2%62.8%56.5%
65.0% -69.9%8112,843,46810.35.02968%971.52x10.9%68.0%59.5%
70.0% -74.9%14280,770,81725.75.06088%1141.38x9.8%73.1%62.0%
Total / Weighted Average:43$1,092,982,047100.0%4.67097%1121.97x11.7%59.1%52.5%

 

LTV Ratios as of the Maturity Date(1)(2)(3)

 

    

Weighted Average

Range of
Maturity Date/ARD LTVs
Number of LoansCut-off Date
Principal
Balance
% of
IPB
Mortgage
Rate
Remaining
Loan Term
UW
NCF
DSCR(1)(2)
UW
NOI
DY(1)
Cut-off
Date
LTV(2)(3)
Maturity
Date
LTV(1)(2)(3)
25.3% -44.9%5$248,225,13722.7%4.09476%1193.02x16.4%39.2%33.7%
45.0% -49.9%336,040,5023.34.74159%1191.56x10.2%59.3%48.8%
50.0% -54.9%9144,039,09813.24.67208%1182.12x11.8%58.2%51.7%
55.0% -59.9%11398,494,20636.54.89623%1131.61x9.9%63.8%57.5%
60.0% -69.6%15266,183,10524.44.86093%1001.51x10.0%71.1%63.5%
Total / Weighted Average:43$1,092,982,047100.0%4.67097%1121.97x11.7%59.1%52.5%

 

Prepayment Protection

 

    

Weighted Average

Prepayment ProtectionNumber of LoansCut-off Date Principal Balance% of IPBMortgage RateRemaining Loan TermUW
NCF
DSCR(1)(2)
UW
NOI
DY(1)
Cut-off
Date LTV(2)(3)
Maturity Date LTV(1)(2)(3)
Defeasance(5)29$584,071,76853.4%4.69163%1131.77x11.0%61.6%54.6%
Yield Maintenance10323,684,62529.64.93902%1081.72x11.9%61.2%52.6%
Defeasance or Yield Maintenance4185,225,65416.94.13740%1173.06x13.4%47.6%45.6%
Total / Weighted Average:43$1,092,982,047100.0%4.67097%1121.97x11.7%59.1%52.5%

 

Loan Purpose

 

    

Weighted Average

Loan PurposeNumber of LoansCut-off Date Principal Balance% of IPBMortgage RateRemaining Loan TermUW
NCF
DSCR(1)(2)
UW
NOI
DY(1)
Cut-off
Date LTV(2)(3)
Maturity Date LTV(1)(2)(3)
Refinance25$688,580,03963.0%4.75054%1142.05x12.4%56.3%49.0%
Acquisition16326,402,00829.94.71603%1061.77x10.8%65.3%58.8%
Recapitalization278,000,0007.13.78004%1162.15x8.8%57.5%57.0%
Total / Weighted Average:43$1,092,982,047100.0%4.67097%1121.97x11.7%59.1%52.5%
(1)In the case of Loan Nos. 1, 2, 3, 4, 5 and 8, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations include the related Pari Passu Companion Loan(s). In the case of Loan Nos. 1, 2 and 10, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations exclude the related Subordinate Companion Loan(s).
(2)In the case of Loan No. 2, the UW NCF DSCR and Maturity Date LTV are calculated using the average of principal and interest payments over the first 12 months following the expiration of the interest-only period based on the assumed principal payment schedule provided on Annex G to the Preliminary Prospectus. Additionally, in the case of Loan No. 10, the UW NCF DSCR and Maturity Date LTV are calculated in accordance with the amortization schedule set forth in Annex [ ] to the Preliminary Prospectus.
(3)In the case of Loan Nos. 2, 12 and 21, the Cut-off Date LTV and the Maturity Date LTV are calculated by using an appraised value based on certain hypothetical assumptions. Refer to “Description of the Mortgage Pool—Assessments of Property Value and Condition” and “—Appraised Value” in the Preliminary Prospectus for additional details.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Collateral Characteristics

 

Previous Securitization History(1)

 

No.Loan NameLocationProperty TypePrevious Securitization
1Hilton Hawaiian VillageHonolulu, HIHotelHILT 2013-HLT
3Dallas Design DistrictDallas, TXIndustrialJPMCC 2015-FL7
655 HawthorneSan Francisco, CAOfficeLBUBS 2006-C6
9Centre Market BuildingNewark, NJOfficeJPMBB 2012-CBX
10Courtyard Marriott - King KamehamehaKailua-Kona, HIHotelMSBAM 2014-C17
13Orchard Hill ParkLeominster, MARetailCOMM 2006-C8
15Marriott GalleriaHouston, TXHotelBCMS 2007-BBA8
16Royal Oaks PlazaHoustonRetailJPMCC 2007-CB19
17Las PalmasSan Antonio, TXRetailJPMCC 2007-CB19
18Liberty CenterTroy, MIOfficeMSC 2007-IQ14
19Ocotillo PlazaLas Vegas, NVRetailGECMC 2007-C1
23Partridge Inn AugustaAugusta, GAHotelGCCFC 2007-GG9
25TownePlace Suites Dallas Las ColinasIrving, TXHotelCDGJ 2014-BXCH
29Montgomery Triangle GatewayCincinnati, OHMixed UseMSC 2007-IQ16
30Neilson SquareEnid, OKRetailCWCI 2007-C2
32.02St. Albans CircleNewton Square, PAMixed UseJPMCC 2006-CB16
33Lake Geneva CommonsLake Geneva, WIRetailJPMCC 2007-CB20
35Holiday Inn Express OrangeburgOrangeburg, SCHotelMSC 2007-HQ11
(1)The table above represents the properties for which the previously existing debt was most recently securitized, based on information provided by the related borrower or obtained through searches of a third-party database.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

(JP MORGAN LOGO) 10 of 125  

 

 

 

Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Hilton Hawaiian Village

 

(GRAPHIC) 

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

(JP MORGAN LOGO) 11 of 125  

 

 

 

Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Hilton Hawaiian Village

 

(GRAPHIC) 

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

(JP MORGAN LOGO) 12 of 125  

 

 

 

Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Hilton Hawaiian Village

 

(GRAPHIC) 

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Hilton Hawaiian Village

 

Mortgage Loan Information Property Information
Mortgage Loan Seller:JPMCB Single Asset / Portfolio:Single Asset
Credit Assessment  Title:Fee / Leasehold
(Moody’s/Fitch/KBRA)(2):Aa3 / BBB- / BBB+ Property Type - Subtype:Hotel – Full Service
Original Principal Balance(3):$80,000,000 Net Rentable Area (Rooms)(6):2,860
Cut-off Date Principal Balance(3):$80,000,000 Location:Honolulu, HI
% of Pool by IPB:7.3% Year Built / Renovated:1961 / 2016
Loan Purpose(4):Refinance Occupancy / ADR / RevPAR:94.6% / $250.09 / $236.65
Borrower:Hilton Hawaiian Village LLC Occupancy / ADR / RevPAR Date:9/30/2016
Sponsor:Park Intermediate Holdings LLC Number of Tenants:N/A
Interest Rate:4.19950% 2013 NOI:$110,964,835
Note Date:10/24/2016 2014 NOI:$119,860,819
Maturity Date:11/1/2026 2015 NOI:$128,737,723
Interest-only Period:120 months Most Recent NOI (as of 9/2016)$131,893,120
Original Term:120 months UW Occupancy / ADR / RevPAR:94.6% / $250.09 / $236.65
Original Amortization:None UW Revenues:$374,437,742
Amortization Type:Interest Only UW Expenses:$241,850,768
Call Protection(5):L(28),DeforGrtr1%orYM(85),O(7) UW NOI:$132,586,975
Lockbox:CMA UW NCF:$132,586,975
Additional Debt:Yes Appraised Value / Per Room:$2,230,000,000 / $779,720
Additional Debt Balance:$616,600,000 / $578,400,000 Appraisal Date:8/30/2016
Additional Debt Type:Pari Passu / Subordinate Debt   
     

 

Escrows and Reserves(7) Financial Information(3)
 InitialMonthlyInitial Cap  Pari Passu DebtWhole Loan
Taxes:$0SpringingN/A Cut-off Date Loan / Room:$243,566$445,804
Insurance:$0SpringingN/A Maturity Date Loan / Room:$243,566$445,804
FF&E:$0SpringingN/A Cut-off Date LTV:31.2%57.2%
TI/LC:$0$0N/A Maturity Date LTV:31.2%57.2%
Other:$0$0N/A UW NCF DSCR:4.47x2.44x
     UW NOI Debt Yield:19.0%10.4%
       

 

Sources and Uses
SourcesProceeds% of Total UsesProceeds% of Total
Mortgage Loan(3)$1,275,000,000100.0% Payoff Existing Debt$1,255,912,70098.5%
    Excess Loan Proceeds(4)10,621,7600.8  
    Closing Costs8,465,5400.7  
Total Sources$1,275,000,000100.0% Total Uses$1,275,000,000100.0%
(1)The Hilton Hawaiian Village Whole Loan was co-originated by JPMCB, Deutsche Bank AG, New York Branch, Goldman Sachs Mortgage Company, Barclays Bank PLC and Morgan Stanley Bank, N.A.
(2)Moody’s, Fitch and KBRA have confirmed that the Hilton Hawaiian Village Mortgage Loan has, in the context of its inclusion in the mortgage pool, credit characteristics consistent with an investment grade obligation.
(3)The Hilton Hawaiian Village Mortgage Loan is part of a whole loan comprised of (i) the mortgage loan (comprised of one senior note with an outstanding principal balance as of the Cut-off Date of $80.0 million), (ii) two companion loans, each of which ispari passu with respect to the Hilton Hawaiian Village Mortgage Loan (such companion loans being comprised of 15pari passu notes) with an aggregate outstanding principal balance as of the Cut-off Date of $616.6 million and (iii) a subordinate companion loan (comprised of fivepari passu notes) with an aggregate outstanding principal balance as of the Cut-off Date of $578.4 million. The Pari Passu Debt Financial Information presented in the chart above reflects the $696.6 million aggregate Cut-off Date balance of the Hilton Hawaiian Village Mortgage Loan and the Hilton Hawaiian Village Pari Passu Companion Loan, excluding the Hilton Hawaiian Village Subordinate Companion Loan. The Whole Loan Financial Information presented in the chart above reflects the Cut-off Date balance of the $1.275 billion Hilton Hawaiian Village Whole Loan, as defined in“The Loan” below.
(4)Excess Loan Proceeds were distributed by the borrower to its member and thereafter utilized by affiliates of Park Hotels & Resorts to prepay other outstanding CMBS loans.
(5)The lockout period will be at least 28 payment dates beginning with and including the first payment date of December 1, 2016. Defeasance of the full $1.275 billion Hilton Hawaiian Village Whole Loan is permitted after the date that is the earlier of (i) May 1, 2019 and (ii) two years from the closing date of the securitization that includes the last note to be securitized (the “REMIC Prohibition Period”). If the borrower has not previously elected to defease the Hilton Hawaiian Village Whole Loan, the borrower is also permitted to prepay the Hilton Hawaiian Village Whole Loan in whole, but not in part, after the expiration of the REMIC Prohibition Period with the payment of a yield maintenance premium.
(6)The Hilton Hawaiian Village property also includes approximately 130,489 square feet of commercial/retail space leased to more than 100 tenants. Additionally, the property includes the 25-story Kalia Tower which is subject to a condominium regime. Kalia Tower contains six floors totaling 72 timeshare units that are not part of the collateral for the loan.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Hilton Hawaiian Village

 

(7)For a full description of Escrows and Reserves, please refer to“Escrows and Reserves”below.

 

The Loan.The Hilton Hawaiian Village loan is secured by a first mortgage lien on the borrower’s fee and leasehold interests in a 2,860-room luxury full-service destination resort located in Honolulu, Hawaii. The whole loan was co-originated by JPMCB, Deutsche Bank AG, New York Branch, Goldman Sachs Mortgage Company, Barclays Bank PLC and Morgan Stanley Bank, N.A. and has an outstanding principal balance as of the Cut-off Date of $1.275 billion (the “Hilton Hawaiian Village Whole Loan”). The Hilton Hawaiian Village Whole Loan is comprised of (i) a senior loan, comprised of 16pari passu notes, with an aggregate outstanding principal balance of $696.6 million (one of which, Note A-2-A-2, will be contributed to the JPMCC 2017-JP5 Trust, the “Hilton Hawaiian Village Mortgage Loan” and the remaining notes, collectively, the “Hilton Hawaiian Village Pari Passu Companion Loan”) and (ii) a subordinate companion loan, comprised of fivepari passu notes, with an aggregate outstanding principal balance of $578.4 million (collectively, the “Hilton Hawaiian Village Subordinate Companion Loan”), each as described below. The Hilton Hawaiian Village Mortgage Loan and the Hilton Hawaiian Village Pari Passu Companion Loan arepari passu in right of payment with each other and are generally senior in right of payment to the Hilton Hawaiian Village Subordinate Companion Loan as and to the extent described in “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced Whole Loans—The Hilton Hawaiian Village Whole Loan” in the Preliminary Prospectus. The senior Note A-1-A was contributed to the Hilton USA Trust 2016-HHV securitization that governs the servicing and administration of the Hilton Hawaiian Village Whole Loan and is the controlling note under the related intercreditor agreement, the rights of which will be exercised by the related trustee (or, prior to the occurrence and continuance of a control termination event under the related trust and servicing agreement (the “Hilton USA Trust 2016-HHV and Servicing Agreement”), the directing certificateholder under the Hilton USA Trust 2016-HHV and Servicing Agreement). However, the JPMCC 2017-JP5 Trust will be entitled, under certain circumstances, to be consulted with respect to certain major decisions (which rights will be exercised by the Directing Certificateholder prior to a Control Termination Event). The Hilton Hawaiian Village Whole Loan has a 10-year term and will be interest-only for the term of the loan. The Hilton Hawaiian Village property was previously securitized in the Hilton USA Trust 2013-HLT trust.

 

Whole Loan Summary

 

 

 

The Borrower.The borrowing entity for the Hilton Hawaiian Village Whole Loan is Hilton Hawaiian Village LLC, a Hawaii limited liability company and special purpose entity.

 

The Loan Sponsor.The loan sponsor and nonrecourse carve-out guarantor is Park Intermediate Holdings LLC. Park Intermediate Holdings LLC is a wholly owned subsidiary of Park Hotels & Resorts Inc. (“Park Hotels & Resorts”), one of two spin-offs announced by Hilton Worldwide Holdings Inc. (“Hilton”). On February 26, 2016, Hilton announced plans to separate into three independent, publicly traded companies: Park Hotels & Resorts (NYSE: PK), Hilton Grand Vacations Inc. (NYSE: HGV) and Hilton (NYSE: HLT). The spin-offs were completed in January 2017. Park Hotels & Resorts now owns most of Hilton’s owned and leased real estate properties and, with over 35,000 rooms and 67 hotels, is the second-largest publicly traded real estate investment trust in the lodging industry. Hilton Grand Vacations Inc. owns and operates Hilton’s timeshare business, while Hilton retains its core management and franchise business and continues to trade on the NYSE as a leading global hospitality company. In connection with the proposed restructuring, at origination, the borrower signed an operating lease with an affiliate, which is also a signatory to the loan documents (other than the promissory notes) as a co-obligor. The operating lease automatically became effective upon consummation of the restructuring. The borrower also delivered a substitute management agreement. The aggregate liability of the guarantor with respect to all full recourse carve-outs in the Hilton Hawaiian Village Whole Loan documents may not exceed an amount equal to 10.0% of the principal balance of the Hilton Hawaiian Village Whole Loan outstanding at the time of the occurrence of such event, plus any and all reasonable third-party collection costs actually incurred by the lender. In addition, the guarantor is not a party to the environmental indemnity. In lieu of the guarantor signing the indemnity, the Hilton Hawaiian Village Whole Loan documents require the borrower to obtain environmental insurance. At origination, the borrower obtained an environmental insurance policy with (i) a term of 10 years, (ii) limits of $10,000,000 per occurrence and $25,000,000 in the aggregate and (iii) a $25,000 deductible.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Hilton Hawaiian Village

 

The Property. The Hilton Hawaiian Village property is a 2,860-room, full-service luxury resort located on the island of Oahu in Honolulu, Hawaii. The Hilton Hawaiian Village is one of Hawaii’s premier urban resort destinations, situated on an entire city block overlooking Waikiki Beach. The property is situated on an approximately 22-acre site, the majority of which is fee-owned. The property is comprised of 2,860 guest rooms spread across five towers: the Ali’i Tower (348 rooms), Diamond Head Tower (380 rooms), Rainbow Tower (796 rooms), Kalia Tower (315 rooms) and Tapa Tower (1,021 rooms). The towers each offer unique guest room accommodations and are situated on ocean-front property, offering views of Waikiki Beach, Diamond Head and downtown Honolulu. The property is the only self-contained destination resort in Waikiki and offers the largest guest room inventory in the state of Hawaii, as well as the most meeting space within its competitive set. The property offers a host of resort-style amenities and services, including 20 food and beverage outlets, over 150,000 square feet of flexible indoor and outdoor function space, three conference centers, five swimming pools, a saltwater lagoon, spa grottos, the Mandara Spa and Fitness Center, a chapel and a retail component comprised of over 100 retail tenants.

 

The property was initially constructed by Hilton in 1961 and has undergone several extensive renovations throughout its existence. According to the sponsor, since 2008, the loan sponsor has invested approximately $232.2 million (approximately $81,188 per room) in capital expenditures spread across all segments of the property. Most recently, the loan sponsor completed a full-scale renovation of its premier luxury guest room tower, the Ali’i Tower, in 2012, updating the guest rooms and suites, main lobby and library at an estimated cost of approximately $20.6 million. Additionally, the loan sponsor completed a comprehensive renovation of the Diamond Head Tower in 2014 at an estimated cost of approximately $17.9 million.

 

Historical Capital Expenditures(1)
 20082009201020112012201320142015YTD 2016(2)Total
Capital Expenditures(3)$22,216$16,509$8,834$56,117$42,568$28,138$32,965$15,559$9,293$232,198
Per Room$7,768$5,772$3,089$19,621$14,884$9,838$11,526$5,440$3,249$81,188
(1)Based on actual capital expenditures as provided by the loan sponsor.
(2)YTD 2016 Capital Expenditures are as of September 30, 2016.
(3)Capital Expenditures are presented in (000)’s.

 

The property offers approximately 150,000 square feet of indoor and outdoor meeting and function space, which is split between three primary locations: the second floor of the Tapa Tower, the base of the Kalia Tower and the Mid-Pacific Conference Center. The property features over 65,000 square feet of indoor meeting space spread throughout four buildings, as well as two outdoor lawns: the Lagoon Green and the Village Green. The Mid-Pacific Conference Center, a stand-alone building, underwent a full-scale refurbishment in 2013 and features 35,000 square feet of meeting/event space, including the 24,840 square foot Coral Ballroom, which is divisible into five separate breakout rooms. It is among the largest conference centers in the Hawaiian Islands and offers the largest capacity ballroom, accommodating up to 2,600 guests.

 

The property features approximately 130,489 square feet of leased retail and restaurant space, which was 78.5% occupied by over 100 tenants as of September 2016. The retail component of the property generated TTM September 2016 sales of approximately $136.1 million for reporting tenants. For the trailing 12-month period ending September 30, 2016, the retail component of the property generated approximately $20.8 million in retail revenue (retail revenue is inclusive of reimbursements for common area maintenance, taxes and marketing expenses, as provided by the loan sponsor) which, net of undistributed expenses attributable to the retail component (as estimated by the loan sponsor), accounts for approximately 13.1% of net cash flow, providing diversity to traditional hotel revenue streams. While the majority of the property’s leased space is made up of traditional retail and restaurant tenants, the hotel also leases some office space to Hilton Grand Vacations and third-party travel wholesalers, such as Kintetsu and JTB. The hotel’s Ocean Crystal Chapel and Lagoon Chapel are also leased to a third-party operator.

 

Historical Retail Component Sales(1)
 201320142015TTM(2)
Total Sales$130,613,993$141,808,186$137,316,925$136,055,744
Sales PSF$1,552$1,651$1,590$1,496
(1)Historical Sales for reporting tenants were provided by the loan sponsor.
(2)TTM is as of September 30, 2016.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Hilton Hawaiian Village

 


Collateral Tenant Summary(1)
TenantRatings(2)
Moody’s/S&P/Fitch
Net Rentable Area (SF)% of
Total NRA
Lease Expiration DateBase Rent PSF% of Total Base RentMost Recent Sales(3)Most Recent Sales PSF(3)
Mandara SpaNA / NA / NA12,5839.6%8/31/2017$53.613.9%$2,903,709$231
Hatsuhana HawaiiNA / NA / NA6,0264.6%11/30/2018$52.381.8%$2,969,958$493
FrescoNA / NA / NA5,9834.6%12/31/2018$58.382.0%$3,331,316$557
Benihana of TokyoNA / NA / NA5,3004.1%5/31/2021$127.63.9%$6,561,789$1,238
Best Bridal - Lagoon ChapelNA / NA / NA4,7553.6%10/31/2022$57.451.6%$520,020$109
Watabe Wedding(4)NA / NA / NA4,1583.2%1/14/2019$63.931.5%$167,697$40
ABC Stores - Tapa TowerNA / NA / NA3,5002.7%8/31/2022$384.27.7%$12,225,380$3,493
Louis VuittonNA / A+ / NA3,5002.7%8/18/2023$146.72.9%$7,978,397$2,280
Lamonts & Whalers General StoreNA / NA / NA2,8002.1%MTM$163.12.6%$1,856,972$663
ABC Discount StoreNA / NA / NA2,1451.6%12/31/2018$812.210.0%$14,519,183$6,769
(1)Based on the underwritten rent roll.
(2)Ratings provided are for the parent company of the entity listed in the “tenant” field whether or not the parent company guarantees the lease.
(3)Most Recent Sales and Most Recent Sales PSF for reporting tenants were provided by the loan sponsor as of September 30, 2016.
(4)Most Recent Sales and Most Recent Sales PSF for Watabe Wedding represent only partial year performance as the venue opened in 2016.

 

The Hilton Hawaiian Village property is located in Honolulu, Hawaii, in the greater Oahu lodging market and the Waikiki submarket. The island of Oahu serves as an economic center of the Hawaiian Islands. Oahu maintains its status as one of the world’s foremost tourist destinations, with cultural venues, golf courses, restaurants, retail and recreational attractions. In 2015, approximately 5.3 million tourists, or 62.4% of Hawaii’s total air tourists, visited the island of Oahu, making it the most popular destination in the Hawaiian Islands. The total number of air visitors has increased by 435,867 from 2012 to 2015, which represents a 2.9% year-over-year increase. International travel to Oahu represented 46.3% of Oahu’s 5.3 million air visitors in 2015 and was marginally unchanged from 2014. Additionally, visitor expenditures in Oahu totaled $7.4 billion in 2015, which represents 49.3% of total expenditures by air visitors in 2015. Honolulu is the strongest lodging market in Oahu and all of the eight Hawaiian Islands, a status attributable to a temperate year-round climate, popularity as one of the leading group and leisure destinations of Hawaii, superior visitor infrastructure and high barriers to new supply. Honolulu encompasses more than 24,000 guest rooms in 74 properties and consistently achieved occupancy rates in the mid 70% to 80% range, never dropping below 74%, between 2009 and 2015. During this same period, RevPAR in Honolulu increased at an average annual rate of 9.5%, ending 2015 at $190, while the average daily rate achieved a premium of $69 over 2009. The market’s RevPAR in 2009, which represented the trough during the downturn, reflects a 14.6% decline relative to 2007, less than other leading markets.

 

The appraisal identified two hotels either recently opened or currently under construction in the Waikiki submarket that are expected to have some degree of competitive interaction with the Hilton Hawaiian Village property. The 623-room Hilton Garden Inn (Ohana Waikiki West Redevelopment) opened in June 2016, while the 230-room boutique Hyatt Centric (Waikiki Trade Center Redevelopment) is expected to open in March 2017. Though offered at a competitive price-point with national brand affiliations, the appraisal notes that both options are non-beachfront locations with select-service product offerings. Additionally, the appraisal notes significant barriers to entry, including nearly no developable ocean-front land and prohibitively high costs.

 


Historical Occupancy, ADR, RevPAR(1)
 Competitive Set(2)Hilton Hawaiian Village(3)Penetration Factor(4)
YearOccupancyADRRevPAROccupancyADRRevPAROccupancyADRRevPAR
201389.0%$248.36$221.0789.9%$237.77$213.84101.0%95.7%96.7%
201487.8%$250.07$219.5090.7%$238.34$216.26103.4%95.3%98.5%
201589.0%$256.75$228.3894.4%$240.62$227.20106.2%93.7%99.5%
TTM(5)89.9%$259.08$232.92 94.6%$250.09$236.65105.3%96.5%101.6%

(1)Variances between the underwriting, the appraisal and the above table with respect to Occupancy, ADR and RevPAR at the Hilton Hawaiian Village property are attributable to variances in reporting methodologies and/or timing differences.
(2)Data provided by STR. The competitive set contains the following properties: Sheraton Waikiki, Marriott Waikiki Beach Resort & Spa, Hyatt Regency Waikiki Beach Resort & Spa, Westin Moana Surfrider, Sheraton Hotel Princess Kaiulani, Outrigger Reef Waikiki Beach Resort and Outrigger Waikiki Beach Resort.
(3)Based on operating statements provided by the borrower, with the exception of 2013 and 2014 which have been adjusted by STR for both ADR and RevPAR in order to normalize for a change in accounting methodology in 2015. Prior to 2015, borrower operating statements presented ADR and RevPAR inclusive of resort fees. For all years presented above, ADR and RevPAR are calculated exclusive of resort fees.
(4)Penetration Factor is calculated based on data provided by STR for the competitive set and borrower-provided operating statements for the property.
(5)TTM represents the trailing 12-month period ending on September 30, 2016.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Hilton Hawaiian Village

 

Competitive Hotels Profile(1)
    2015 Estimated Market Mix2015 Estimated Operating Statistics
PropertyRoomsYear OpenedMeeting Space (SF)WholesaleTransientMeeting & GroupOccupancyADRRevPAR
Hilton Hawaiian Village(2)2,8601961150,00037%44%19%94.4%$240.62$227.20
Primary Competitors         
Sheraton Waikiki1,636197148,21065%15%20%90-95%$300-325$280-290
Marriott Waikiki Beach Resort & Spa1,310197155,00020%60%20%85-90%$210-220$180-190
Hyatt Regency Waikiki Beach Resort & Spa1,230197623,13060%25%15%85-90%$250-260$220-230
Westin Moana Surfrider7911901-196923,61260%30%10%85-90%$350-375$300-325
Secondary Competitors         
Sheraton Hotel Princess Kaiulani1,000195514,00065%25%10%85-90%$150-160$130-140
Outrigger Reef Waikiki Beach Resort63519569,60055%40%5%85-90%$250-260$220-230
Outrigger Waikiki Beach Resort52419675,00050%40%10%80-85%$260-270$220-230
 Total(3)7,126        
(1)Based on the appraisal.
(2)Occupancy, ADR and RevPAR are based on operating statements provided by the borrower.
(3)Excludes the Hilton Hawaiian Village property.

 


Operating History and Underwritten Net Cash Flow
 201320142015TTM(1)UnderwrittenPer Room(2)% of Total Revenue(3)
Occupancy89.9%90.7%94.4%94.6%94.6%  
ADR(4)$247.48$259.85$240.62$250.09$250.09  
RevPAR(4)$222.57$235.77$227.20$236.65$236.65  
        
Room Revenue$232,345,007$246,124,088$237,172,233$247,711,744$247,034,700$86,37666.0%
Resort Fee(4)0022,462,63522,641,80822,752,3817,9556.1%
Food and Beverage Revenue56,844,00762,740,10070,771,36969,023,62368,996,66724,12518.4%
Retail Revenue(5)19,071,36120,048,65820,582,01820,786,06219,162,8126,7005.1%
Other Departmental Revenue16,714,51417,176,78115,802,96716,824,20116,491,1835,7664.4%
        
Total Revenue$324,974,888$346,089,627$366,791,222$376,987,438$374,437,742$130,922100.0%
        
Room Expense$55,976,889$59,766,137$62,515,991$64,556,543$64,380,098$22,51126.1%
Food and Beverage Expense45,055,10048,831,67656,658,88956,716,91456,028,34819,59081.2%
Other Departmental Expense7,418,5387,148,3347,483,4966,425,2746,371,6082,22838.6%
Departmental Expenses$108,450,526$115,746,148$126,658,376$127,698,731$126,780,054$44,32933.9%
        
Departmental Profit$216,524,362$230,343,479$240,132,846$249,288,707$247,657,688$86,59466.1%
        
Operating Expenses$61,997,168$64,229,329$62,250,540$64,897,454$62,099,714$21,71316.6%
Gross Operating Profit$154,527,194$166,114,150$177,882,306$184,391,253$185,557,974$64,88049.6%
        
Management Fee$9,159,509$9,759,316$10,366,617$11,551,940$10,658,248$3,7272.8%
Incentive Management Fee7,542,5878,134,5448,776,7019,141,6759,344,2153,2672.5%
Retail Management Fee1,081,1851,142,8501,168,0531,174,8671,053,9553690.3%
Property Taxes8,335,7259,129,49710,512,96411,773,67612,249,1304,2833.3%
Property Insurance3,138,4103,058,1062,452,0712,579,0983,343,6301,1690.9%
Ground Rent & Other Expense1,305,9481,185,4321,196,5271,197,3791,344,3124700.4%
FF&E12,998,99613,843,58514,671,64915,079,49814,977,5105,2374.0%
Total Other Expenses$43,562,359$46,253,331$49,144,583$52,498,133$52,971,000$18,52114.1%
        
Net Operating Income$110,964,835$119,860,819$128,737,723$131,893,120$132,586,975$46,35935.4%
Net Cash Flow$110,964,835$119,860,819$128,737,723$131,893,120$132,586,975$46,35935.4%
(1)TTM represents the trailing 12-month period ending on September 30, 2016.
(2)Per Room values based on 2,860 guest rooms.
(3)% of Total Revenue for Room Expense, Food and Beverage Expense and Other Departmental Expenses is based on their corresponding revenue line items.
(4)Prior to a change in industry accounting methodology in 2015, resort fees were accounted for as a component of Room Revenue and included in ADR and RevPAR calculations. Since 2014, resort fees have been netted out of Room Revenue and shown separately in the Resort Fee category. ADR and RevPAR are shown net of resort fees for 2015 and all future years.
(5)Retail tenant spaces are occupied pursuant to partial net leases. Retail Revenue is inclusive of reimbursements associated with shared common area maintenance, tax and marketing expenses. Related expenses attributable to the retail component are included in undistributed Operating Expenses for the overall property.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Hilton Hawaiian Village

 

Property Management. The property is currently managed by Hilton Management LLC, a Delaware limited liability company and subsidiary of Hilton. The current management agreement expires on December 31, 2047, with two 20-year extension options, and provides for (i) a base management fee equal to 3.0% of gross revenue (less revenue from the retail component of the property), (ii) an incentive management fee equal to 6.0% of adjusted gross profit (exclusive of the retail component of the property), (iii) a management fee equal to 5.5% of net retail income with respect to the retail component of the property and (iv) monthly FF&E deposits equal to 4.0% of gross revenue.

 

Escrows and Reserves. No upfront reserves were taken at origination.

 

Tax Escrows - The requirement for the borrower to make monthly deposits to the tax escrow is waived so long as the borrower has reserved such amounts with the property manager or the manager pays such taxes, in each case pursuant to the management agreement. In the event that the borrower is no longer required to reserve such amounts with the property manager, on each payment date, the borrower will be required to deposit 1/12 of annual estimated taxes upon the occurrence of a Trigger Period (as defined below).

 

Insurance Escrows - The requirement for the borrower to make monthly deposits to the insurance escrow is waived so long as the borrower has reserved such amounts with the property manager or the manager pays such premiums, in each case pursuant to the management agreement. In the event that the borrower is no longer required to reserve such amounts with the property manager, on each payment date, the borrower will be required to deposit 1/12 of annual estimated insurance premiums upon the occurrence of a Trigger Period. In addition, provided that no event of default has occurred and is continuing, the requirement to deposit such amounts is waived so long as the property is insured under a blanket policy reasonably acceptable to the lender insuring substantially all of the real property owned, directly or indirectly, by the guarantor.

 

Replacement Reserves -The requirement for the borrower to make monthly deposits for replacements reserves is waived so long as the borrower has reserved such amounts with the property manager pursuant to the management agreement. In the event that the borrower is no longer required to reserve such amounts with the property manager, on each payment date, the borrower will be required to deposit 4.0% of gross income for the calendar month that is two months prior to the applicable payment date (as calculated in the loan documents).

 

Lockbox / Cash Management.The loan is structured with a CMA lockbox. All revenues will be deposited into segregated property accounts maintained by the property manager on behalf of the borrower and the operating lessee, as applicable, and controlled by the lender (the “Property Accounts”). All revenues in the Property Accounts (less any account charges payable to the bank at which the Property Accounts are maintained and less any required minimum peg balance) will be transferred on each business day to accounts maintained by the property manager on behalf of the borrower and the operating lessee, as applicable (each, an “Operating Account”). Funds on deposit in the Operating Accounts will be disbursed in an amount equal to the monthly replacement reserve deposit into the manager replacement reserve account (the “Manager FF&E Reserve Account”) (each of the Manager FF&E Reserve Account, the Operating Account and the Property Account are referred to as “Manager Accounts”). The property manager will be required to apply such funds to the payment of real property taxes and insurance, ground rent, debt service (but only prior to the restructuring), management fees, capital expenditures and reserves for the same, operating expenses, emergency repairs, tenant improvement costs and leasing commissions, working capital reserves, sales and use taxes owed to governmental authorities, custodial funds and required monthly reserves, in each case in accordance with the management agreement (the “Required Payments”). The lender will not require any reserves with respect to any Required Payments which are to be paid directly by or reserved by the property manager pursuant to the management agreement. On a monthly basis, the property manager will deposit all funds remaining in the Operating Accounts after the payment of the Required Payments (“Excess Cash”) into a lender-controlled account as additional collateral for the mortgage loan (the “Cash Management Account”). So long as no Trigger Period is continuing, all funds in the Cash Management Account after payment of debt service, required reserves and operating expenses will be released to the operating lessee and/or the borrower, as applicable, not later than the business day immediately following the date such funds are deposited by the property manager. During a Trigger Period, all funds in the Cash Management Account will be deposited into the excess cash accounts and held as additional collateral for the Hilton Hawaiian Village Whole Loan. The operating lessee and/or the borrower, as applicable, is required to grant a security interest in all Manager Accounts (and the property manager will consent to the same); provided, that such amounts on deposit in the Manager Accounts will be available for use by the property manager in accordance with the management agreement following an event of default and the lender will not apply such amounts on deposit in the Manager Accounts to Hilton Hawaiian Village Whole Loan.

 

A “Trigger Period” will commence upon the occurrence of: (i) an event of default or (ii) the date that the debt yield (as calculated in the loan documents) is less than 7.0%.

 

A Trigger Period will end when, if caused by (a) clause (i) above, the respective event of default has been cured or waived or (b) clause (ii) above, the debt yield (as calculated in the loan documents) exceeds 7.0% for two consecutive quarters.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Hilton Hawaiian Village

 

Partial Releases.The borrower is permitted to release (i) the ground leased parcel, (ii) the retail component and/or (iii) certain other parcels of property that do not materially and adversely affect the ongoing operations of the remaining property, other than the lost income associated with the released parcels, in each case through a partial prepayment of the Hilton Hawaiian Village Whole Loan at any time after the expiration of the lockout period upon certain terms and conditions contained in the loan documents (including, without limitation, payment of the yield maintenance premium, if applicable). Please see “Description of the Mortgage Pool—Certain Terms of the Mortgage Loans—Partial Releases” in the Preliminary Prospectus for additional details.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Moffett Gateway

 

(GRAPHIC) 

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Moffett Gateway

 

(MAP) 

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Moffett Gateway

 

 (MAP)

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Moffett Gateway

 

Mortgage Loan Information Property Information
Mortgage Loan Seller:JPMCB Single Asset / Portfolio:Single Asset
Credit Assessment (Fitch)(1)BBB- Title:Fee
Original Principal Balance(2):$80,000,000 Property Type - Subtype:Office – Suburban
Cut-off Date Principal Balance(2):$80,000,000 Net Rentable Area (SF):612,691
% of Pool by IPB:7.3% Location:Sunnyvale, CA
Loan Purpose:Refinance Year Built / Renovated:2016 / N/A
Borrower:441 Real Estate LLC Occupancy(6):100.0%
Sponsor(3):Joseph K. Paul Occupancy Date:2/1/2017
Interest Rate:3.319403% Number of Tenants:1
Note Date:9/22/2016 2013 NOI(7):N/A
Maturity Date:4/1/2027 2014 NOI(7):N/A
Interest-only Period:60 months 2015 NOI(7):N/A
Original Term:126 months TTM NOI(7):N/A
Original Amortization(4):360 months UW Economic Occupancy:95.0%
Amortization Type:IO-Balloon UW Revenues:$35,097,235
Call Protection(5):L(29),Def(90),O(7) UW Expenses:$6,170,971
Lockbox:Hard UW NOI:$28,926,265
Additional Debt:Yes UW NCF:$27,631,280
Additional Debt Balance(2):$163,000,000 / $102,000,000 / Appraised Value / Per SF(8):$525,000,000 / $857
 $50,000,000 Appraisal Date:7/20/2016
Additional Debt Type:Pari Passu / B-Note /   
 Mezzanine Loan   
     

 

Escrows and Reserves(9) Financial Information(2)
 InitialMonthlyInitial Cap  A-Notes Whole Loan
Taxes:$180,864$180,864N/A Cut-off Date Loan / SF:$397 $563
Insurance:$0SpringingN/A Maturity Date Loan / SF:$337 $503
Replacement Reserves:$0$0N/A Cut-off Date LTV(8):46.3% 65.7%
TI/LC:$0$0N/A Maturity Date LTV(8):39.3% 58.7%
Other:$86,961,915$0N/A UW NCF DSCR(10):1.95x 1.43x
     UW NOI Debt Yield:11.9% 8.4%
        

 

Sources and Uses
SourcesProceeds% of Total UsesProceeds     % of Total
A-Notes(2)$243,000,00061.5% Payoff Existing Debt$216,321,08354.8%
B-Note(2)102,000,00025.8  Upfront Reserves87,142,77922.1 
Mezzanine Loan50,000,00012.7  Return of Equity84,003,84721.3 
     Closing Costs7,532,2901.9 
Total Sources$395,000,000100.0% Total Uses$395,000,000100.0%

(1)Fitch has confirmed that the Moffett Gateway Mortgage Loan has, in the context of its inclusion in the mortgage pool, credit characteristics consistent with an investment grade obligation.
(2)The Moffett Gateway loan is part of a whole loan evidenced by fivepari passu notes with an aggregate principal balance as of the Cut-off Date of $243.0 million (the “A-Notes”) and a subordinate companion loan (the “B-Note”). The A-Notes Financial Information presented in the chart above reflects the Cut-off Date balance of the A-Notes evidencing the Moffett Gateway Whole Loan, as defined in “The Loan” below, but excludes the related B-Note and mezzanine loan. The Whole Loan Financial Information presented in the chart above reflects the Cut-off Date balance of the A-Notes and B-Note evidencing the Moffett Gateway Whole Loan, but excludes the related mezzanine loan.
(3)For a full description of Sponsor, please refer to “The Loan Sponsor” below.
(4)The Moffett Gateway A-Notes will amortize in accordance with the amortization schedule set forth in [Annex F] to the Preliminary Prospectus subsequent to a five-year interest-only period. The principal payments that would otherwise have been paid to the B-Note will be used to pay down the aggregate principal balance of the A-Notes.
(5)The lockout period will be at least 29 payment dates beginning with and including the first payment date of November 1, 2016. Defeasance of the full $345.0 million Moffett Gateway Whole Loan is permitted after the date that is two years from the closing date of the securitization that includes the note to be last securitized (the “REMIC Prohibition Period”). If the REMIC Prohibition Period has not expired by November 1, 2020, the borrower is permitted to prepay the Moffett Gateway Whole Loan in whole, but not in part, with the payment of a yield maintenance premium.
(6)The property is 100.0% leased to Google Inc. (“Google”) through March 2027. Google has executed two leases for the property but is not yet in occupancy of either space. Google leases the property under two separate leases, one for 1225 Crossman Avenue (“Building One”) and the second for 1265 Crossman Avenue (“Building Two”). Google is expected to take occupancy for both spaces by September 2017 and, subsequent to any applicable free rent periods, is required to begin paying full rent as applicable under each lease as follows: Building One in July 2018 and Building Two in July 2017.
(7)Historical cash flows are not available as the property was constructed in 2016.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Moffett Gateway

 

(8)The Appraised Value / Per SF, Cut-off Date LTV and Maturity Date LTV are calculated based on the “hypothetical market value as stabilized”, which assumes that all tenant improvement construction is complete and that all contractual free rent has “burned off” at the “stabilized” value date. At origination, the borrower reserved approximately $87.0 million for unfunded obligations (approximately $49.4 million for outstanding tenant improvements and leasing commissions and approximately $37.6 million for free rent). The “as-is” value as of July 20, 2016 is $430.0 million, which results in a Cut-off Date LTV and Maturity Date LTV of 56.5% and 48.0%, respectively, and a Whole Loan Cut-off Date LTV and Maturity Date LTV of 80.2% and 71.7%, respectively.
(9)For a full description of Escrows and Reserves, please refer to “Escrows and Reserves” below.
(10)The UW NCF DSCR is calculated using the sum of principal and interest payments over the first 12 months following the expiration of the interest-only period based on the assumed principal payment schedule provided on [Annex F] to the Preliminary Prospectus.

 

The Loan.The Moffett Gateway loan is secured by a first mortgage lien on the borrower’s fee interest in a newly constructed corporate office campus consisting of two seven-story towers, an amenities building and a parking garage, located in Sunnyvale, California. The whole loan has an outstanding principal balance as of the Cut-off Date of $345.0 million (the “Moffett Gateway Whole Loan”) and is comprised of fivepari passusenior notes, each as described below, with an aggregate outstanding principal balance as of the Cut-off Date of $243.0 million (collectively, the “Moffett Gateway A-Notes”) and a subordinate B-Note with an outstanding principal balance as of the Cut-off Date of $102.0 million (the “Moffett Gateway Subordinate Companion Loan”), each as described below. Note A-1, with an outstanding principal balance as of the Cut-off Date of $80.0 million, is being contributed to the JPMCC 2017-JP5 Trust (the “Moffett Gateway Mortgage Loan”). Note A-3 and Note A-4, with outstanding principal balances as of the Cut-off Date of $40.0 million and $20.0 million, respectively, are expected to be contributed to one or more future securitization trusts. Note A-2, with an outstanding principal balance as of the Cut-off Date of $60.0 million, was contributed to the JPMCC 2016-JP4 trust and Note A-5, with an outstanding principal balance as of the Cut-off Date of $43.0, million was contributed to the JPMDB 2016-C4 trust (together, with Note A-3 and Note A-4, the “Moffett Gateway Pari Passu Companion Loans”). The Moffett Gateway Subordinate Companion Loan has been sold to a third party investor. Under the related intercreditor agreement, prior to a control appraisal period with respect to the Moffett Gateway Subordinate Companion Loan, under certain circumstances, the holder of the Moffett Gateway Subordinate Companion Loan will have the right to approve certain major decisions with respect to the Moffett Gateway Whole Loan, to exercise certain cure rights and to replace the related special servicer with or without cause. The holder of the Moffett Gateway Subordinate Companion Loan will also have the right to purchase the Moffett Gateway A-Notes under certain circumstances. After the occurrence and during the continuance of a control appraisal period occurs with respect to the Moffett Gateway Subordinate Companion Loan, the holder of Note A-2 will be entitled to exercise the rights of the controlling noteholder for the Moffett Gateway Whole Loan, which rights will be exercised by the related trustee (or, prior to the occurrence and continuance of a control termination event under the related pooling and servicing agreement, by the related directing certificateholder); however, the holders of the Moffett Gateway Pari Passu Companion Loans will be entitled, under certain circumstances, to be consulted with respect to certain major decisions. The Moffett Gateway Whole Loan has a 10-year, six-month term and, subsequent to a five-year interest-only period, the Moffett Gateway A-Notes will amortize in accordance with the amortization schedule set forth on [Annex F] to the Preliminary Prospectus. The principal payments that would otherwise have been paid to the Moffett Gateway Subordinate Companion Loan are included as part of the scheduled amortization of the Moffett Gateway A-Notes.

 

Whole Loan Summary
NoteOriginal BalanceCut-off Date Balance Note Holder Controlling Piece
A-1$80,000,000$80,000,000 JPMCC 2017-JP5 No
A-260,000,00060,000,000 JPMCC 2016-JP4 No
A-340,000,00040,000,000 JPMCB No
A-420,000,00020,000,000 JPMCB No
A-543,000,00043,000,000 JPMDB 2016-C4 No
B-1102,000,000102,000,000 Third Party Investor Yes
Total$345,000,000$345,000,000    

 

The Borrower. The borrowing entity for the Moffett Gateway Whole Loan is 441 Real Estate LLC, a Delaware limited liability company and special purpose entity.

 

The Loan Sponsor. The loan sponsor is Joseph K. Paul (“Jay Paul”) and the nonrecourse carve-out guarantors are Jay Paul, Jay Paul Revocable Living Trust Dated November 9, 1999, as Amended and Restated on March 19, 2010, and Paul Guarantor LLC, a Delaware limited liability company. Jay Paul is the founder of the Jay Paul Company. The Jay Paul Company is an owner and developer of commercial office properties throughout California. Founded in 1975, the Jay Paul Company has developed or acquired over 8.5 million square feet of office space, including 21 buildings in Moffett Park totaling 5.0 million square feet. Jay Paul Company has built projects for many notable companies including Apple, Google, Amazon, Motorola, Microsoft, Boeing, Philips Electronics, HP and DreamWorks, among others. The loan sponsor focuses on sustainable design and has closed in excess of $12.0 billion in equity and debt financings since inception. The borrower is permitted to obtain the release of Jay Paul and the trust from the guaranty and environmental indemnity upon satisfaction of certain conditions in the loan documents, which include, without limitation, Paul Guarantor LLC maintaining a net worth of not less than $300.0 million and liquidity of not less than $20.0 million.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Moffett Gateway

 

The loan sponsor purchased the land and previous buildings in 2012 for approximately $50.4 million and has spent approximately $182.5 million ($298 per square foot) on the development of the Moffett Gateway office complex. Additionally, the loan sponsor has spent approximately $55.1 million ($90 per square foot) in tenant improvement and leasing commission costs. The loan sponsor’s total cost basis is approximately $336.1 million ($549 per square foot).

 

The Property. The Moffett Gateway property is comprised of two newly-constructed seven-story Class A LEED Platinum-Certified towers totaling 597,848 square feet and is located in Sunnyvale, California. The property is situated on approximately 15.5 acres and features a 14,843 square foot amenities building, which contains a fitness center with locker rooms, showers, steam rooms and a yoga studio, a rooftop dining area, bocce court area and common and recreation areas. Additionally, the property contains 2,022 parking spaces resulting in a parking ratio of approximately 3.3 spaces per 1,000 square feet of space. The property benefits from its location at the intersection of Highways 237 and 101, two regional highway systems that provide direct access to the surrounding areas as well as the San Francisco central business district, located approximately 38.4 miles north of the property. The property is part of the larger Moffett Park development, a 519-acre area comprised of recently developed office spaces and research and development buildings. Additionally, a Santa Clara Light Rail System is located adjacent to the property, which provides service to the surrounding residential communities. The Santa Clara County Transit System provides bus service county-wide and has four stops nearby the property.

 

As of December 1, 2016, the property is 100.0% leased to Google pursuant to two separate 298,924 square foot triple net leases through March 31, 2027 for Building One and Building Two, each with two seven-year extension options and no early termination options. Google does not directly lease the amenities building from the landlord. Instead, Google’s right to use the amenities building is contained within each individual lease. Google’s right to use the amenities building is exclusive during any period when Google leases both office buildings and is non-exclusive for any period of time that an additional tenant leases space at the property in the future. Additionally, the amenities building, which includes the parking structure, is part of the common areas which are owned in fee simple by an owners association, which is wholly owned by the borrower. The borrower has pledged the ownership interests in the owner’s association as collateral for the Moffett Gateway Whole Loan.

 

Google’s main headquarters in Mountain View, California is located approximately 6.4 miles west of the property. On October 2, 2015, Google implemented a holding company reorganization in which Alphabet became the successor issuer to Google. At that time, Alphabet recognized the assets and liabilities of Google at carryover basis. Alphabet, through its subsidiaries, provides online advertising services in the United States, the United Kingdom and rest of the world. Alphabet is the second largest publicly traded company (NASDAQ: GOOG) in the world as measured by market capitalization and is rated Aa2 and AA by Moody’s and S&P, respectively. Google represents approximately 99.4% of Alphabet’s total revenues, based on Alphabet’s 2015 annual report.

 

The property is located in the Sunnyvale office submarket. The submarket features one of the highest concentrations of technology, software and creative tenants within Silicon Valley. Moffett Gateway is located along Moffett Park Avenue, a part of the larger Moffett Park development, which is a 519-acre area comprised of recently developed office spaces and research and development buildings. Moffett Park is home to several notable technology firms including Amazon.com, Google, Hewlett-Packard, Juniper Networks, Lockheed Martin, Microsoft, and Yahoo!. Google owns or leases approximately 3.5 million square feet of office space in Sunnyvale, making it the largest corporate occupier in the submarket. Additionally, Google collectively owns or leases approximately 15.1 million square feet in Silicon Valley and the greater San Francisco area. As of the second quarter of 2016, the Sunnyvale market had a Class A office inventory of approximately 8.9 million square feet with an overall vacancy rate of 8.8% and annual asking rents between $43.80 and $45.60 per square foot on a triple-net basis.

 

Historical and Current Occupancy(1)
201320142015Current(2)
N/AN/AN/A100.0%

(1)Historical Occupancy is not available as the property was constructed in 2016.
(2)Current Occupancy is as of December 1, 2016. The property is 100.0% leased to Google through March 2027. Google has executed two leases for the property but is not yet in occupancy of either space. Google leases the property under two separate leases, one for Building One and the second for Building Two. Google is expected to take occupancy by September 2017 and, subsequent to any applicable free rent periods, is required to begin paying full rent at Building One in July 2018 and full rent at Building Two in July 2017. At origination, the borrower reserved approximately $87.0 million for unfunded obligations (approximately $49.4 million for outstanding tenant improvements and leasing commissions and approximately $37.6 million for free rent).

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Moffett Gateway

 

Tenant Summary(1)
TenantRatings(2)
Moody’s/S&P/Fitch
Net Rentable
Area (SF)
% of Total
NRA
Base Rent
PSF(3)
% of Total
Base Rent
Lease
Expiration Date
Google(4)Aa2 / AA / NA612,691100.0%$50.87100.0%3/31/2027
        

(1)Based on the underwritten rent roll.
(2)Ratings provided are for the parent company of the entity listed in the “Tenant” field whether or not the parent company guarantees the lease.
(3)Base Rent PSF includes the 14,843 square foot amenities building, for which approximately $785,298 of base rent has been underwritten. Google’s right to use the amenities building is exclusive during any period when Google leases both office buildings and is non-exclusive for any additional tenant that may sign a lease at the property in the future.
(4)Google has two seven-year renewal options remaining for each lease. Google must provide notice of its intention to renew no earlier than January 2026 or later than June 2026.

 

Lease Rollover Schedule(1)
YearNumber of Leases ExpiringNet Rentable Area Expiring% of NRA ExpiringBase Rent Expiring% of Base Rent ExpiringCumulative Net Rentable Area ExpiringCumulative % of NRA ExpiringCumulative Base Rent ExpiringCumulative % of Base Rent Expiring
VacantNAP00.0%NAPNAP00.0%NAPNAP
2017 & MTM000.0%$00.0%00.0%$00.0%
2018000.0%00.0%00.0%$00.0%
2019000.0%00.0%00.0%$00.0%
2020000.0%00.0%00.0%$00.0%
2021000.0%00.0%00.0%$00.0%
2022000.0%00.0%00.0%$00.0%
2023000.0%00.0%00.0%$00.0%
2024000.0%00.0%00.0%$00.0%
2025000.0%00.0%00.0%$00.0%
2026000.0%00.0%00.0%$00.0%
20272612,691100.0%31,169,318100.0%612,691100.0%$31,169,318100.0%
2028 & Beyond  000.0%00.0%612,691100.0%$31,169,318100.0%
Total2612,691100.0%$31,169,318100.0%    

(1)Based on the underwritten rent roll.

 

Google Rent Schedule
PeriodBuilding One Base Rent per YearBuilding One Base Rent per Year PSFBuilding Two Base Rent per YearBuilding Two Base Rent per Year PSFCumulative Base Rent per YearCumulative Base Rent per Year PSF
Months 1 – 10(1)$0$0.00$0$0.00$0$0.00
Months 11 – 22(1)00.0012,232,56820.4612,232,56820.46
Months 23 – 3412,599,54521.0713,738,74422.9826,338,28944.06
Months 35 – 4614,150,90723.6714,150,90723.6728,301,81347.34
Months 47 – 5814,575,43424.3814,575,43424.3829,150,86848.76
Months 59 – 7015,012,69725.1115,012,69725.1130,025,39450.22
Months 71 – 8215,463,07825.8615,463,07825.8630,926,15651.73
Months 83 – 9415,926,97026.6415,926,97026.6431,853,94053.28
Months 95 – 10616,404,77927.4416,404,77927.4432,809,55954.88
Months 107 – 11816,896,92328.2616,896,92328.2633,793,84556.53
Months 119 – 12814,431,03724.1414,431,03724.1428,862,07348.28
Total/Wtd. Avg.(2)$135,461,369$25.34$148,833,136$25.09$284,294,505$49.53
(1)The property is 100.0% leased to Google through March 2027. Google has executed two leases for the property but is not yet in occupancy of either space. Google leases the property under two separate leases, one for Building One and the second for Building Two. Google is expected to take occupancy by September 2017 and, after any applicable free rent periods, is required to begin paying full rent as applicable under each lease as follows: Building One in July 2018 and Building Two in July 2017. At origination, the borrower reserved approximately $87.0 million for unfunded obligations (approximately $49.4 million for outstanding tenant improvements and leasing commissions and approximately $37.6 million for free rent).
(2)The Total/Wtd. Avg. Base Rent and PSF numbers exclude the 14,843 square foot amenities building, for which approximately $785,298 of base rent has been underwritten. Google’s right to use the amenities building is exclusive during any period when Google leases both office buildings and is non-exclusive for any period of time an additional tenant leases space at the property in the future.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Moffett Gateway

 

Proforma and Underwritten Net Cash Flow

Proforma
2017

Proforma
2018

Proforma
2019

Underwritten

 

Per Square
Foot

 

%(1)

Rents in Place(2) $3,318,057 $17,393,064 $28,439,878 $31,169,318 $50.87 84.4%
Vacant Income 0 0 0 0 0.00 0.0 
Gross Potential Rent $3,318,057 $17,393,064 $28,439,878 $31,169,318 $50.87 84.4%
Total Reimbursements 4,112,410 6,072,471 6,503,937 5,775,140 9.43 15.6 
Net Rental Income $7,430,467 $23,465,535 $34,943,815 $36,944,458 $60.30 100.0% 
(Vacancy/Credit Loss) 0 0 0 (1,847,223)  (3.01)  (5.0)
Other Income 0 0 0 0 0.00 0.0 
Effective Gross Income $7,430,467 $23,465,535 $34,943,815 $35,097,235 $57.28 95.0%
              
Total Expenses $5,583,716 $6,204,727 $6,692,827 $6,170,971 $10.07 17.6%
              
Net Operating Income $1,846,751 $17,260,808 $28,250,988 $28,926,265 $47.21 82.4%
              
Total TI/LC, Capex/RR 0 0 0 1,294,985 2.11 3.7 
Net Cash Flow $1,846,751 $17,260,808 $28,250,988 $27,631,280 $45.10 78.7%

(1)% column represents percent of Net Rental Income for all revenue lines and represents percent of Effective Gross Income for the remainder of fields.
(2)The property is 100.0% leased to Google through March 2027. Google has executed two leases for the property but is not yet in occupancy of either space. Google leases the property under two separate leases, one for Building One and the second for Building Two. Google is expected to take occupancy by September 2017 and, after any applicable free rent periods, is required to begin paying full rent as applicable under each lease as follows: Building One in July 2018 and Building Two in July 2017. At origination, the borrower reserved approximately $87.0 million for unfunded obligations (approximately $49.4 million for outstanding tenant improvements and leasing commissions and approximately $37.6 million for free rent).

 

Property Management. The property is subject to a management agreement with Paul Holdings, Inc., an affiliate of the loan sponsor.

 

Escrows and Reserves. At origination, the borrower deposited into escrow approximately $87.0 million for unfunded obligations (which included approximately $49.4 million for outstanding tenant improvements and leasing commissions and approximately $37.6 million for free rent reserves) and $180,864 for tax reserves.

 

Tax Escrows- On a monthly basis, the borrower is required to escrow 1/12 of the annual estimated tax payments, which currently equates to $180,864.

 

Insurance Escrows- The requirement for the borrower to make monthly deposits to the insurance escrow is waived so long as (i) no event of default exists and (ii) the borrower provides satisfactory evidence that the property is insured under an acceptable blanket policy in accordance with the loan documents.

 

Lockbox / Cash Management.The loan is structured with a hard lockbox and in-place cash management. The borrower was required to send tenant direction letters to all tenants upon the origination of the loan instructing them to deposit all rents and payments directly into the lockbox account controlled by the lender. All funds in the lockbox account are swept each business day to a segregated cash management account under the control of the lender and disbursed on each payment date during the term of the loan in accordance with the loan documents. During a Cash Sweep Period (as defined below), all excess cash flow after payment of the mortgage debt service, required reserves, operating expenses and mezzanine debt service will be held as additional collateral for the loan. The lender has a first priority security interest in the cash management account.

 

A “Cash Sweep Period” means the period after the occurrence of (i) an event of default, (ii) any bankruptcy action of the borrower or manager (if, with respect to the manager only, such bankruptcy action is not discharged, stayed or dismissed within 30 days), (iii) the date on which the debt service coverage ratio (as calculated in the loan documents), based on trailing three-months is less than 1.10x (including aggregate debt service for the Moffett Gateway A-Notes, Moffett Gateway Subordinate Companion Loan and mezzanine loan) or (iv) any of the following: (a) the earlier of (1) the payment date in August 2024, (2) a notification by Google of its intention to not renew its leases or (3) any failure to renew the Google leases in accordance with their terms (a “Maturity Trigger”), (b) the date on which the long term unsecured debt rating of Google or its parent company is not rated by two rating agencies, is withdrawn by two rating agencies or is downgraded to or below BBB- (or its equivalent) by two rating agencies (a “Downgrade Trigger”), (c) any default by Google under its leases (a “Default Trigger”), (d) any bankruptcy or insolvency action by Google or any party providing a guaranty or credit support for the leases (a “Tenant Bankruptcy Trigger”), or (e) Google gives notice that it intends to terminate its leases or any termination or cancellation of the leases (a “Termination Trigger”) (any of the foregoing in subpart (iv), a “Specified Tenant Trigger”).

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Moffett Gateway

 

The borrower has the right to cure a Cash Sweep Period by, if caused by (a) clause (i) above, the acceptance of a cure by the lender of the applicable event of default (in its sole and absolute discretion), (b) clause (ii) above solely with respect to the manager, the replacement of such manager with a qualified manager under a management agreement acceptable to the lender within 60 days (or, if such bankruptcy action was involuntary and the manager or borrower did not consent to or solicit or collude with the party filing such action, upon the same being discharged, stayed or dismissed within 60 days), (c) clause (ii) above solely with respect to the borrower if the bankruptcy action was involuntary and the borrower, guarantor or any affiliate did not consent to or solicit or collude with the party filing such action, upon the same not being discharged, stayed or dismissed within 60 days, (d) if caused by clause (iii) above, the achievement of a debt service coverage ratio for two consecutive quarters of at least 1.10x on a trailing three-month basis, (e) a Maturity Trigger, Google renewing both of its leases in accordance with the loan documents and paying full unabated rent without any right of offset or free rent credit or outstanding tenant improvement obligations in accordance with the loan documents, (f) a Downgrade Trigger, the initiation or reinstatement by Fitch, Moody’s and S&P, of the applicable rating required under the loan documents, (g) a Default Trigger, Google has cured all defaults and is paying full unabated rent without any right of offset or free rent credit or outstanding tenant improvement obligations (unless the tenant is rated at least BBB- (or its equivalent) by Fitch, Moody’s and S&P and the borrower reserves for such amounts in accordance with the loan documents), (h) a Tenant Bankruptcy Trigger, the bankruptcy action is dismissed pursuant to a final, non-appealable order and Google is paying full unabated rent without any right of offset or free rent credit or outstanding tenant improvement obligations (unless the tenant is rated at least BBB- (or its equivalent) by Fitch, Moody’s and S&P and the borrower reserves for such amounts in accordance with the loan documents), or (i) a Termination Trigger, Google has revoked or rescinded all termination or cancellation notices with respect to the lease(s) and has re-affirmed each lease as being in full force and effect and is paying full unabated rent without any right of offset or free rent credit or outstanding tenant improvement obligations (unless the tenant is rated at least BBB- (or its equivalent) by Fitch, Moody’s and S&P and the borrower reserves for such amounts in accordance with the loan documents). The borrower may also cure a Default Trigger, a Tenant Bankruptcy Trigger or a Termination Trigger by re-leasing the space leased by Google to a replacement tenant in accordance with the loan documents. In no event will the borrower have the right to cure a Cash Sweep Period caused by the borrower’s voluntary bankruptcy or insolvency, and the borrower is limited to curing a Cash Sweep Period caused by an event of default, a Default Trigger, a Downgrade Trigger, a Tenant Bankruptcy Trigger or a Termination Trigger to no more than three times during the term of the loan.

 

Additional Debt. There is a $102.0 million Moffett Gateway Subordinate Companion Loan and a $50.0 million mezzanine loan, both coterminous with the Moffett Gateway A-Notes. The Moffett Gateway Subordinate Companion Loan and the mezzanine loan have each been sold to separate third party investors. The Moffett Gateway Subordinate Companion Loan has a 5.00000% coupon and is interest only for the entire term. All principal payments on the Moffett Gateway Whole Loan once amortization begins after the expiration of the interest-only period will be applied to the Moffett Gateway A-Notes, which will cause hyper-amortization of the Moffett Gateway A-Notes. The mezzanine loan has a 6.35000% coupon and is interest only for the full term of the loan. Including the Moffett Gateway Subordinate Companion Loan and mezzanine loan, the cumulative Cut-off Date LTV, cumulative UW NCF DSCR and cumulative UW NOI Debt Yield are 75.2%, 1.22x and 7.3%, respectively. The mortgage and mezzanine lenders have entered into an intercreditor agreement.

 

Partial Release. The borrower is permitted to release Building One or Building Two from the lien of the security instrument through a partial defeasance of the Moffett Gateway Whole Loan at any time after the expiration of the lockout period if, among other conditions, (i) no event of default has occurred and is continuing, (ii) the borrower defeases a portion of the Moffett Gateway Whole Loan in an amount equal to (a) the allocated loan amount for the applicable building (which is $170.0 million for each building with respect to the Whole Loan and $27.5 million for each building with respect to the mezzanine loan) plus (b) if the Google Tenancy Condition (as defined below) is not satisfied, 25% of the allocated loan amount, (iii) after giving effect to the release, the debt service coverage ratio of the remaining portion of the property based on the trailing 12-month period equals or is greater than the greater of (a) 1.23x and (b) the debt service coverage ratio for the property (including the building being released) immediately preceding the release based on the trailing-three month period.

 

Google Tenancy Condition” means (a) there is no Cash Sweep Period caused by a Specified Tenant Trigger and (b) either the Google lease or a lease for the Google leased premises with a tenant that has a long term unsecured debt rating of BBB or its equivalent is in full force and effect for the remaining property.

 

Right of First Offer. Google has a right of first offer, so long as the borrower or an affiliate owns the property, to purchase all or any portion of the property that the borrower is willing to sell. The right of first offer expressly does not apply to any third party (including any owner by reason of foreclosure or any successor-in-interest) who subsequently owns all or any portion of the property.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Moffett Gateway

 

 (GRAPHIC)

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Dallas Design District

 

(Graphic) 

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

(JP MORGAN LOGO) 31 of 125  

 

 

 

Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Dallas Design District

 

(Graphic) 

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Dallas Design District

 

Mortgage Loan Information Property Information
Mortgage Loan Seller:JPMCB Single Asset / Portfolio:Single Asset
Original Principal Balance(1):$75,000,000 Title:Fee / Leasehold
Cut-off Date Principal Balance(1):$75,000,000 Property Type - Subtype:Industrial - Flex
% of Pool by IPB:6.9% Net Rentable Area (SF):728,452
Loan Purpose:Refinance Location:Dallas, TX
Borrowers(2):Various Year Built / Renovated(3)Various / Various
Sponsors:Donald Engle and Occupancy:98.7%
 William L. Hutchinson Occupancy Date:12/28/2016
Interest Rate:5.25700% Number of Tenants:100
Note Date:1/5/2017 2013 NOI(4):$7,626,320
Maturity Date:2/1/2027 2014 NOI(4):$9,005,119
Interest-only Period:36 months 2015 NOI(5):$8,498,455
Original Term:120 months TTM NOI (as of 9/2016)(5):$9,637,865
Original Amortization:360 months UW Economic Occupancy:95.0%
Amortization Type:IO-Balloon UW Revenues:$15,304,762
Call Protection:L(25),Grtr1%orYM(91),O(4) UW Expenses:$4,048,471
Lockbox:Hard UW NOI(5):$11,256,291
Additional Debt:Yes UW NCF:$10,204,999
Additional Debt Balance:$45,000,000 Appraised Value / Per SF:$193,085,000 / $265
Additional Debt Type:Pari Passu Appraisal Date:Various
     

 

Escrows and Reserves(6) Financial Information(1)
 InitialMonthlyInitial Cap Cut-off Date Loan / SF: $165 
Taxes:$316,270$316,270N/A Maturity Date Loan / SF: $147 
Insurance:$200,000SpringingN/A Cut-off Date LTV: 62.1% 
Replacement Reserves:$374,106Springing$372,816 Maturity Date LTV: 55.3% 
TI/LC:$3,278,052Springing$3,278,052 UW NCF DSCR: 1.28x 
Other:$2,155,636$6,025N/A UW NOI Debt Yield: 9.4% 
        

 

Sources and Uses
SourcesProceeds% of Total UsesProceeds% of Total
Mortgage Loan(1)$120,000,000100.0% Payoff Existing Debt$109,451,75691.2%
  % Upfront Reserves6,324,0645.3%
    Closing Costs3,812,3713.2%
    Return of Equity411,8090.3%
Total Sources$120,000,000100.0% Total Uses$120,000,000100.0%
          
(1)The Dallas Design District loan is part of a whole loan evidenced by twopari passu notes, with an aggregate outstanding principal balance as of the Cut-off Date of $120.0 million. The Financial Information presented in the chart above reflects the Cut-off Date balance of the $120.0 million Dallas Design District Whole Loan, as defined in “The Loan” below.
(2)For a full description of the Borrowers please refer to “The Borrowers” below.
(3)The Dallas Design District properties were built between 1953 and 1999 and renovated between 2010 and 2016.
(4)The increase in 2014 NOI from 2013 NOI is primarily due to rents in place increasing from approximately $9.0 million in 2013 to approximately $9.9 million in 2014 as a result of new/renewal leases signed at higher rents at 1025 Stemmons, 1250 Slocum, 1617 Hi Line, 1645 Stemmons and 1500 Dragon.
(5)The increase in NOI from 2015 to UW NOI is primarily due to recent leasing across the properties along with contractual rent steps taken through January 2018 totaling $425,877.
(6)For a full description of Escrows and Reserves, please refer to“Escrows and Reserves”below.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Dallas Design District

 

The Loan.The Dallas Design District loan is secured by a first mortgage lien on the borrowers’ fee and leasehold interests in 12 industrial-flex properties located in Dallas, Texas. The whole loan has an outstanding principal balance as of the Cut-off Date of approximately $120.0 million (the “Dallas Design District Whole Loan”) and is comprised of twopari passu notes, each as described below. Note A-1, with an outstanding principal balance as of the Cut-off Date of $75.0 million, is the controlling note and is being contributed to the JPMCC 2017-JP5 Trust. Note A-2, with an outstanding principal balance as of the Cut-off Date of $45.0 million, is expected to be contributed to one or more future securitizations. The Dallas Design District Whole Loan has a 10-year term and, subsequent to a three-year interest-only period, will amortize on a 30-year schedule. The previous debt securing the property was securitized in JPMCC 2015-FL7.

 

Whole Loan Summary
NotesOriginal BalanceCut-off Date BalanceNote HolderControlling Piece
A-1$75,000,000$75,000,000JPMCC 2017-JP5 Yes
A-245,000,00045,000,000JPMCBNo
Total$120,000,000$120,000,000  

 

The Borrowers. The borrowing entities for the Dallas Design District Whole Loan are DE Design Borrower 2017 LLC, DD Dunhill 2017 LLC and 1500 Dragon Dunhill LLC, each a Delaware limited liability company and special purpose entity. DD Dunhill 2017 LLC and DE Design Borrower 2017 LLC own the majority of the property as tenants-in-common and the remaining borrower owns the fee interest in its parcel.

 

The Loan Sponsors.The Dallas Design District Whole Loan’s sponsors and nonrecourse carve-out guarantors are William L. Hutchinson, President of Dunhill Partners (“Dunhill”), and Donald Engle. Dunhill specializes in the sale, acquisition, leasing and management of retail shopping centers. Over the last 10 years, Dunhill has bought and sold approximately $3.0 billion of shopping centers throughout the Southwestern United States. Dunhill currently manages more than 5.8 million square feet of retail commercial property in Texas. Donald Engle, who owns one of the borrowers, is not a party to the environmental indemnity and is obligated under his guaranty only for certain breaches or violations of the nonrecourse carve-out provisions attributed to that borrower. The other guarantor, William L. Hutchinson, is a party to the environmental indemnity and is obligated under his guaranty for any breach or violation of the nonrecourse carve-out provisions in the loan documents.

 

The Property.The Dallas Design District properties consist of 728,452 square feet of industrial-flex space across 12 Class A properties located in Dallas, Texas. The 12 properties were developed between 1953 and 1999, renovated between 2010 and 2016, and are situated on approximately 32.5 acres. Among the 12 properties are three larger design and showroom centers, which comprise the majority of the property collateral.

 

As of December 28, 2016, the complex was 98.7% occupied by 100 tenants. The rent roll at the properties is diverse with no tenant representing more than 6.1% of net rentable area. Tenants at the properties include seven restaurants, several retail shops, and showroom/gallery space for tenants such as furniture retailers, wholesale textile retailers, interior design and architecture firms, and other professional firms including a modeling agency and photography studio. Among the properties, the largest tenant is Regulus Group LLC (“Regulus Group”), which first took occupancy in November 2006 and leases 6.1% of the net rentable area through March 2017. Regulus Group was founded in 2002 and provides processing solutions to a wide range of firms and has operations in three states. The second largest tenant is Walter Lee Culp Associates, Inc. (“Culp Associates”), which first took occupancy in September 1993 and recently exercised a lease extension option through October 2028, and leases 4.2% of the net rentable area. Culp Associates has two, five-year extension options. Culp Associates has been involved in the interior design community for over 42 years. The Culp Associates showroom has a large collection of traditional, transitional and fashion-forward textiles. The third largest tenant is David Sutherland, Inc. (“David Sutherland”), which first took occupancy in October 1997, and leases 4.1% of the net rentable area through May 2023. The David Sutherland showroom has a multi-line collection of furniture, fabric and accessories from manufacturers from around the world. David Sutherland has one, five-year extension option.

 

The loan sponsors have recently executed several new and renewal leases with tenants at the properties, with 305,121 square feet of new, renewal and expansion leases executed since May 2015. Headington Realty signed a new lease for 10,161 square feet at $35.00 per square foot and William E. McGannon, Inc. renewed its 15,823 square foot lease starting January 2018 at 1617 Hi Line at $15.04 per square foot. Additionally, new leases were executed by Level Two at 1250 Slocum for 12,949 square feet at $3.73 per square foot and by Made Goods at 1025 Stemmons for 4,670 square feet at $28.00 per square foot.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Dallas Design District

 

Property Summary(1)
Property NameNet Rentable
Area (SF)
Property DescriptionClassYear BuiltOccupancy(2)Appraised Value(3)% of
Appraised Value
1025 Stemmons212,329Retail / Lifestyle CenterA198297.6%$51,300,00026.6%
1250 Slocum156,659Retail / Lifestyle CenterA199998.3%41,500,00021.5%
1617 Hi Line136,539Designer / ShowroomA1955-1967100.0%40,500,00021.0%
1500 Dragon104,641Office / ShowroomA1979,1981100.0%18,500,0009.6%
1700 Oak Lawn17,425Designer / ShowroomA1957100.0%8,350,0004.3%
1645 Stemmons22,726Designer / ShowroomA1963100.0%7,100,0003.7%
1616 Hi Line19,074Designer / ShowroomA1954100.0%5,450,0002.8%
1628-1630 Oak Lawn11,655Restaurant / ShowroomA195492.6%4,950,0002.6%
1519-1525 Hi Line13,816Designer / ShowroomA195599.2%4,250,0002.2%
1621 Oak Lawn9,038Restaurant / RetailA195396.6%4,000,0002.1%
1626 Hi Line14,150Designer / ShowroomA195599.4%3,725,0001.9%
1616 Oak Lawn10,400Designer / ShowroomA1953100.0%3,460,0001.8%
Total/Wtd. Avg.728,452   98.7%$193,085,000100.0%
(1)Based on the appraisals.
(2)Based on the underwritten rent roll dated December 28, 2016.
(3)CBRE appraised the Dallas Design District properties on a property-by-property basis in November 2016. The aggregate value of the individual properties totaled approximately $193.1 million.

 

The Dallas Design District property is located approximately 2.7 miles northwest of downtown Dallas in an area locally known as the “The Design District”. Originally developed as showrooms for home furnishings, fabrics and decorative accessories, The Design District is comprised of approximately 160.0 acres just west of downtown Dallas and on the north side of the Trinity River corridor. The area consists of residential, retail, restaurants, showrooms and trade buildings and, according to the borrowers, is known to have the fourth largest concentration of designer showroom space in the country. Approximately 186.0 acres within The Design District are part of a Tax Increment Financing (“TIF”) zone that began in June 2005 and will terminate on December 31, 2027. The mission of the TIF zone is to provide a source of funding for public infrastructure improvements that will assist in redeveloping an industrial and warehouse district to take full advantage of the expanding DART light rail system, to promote transit oriented development, and to improve access to the Trinity River and the quality of development adjacent to the Trinity River Corridor.

 

According to the appraisal, the Dallas Design District is also home to the Dallas Market Center (“DMC”), one of the world’s largest wholesale marts (more than five million square feet), which is located along Stemmons Freeway near Market Center Boulevard, approximately one mile north of the property. The DMC offers more than 2,000 permanent showrooms with thousands of lines from leading manufacturers of gift products, decorative accessories, home furnishing, lighting, garden accessories, gourmet products, holiday and floral items and apparel. The DMC holds approximately 50 trade and special events each year with the largest event attracting more than 50,000 attendees. According to the appraisal, approximately 400,000 people visit the DMC campus each year including more than 200,000 buyers and sellers from all 50 states and 84 countries.

 

The Dallas Design District property is located adjacent to Stemmons Freeway, a main north-south thoroughfare that bisects Dallas. The property is also located off Interstate 35 to the north and east, with access on the south to Riverfront Boulevard and the Trinity River. The area benefited from a 2011 Interstate 35 expansion that added additional freeway access points to the surrounding area. The Dallas Design District property is situated on the other side of Interstate 35 and is approximately one mile from the American Airlines Center, which hosts approximately 240 events and 2.8 million visitors annually. According to the 1025 Stemmons appraisal, the population within a three and five-mile radius contained 155,036 and 355,808 people, respectively, with a median household income of $54,153 and $51,771, respectively, as of 2016.

 

Appraisal Market Rent Summary
CategoryRent(1)
Showroom <20k Square Feet$23
Showroom >20k Square Feet$18
Collection Space$19
Showroom/Retail$35
Mezz/Rear$9
Restaurant$34
(1)Weighted average of the appraisal rent per square feet for each of the categories.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Dallas Design District

 

Historical and Current Occupancy(1)
201320142015Current(2)
89.6%86.7%89.6%98.7%
(1)Historical Occupancies are as of December 31 of each respective year.
(2)Current Occupancy is as of December 28, 2016.

 

Tenant Summary(1)
TenantRatings Moody’s/S&P/FitchNet Rentable
Area (SF)
% of Total
NRA
Base
Rent PSF
% of Total
Base Rent
Lease
Expiration Date
Regulus Group LLC(2)NA / NA / NA44,3456.1%$11.504.1%3/31/2017
Walter Lee Culp Associates, Inc.NA / NA / NA30,6504.2%$13.413.3%10/31/2028
David Sutherland, Inc.(3)NA / NA / NA29,9374.1%$12.503.0%5/31/2023
Interior Design Collections, Ltd.NA / NA / NA24,6513.4%$16.993.4%6/30/2026
E.C. Dicken, Inc.NA / NA / NA23,0833.2%$13.752.6%5/31/2020
George Cameron Nash, Inc.NA / NA / NA21,3052.9%$20.093.5%12/31/2025
Baker, Knapp & Tubbs, Inc./Kohler InteriorNA / NA / NA20,8002.9%$13.042.2%1/31/2018
Scott + Cooner, Inc.NA / NA / NA20,0792.8%$17.502.9%8/31/2019
The Robert Allen Group, Inc.NA / NA / NA16,9402.3%$15.452.1%10/31/2017
Morrison Supply Co.NA / NA / NA16,4332.3%$10.711.4%6/10/2024
(1)Based on the underwritten rent roll dated December 28, 2016 and includes rent steps through January 2018.
(2)According to the loan sponsors, Regulus Group LLC has a lease out for signature that will extend the term of their lease until September 30, 2017. The loan sponsors are in discussions with four potential tenants to backfill the space at rents approximately 25% higher than the rent currently paid by Regulus Group LLC.
(3)David Sutherland, Inc. has the right to terminate its lease on June 1, 2018, with 12 months’ notice and the payment of a termination fee.

 

Lease Rollover Schedule(1)
YearNumber
of
Leases Expiring
Net
Rentable
Area
Expiring
% of
NRA
Expiring
Base Rent Expiring% of
Base
Rent
Expiring
Cumulative
Net Rentable
Area Expiring
Cumulative
% of NRA
Expiring
Cumulative Base Rent ExpiringCumulative %
of Base Rent Expiring
VacantNAP9,1651.3%NAPNAP9,1651.3%NAPNAP
2017 & MTM992,61812.7$1,431,09411.6%101,78314.0%$1,431,09411.6%
20181694,45513.0$1,466,51311.9196,23826.9%$2,897,60723.5%
201920107,32114.7$1,853,56415.0303,55941.7%$4,751,17138.5%
2020864,0018.8$1,091,7608.9367,56050.5%$5,842,93147.4%
20211153,8267.4$1,145,0519.3421,38657.8%$6,987,98256.7%
2022615,1142.1$345,9332.8436,50059.9%$7,333,91559.5%
2023980,91511.1$1,268,39210.3517,41571.0%$8,602,30769.8%
2024439,1795.4$566,3004.6556,59476.4%$9,168,60774.4%
2025560,7268.3$1,007,4278.2617,32084.7%$10,176,03482.6%
2026962,1218.5$1,411,69911.5679,44193.3%$11,587,73394.0%
2027218,3612.5$327,0392.7697,80295.8%$11,914,77296.7%
2028 & Beyond130,6504.2$410,8663.3728,452100.0%$12,325,638100.0%
Total100728,452100.0%$12,325,638100.0%    
(1)Based on the underwritten rent roll dated December 28, 2016 and includes rent steps through January 2018.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Dallas Design District

  

Operating History and Underwritten Net Cash Flow
 201320142015TTM(1)UnderwrittenPer Square Foot%(2)
Rents in Place(3)(4)$8,960,054$9,866,210$9,805,348$10,552,323$12,325,638$16.9276.8%
Vacant Income0000147,9980.200.9%
Gross Potential Rent$8,960,054$9,866,210$9,805,348$10,552,323$12,473,636$17.1277.7%
CAM Reimbursements2,635,9572,937,4972,547,6672,773,7693,279,3654.5020.4%
Percentage Rent127,620208,806200,877266,763293,9870.401.8%
Net Rental Income$11,723,632$13,012,514$12,553,892$13,592,854$16,046,988$22.03100.0%
(Vacancy/Credit Loss)599(39,490)00(802,349)(1.10)(5.0)
Other Income38,61083,34452,72880,91860,1230.080.4%
Effective Gross Income$11,762,840$13,056,367$12,606,620$13,673,772$15,304,762$21.0195.4%
        
Total Expenses$4,136,520$4,051,248$4,108,165$4,035,907$4,048,471$5.5626.5%
        
Net Operating Income$7,626,320$9,005,119$8,498,455$9,637,865$11,256,291$15.4573.5%
        
Total TI/LC, Capex/RR00001,051,2921.446.9%
        
Net Cash Flow$7,626,320$9,005,119$8,498,455$9,637,865$10,204,999$14.0166.7%
(1)TTM Column represents the trailing 12-month period ending September 30, 2016.
(2)% column represents percent of Net Rental Income for all revenue lines and represents percent of Effective Gross Income for the remainder of the fields.
(3)The increase in 2014 Rents in Place from 2013 Rents in Place is primarily due a result of new/renewal leases signed at higher rents at 1025 Stemmons, 1250 Slocum, 1617 Hi Line, 1645 Stemmons and 1500 Dragon.
(4)The increase in Underwritten Rents in Place from TTM Rents in Place is primarily due to recent leasing across the properties along with contractual rent steps taken through January 2018 totaling $425,877.

 

Property Management. The property is managed by Dunhill Property Management Services, Inc., an affiliate of the borrowers.

 

Escrows and Reserves. At origination, the borrowers deposited into escrow $3,278,052 for future tenant improvements and leasing commissions, $1,693,764 for outstanding tenant improvements and leasing commissions related to 11 tenants, $374,106 for a replacement reserve, $320,671 for a free rent reserve related to four tenants $316,270 for a real estate tax reserve, $200,000 for an insurance reserve, $123,125 for a deferred maintenance reserve and $18,076 for a ground rent reserve.

 

Tax Escrows- On a monthly basis, the borrowers are required to escrow 1/12 of the annual estimated tax payments, which currently equates to $316,270.

 

Insurance Escrows - The requirement for the borrowers to make monthly deposits to the insurance escrow is waived so long as (i) no event of default exists and (ii) the borrowers provide satisfactory evidence that the properties are insured under an acceptable blanket policy in accordance with the loan documents.

 

Replacement Reserves - At origination, the borrowers reserved $374,106 for replacement reserves. If the total amount of replacement reserves on deposit decreases below $372,816 during the term of the loan, on a monthly basis, the borrowers are required to escrow $9,106 (approximately $0.13 per square foot annually) for future ongoing replacement reserves. The reserve is subject to a cap of $372,816 (approximately $0.51 per square foot).

 

TI/LC Reserves - At origination, the borrowers reserved $3,278,052 for tenant improvements and leasing commissions. If the total amount on deposit decreases below $3,278,052 during the term of the loan, on a monthly basis, the borrowers are required to escrow $91,057 for future tenant improvements and leasing commissions. The reserve is subject to a cap of $3,278,052 (approximately $4.50 per square foot).

 

Lockbox / Cash Management.The Dallas Design District Whole Loan is structured with a hard lockbox and in-place cash management. No later than three business days after the establishment of the lockbox account, the borrowers were required to send tenant direction letters to the tenants at the property instructing them to deposit all rents and payments directly into the lockbox account controlled by the lender. All funds in the lockbox account are swept each business day to a segregated cash management account under the control of the lender and disbursed in accordance with the loan documents. During a Cash Sweep Event (as defined below) all excess cash flow after payment of the debt service, required reserves and operating expenses will be held as additional collateral for the loan. The lender has a first priority security interest in the cash management account.

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Dallas Design District

 

A “Cash Sweep Event” means (i) the occurrence of an event of default, (ii) the bankruptcy or insolvency action of the borrowers or the property manager, or (iii) a DSCR Trigger Event (as defined below) has occurred and is ongoing.

 

A “DSCR Trigger Event” means the trailing three-month debt service coverage ratio as calculated in accordance with the loan documents is less than 1.15x.

 

A Cash Sweep Event may be cured by the following: if the Cash Sweep Event is caused solely by (a) clause (i) above, the acceptance by the lender of a cure of such event of default, (b) clause (ii) above, only with respect to the property manager, the borrowers replacing such property manager with a qualified manager under a replacement management agreement within 60 days, and (c) clause (iii) above, the applicable debt service coverage ratio for two consecutive quarters based on the trailing three-month period is 1.20x or greater. A Cash Sweep Event cure may occur no more than four times during the term of the loan.

 

Ground Lease. The property located at 1621 Oak Lawn Avenue is subject to a ground lease, which commenced on December 21, 1952 for a term of 99 years and expires on December 20, 2051 with no renewal options. The annual rent under the ground lease is currently $72,305 and is payable in advance on December 21 of each year during the term of the lease. Annual rent is subject to adjustment on December 21 of every 10th year. The annual rent is adjusted pursuant to the agreement of the parties or pursuant to an appraisal every 10 years. The annual rent is required to be 6.0% of the appraised value of the land (exclusive of improvements and buildings constructed by the borrowers, but including paving, storm sewers, utilities and other improvements constructed by the ground lessor). The appraised value will be determined by three appraisers: one chosen by the borrowers under the ground lease (DD Dunhill 2017 LLC and DE Design Borrower 2017 LLC), one chosen by the ground lessor and one chosen by the other two appraisers (this third appraiser must be a realtor and a qualified member of the Dallas Real Estate Board). The next rent adjustment is expected to occur on December 21, 2017.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term SheetJPMCC 2017-JP5
  
Fresno Fashion Fair Mall

 

 (Graphic)

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term SheetJPMCC 2017-JP5
  
Fresno Fashion Fair Mall

 

 (Graphic)

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

(JP MORGAN LOGO) 40 of 125  

 

 

 

Structural and Collateral Term SheetJPMCC 2017-JP5
  
Fresno Fashion Fair Mall

 

 (Graphic)

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THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term SheetJPMCC 2017-JP5
  
Fresno Fashion Fair Mall

 

 

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term SheetJPMCC 2017-JP5
  
Fresno Fashion Fair Mall

 

Mortgage Loan Information Property Information
Mortgage Loan Seller(1):JPMCB Single Asset / Portfolio:Single Asset
Original Principal Balance(2):$69,000,000 Title:Fee
Cut-off Date Principal Balance(2):$69,000,000 Property Type - Subtype:Retail – Super Regional Mall
% of Pool by IPB:6.3% Net Rentable Area (SF)(3):536,106
Loan Purpose:Recapitalization Location:Fresno, CA
Borrower:Macerich Fresno Limited Year Built / Renovated:1970 / 2003
 Partnership Occupancy(4):89.3%
Sponsor:The Macerich Partnership, L.P. Occupancy Date:1/31/2017
Interest Rate:3.58700% Number of Tenants:108
Note Date:10/6/2016 2013 NOI:$25,136,449
Maturity Date:11/1/2026 2014 NOI:$26,351,309
Interest-only Period:120 months 2015 NOI:$28,175,002
Original Term:120 months 2016 NOI:$27,639,900
Original Amortization:None UW Economic Occupancy:90.8%
Amortization Type:Interest Only UW Revenues(5):$33,363,299
Call Protection:L(28),DeforGrtr1%orYM(88),O(4) UW Expenses:$6,507,414
Lockbox:CMA UW NOI:$26,855,885
Additional Debt:Yes UW NCF:$25,836,869
Additional Debt Balance:$256,000,000 Appraised Value / Per SF:$565,000,000 / $1,054
Additional Debt Type:Pari Passu Appraisal Date:8/24/2016
     

 

Escrows and Reserves(6) Financial Information(2)
 InitialMonthlyInitial Cap Cut-off Date Loan / SF:$606 
Taxes:$0SpringingN/A Maturity Date Loan / SF:$606 
Insurance:$0SpringingN/A Cut-off Date LTV:57.5% 
Replacement Reserves:$0Springing$184,080 Maturity Date LTV:57.5% 
TI/LC:$0Springing$1,112,820 UW NCF DSCR:2.19x 
Other:$0 $0N/A UW NOI Debt Yield:8.3% 
        
 
Sources and Uses
SourcesProceeds% of Total UsesProceeds% of Total
Mortgage Loan(2)$325,000,000100.0% Return of Equity(7)$322,225,80299.1%
    Closing Costs2,774,1980.9 
Total Sources$325,000,000100.0% Total Uses$325,000,000100.0%
          
(1)The Fresno Fashion Fair Mall Whole Loan was co-originated by JPMCB and Société Générale.
(2)The Fresno Fashion Fair Mall loan is part of a whole loan evidenced by sevenpari passu notes with an aggregate original principal balance of $325.0 million. The Financial Information presented in the chart above reflects the Cut-off Date balance of the $325.0 million Fresno Fashion Fair Mall Whole Loan, as defined in “The Loan” below.
(3)Net Rentable Area (SF) excludes square footage associated with Macy’s Women & Home, Macy’s Men’s & Children’s and Forever 21. The Macy’s Women & Home land and improvements are tenant owned with no attributable base rent, while the Forever 21 land and improvements are owned by an affiliate of the loan sponsor and not held as collateral for the Fresno Fashion Fair Mall Whole Loan. Please see “Redevelopment, Master Lease and Partial Releases” below for additional details with respect to the Macy’s Men’s & Children’s ground leased space. Reimbursements for common area maintenance and real estate taxes associated with the Macy’s Women & Home and Macy’s Men’s & Children’s parcels are included in UW NOI. Additionally, Net Rentable Area (SF) is not inclusive of square footage associated with the BJ’s Restaurant, Chick-fil-A and Fleming’s, for which the respective tenants own their improvements but not the related land, which are ground leased from the borrower.
(4)Occupancy includes 681 square feet of expansion space for M.A.C. and Macy’s. The lease has been executed and is scheduled to commence on April 1, 2017.
(5)UW Revenues includes $886,070 in underwritten rent associated with in-line temporary tenants and $1,410,094 in underwritten rent associated with temporary kiosks and carts. UW Revenues also includes base rent attributable to the BJ’s Restaurant, Chick-fil-A and Fleming’s ground leases in the amount of approximately $343,850 per year.
(6)For a full description of Escrows and Reserves, please refer to“Escrows and Reserves”below.
(7)The Fresno Fashion Fair Mall property was previously unencumbered.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term SheetJPMCC 2017-JP5
  
Fresno Fashion Fair Mall

  

The Loan.The Fresno Fashion Fair Mall loan is secured by the borrower’s fee interest in 536,106 square feet of an approximately 957,944 square foot super regional mall located in Fresno, California. The whole loan was co-originated by JPMCB and Société Générale, has an outstanding principal balance as of the Cut-off Date of $325.0 million (the “Fresno Fashion Fair Mall Whole Loan”) and is comprised of sevenpari passu notes, each as described below. Note A-1-A was securitized in the JPMDB 2016-C4 trust and is the controlling note under the related co-lender agreement, the rights of which will be exercised by the related trustee (or, prior to the occurrence and continuance of a control termination event under the related pooling and servicing agreement, by the related directing certificateholder). However, the JPMCC 2017-JP5 Trust will be entitled, under certain circumstances, to be consulted with respect to certain major decisions. The Fresno Fashion Fair Mall Whole Loan has a 10-year term and will be interest-only for the term of the loan.

 

 Whole Loan Summary
NoteOriginal BalanceCut-off Date Balance Note HolderControlling Piece
A-1-A$60,000,000$60,000,000 JPMDB 2016-C4Yes
A-1-B80,000,00080,000,000 JPMCC 2016-JP4No
A-1-C69,000,00069,000,000 JPMCC 2017-JP5No
A-2-A40,000,00040,000,000 CFCRE 2016-C6No
A-2-B36,000,00036,000,000 CFCRE 2016-C7No
A-2-C35,000,00035,000,000 CGCMT 2016-P6No
A-2-D5,000,0005,000,000 CFCRE 2016-C7No
Total$325,000,000$325,000,000   

 

The Borrower.The borrowing entity for the Fresno Fashion Fair Mall Whole Loan is Macerich Fresno Limited Partnership, a California limited partnership and special purpose entity.

 

The Loan Sponsor. The loan sponsor and nonrecourse carve-out guarantor for the Fresno Fashion Fair Mall Whole Loan is The Macerich Partnership, L.P., an affiliate of the Macerich Company (NYSE: MAC) (“Macerich”). Macerich is a self-administered and self-managed real estate investment trust involved in the acquisition, ownership, development, redevelopment, management and leasing of regional and community shopping centers located throughout the United States. As of December 31, 2015, Macerich owned approximately 55 million square feet of real estate consisting primarily of interests in 58 regional shopping centers. Macerich specializes in successful retail properties in many of the country’s most attractive and densely populated markets, with a significant presence in California, Arizona, Chicago and the greater New York metropolitan area. As of February 1, 2017, Macerich had a total market capitalization of approximately $10.5 billion and an enterprise value of approximately $14.9 billion. Macerich reported full-year 2015 revenues of approximately $1.3 billion with net income of approximately $488.0 million.

 

The loan sponsor acquired the property in 1996 for approximately $87.9 million ($164 per square foot). Since acquisition, the loan sponsor has indicated that it has invested approximately $51.9 million ($97 per square foot) in improvements to the property for a total cost basis in the property of $139.8 million ($261 per square foot). Additionally, the loan sponsor intends to invest approximately $2.5 million over the next two years in routine upgrades and maintenance.

 

The Property. Fresno Fashion Fair Mall is an approximately 957,944 square foot, super regional mall located in Fresno, California. Approximately 536,106 square feet of the Fresno Fashion Fair Mall serves as collateral for the Fresno Fashion Fair Mall Whole Loan. Fresno Fashion Fair Mall was originally developed in 1970 and was most recently renovated in 2003. The property is located on a 69.0 acre parcel and features four anchor spaces, six outparcel lots and approximately 351,699 square feet of in-line retail space. Since acquiring the property, the loan sponsor has undertaken two large scale redevelopment projects at the property. In 2003, the loan sponsor began an extensive interior remodeling at an estimated cost of approximately $11.7 million, aimed at repositioning and remerchandising the mall’s product offering. In addition, in 2006, the loan sponsor completed an expansion comprised of an outdoor village at an estimated cost of approximately $20.5 million. The 2006 expansion attracted well-known national brands such as Anthropologie (10,928 square feet), Michael Kors (2,225 square feet), Sephora (5,158 square feet), Cheesecake Factory (10,200 square feet) and GUESS (5,226 square feet). The property contains 5,930 surface parking spaces for an overall parking ratio of 6.19 spaces per 1,000 square feet.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term SheetJPMCC 2017-JP5
  
Fresno Fashion Fair Mall

 

The property is anchored by JCPenney, Macy’s Women & Home, Forever 21 and Macy’s Men’s & Children’s. JCPenney leases 153,769 square feet (28.7% of collateral net rentable area) through November 2017 and is the primary collateral anchor tenant. For the trailing 12-month period ending November 2016, JCPenney totaled $36.0 million in annual sales ($234 per square foot) and has outperformed the national average for equivalent JCPenney stores. JCPenney is an original tenant at the property and is not obligated to pay rent under its lease, but the tenant is responsible for its proportionate share of tax and common area maintenance reimbursements. Macy’s Women & Home owns its underlying land and improvements and is not collateral for the Fresno Fashion Fair Mall Whole Loan. The Forever 21 anchor parcel was conveyed to an affiliate of the loan sponsor prior to origination and does not serve as collateral for the Fresno Fashion Fair Mall Whole Loan.

 

Non-Owned Anchors
TenantRatings(1)
Moody’s/S&P/Fitch
Net Rentable
Area (SF)
Most Recent
Sales(2)
Most Recent
Sales PSF(2)
Macy’s Women & Home(3)(5)Baa2 / BBB / BBB176,410 $45,500,000 $258
Forever 21(3)(5)NA / NA / NA148,614 $10,914,534   $73
Macy’s Men’s & Children’s(4)(5)Baa2 / BBB / BBB  76,650$19,500,000 $254
(1)Ratings provided are for the parent company of the entity listed in the “Tenant” field whether or not the parent company guarantees the lease.
(2)Macy’s Women & Home and Macy’s Men’s & Children’s are based on the loan sponsor’s estimate, while Forever 21 is based on actual reported sales, each as of November 30, 2016.
(3)The Macy’s Women & Home and Forever 21 anchor parcels are not part of the collateral for the Fresno Fashion Fair Mall Whole Loan. Macy’s Women & Home land and improvements are tenant-owned, while the Forever 21 land and improvements are owned by an affiliate of the loan sponsor and not held as collateral for the loan.
(4)Please see “Redevelopment, Master Lease and Partial Releases” below for additional detail with respect to the Macy’s Men’s & Children’s ground leased space.
(5)No base rent has been underwritten in connection with the Macy’s Women & Home, Forever 21 and Macy’s Men’s & Children’s spaces.

 

As of January 31, 2017, the property was 89.3% leased by 108 tenants across 113 leases (93.1% including temporary tenants). The overall mall, inclusive of non-owned anchor tenants, is 93.9% occupied (96.1% including temporary tenants). The property’s tenant offering is broad with a range of higher-end and mass market tenants represented. The largest non-anchor collateral tenant, Victoria’s Secret, leases 14,530 square feet (2.7% of the collateral net rentable area) through January 2027. Victoria’s Secret contributes 3.5% of the total underwritten base rent and reported sales of $715 per square foot for the trailing 12-months ending November 30, 2016. The second largest non-anchor collateral tenant, Love Culture, leases 14,135 square feet (2.6% of the collateral net rentable area) through October 2020. Love Culture contributes 3.1% of the total underwritten base rent and reported sales of $126 per square foot for the trailing 12-months ending November 30, 2016. Outside of the four anchor tenants, no individual tenant occupies more than 2.7% of collateral net rentable area or accounts for more than 3.5% in underwritten base rent. In addition to its anchors, the property’s in-line tenants largely consist of national retailers such as Apple, Abercrombie & Fitch, American Eagle Outfitters and Foot Locker.

 

The property has generated more than $315.9 million in overall gross sales for the trailing 12-months ending November 30, 2016, with comparable in-line sales of approximately $699 per square foot and occupancy costs of 12.4%. The property has demonstrated consistent performance with overall mall occupancy having averaged 95.8% from 2007 to 2015, while net operating income has demonstrated steady year-over-year gains every year dating back to 2010. More recently, the property has experienced continued leasing momentum, with 37 new and renewal leases over the preceding 25-month period accounting for 100,578 square feet and approximately $6.3 million in underwritten base rent.

 

Historical and Current Occupancy(1)(2)(3)
201320142015Current(4)
95.8%95.8%93.2%89.3%
(1)Historical Occupancies are as of December 31 of each respective year.
(2)Historical and Current Occupancy includes only permanent leases.
(3)Historical and Current Occupancy including specialty tenants with leases over six months for 2013 to Current is 96.8%, 98.4%, 98.1% and 92.2%, respectively.
(4)Current Occupancy is as of January 31, 2017 and includes 681 square feet of expansion space for M.A.C. and Macy’s. The lease has been executed and commences April 1, 2017.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term SheetJPMCC 2017-JP5
  
Fresno Fashion Fair Mall

 

Historical In-line Sales and Occupancy Costs(1)(2)
 201320142015TTM(3)
In-line Sales PSF(4)$621$603$642$699
Occupancy Costs(5)12.7%13.4%13.0%12.4%
(1)Historical In-line Sales and Occupancy Costs are based on actual reported sales or estimates, in each case provided by the loan sponsor.
(2)In-line Sales PSF and Occupancy Costs are for comparable tenants less than 10,000 square feet that reported full year sales and were provided by the loan sponsor.
(3)TTM In-line Sales and Occupancy Costs are as of November 30, 2016.
(4)In-line Sales PSF excluding Apple are $535, $524, $556 and $600 for 2013, 2014, 2015 and TTM, respectively.
(5)Occupancy Costs excluding Apple are 14.9%, 15.4%, 15.0% and 14.5% for 2013, 2014, 2015 and TTM, respectively.

 

Fresno Fashion Fair Mall benefits from its location approximately 5.5 miles north of downtown Fresno, California. The property is located approximately 5.8 miles east of Highway 99, the major regional highway through the Central Valley of California and is situated between Highway 41 and Highway 168. According to the California State Transportation Agency, the daily traffic count for Highway 168 was approximately 123,000 vehicles. Additionally, the property is located just over 1.0 mile west of California State University, which had a total student population of 24,403 as of the 2016 fall semester. According to the appraisal, the property benefits from regional and local accessibility, serving a 25-mile trade area covering nearly 1.0 million residents and spanning over 300,000 households. As of year-end 2015, the Fresno metropolitan statistical area is home to approximately 975,499 people with an estimated population within a five-, seven- and 25-mile radius of the property of approximately 400,022, 623,569 and 989,691 people, respectively. Additionally, estimated household income within a five-, seven- and 25-mile radius of the property is approximately $63,126, $66,212 and $66,870, respectively, with projected annual compound growth of 3.0% through 2020.

 

As of the second quarter of 2016, the Fresno retail market consisted of approximately 64.2 million square feet with an overall vacancy rate of 7.5% and average asking rents of $13.14 per square foot. According to the appraisal, the property’s primary and secondary competition consists of nine properties as demonstrated in the table below. The competitive properties in the primary trade area maintained a vacancy rate of approximately 9.0% and average sales ranging from $250 to $400 per square foot. The appraisal does not identify any new or proposed directly competitive properties in the area.

 

Competitive Set Summary(1)
 PropertyYear Built / RenovatedTotal GLAProximity (Miles)Estimated OccupancySales PSFAnchor Tenants
Fresno Fashion Fair Mall(2)1970 / 2003957,944NAP93.9%$600Macy’s Women & Home, Macy’s Men’s and Children’s, Forever 21, JCPenney
Primary Competition      
Fig Garden Village1956 / 2007301,1011.794.0%$400Whole Foods Market, CVS
The Shops at River Park1997 / NAP677,2523.593.0%$325Macy’s, Edward’s Cinema, REI, Cost Plus
Marketplace At River Park1996 / NAP505,9253.398.0%$325JCPenney, Target, Best Buy, Buy Buy Baby, Marshalls, Old Navy
       
Villagio Shopping Center2002 / 2006203,2684.0100.0%NAVNordstrom Rack, Barnes & Noble, HomeGoods
Sierra Vista Mall1988 / 2007697,9804.480.0%$250Sears, Kohl’s, Target, Sierra Vista Cinema
Secondary Competition      
Burlington Plaza(3)1978 / NAP395,0591.475.0%NAVTarget, Smart & Final
Winepress S.C.(3)1987 / NAP310,6504.079.0%NAVTarget, Stein Mart, Anna’s Linens, Big 5
Clovis Crossing2000 / 2005446,6435.898.0%NAVWalmart, Dick’s Sporting Goods, HomeGoods, Anna’s Linens
       
Marketplace at El Paseo2014 / NAP365,1479.595.0%NAVTarget, Ross Dress For Less, Old Navy, Marshalls, Burlington Coat Factory, Anna’s Linens, Petco
(1)Based on the appraisal.
(2)Total GLA for Fresno Fashion Fair Mall includes non-collateral space and Estimated Occupancy represents actual occupancy as of January 31, 2017, excluding temporary tenants. Sales PSF for the Fresno Fashion Fair Mall represents comparable in-line sales excluding Apple as of November 30, 2016.
(3)Burlington Plaza and Winepress S.C. each have a vacant anchor tenant space.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term SheetJPMCC 2017-JP5
  
Fresno Fashion Fair Mall

 

Collateral Tenant Summary(1)
TenantRatings(2)
Moody’s/S&P/Fitch
Net
Rentable
Area (SF)
% of
Total
NRA
Lease Expiration
Date
Base
Rent PSF
% of Total Base RentMost Recent Sales PSF(3)Occupancy Cost(3)
JCPenney(4)(5)B1 / B / B+153,76928.7%11/30/2017$0.000.0%$2340.7%
Victoria’s SecretBa1 / BB+ / BB+14,5302.7%1/31/2027$48.233.5%$7159.1%
Love CultureNA / NA / NA14,1352.6%10/31/2020$44.223.1%$12635.2%
Bank of the WestAa3 / A- / A14,1142.6%12/31/2018$43.863.1%NAVNAV
AnthropologieNA / NA / NA10,9282.0%10/31/2017$31.781.7%$21422.6%
Cheesecake FactoryNA / NA / NA10,2001.9%1/31/2026$40.002.0%$9565.9%
Charming CharlieNA / NA / NA9,5631.8%1/31/2022$28.851.4%$13420.6%
New York & Company(6)NA / NA / NA9,2681.7%MTM$37.911.7%$24127.1%
American EagleNA / NA / NA8,5491.6%3/31/2027$48.962.1%$39917.9%
ExpressNA / NA / NA8,5001.6%1/31/2026$36.391.5%$45614.0%
(1)Based on the underwritten rent roll.
(2)Ratings provided are for the parent company of the entity listed in the “Tenant” field whether or not the parent company guarantees the lease.
(3)Most Recent Sales PSF and Occupancy Cost are based on actual reported sales or estimates, in each case provided by the loan sponsor as of November 30, 2016. Most Recent Sales PSF for American Eagle is based on 7,382 square feet. American Eagle expanded its space to 8,549 square feet under a lease extension effective January 31, 2017.
(4)JCPenney is an original tenant at the property and is not obligated to pay rent under its lease. Under its current lease, JCPenney is responsible only for its proportionate share of CAM and tax reimbursements.
(5)JCPenney’s lease will be terminated and the tenant will be released from its obligations under the lease in the event the borrower rejects an offer by the tenant to purchase its leased premises. See “Purchase Option” below for additional details.

(6) New York & Company’s lease expired on January 31, 2017 and according to the loan sponsor is currently negotiating an extension.

 

 

Lease Rollover Schedule(1)(2)
YearNumber
of
Leases Expiring
Net Rentable Area Expiring% of NRA ExpiringBase Rent
Expiring
% of Base Rent ExpiringCumulative Net Rentable Area ExpiringCumulative
% of NRA
Expiring
Cumulative Base Rent ExpiringCumulative
% of Base
Rent Expiring
VacantNAP57,12910.7%NAPNAP57,12910.7%NAPNAP
2017 & MTM21217,96040.7%$3,510,87417.5%275,08951.3%$3,510,87417.5%
20181136,8506.9%2,275,22311.3%311,93958.2%$5,786,09828.8%
20191327,1785.1%1,805,4029.0%339,11763.3%$7,591,50037.8%
20201438,8217.2%2,430,49712.1%377,93870.5%$10,021,99749.9%
2021(3)1019,9013.7%1,365,9096.8%397,83974.2%$11,387,90656.7%
2022319,6143.7%723,7653.6%417,45377.9%$12,111,67160.3%
20231025,0114.7%1,627,8028.1%442,46482.5%$13,739,47368.4%
2024(3)1221,8574.1%2,280,32811.4%464,32186.6%$16,019,80179.7%
2025713,2502.5%1,017,6155.1%477,57189.1%$17,037,41784.8%
2026833,6246.3%1,722,0038.6%511,19595.4%$18,759,42093.4%
2027324,9114.6%1,210,8316.0%536,106100.0%$19,970,25199.4%
2028 & Beyond(3)100.0%120,0000.6%536,106100.0%$20,090,251100.0%
Total 113536,106100.0% $20,090,251100.0%    
            
(1)Based on the underwritten rent roll.
(2)Lease Rollover Schedule excludes the square footage associated with the Macy’s Women & Home, Macy’s Men’s & Children’s and Forever 21 boxes. The Macy’s Women & Home land and improvements are tenant-owned with no attributable base rent, while the Forever 21 land and improvements are Macerich-owned and not collateral for the Fresno Fair Fashion Mall Whole Loan. While currently held as collateral for the loan, the Macy’s Men’s & Children’s anchor parcel is subject to free release by the borrower with no accompanying payment of a release price or prepayment of the Fresno Fashion Fair Mall Whole Loan.
(3)Represents owned collateral only and excludes the square footage associated with BJ’s Restaurant (expiring in 2024), Chick-fil-A (expiring in 2035) and Fleming’s (expiring in 2021), for which the respective tenant owns its improvements but not the related land, which are ground leased from the borrower. Underwritten base rent attributable to the BJ’s Restaurant, Chick-fil-A and Fleming’s ground leases is approximately $343,850 per year and is included in each tenant’s respective expiration year.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term SheetJPMCC 2017-JP5
  
Fresno Fashion Fair Mall

 

Operating History and Underwritten Net Cash Flow
 2013201420152016UnderwrittenPer Square Foot%(1)
Rents in Place(2)(3)$18,767,733$20,007,601$20,310,953$19,697,394$20,090,251$37.4761.2%
Vacant Income00003,006,4295.619.2%
Gross Potential Rent$18,767,733$20,007,601$20,310,953$19,697,394$23,096,680$43.0870.4%
CAM Reimbursement8,043,1478,289,4318,666,0148,153,8407,630,45414.2323.2%
Real Estate1,646,2151,693,4581,809,2381,927,7901,714,0443.205.2%
Percentage Rent455,674281,211295,450344,621246,5080.460.8%
Other Rental Storage33,95630,97650,479135,624135,6240.250.4%
Net Rental Income$28,946,725$30,302,678$31,132,134$30,259,269$32,823,310$61.23100.0%
(Vacancy/Credit Loss)(205,366)(244,149)(454,317)(218,480)(3,006,429)(5.61)(9.2)--
Other Income(4)2,846,1612,735,6633,150,5903,546,4183,546,4186.6210.8%
Effective Gross Income$31,587,519$32,794,192$33,828,408$33,587,207$33,363,299$62.23101.6%
        
Total Expenses$6,451,070$6,442,883$5,653,406$5,947,307$6,507,414

$12.14

 

19.5%
        
Net Operating Income$25,136,449$26,351,309$28,175,002$27,639,900$26,855,885$50.0980.5%
        
Total TI/LC, Capex/RR00001,019,0151.903.1%
        
Net Cash Flow$25,136,449$26,351,309$28,175,002$27,639,900$25,836,869$48.1977.4%
(1)% column represents percent of Net Rental Income for all revenue lines and percent of Effective Gross Income for the remainder of fields.
(2)Underwritten Rents in Place is inclusive of $480,704 in contractual rent steps underwritten through February 2018.
(3)Non-collateral anchor tenants, Macy’s Women & Home, Forever 21 and Macy’s Men’s & Children’s, have not been included in Rents in Place. Underwritten Rents in Place is inclusive of approximately $343,850 attributable to the BJ’s Restaurant, Chick-fil-A and Fleming’s ground leases.
(4)Other Income includes tenant marketing expense reimbursements and other rents, including $886,070 in underwritten rent associated with in-line temporary tenants and $1,410,094 in underwritten base rent associated with temporary kiosks and carts.

 

Property Management. The property is managed by Macerich Property Management Company, LLC, an affiliate of the loan sponsor.

 

Escrows and Reserves. No upfront escrows were taken at origination.

 

Tax Escrows - The requirement for the borrower to make monthly deposits into the tax escrow is waived so long as (i) no Trigger Period (as defined below) has occurred and is continuing and (ii) the borrower delivers evidence reasonably satisfactory to the lender that all taxes have been timely paid.

 

Insurance Escrows - The requirement for the borrower to make monthly deposits into the insurance escrow is waived so long as (i) no Trigger Period has occurred and is continuing and (ii) the borrower provides satisfactory evidence that the property is insured under an acceptable blanket policy in accordance with the loan documents and that all premiums have been timely paid.

 

Replacement Reserves - The requirement for the borrower to make monthly deposits into the replacement reserve account is waived so long as no Trigger Period has occurred and is continuing. Following the occurrence and during the continuance of a Trigger Period, the borrower is required to deposit $7,670 per month (approximately $0.17 per square foot annually) for replacement reserves. The reserve is subject to a cap of $184,080 (approximately $0.34 per square foot).

 

TI/LC Reserves -The requirement for the borrower to make monthly deposits into the TI/LC reserve is waived so long as no Trigger Period has occurred and is continuing. Following the occurrence and during the continuance of a Trigger Period, the borrower is required to deposit approximately $46,368 per month (approximately $1.04 per square foot annually) for TI/LC reserves. The TI/LC reserve is subject to a cap of $1,112,820 (approximately $2.08 per square foot). The borrower is also required to deposit any lease termination payments (regardless of the existence of a Trigger Period) into the TI/LC reserve.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term SheetJPMCC 2017-JP5
  
Fresno Fashion Fair Mall

 

Lockbox / Cash Management.The loan is structured with a CMA lockbox. Tenant direction letters were required to be sent to all tenants instructing them to deposit all rents and payments into the lockbox account controlled by the lender. The funds are then transferred to an account controlled by the borrower until the occurrence of a Trigger Period (as defined below). During the continuance of a Trigger Period, all rents will be swept weekly to a segregated cash management account and held in trust for the benefit of the lender. The lender will have a first priority security interest in the cash management account. Upon the occurrence and during the continuance of a Trigger Period until the occurrence of a Trigger Period Cure (as defined below), all excess cash after payment of debt service, required reserves and budgeted operating expenses will be held as additional security for the Fresno Fashion Fair Mall Whole Loan.

 

A “Trigger Period” means (i) the occurrence and continuance of an event of default or (ii) the occurrence of a DSCR Trigger Event.

 

A “DSCR Trigger Event” means the period commencing on the date when the debt service coverage ratio (as calculated in the loan documents) falls below 1.45x.

 

A “Trigger Period Cure” means with respect to the Trigger Period caused solely by (a) an event of default, the event of default has been cured (and no other event of default is continuing) or (b) a DSCR Trigger Event, the achievement of a debt service coverage ratio of 1.50x for two consecutive calendar quarters.

 

Redevelopment, Master Lease and Partial Releases.The borrower is permitted to engage in certain redevelopment activities at the property, which may include the modification and/or termination of the Macy’s Men’s and Children’s or JCPenney leases and the release of surface parking adjacent to the Forever 21 store and/or the Macy’s Men’s and Children’s store with the adjacent parking area, in each case without the payment of a release price or prepayment of the loan. In the event of any decrease in underwritten net operating income (as defined in the Fresno Fashion Fair Mall Whole Loan documents) as a result of the redevelopment activities, the borrower is required to enter into a master lease with the guarantor for all vacant space at the property. The rent under any such master lease is required to be in the amount of any decrease in underwritten net operating income. The loan documents provide that rent under such master lease will be reduced if and to the extent underwritten net operating income with respect to the property increases, as determined on a quarterly basis. With respect to any termination of the Macy’s Men’s & Children’s lease or the JCPenney lease, the master lease will terminate if: (x) the underwritten net operating income with respect to the property is restored to the greater of (i) pre-development levels and (ii) $27,000,000 and (y) the areas impacted by such redevelopment activities are 90% or more occupied with tenants in possession and paying rent. With respect to any modification of the Macy’s Men’s & Children’s lease and/or the JCPenney lease resulting in a decrease in underwritten net operating income, the master lease will terminate when the underwritten NOI is restored to the greater of (i) pre-modification levels and (ii) $27,000,000. No base rent has been underwritten in connection with the Macy’s Women & Home, JCPenney, Macy’s Men’s & Children’s and Forever 21 spaces. Please see “Description of the Mortgage Pool—Tenant Issues—Affiliated Leases”, “—Redevelopment, Renovation and Expansion” and “—Certain Terms of the Mortgage Loan.—Partial Releases”in the Preliminary Prospectus for additional information.

 

Purchase Option. JCPenney has the right to purchase its parcel under its lease. The borrower may nullify this purchase option, but the lease provides that a rejection of the offer to purchase will result in a termination of the lease and JCPenney being released from its obligations under the lease, as long as JCPenney pays all basic rents and other amounts due. The loan documents require that the borrower reject any offer by JCPenney to purchase the leased parcel.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Riverway

 

(graphics)

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Riverway

 

(graphics)

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Riverway

 

(graphics)

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Riverway

 

(graphics)

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Riverway

 

(graphics) 

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Riverway

 

(graphics)

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Riverway

 

Mortgage Loan Information Property Information
Mortgage Loan Seller:JPMCB Single Asset / Portfolio:Single Asset
Original Principal Balance(1):$65,000,000 Title:Fee
Cut-off Date Principal Balance(1):$64,763,123 Property Type - Subtype:Office – Suburban
% of Pool by IPB:5.9% Net Rentable Area (SF):869,120
Loan Purpose:Acquisition Location:Rosemont, IL
Borrower:Adventus US Realty #12 LP Year Built / Renovated:1988, 1994 / 2016
Sponsor:Adventus Holdings LP Occupancy:95.0%
Interest Rate:4.96000% Occupancy Date:9/30/2016
Note Date:11/2/2016 Number of Tenants:24
Maturity Date:12/1/2026 2013 NOI(2):$14,484,517
Interest-only Period:None 2014 NOI(2):$11,696,602
Original Term:120 months 2015 NOI:$12,200,715
Original Amortization:360 months TTM NOI (as of 8/2016)(3):$12,272,361
Amortization Type:Balloon UW Economic Occupancy:90.0%
Call Protection:L(27),Def(90),O(3) UW Revenues:$25,871,039
Lockbox:CMA UW Expenses:$12,713,001
Additional Debt:Yes UW NOI(3):$13,158,038
Additional Debt Balance:$62,770,411 UW NCF:$11,678,973
Additional Debt Type:Pari Passu Appraised Value / Per SF:$176,200,000 / $203
   Appraisal Date:9/7/2016
     

 

Escrows and Reserves(4) Financial Information(1)
 InitialMonthlyInitial Cap Cut-off Date Loan / SF: $147 
Taxes:$360,173$500,000N/A Maturity Date Loan / SF: $121 
Insurance:$0SpringingN/A Cut-off Date LTV: 72.4% 
Replacement Reserves:$14,485$14,485$869,100 Maturity Date LTV: 59.6% 
TI/LC:$108,640$108,640N/A UW NCF DSCR: 1.42x 
Other:$7,338,122$0N/A UW NOI Debt Yield: 10.3% 
        
 
Sources and Uses
SourcesProceeds% of Total UsesProceeds% of Total
Mortgage Loan(1)$128,000,00070.4% Purchase Price$173,000,00095.2%
Sponsor Equity53,779,28129.6 Upfront Reserves7,821,4204.3
    Closing Costs957,8610.5
Total Sources$181,779,281100.0% Total Uses$181,779,281100.0%
          
(1)The Riverway loan is part of a whole loan evidenced by twopari passu notes with an aggregate outstanding principal balance as of the Cut-off Date of approximately $127.5 million. The Financial Information presented in the chart above reflects the Cut-off Date balance of the approximately $127.5 million Riverway Whole Loan, as defined in “The Loan” below.
(2)The decrease in 2014 NOI from 2013 is primarily due to rent abatements for certain tenants, including Appleton and Culligan, of approximately $414,000.
(3)UW NOI is higher than TTM NOI due to future contractual rent steps through September 2017 totaling $366,501 and the expiration of free rent associated with certain tenants.
(4)For a full description of Escrows and Reserves, please refer to“Escrows and Reserves”below.

 

The Loan. The Riverway loan is secured by a first mortgage lien on the borrower’s fee interest in a four-building property totaling 869,120 square feet located in Rosemont, Illinois. The property consists of three office buildings totaling 858,711 square feet and one 10,409 square foot daycare center. The whole loan has an outstanding principal balance as of the Cut-off Date of approximately $127.5 million (the “Riverway Whole Loan”) and is comprised of twopari passu notes, each as described below. Note A-2 was contributed to the JPMCC 2016-JP4 trust and is the controlling note under the related co-lender agreement, the rights of which will be exercised by the related trustee (or, prior to the occurrence and continuance of a control termination event under the related pooling and servicing agreement, by the related directing certificateholder). However, the JPMCC 2017-JP5 Trust will be entitled, under certaincircumstances, to be consulted with respect to certain major decisions. The Riverway Whole Loan has a 10-year term and will amortize on a 30-year schedule.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Riverway

 

Whole Loan Summary
 Original BalanceCut-off Date BalanceNote HolderControlling Piece
A-1$65,000,000$64,763,123JPMCC 2017-JP5No
A-263,000,00062,770,411JPMCC 2016-JP4Yes
Total$128,000,000$127,533,534  

 

The Borrower. The borrowing entity for the Riverway Whole Loan is Adventus US Realty #12 LP, a Delaware limited partnership and special purpose entity.

 

The Loan Sponsor.The loan sponsor and nonrecourse carve-out guarantor is Adventus Holdings LP, a Delaware limited partnership. Adventus Holdings LP is an affiliate of Adventus Realty Trust, a private real estate investment trust formed in 2012. Based in Vancouver, Canada, Adventus Realty Trust invests in commercial real estate properties in suburban office markets outside of Chicago, Illinois and Atlanta, Georgia. The company targets properties with strong credit-worthy tenants and long term leases in place and attempts to add value through lease-up of vacant space, maximizing lease renewal rates upon maturity and strict management of operating expenses.

 

The Properties. Riverway is a Class A office complex consisting of three multi-tenant office buildings (“Riverway Central”, “Riverway East” and “Riverway West”, and, together, the “Riverway Office Properties”) totaling 858,711 square feet, a daycare center (“Riverway Daycare”) totaling 10,409 square feet, one owner-user office building and a Marriott Suites hotel. Riverway Central, Riverway East, Riverway West and Riverway Daycare (together, the “Riverway Properties”) serve as collateral for the Riverway Whole Loan. The Riverway Office Properties are located on a 14.1 acre parcel in Rosemont, Illinois and were constructed in 1988 and renovated in 2016. The Riverway Daycare was built in 1994. As of September 30, 2016, the Riverway Properties were 95.0% leased to 24 tenants. The three largest tenants are U.S. Foods, Inc. (“U.S. Foods”) (NYSE: USFD), which occupies space at Riverway East and Riverway West, Central States Pension Fund (“Central States”) and Culligan International Company (“Culligan”), which occupy 36.9%, 21.9% and 6.1% of the net rentable area, respectively. For additional information on the properties, see below.

 

Property Summary 

Property Name
LocationNet Rentable Area (SF)Year Built / RenovatedClassNumber of Tenants(1)Appraised ValueUnderwritten Net Cash Flow% of Underwritten Net Cash Flow
Riverway CentralRosemont, IL313,4781988 / 2016A5$62,200,000$4,480,15338.4%
Riverway EastRosemont, IL284,2411988 / 2016A1257,100,0003,599,81230.8 
Riverway WestRosemont, IL260,9921988 / 2016A1055,600,0003,574,09830.6 
Riverway Daycare(2)Rosemont, IL10,4091994NAP11,300,00024,9100.2 
Total 869,120  28$176,200,000$11,678,973100.0%
(1)The total number of tenants does not equal 24 because certain tenants at the Riverway Office Properties have spaces at multiple buildings.
(2)The Riverway Daycare building is 100% leased to Bright Horizons under a lease that expires in March 2027. The tenant also has the right to terminate the lease annually on each anniversary of the lease commencement date.

  


Historical and Current Occupancy(1)
Property201320142015Current(2)
Riverway Central91.2%86.5%93.9%93.9%
Riverway East91.2%91.6%90.5%98.3%
Riverway West98.2%92.9%95.9%92.3%
Riverway Daycare100.0%100.0%100.0%100.0%
Weighted Average(3)93.4%90.2%93.5%95.0%
(1)Historical Occupancies are as of December 31 of each respective year.
(2)Current Occupancy is as of September 30, 2016.
(3)Weighted Average based on individual property square footage.

  

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Riverway

 

Riverway Central. Riverway Central is a 313,478 square foot, 11-story Class A office tower located in Rosemont, Illinois. The property includes 1,027 garage and 32 surface parking spaces (3.38 spaces per 1,000 square feet of net rentable area). As of September 30, 2016, the property was 93.9% occupied by five tenants. The largest tenant at Riverway Central is Central States, one of the country’s largest defined benefit pension plans, which first leased its space in May 2003 and currently leases 60.6% of the net rentable area at Riverway Central through December 2019 (excluding two five-year extension options) across seven floors. Established in 1955, Central States is a health management firm that provides Teamsters and their families pension, health and welfare benefits. The second largest tenant at Riverway Central is Appleton GRP LLC (“Appleton”), which first leased its space in May 2003 and currently leases 12.1% of the net rentable area at Riverway Central through July 2021 across two floors. Headquartered at the property, Appleton manufactures electrical products for a number of industries including the automotive, beverage, chemical and energy industries. The company was founded in 1903 and is an affiliate of the Emerson Electric Company (NYSE: EMR) (rated A2/A by Moody’s and S&P, respectively), a Fortune 500 company. The third largest tenant at Riverway Central is GSA Public Building Services (“GSA”) (rated Aaa/AA+/AAA by Moody’s, S&P and Fitch, respectively), which currently leases 10.6% of the net rentable area at Riverway Central through August 2, 2020. GSA’s space serves as office space for the Transportation Security Administration (“TSA”). Established by the Aviation and Transportation Security Act of 2001, the TSA is tasked with protecting the United States’ transportation systems.

 

Riverway East. Riverway East is a 284,241 square foot, 11-story Class A office tower located in Rosemont, Illinois. The property includes 925 garage spaces and 41 surface parking spaces (3.40 spaces per 1,000 square feet of net rentable area). As of September 30, 2016, the property was 98.3% occupied by 12 tenants. The largest tenant at Riverway East is U.S. Foods, which first leased its space in April 2006 and currently leases 69.7% of the net rentable area at Riverway East through September 2023 across eight floors. Headquartered at the property, U.S. Foods is one of the largest food distributors in the United States. It offers a range of fresh, frozen and dry food and non-food products, serving independently owned single and multi-unit restaurants, regional restaurant concepts, national restaurant chains, hospitals, nursing homes, hotels and motels, country clubs, government and military organizations, colleges and universities and retail locations. The second largest tenant at Riverway East is OMS National Insurance Company (“OMS”), which first leased its space in April 1996 and currently leases 8.6% of the net rentable area at Riverway East through January 2019. Headquartered at the property, OMS is an insurance company that provides risk management programs and insurance services to the medical industry. The third largest tenant at Riverway East is Sumitomo Corporation of America (“Sumitomo”), which first leased its space in October 2002 and currently leases 5.6% of the net rentable area at Riverway East through January 2019. Sumitomo produces steel, metal, machinery, power, chemicals, electronics, mineral resources and energy products for the automotive, electronics, energy, communications, transportation and container sectors. The company was founded in 1952 and its U.S. headquarters are located in New York, New York.

 

Riverway West. Riverway West is a 260,992 square foot, 11-story Class A office tower located in Rosemont, Illinois. The property includes 861 garage and 14 surface parking spaces (3.35 spaces per 1,000 square feet of net rentable area). As of September 30, 2016, the property was 92.3% occupied by 10 tenants. The property’s largest tenant is U.S. Foods, which first leased its space in January 2005 and currently leases 46.8% of the net rentable area at Riverway West through September 2023 across five floors. The second largest tenant is Culligan, which currently leases 20.4% of the net rentable area at Riverway West through December 2021 across three floors. The building serves as the headquarters for the tenant. Founded in 1936, Culligan manufactures and distributes water filtration and treatment systems for residential, office, commercial and industrial applications. The third largest tenant is The NPD Group Inc. (“NPD”), which first leased its space in September 1994 and currently leases 14.8% of the net rentable area at Riverway West through March 2020 across two floors. NPD provides market information, tracking, analytic and advisory services to clients in the Americas, Europe and the Asia-Pacific.

 

The Riverway Properties are located in Rosemont, Illinois in the O’Hare Area submarket. O’Hare International Airport is located approximately three miles away and the Chicago central business district is approximately 15 miles away. Primary access to the area is provided by the Kennedy Expressway, a major arterial that crosses the Chicago area in a northwest/southeast direction. Public transportation is provided by Chicago Transit Authority and Pace Suburban Bus Service, which provide access to the Chicago central business district. According to the appraisal, the trade area consisting of a five-mile radius contains approximately 154,544 people with a median household income of $60,131. As of the second quarter of 2016, the O’Hare Area submarket had an office inventory of approximately 14.1 million square feet across 106 buildings with an average occupancy rate of 74.7% and average asking rent of $24.22 per square foot. The appraisal identified eight comparable office properties that serve as a competitive set for the Riverway Office Properties. The office properties in the competitive set range from approximately 121,117 square feet to 818,000 square feet and were constructed between 1980 and 2010. The competitive set has a weighted average occupancy rate of 90.9% and an average asking rent of $18.49.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Riverway

 

Tenant Summary(1)
TenantPropertyRatings(2)Moody’s/S&P/FitchNet Rentable Area (SF)% of Total NRABase RentBase Rent PSF(3)Lease Expiration Date
U.S. Foods(4)Riverway East / WestCaa1 / B+ / NA320,34136.9%$5,998,5$18.739/30/2023
Central StatesRiverway CentralNA / NA / NA190,07721.9%$3,983,3$20.9612/31/2019
Culligan(5)Riverway WestNA / NA / NA53,1336.1%$883,728$16.6312/31/2021
NPDRiverway WestNA / NA / NA38,9174.5%$696,656$17.903/31/2020
AppletonRiverway CentralA2 / A / NA38,0034.4%$723,857$19.057/31/2021
GSARiverway CentralAaa / AA+ / AAA33,2163.8%$950,370$28.618/2/2020
First Union RailRiverway CentralAa2 / AA- / AA33,2123.8%$612,761$18.451/31/2024
OMSRiverway EastNA / NA / NA24,5212.8%$489,420$19.961/31/2019
Sumitomo(6)Riverway EastA1 / A- / NA15,7761.8%$331,296$21.001/31/2019
PricewaterhouseCoopersRiverway WestNA / NA / NA11,2071.3%$224,140$20.004/30/2020
(1)Based on the underwritten rent roll.
(2)Ratings provided are for the parent company of the entity listed in the “Tenant” field whether or not the parent company guarantees the lease.
(3)Base Rent PSF represents the weighted average for each tenant in the case of tenants with various leases containing different rents per square foot.
(4)U.S. Foods leases 198,071 square feet of net rentable area at Riverway East and 122,270 square feet of net rentable area at Riverway West.
(5)Culligan has a one-time right to terminate its lease as of December 31, 2019, with notice on or prior to March 31, 2019 and the payment of a termination fee.
(6)Sumitomo has a one-time right to terminate its lease as of January 31, 2018, with notice on or prior to April 30, 2017 and the payment of a termination fee.

 

Lease Rollover Schedule(1)
YearNumber of Leases ExpiringNet Rentable Area Expiring% of NRA ExpiringBase Rent Expiring% of Base Rent ExpiringCumulative Net Rentable Area ExpiringCumulative % of NRA ExpiringCumulative Base Rent ExpiringCumulative % of Base Rent Expiring
VacantNAP43,8435.0%NAPNAP43,8435.0%NAPNAP
2017 & MTM(2)510,1251.2$206,1961.3%53,9686.2%$206,1961.3%
201833,8110.4106,2610.757,7796.6%$312,4572.0%
20193230,37426.54,804,02730.4288,15333.2%$5,116,48432.4%
2020599,80911.52,193,40613.9387,96244.6%$7,309,89046.3%
2021499,95111.51,770,57011.2487,91356.1%$9,080,46057.5%
2022000.000.0487,91356.1%$9,080,46057.5%
20231320,34136.95,998,55138.0808,25493.0%$15,079,01195.5%
2024133,2123.8612,7613.9841,46696.8%$15,691,77299.4%
202515,3660.640,7370.3846,83297.4%$15,732,50999.6%
2026000.000.0846,83297.4%$15,732,50999.6%
2027110,4091.260,0000.4857,24198.6%$15,792,509100.0%
2028 & Beyond(3)011,8791.400.0869,120100.0%$15,792,509100.0%
Total24869,120100.0%$15,792,509 100.0%    
              

(1)Based on the underwritten rent roll.
(2)2017 & MTM includes United Parcel Service and Federal Express Corporation.
(3)2028 & Beyond includes an 8,053 square foot fitness center and 3,826 square foot management office located at Riverway East.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Riverway

 

Operating History and Underwritten Net Cash Flow 
 201320142015TTM(1)UnderwrittenPer Square Foot%(2)
Rents in Place(3) $14,744,668$14,359,825$14,636,219$14,596,191$15,792,506 $18.1755.2%
Vacant Income0000789,550 0.912.8 
Gross Potential Rent $14,744,668$14,359,825$14,636,219$14,596,191$16,582,056 $19.0858.0%
Total Reimbursements 10,814,9469,855,26710,473,99111,583,58012,024,877 13.8442.0 
Net Rental Income $25,559,614$24,215,092$25,110,210$26,179,771$28,606,934 $32.91100.0%
(Vacancy/Credit Loss) (150,651)(968,767)(458,594)(1,464,547)(2,860,693) (3.29)(10.0) 
Other Income(4) 80,499102,96543,09651,555124,800 0.140.4 
Effective Gross Income $25,489,463$23,349,290$24,694,712$24,766,779$25,871,039 $29.7790.4%
         
Total Expenses $11,004,945$11,652,689$12,493,997$12,494,418$12,713,001 $14.6349.1%
         
Net Operating Income $14,484,517$11,696,602$12,200,715$12,272,361$13,158,038 $15.1450.9%
         
Total TI/LC, Capex/RR00001,479,065 1.705.7 
         
Net Cash Flow $14,484,517$11,696,602$12,200,715$12,272,361$11,678,973 $13.4445.1%
(1)TTM historical financials are based on the trailing 12-month period ending on August 31, 2016.
(2)% column represents percent of Net Rental Income for all revenue lines and represents percent of Effective Gross Income for the remainder of fields.
(3)The increase in Underwritten Rents in Place over TTM Rents in Place is due to contractual rent steps taken through September 2017 and the expiration of free rent associated with certain tenants.
(4)Other Income consists primarily of auditorium fees, fitness center fees and sundry revenues.

 

Property Management. The property is managed by Cushman & Wakefield U.S., Inc.

 

Escrows and Reserves. At origination, the borrower deposited into escrow approximately $7.0 million for outstanding tenant improvements and leasing commissions associated with three tenants, $360,173 for tax reserves, $271,509 for free rent reserves associated with one tenant, $108,640 for future tenant improvements and leasing commissions, $81,825 for immediate repairs and $14,485 for replacement reserves.

 

Tax Escrows- On a monthly basis, the borrower is required to escrow 1/12 of the annual estimated tax payments, which currently equates to approximately $500,000.

 

Insurance Escrows- The requirement for the borrower to make monthly deposits to the insurance escrow is waived so long as (i) no event of default exists and (ii) the borrower provides satisfactory evidence that the property is insured under an acceptable blanket policy in accordance with the loan documents.

 

Replacement Reserves- On a monthly basis, the borrower is required to escrow $14,485 ($0.20 per square foot annually) for replacement reserves. The reserve is subject to a cap of $869,100 (approximately $1.00 per square foot).

 

TI/LC Reserves- On a monthly basis, the borrower is required to deposit $108,640 ($1.50 per square foot annually) for tenant improvements and leasing commissions reserves. The reserve is not subject to a cap. In addition, upon the occurrence and continuance of either a Tenant Trigger Event (as defined below) or a Downgrade Trigger Event (as defined below), all excess cash flow after payment of debt service, required reserves and operating expenses is required to be deposited into the reserve.

 

Lockbox / Cash Management.The Riverway Whole Loan is structured with a CMA lockbox. The borrower and manager were required at origination to deliver tenant direction letters instructing all tenants to deposit rents into a lockbox account controlled by the lender. All funds in the lockbox account will be swept daily into the borrower’s operating account unless a Trigger Period (as defined below) is continuing, in which event such funds will be swept each business day into a cash management account controlled by the lender and disbursed on each payment date in accordance with the loan documents.

 

A “Trigger Period” commences upon the occurrence of (i) an event of default, (ii) the bankruptcy or insolvency of the borrower or the property manager, (iii) the debt service coverage ratio (as calculated in the loan documents) falling below 1.15x based on a trailing three-month basis (a “DSCR Trigger Event”), (iv) Central States or U.S. Foods (or any replacement tenant(s) (a) terminating, vacating or giving notice of its intention to terminate its lease or vacate its space or failing to give notice of its intent to renew its lease(s) or (b) becoming insolvent or bankrupt (either (a) or (b), a “Tenant Trigger Event”) or (v) U.S. Foods’ long-term credit rating being downgraded to or below “B2” or “B” by S&P, Moody’s or Fitch (the current Moody’s and S&P long-term ratings are B1 and B+, respectively) or the withdrawal of U.S. Foods’ credit rating (unless U.S. Foods’ rating is withdrawn solely as the result of no longer having public debt necessary to enable such rating and it maintains a net worth of at least $1 billion) (each, a “Downgrade Trigger Event”).

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Riverway

 

The borrower will have the right two times in the aggregate (except with respect to a DSCR Trigger Event, a Tenant Trigger Event or a Downgrade Trigger Event, which may be cured an unlimited number of times) during the term of the loan to cure a Trigger Period as follows: if a Trigger Period exists solely by reason of (i) an event of default, the acceptance of a cure by the lender of the applicable event of default (in its sole and absolute discretion), (ii) a bankruptcy or insolvency of a property manager, the replacement of such manager with a qualified manager under a management agreement in accordance with the loan documents, (iii) a DSCR Trigger Event, the achievement of a debt service coverage ratio for two consecutive quarters of at least 1.20x on a trailing three-month basis, (iv) if a Trigger Period exists by reason of a Tenant Trigger Event, the applicable space(s) is re-leased in accordance with the loan documents (which includes a requirement that annualized gross income (as defined in the loan documents) be not less than $24,895,000 (as reasonably determined by the lender), and (v) a Downgrade Trigger Event, the reinstatement or increasing of the applicable rating as required by the loan documents (or, in the case of a Downgrade Trigger Event triggered by the net worth of U.S. Foods, such net worth being at least $1,000,000,000) or the borrower has deposited $9,800,000 in the aggregate into the TI/LC reserve account from excess cash flow as described above.

 

Partial Releases.None.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
55 Hawthorne

 

 

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

(JP MORGAN LOGO) 62 of 125  

 

 

 

Structural and Collateral Term Sheet JPMCC 2017-JP5
 
55 Hawthorne

 

 

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

(JP MORGAN LOGO) 63 of 125  

 

 

 

Structural and Collateral Term Sheet JPMCC 2017-JP5
 
55 Hawthorne

  

 

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
55 Hawthorne

 

Mortgage Loan Information Property Information
Mortgage Loan Seller:JPMCB Single Asset / Portfolio:Single Asset
Original Principal Balance:$61,500,000 Title:Fee
Cut-off Date Principal Balance:$61,500,000 Property Type - Subtype:Office – CBD
% of Pool by IPB:5.6% Net Rentable Area (SF):136,432
Loan Purpose:Acquisition Location:San Francisco, CA
Borrower:55 Hawthorne (SF) Owner, LLC Year Built / Renovated:1970 / 2016
Sponsor:CIM Urban Income Investments, L.P. Occupancy:100.0%
Interest Rate:4.12300% Occupancy Date:3/1/2017
Note Date:12/22/2016 Number of Tenants(1):1
Maturity Date:1/1/2027 2013 NOI(2)N/A
Interest-only Period:120 months 2014 NOI(2):N/A
Original Term:120 months 2015 NOI(3):$1,375,274
Original Amortization:None TTM NOI (as of 11/2016)(3)(4):$3,860,771
Amortization Type:Interest Only UW Economic Occupancy:94.6%
Call Protection:L(26),Def(87),O(7) UW Revenues:$10,472,045
Lockbox:CMA UW Expenses:$3,220,717
Additional Debt:N/A UW NOI(4):$7,251,328
Additional Debt Balance:N/A UW NCF:$6,698,692
Additional Debt Type:N/A Appraised Value / Per SF:$123,000,000 / $902
   Appraised Dark Value / Per SF(5):$106,300,000 / $779
   Appraisal Date:12/9/2016
     

 

Escrows and Reserves(6) Financial Information
 InitialMonthlyInitial Cap Cut-off Date Loan / SF: $451 
Taxes:$0SpringingN/A Maturity Date Loan / SF: $451 
Insurance:$0SpringingN/A Cut-off Date LTV: 50.0% 
Replacement Reserves:$0$0N/A Maturity Date LTV: 50.0% 
TI/LC:$0SpringingN/A UW NCF DSCR: 2.61x 
Other:$2,531,359$0N/A UW NOI Debt Yield: 11.8% 
        

 

Sources and Uses
SourcesProceeds% of Total UsesProceeds% of Total
Sponsor Equity$64,541,23951.2% Purchase Price$123,000,00097.6%
Mortgage Loan61,500,00048.8% Upfront Reserves2,531,3592.0   
    Closing Costs509,8800.4   
Total Sources$126,041,239100.0% Total Uses$126,041,239100.0%

  

(1)There are currently 10 tenants that occupy the property. Yelp, the largest tenant, is contractually obligated to lease space that is being vacated by the other current tenants at the property as their leases expire throughout 2017. Yelp is expected to lease the entire property by October 2017. One tenant, Make-a-Wish Foundation, has a five-year renewal option remaining, however, the loan sponsor does not expect them to exercise the renewal option, which would increase their rent from $32.00 per square foot to market value, which the appraisal concluded to be $72.00 per square foot. In the event Make-a-Wish Foundation elects to renew its lease, Yelp will have the option to lease such space upon the expiration of the renewal term.
(2)2013 and 2014 NOI figures are not available as the previous owner acquired the property in July 2014 and historical cash flows were not provided at the time of acquisition. Additionally, between 2014 and 2015, the property underwent an approximately $26.2 million ($192 per square foot) renovation.
(3)The increase in TTM NOI from 2015 NOI is predominantly a result of Yelp taking occupancy of the fifth and sixth floors in February 2016, representing approximately $2.2 million in annual base rent.
(4)The increase in UW NOI from TTM NOI is driven by Yelp’s contractual obligation to occupy tenant spaces as they are vacated. Yelp is expected to occupy 100.0% of the property by October 2017. As of the Cut-off Date, Yelp occupies 75.0% of the net rentable area at an underwritten base rent of $65.78 per square foot. The remaining 25.0% of the net rentable area that Yelp is expected to occupy will be leased at $72.00 per square foot, which represents a premium of approximately 47.0% over the weighted average current rent paid by existing tenants.
(5)The appraisal concluded to a “Hypothetical Go Dark Value” of $106.3 million, which assumes the property was 100% vacant and factors in market rent, downtime, expenses and lease-up costs.
(6)For a full description of Escrows and Reserves, please refer to“Escrows and Reserves”below.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
55 Hawthorne

   

The Loan.The 55 Hawthorne loan has an outstanding principal balance as of the Cut-off Date of $61.5 million and is secured by a first mortgage lien on the borrower’s fee interest in an 11-story, 136,432 square foot, Class A/B office building located in San Francisco, California. The loan has a 10-year term and is interest-only for the entire term.

 

The Borrower. The borrowing entity for the 55 Hawthorne loan is 55 Hawthorne (SF) Owner, LLC, a Delaware limited liability company and special purpose entity.

 

The Loan Sponsor.The loan sponsor and nonrecourse carve-out guarantor for the 55 Hawthorne loan is CIM Urban Income Investments, L.P., an affiliate of CIM Group, LLC (“CIM Group”). CIM Group is a full service urban real estate and infrastructure fund manager with approximately $19.2 billion of assets under management.

 

The prior owner acquired the property in July 2014 and, according to the loan sponsor, invested approximately $26.2 million ($192 per square foot) in capital improvements, including approximately $12.7 million ($93 per square foot) by Yelp. Renovations included a complete interior renovation and upgrades to modernize building systems as well as the construction of a new rooftop deck for Yelp. Additionally, according to the loan sponsor the loan sponsor and Yelp are expected to contribute $1.8 million and $3.1 million, respectively, towards the build-out of Yelp’s expansion premises, for a combined investment of approximately $4.9 million ($36 per square foot).

 

The Property.The 55 Hawthorne property is an 11-story, 136,432 square foot, Class A/B office building located in the San Francisco central business district. The property was originally constructed in 1970 and is situated on approximately 0.6 acres. The property features views of downtown San Francisco and the San Francisco Oakland Bay Bridge as well as a recently renovated rooftop terrace. Additionally, the property contains 272 on-site parking spaces resulting in a parking ratio of approximately 1.99 spaces per 1,000 square feet. The parking spaces are located on floors one, two and three as well as two sublevels and are operated by a third party provider. Pedestrian access to the property is provided via Tehama Street to the north and Hawthorne Street to the south, and vehicle access is provided via both streets.

 

As of March 1, 2017, the property was 100.0% leased to 10 tenants. The largest tenant, Yelp, Inc. (“Yelp”) currently leases 75.0% of the net rentable area through July 2025 and has occupied its space since February 2015. Except as noted below with respect to the Make-a-Wish Foundation renewal option, Yelp is contractually obligated to lease the space vacated by the other current tenants by October 2017. Upon taking over the vacated spaces, Yelp is expected to occupy 100.0% of the net rentable area at the property through July 2025. Yelp (NYSE: YELP) operates a platform that connects people with local businesses primarily in the United States. Yelp’s platform covers various local business categories, including restaurants, shopping, beauty and fitness, arts, entertainment and events, home and local services, health, nightlife, travel and hotel, auto and other categories. The company was founded in 2004 and is currently headquartered in San Francisco, approximately two blocks northwest of the property. Yelp has continued to expand its business and as of September 30, 2016, employed 4,353 employees, which represents an approximately 19.0% increase as compared to September 30, 2015. Yelp is obligated under its lease to occupy new space as it becomes vacant and, according to the loan sponsor, has invested approximately $12.7 million into the property. Additionally, according to the loan sponsor, Yelp is expected to invest approximately $3.1 million into the build out of new space it is expected to occupy as existing tenants vacate. Currently, there is one tenant, Make-a-Wish Foundation, with one five-year renewal option, however, exercising the renewal option would increase its rent from $32.00 per square foot to market value, which the appraisal concluded to be $72.00 per square foot. In the event Make-a-Wish Foundation elects to renew its lease, Yelp will have the option to lease such space upon the expiration of the renewal term.

 

The 55 Hawthorne property is located in the central business district of San Francisco, California, and many demand drivers lie within walking distance of the property, including the Union Square shopping district, Treasure Island, Westfield San Francisco Centre shopping mall, several notable museums and AT&T Park, home of the San Francisco Giants Major League Baseball team. The property also benefits from its proximity to major public transportation lines, including the Montgomery BART train station, which is located six blocks northwest and Interstate Highway 80 and the San Francisco–Oakland Bay Bridge, located approximately three blocks south east. Additionally, the property is located approximately 14.2 miles north of San Francisco International Airport and approximately 10.5 miles west of the Oakland central business district. The property is expected to benefit from the completion of the Transbay Transit Center, a mass-transit hub that is expected to connect eight Bay Area counties through 11 transportation systems including the BART, AC Transit, Amtrak, Caltrain and California’s planned high speed rail system. According to the Transbay Joint Powers Authority, the project, which is located approximately 0.5 miles northeast of the property, is expected to include 3,500 residential units, 59,000 square feet of ground-level retail space and an approximately 1.4 million square foot office tower. Additionally, the project is expected to feature City Park, a 5.4-acre rooftop public park with a variety of activities and amenities including an open air amphitheater, gardens, open grass areas and restaurant and café. The Transbay Transit Center will be constructed in two phases, with the first phase expected to be complete in the fall of 2017. The first phase will include construction of the above-ground portion of the new Transit Center, the below-grade rail levels and the bus ramp connecting the Transit Center to the San Francisco–Oakland Bay Bridge. A timeline has not been provided yet for construction of phase two, which includes the downtown rail extension.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
55 Hawthorne

  

According to the appraisal, the property is located in the South Financial District office submarket of the greater San Francisco – Redwood City – South San Francisco market. As of year-end 2016, the Class A office submarket consisted of 50 buildings totaling approximately 21.5 million square feet of office space with an overall vacancy rate of 5.4% and average asking rents of $60.90 per square foot. As of year-end 2016, the Class B office submarket consisted of 55 buildings totaling approximately 5.0 million square feet of office space with an overall vacancy rate of 4.6% and average rents of $54.66 per square foot. The appraisal identified seven comparable office leases in the San Francisco market ranging in size from approximately 51,895 square feet to 118,000 square feet. Base rents for the comparable leases ranged from $68.00 per square foot to $80.00 per square foot, with a weighted average of approximately $72.75 per square foot, which is in line with the property.

 


Historical and Current Occupancy(1)
201320142015Current(2)
N/AN/A98.8%100.0%
(1)Historical Occupancies are as of December 31 of each respective year. 2013 and 2014 occupancies were not made available by the prior owner.
(2)Current Occupancy is as of March 1, 2017. There are currently 10 tenants that occupy the property. Yelp, the largest tenant, is contractually obligated to lease space that is being vacated by the other current tenants at the property as their leases expire throughout 2017. There is one tenant, Make-a-Wish Foundation, with one five-year renewal option, however, exercising the renewal option would increase its rent from $32.00 per square foot to market value, which the appraisal concluded to be $72.00 per square foot.

 

Tenant Summary(1)
TenantRatings
Moody’s/S&P/Fitch
Net Rentable
Area (SF)
% of
Total NRA
Base Rent
PSF
% of Total
Base Rent
Lease
Expiration Date
Yelp(2)NA / NA / NA136,432100.0%$67.78100.0%7/31/2025
       
(1)Based on the underwritten rent roll dated February 1, 2017, assuming that Yelp takes occupancy of the spaces leased by the other current tenants at the property by October 2017.
(2)Yelp’s lease contains one, five-year renewal option and a partial termination option with respect to two entire floors on or after January 31, 2021 and one additional floor on or after January 31, 2023 (provided, in each case, that it leases at least 65.0% of total rentable area at the property). If Yelp chooses to partially terminate its lease, it is responsible for a termination fee equal to three months of rent at the time of termination and the unamortized tenant improvements and leasing commissions outstanding.

 

Lease Rollover Schedule(1)
YearNumber of Leases ExpiringNet Rentable Area Expiring% of NRA ExpiringBase Rent Expiring% of Base Rent ExpiringCumulative Net Rentable Area ExpiringCumulative % of NRA ExpiringCumulative Base Rent ExpiringCumulative % of Base Rent Expiring
VacantNAP00.0%NAPNAP00.0%NAPNAP
2017 & MTM000.0%$00.0%00.0%$00.0%
2018000.0%00.0%00.0%$00.0%
2019000.0%00.0%00.0%$00.0%
2020000.0%00.0%00.0%$00.0%
2021000.0%00.0%00.0%$00.0%
2022000.0%00.0%00.0%$00.0%
2023000.0%00.0%00.0%$00.0%
2024000.0%00.0%00.0%$00.0%
20251136,432100.0%9,248,039100.0%136,432100.0%$9,248,039100.0%
2026000.0%00.0%136,432100.0%$9,248,039100.0%
2027000.0%00.0%136,432100.0%$9,248,039100.0%
2028 & Beyond000.0%00.0%136,432100.0%$9,248,039100.0%
Total1136,432100.0%$9,248,039100.0%    
                  
(1)Based on the underwritten rent roll dated November 1, 2016.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
55 Hawthorne

   

Operating History and Underwritten Net Cash Flow(1)
 2015TTM(2)UnderwrittenPer Square
Foot
 %(3)
Rents in Place(4)$4,789,701$7,561,694$9,248,039$67.7883.5%
Vacant Income0000.000.0%
Gross Potential Rent$4,789,701$7,561,694$9,248,039$67.7883.5%
CAM Reimbursements332,126272,064589,0344.325.3%
Parking Income1,144,7961,069,7441,232,7429.0411.1%
Net Rental Income$6,266,623$8,903,502$11,069,815$81.14100.0%
(Vacancy/Credit Loss)(5)(2,486,370)(2,480,951)(597,770)(4.38)(5.4)--
Other Income143,02755,86600.000.0%
Effective Gross Income$3,923,280$6,478,417$10,472,045$76.7694.6%
      
Total Expenses$2,548,006$2,617,646$3,220,717$23.6130.8%
      
Net Operating Income(6)$1,375,274$3,860,771$7,251,328$53.1569.2%
      
Total TI/LC, Capex/RR00552,6364.055.3%
      
Net Cash Flow$1,375,274$3,860,771$6,698,692$49.1064.0%
(1)Historical 2013 and 2014 Net Operating Income figures are not available as the prior owner acquired the property in July 2014 and historical cash flows were not provided at the time of acquisition. Additionally, between 2014 and 2015, the property underwent an approximately $26.2 million ($192 per square foot) renovation.
(2)TTM Column represents the trailing 12-month period ending November 30, 2016.
(3)% column represents percent of Net Rental Income for all revenue lines and represents percent of Effective Gross Income for the remainder of the fields.
(4)The increase in TTM Rents in Place from 2015 Rents in Place is predominantly a result of Yelp taking occupancy of the fifth and sixth floors in February 2016, representing approximately $2.2 million in annual base rent.
(5)The Vacancy/Credit Loss reflects free rent and concessions given to Yelp related to the leasing of its original space.
(6)The increase in Underwritten Net Operating Income from TTM Net Operating Income is driven by Yelp’s contractual obligation to occupy tenant spaces as they vacate. Yelp is expected to occupy 100.0% of the property by October 2017. As of the Cut-off Date, Yelp occupies 75.0% of the net rentable area at an underwritten base rent of $65.78 per square foot. The remaining 25.0% of the net rentable area that Yelp is expected to occupy will be leased at $72.00 per square foot, which represents a premium of approximately 47.0% over the weighted average current rent paid by existing tenants.

 

Property Management. The property is managed by CIM Management, Inc., a subsidiary of CIM Group, and Harvest Properties, Inc., which is a third party management company.

 

Escrows and Reserves. At origination, the borrower deposited into escrow $1,484,875 for outstanding tenant improvements and leasing commissions and $1,046,484 for outstanding free rent, in each case related to Yelp.

 

Tax Escrows -The requirement for the borrower to make deposits to the real estate tax escrow is waived so long as no event of default has occurred and is continuing and the borrower provides satisfactory evidence that all property taxes have been paid within 10 business days after the date when due.

 

Insurance Escrows- The requirement for the borrower to make deposits to the insurance escrow is waived so long as no event of default has occurred and is continuing and the borrower provides satisfactory evidence that the property is insured as part of a blanket policy in accordance with the loan documents.

 

TI/LC Reserves - The requirement for the borrower to make deposits to the tenant improvement and leasing commissions reserve is waived so long as a Cash Sweep Event (as defined below) caused by a Tenant Trigger (as defined below) has not occurred. During a Cash Sweep Event caused by a Tenant Trigger, all excess cash flow shall be deposited and held with the lender in accordance with the loan documents.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
55 Hawthorne

  

Lockbox / Cash Management.The loan is structured with a CMA lockbox. The borrower was required at origination to deliver tenant direction letters instructing all tenants to deposit rents into a lockbox account controlled by the lender. All funds in the lockbox account will be swept each business day into the borrower’s operating account, unless a Cash Sweep Event is continuing, in which event such funds will be swept each business day into a cash management account controlled by the lender and disbursed on each payment date in accordance with the loan documents.

 

A “Cash Sweep Event” means the occurrence of (i) an event of default, (ii) the bankruptcy or insolvency action of the borrower or the property manager, unless (a) with respect to a bankruptcy or insolvency action of a property manager that is not affiliated with the borrower, the property manager is replaced in accordance with the loan agreement within 60 days or such bankruptcy filing is discharged or dismissed within 30 days of the date of filing or (b) with respect to a bankruptcy or insolvency action of an affiliated property manager, the property manager is replaced in accordance with the loan agreement within 15 days or (iii) a Tenant Trigger.

 

A “Tenant Trigger” means any of the following: (i) Yelp delivers a written notice of its intention not to renew the lease, (ii) Yelp delivers a written notice of its intention to terminate its lease for a portion of the building that results in a vacancy of 2.5 floors or more of its leased space, provided that any such portion of terminated space has not been re-leased to a replacement tenant in accordance with the loan documents, (iii) Yelp’s failure to renew its lease on or prior to the date required for such renewal, (iv) Yelp goes dark, vacates or abandons a portion of its space for a period of more than 180 consecutive days or (v) any bankruptcy or insolvency action with respect to Yelp.

 

A Cash Sweep Event may be cured by the following: if the Cash Sweep Event is caused solely by (a) clause (i) of the definition of Cash Sweep Event above, the acceptance by the lender of a cure of such event of default, (b) clause (ii) of the definition of Cash Sweep Event above only with respect to the property manager, the lender replacing such property manager with a qualified manager under a replacement management agreement, (c) clause (ii) of the definition of Cash Sweep Event above only with respect to the borrower, if such bankruptcy is caused by a party filing an involuntary petition against the borrower and none of the borrower, guarantor or their affiliates has colluded with such party for any involuntary petition against the borrower, and such bankruptcy action is dismissed within 90 days without any material adverse modifications to the terms of the loan documents and (d) clause (iii) of the definition of Cash Sweep Event above, the occurrence of a Tenant Trigger Cure (as defined below) (each of the foregoing, a “Cash Sweep Event Cure”). Each Cash Sweep Event Cure is also subject to the following conditions: (1) no other event of default has occurred and is continuing under the loan documents (2) the borrower pays all of the lender’s reasonable out-of-pocket, non-de minimis expenses incurred in connection with the Cash Sweep Event Cure; and (3) in no event will the borrower be permitted to cure in the event of a voluntary or collusive involuntary bankruptcy or insolvency action of the borrower.

 

A “Tenant Trigger Cure” means any of the following: with respect to a Tenant Trigger caused by (a) (i) through (iv) of the definition of Tenant Trigger above, (1) either: (A) the unleased portion of the Yelp premises does not exceed 2.5 floors or (B) Yelp (or one or more replacement tenant(s)) is open for business in its premises either pursuant to the Yelp lease (with the same having been renewed or extended in accordance with its terms) or a lease with a replacement tenant(s) and (2) the debt service coverage ratio (as calculated in the loan documents) based on the trailing three month period is at least 1.90x for one quarter, (b) (iv) of the definition of Tenant Trigger above, (1) Yelp has continued to pay full contract rent under its lease, (2) unless Yelp has vacated, gone dark or abandoned its entire premises, at least $50.00 per rentable square foot of the Yelp premises that is vacant, dark or abandoned has been swept into the tenant improvement and leasing commissions reserve or (3) if Yelp has vacated, gone dark or abandoned its entire premises at least $60.00 per rentable square foot of the Yelp premises that is vacant, dark or abandoned has been swept into the tenant improvement and leasing commissions reserve and (c) (v) of the definition of Tenant Trigger above, (1) either: (A) the Yelp lease has been affirmed in bankruptcy and Yelp is in occupancy, open for business and paying full contractual rent (without right of offset or free rent credit unless such amounts are escrowed with lender) or (B) the Yelp premises has been re-let to one or more replacement tenant(s) and (2) the debt service coverage ratio (as calculated in the loan documents) based on the trailing three-month period is at least 1.90x for one quarter.

 

Permitted Mezzanine Debt. One or more owners of the direct or indirect equity interests of the borrower are permitted to obtain one or more mezzanine loan(s) secured by the ownership interests in the related borrower upon satisfaction of certain terms and conditions which include, without limitation, (i) the mezzanine lender meets a qualified lender provision in the loan documents, (ii) the combined loan-to-value ratio of the mezzanine loan and mortgage loan does not exceed 50.0%, (iii) the combined debt service coverage ratio (as calculated in the loan documents) is not less than the debt service coverage ratio as of the origination date and (iv) the lenders enter into a customary intercreditor agreement reasonably acceptable to the mortgage lender.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term SheetJPMCC 2017-JP5
 
Bardmoor Palms
 

 (GRAPHICS)

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term SheetJPMCC 2017-JP5
 
Bardmoor Palms
 

 (MAP)

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term SheetJPMCC 2017-JP5
 
Bardmoor Palms
 

 (MAP)

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term SheetJPMCC 2017-JP5
 
Bardmoor Palms
 
Mortgage Loan Information Property Information
Mortgage Loan Seller:JPMCB Single Asset / Portfolio:Single Asset
Original Principal Balance:$55,500,000 Title:Fee
Cut-off Date Principal Balance:$55,352,648 Property Type - Subtype:Mixed Use – Office/Industrial
% of Pool by IPB:5.1% Net Rentable Area (SF):553,485
Loan Purpose:Refinance Location:Largo, FL
Borrower:BP Land Holdings, LLC Year Built / Renovated:1973 / 2016
Sponsor:Gary W. Harrod Occupancy:100.0%
Interest Rate:4.74400% Occupancy Date:9/16/2016
Note Date:12/15/2016 Number of Tenants:9
Maturity Date:1/1/2027 2013 NOI(1):$1,782,510
Interest-only Period:None 2014 NOI(1)(2):$1,485,699
Original Term:120 months 2015 NOI(2)(3):$646,165
Original Amortization:360 months TTM NOI (as of 9/2016)(3)(4):$2,056,957
Amortization Type:Balloon UW Economic Occupancy:93.0%
Call Protection:L(25),Grtr1%orYM(92),O(3) UW Revenues:$7,514,480
Lockbox:CMA UW Expenses:$2,324,477
Additional Debt:N/A UW NOI(4):$5,190,003
Additional Debt Balance:N/A UW NCF:$4,830,238
Additional Debt Type:N/A Appraised Value / Per SF:$75,000,000 / $136
   Appraisal Date:12/1/2016
     

 

Escrows and Reserves(5) Financial Information
 InitialMonthlyInitial Cap Cut-off Date Loan / SF: $100 
Taxes:$93,078$46,539N/A Maturity Date Loan / SF: $82 
Insurance:$0SpringingN/A Cut-off Date LTV: 73.8% 
Replacement Reserves:$7,110$7,110N/A Maturity Date LTV: 60.3% 
TI/LC:$28,425$28,425$1,500,000 UW NCF DSCR: 1.39x 
Other:$770,000$0N/A UW NOI Debt Yield: 9.4% 
        
 
Sources and Uses
SourcesProceeds% of Total UsesProceeds% of Total
Mortgage Loan$55,500,00095.9% Payoff Existing Debt$56,225,90097.1%
Sponsor Equity2,373,1214.1 Upfront Reserves898,6131.6
    Closing Costs748,6081.3
Total Sources$57,873,121100.0% Total Uses$57,873,121100.0%
          
(1)The decrease in NOI from 2013 to 2014 is primarily due to late fees received in 2013 from former tenant Camsing in the amount of $365,315 that were not received in 2014.
(2)The decrease from 2014 NOI to 2015 NOI is primarily due to a temporary tenant, Dex Imaging, vacating.
(3)The increase from 2015 NOI to TTM NOI is primarily due to leases signed with Allstate (127,669 square feet), 5% Nutrition (36,202 square feet) and Forensic Innovation Center LLC (17,193 square feet) contributing a total of $855,571 in base rent on an annualized basis.
(4)The UW NOI is greater than TTM NOI due to five tenants, Allstate, HIT Promotional Products, PharmaLink, 5% Nutrition and Forensic Innovation Center LLC, which executed leases in 2016. Allstate has been in occupancy since July 1, 2016 and began paying rent of approximately $430,227 per annum, on October 1, 2016. HIT Promotional Products has been in occupancy and paying rent of approximately $536,536 per annum since December 1, 2016. PharmaLink has been in occupancy and paying rent of approximately $356,328 per annum since November 1, 2016. 5% Nutrition has been in occupancy since June 1, 2016 and began paying rent of approximately $253,414 on September 1, 2016. Forensic Innovation Center LLC has been in occupancy and paying rent of approximately $171,930 per annum since April 1, 2016. The increase in UW NOI from TTM NOI is also due to rent abatements burning off for Allstate and Matrix Management totaling $500,885.
(5)For a full description of Escrows and Reserves, please refer to“Escrows and Reserves”below.

 

The Loan.The Bardmoor Palms loan has an outstanding principal balance as of the Cut-off Date of approximately $55.4 million and is secured by a first mortgage lien on the borrower’s fee interest in a 553,485 square foot office and industrial property located in Largo, Florida. The loan has a 10-year term and will amortize on a 30-year schedule.

 

The Borrower. The borrowing entity for the Bardmoor Palms loan is BP Land Holdings, LLC, a Florida limited liability company and special purpose entity.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term SheetJPMCC 2017-JP5
 
Bardmoor Palms
 

The Loan Sponsor.The loan sponsor and nonrecourse carve-out guarantor is Gary W. Harrod, who is the founder and chief executive officer of Harrod Properties Inc. (“Harrod Properties”), a commercial real estate development company that designs, builds, leases and manages office and industrial buildings throughout the United States. The firm’s portfolio includes 28 properties across Florida, New Mexico, Texas and Tennessee. Harrod Properties has been involved in the development of approximately 15.0 million square feet of office, industrial, retail and medical properties since it was founded in 1990.

 

According to the loan sponsor, Harrod Properties acquired the property in 2006 for $24.0 million ($43 per square foot) and has invested approximately $47.7 million ($86 per square foot) on capital improvements over the course of ownership for a total cost basis of approximately $71.7 million ($130 per square foot). The loan sponsor also informed the lender that from 2006 to 2008, it invested approximately $13.3 million on the East Building (as defined below) which included a 44,100 square foot warehouse expansion, improvements to the office space and building entrances, a new heating and air conditioning system, electrical work, a new roof, a new lobby, new restrooms and exterior renovations, and from 2015 to 2016, it invested approximately $14.3 million on improvements to the West Building (as defined below) which included the addition of the parking deck, exterior renovations, improvements to the office space and soft costs.

 

The Property.The Bardmoor Palms property consists of a total of 553,485 square feet comprised of a two-story office building with 148,350 square feet of net rentable area (“West Building”) and a two-story office and warehouse building with 405,135 square feet of net rentable area (“East Building”). The property is located in Largo, Florida approximately 20.0 miles west of the Tampa central business district and Tampa International Airport. The buildings are joined by an elevated crosswalk and feature two, three-level detached parking structures and open surface parking which provides 2,054 parking spaces (resulting in a parking ratio of 3.71 spaces per 1,000 square feet of net rentable area). The Bardmoor Palms property was originally built and fully occupied by Eckerd Corporation as its national headquarters. In 2012, former tenant Raytheon vacated 223,975 square feet at the property and instead of immediately reconfiguring the West Building for multi-tenant use, the loan sponsor decided to wait for a long-term lease to an investment grade tenant. In October 2015, the loan sponsor signed a lease with Allstate for 127,669 square feet and subsequently signed leases for the remainder of the vacant space with HIT Promotional Products (76,648 square feet), PharmaLink (50,904 square feet), 5% Nutrition (36,202 square feet) and Forensic Innovation Center LLC (17,193 square feet), which brought occupancy to 100.0%.

 

As of September 16, 2016, the property was 100.0% leased to nine national and regional tenants. The largest tenant at the property, Allstate Corporation (“Allstate”) (NYSE: ALL, rated A3/A-/BBB+ by Moody’s, S&P and Fitch), leases 90,258 square feet of space in the West Building and 37,411 square feet in the East Building for a combined 127,669 square feet (23.1% of the net rentable area). Allstate’s leases expire in September 2026 and the tenant has been in occupancy at the Bardmoor Palms property since July 2016. Allstate has two, seven-year renewal options under both leases, which would extend its leases to 2040. Headquartered in Northfield Township, Illinois, Allstate is the largest publicly traded property casualty insurance company in the United States and provides insurance products to approximately 16.0 million households. The second largest tenant, HIT Promotional Products, leases 76,648 square feet (13.8% of the net rentable area) within the East Building. HIT Promotional Products has been a tenant at the property since December 2016 and has a lease expiration date in November 2022 with two, five-year renewal options, which would extend its lease to 2032. HIT Promotional Products has been in the customizable promotional product business for over 50 years and is ranked among the top 50 suppliers of customizable promotional products in the nation, according to Promo Marketing Magazine, with more than 1,900 items. HIT Promotional Products’ customizable products include apparel, accessories, mugs, desk toys, backpacks, food products and tech accessories, among others. The third largest tenant, National Forensic Science Technology Center (“NFSTC”), leases 71,614 square feet (12.9% of the net rentable area) within the East Building and has been a tenant at the property since May 2014. NFSTC’s lease expires in April 2024 with two, five-year renewal options, which would extend its lease to 2034. Founded in 1995, NFSTC is a not-for-profit corporation headquartered at the property, which provides forensic services including training, assessment, research and technology assistance to the justice and forensic science communities.

 

The property is located along the north side of Bryan Dairy Road and between West Bay Drive and Route 694 within Pinellas County in the Tampa-St. Petersburg-Clearwater metropolitan statistical area (“Tampa MSA”). According to Cushman & Wakefield, the Tampa MSA has a population of approximately 3.0 million residents and is the industrial, commercial and financial hub of Florida’s west coast with an economy that is founded on a base that includes tourism, agriculture, construction, finance, health care, technology and maritime industry. Additionally, Tampa’s economy benefits greatly from its port, the 11th largest (by tonnage) in the country and the largest in the state of Florida. Port Tampa Bay recently revealed plans for an approximately $1.5 billion redevelopment to bring residential towers, offices, parks and a hotel to 45.0 acres alongside Tampa’s cruise ship terminal. According to Cushman & Wakefield, Tampa Bay Lighting owner Jeff Vinik plans to invest approximately $1.0 billion in downtown Tampa to create an approximately 3.0 million square foot live, work, play and stay neighborhood in Tampa’s Channel District. According to Cushman & Wakefield, the Tampa Bay region has experienced growth in the innovation and technology industries, which includes financial and shared services, life sciences, defense, security, manufacturing and agribusiness, while benefiting from strong population growth with its associated demand for goods, services and housing.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term SheetJPMCC 2017-JP5
 
Bardmoor Palms
 

The Bardmoor Palms property is located within the Mid-Pinellas County office submarket which, according to the appraisal, is a submarket where vacant land is scarce and most construction activity represents redevelopment. As of the third quarter of 2016, the Mid-Pinellas County office submarket had an existing inventory of approximately 6.3 million square feet, an overall office vacancy rate of 11.0%, an average quoted rental rate of $16.78 per square foot and year-to-date net absorption of 137,317 square feet. The appraisal identified four competitive office properties built between 1979 and 2000 and ranging in size from 60,000 square feet to 178,545 square feet. The comparable properties reported occupancies ranging from 21.0% to 100.0% with a weighted average occupancy of approximately 81.6%. The appraisal concluded a stabilized occupancy rate of 96.4% for the property and an office market rental range of $11.50 to $15.25 per square foot on a triple net basis.

 

The property is located in the South Pinellas industrial submarket which has an existing inventory of approximately 55.9 million square feet. As of the third quarter of 2016, the industrial submarket reported an overall vacancy rate of 5.8% and overall average asking rents of $5.94 per square foot. The appraisal identified five competitive industrial properties built between 1985 and 1999 and ranging in size from 84,123 square feet to 132,548 square feet. The comparable properties reported occupancies ranging from 86.0% to 100.0% with a weighted average occupancy of approximately 95.2%. The appraisal concluded a warehouse market blended office rental range of $7.00 to $9.50 per square foot.

 

Historical and Current Occupancy(1)(2)
201320142015(3)Current(3)(4)
54.7%41.6%49.9%100.0%
(1)Historical Occupancies are as of December 31 of each respective year.
(2)In 2012, former tenant Raytheon vacated 223,975 square feet at the property, and the loan sponsor decided to wait for a long-term lease to an investment grade tenant instead of converting it to multi-tenant use. In October 2015, the loan sponsor signed a lease with Allstate for 127,669 square feet and subsequently signed five additional leases for the remainder of the vacant space throughout 2016.
(3)The increase in occupancy from 2015 to Current is primarily due to leases signed with Allstate (127,669 square feet), HIT Promotional Products (76,648 square feet), PharmaLink (50,904 square feet), 5% Nutrition (36,202 square feet) and Forensic Innovation Center LLC (17,193 square feet).
(4)Current Occupancy is as of September 16, 2016.

 

Tenant Summary(1)
TenantRatings(2)
Moody’s/S&P/Fitch
Net
Rentable
Area (SF)
% of
Total
NRA
Base
Rent
PSF
% of Total
Base
Rent
Lease
Expiration
Date
Allstate(3)A3 / A- / BBB+127,669 23.1%$13.6528.1%9/30/2026
HIT Promotional ProductsNA / NA / NA76,64813.8% $7.148.8%11/30/2022
National Forensic Science Technology Center(4)NA / NA / NA71,61412.9%$13.7315.9%4/30/2024
ThinkDirect MarketingNA / NA / NA61,06311.0%$11.2511.1%10/31/2020
Renew Life Formulas, Inc.NA / NA / NA54,1009.8%$6.255.5%2/29/2020
PharmaLinkNA / NA / NA50,9049.2%$7.005.8%12/31/2023
Matrix Management(4)NA / NA / NA49,5118.9%$22.1517.7%10/31/2022
5% Nutrition(5)NA / NA / NA36,2026.5%$7.214.2%8/31/2023
Forensic Innovation Center LLC(4)(6)NA / NA / NA17,1933.1%$10.302.9%3/31/2019

(1)Based on the underwritten rent roll dated September 16, 2016.
(2)Ratings provided are for the parent company of the entity listed in the “Tenant” field whether or not the parent company guarantees the lease.
(3)Allstate has the right to terminate its lease with respect to (i) 37,411 square feet in the East Building beginning October 1, 2021 with 12 months’ written notice and the payment of a termination fee and (ii) 90,258 square feet in the West Building beginning October 1, 2023 with 12 months’ written notice and the payment of a termination fee. In addition, if Allstate elects to terminate its lease at either the East Building or the West Building, it may also terminate its lease at the other building at such time. Allstate’s rent is underwritten to the average rent steps through the termination options.
(4)National Forensic Science Technology Center, Matrix Management and Forensic Innovation Center LLC have modified gross leases. All other tenants have triple net leases.
(5)5% Nutrition leases 36,202 square feet on the first floor of the East Building and 3,000 square feet of mezzanine space in the East Building.
(6)Forensic Innovation Center LLC has the right to terminate its lease with 60 days’ written notice.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term SheetJPMCC 2017-JP5
 
Bardmoor Palms
 

Lease Rollover Schedule(1)
YearNumber of Leases
Expiring
Net
Rentable
Area
Expiring
% of NRA ExpiringBase Rent Expiring% of Base
Rent
Expiring
Cumulative
Net Rentable
Area
Expiring
Cumulative
% of NRA Expiring
Cumulative
Base Rent Expiring
Cumulative
% of Base
Rent
Expiring
VacantNAP00.0%NAPNAP00.0% NAPNAP
2017 & MTM000.0$00.0%00.0%$00.0%
2018000.000.000.0%$00.0%
2019117,1933.1177,0882.917,1933.1%$177,0882.9%
20202115,16320.81,025,08416.6132,35623.9%$1,202,17219.4%
2021000.000.0132,35623.9%$1,202,17219.4%
20222126,15922.81,643,93526.6258,51546.7%$2,846,10746.0%
2023287,10615.7617,34410.0345,62162.4%$3,463,45156.0%
2024171,61412.9983,31015.9417,23575.4%$4,446,76271.9%
2025000.000.0417,23575.4%$4,446,76271.9%
20262127,66923.11,742,08928.1544,90498.4%$6,188,850100.0%
2027000.000.0544,90498.4%$6,188,850100.0%
2028 & Beyond(2)18,5811.600.0553,485100.0%$6,188,850100.0%
Total11553,485100.0%$6,188,850100.0%    
(1)Based on the underwritten rent roll dated September 16, 2016 and includes rent steps through December 2017.
(2)2028 & Beyond includes 8,581 square feet associated with a cafeteria with no attributable base rent.

 

Operating History and Underwritten Net Cash Flow
 201320142015TTM(1)UnderwrittenPer Square Foot %(2)
Rents in Place$2,296,243$2,588,937$1,886,669$3,089,820$6,188,850$11.1877.1%
Vacant Income000000.000.0   
Gross Potential Rent$2,296,243$2,588,937$1,886,669$3,089,820$6,188,850$11.1877.1%
Total Reimbursements940,704676,858670,700974,2981,835,8743.3222.9   
Net Rental Income$3,236,948$3,265,795$2,557,369$4,064,118$8,024,725$14.50100.0%
(Vacancy/Credit Loss)0000(561,731)(1.01) (7.0)  
Other Income65,31513,974010,00051,4860.09 0.6   
Effective Gross Income$3,302,262$3,279,768$2,557,369$4,074,118$7,514,480$13.5893.6%
        
Total Expenses$1,819,752$1,794,069$1,911,205$2,017,161$2,324,477$4.20 30.9%
        
Net Operating Income(3)(4)(5)(6)$1,482,510$1,485,699$646,165$2,056,957$5,190,003$9.3869.1%
        
Total TI/LC, Capex/RR0000359,7650.65 4.8   
        
Net Cash Flow$1,482,510$1,485,699$646,165$2,056,957$4,830,238$8.7364.3%
(1)TTM column represents the trailing 12-month period ending September 30, 2016.
(2)% column represents percent of Net Rental Income for all revenue lines and represents percent of Effective Gross Income for the remainder of the fields.
(3)The decrease in Net Operating Income from 2013 to 2014 is primarily due to late fees received in 2013 from former tenant Camsing in the amount of $365,315 that were not received in 2014.
(4)The decrease in Net Operating Income from 2014 to 2015 is primarily due to temporary tenant Dex Imaging vacating the property.
(5)The increase in Net Operating Income from 2015 to TTM is primarily due to leases signed with Allstate (127,669 square feet), 5% Nutrition (36,202 square feet) and Forensic Innovation Center LLC (17,193 square feet) contributing a total of $855,571 in base rent on an annualized basis.
(6)The UW Net Operating Income is greater than TTM Net Operating Income due to five tenants, Allstate, HIT Promotional Products, PharmaLink, 5% Nutrition and Forensic Innovation Center LLC, which executed leases in 2016. Allstate has been in occupancy since July 1, 2016 and began paying rent of approximately $430,227 per annum, on October 1, 2016. HIT Promotional Products has been in occupancy and paying rent of approximately $536,536 per annum since December 1, 2016. PharmaLink has been in occupancy and paying rent of approximately $356,328 per annum since November 1, 2016. 5% Nutrition has been in occupancy since June 1, 2016 and began paying rent of approximately $253,414 on September 1, 2016. Forensic Innovation Center LLC has been in occupancy and paying rent of approximately $171,930 per annum since April 1, 2016. The increase in UW Net Operating Income from TTM Net Operating Income is also due to rent abatements burning off for Allstate and Matrix Management totaling $500,885.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term SheetJPMCC 2017-JP5
 
Bardmoor Palms
 

Property Management. The property is managed by HP Realty Associates, Inc., an affiliate of the borrower.

 

Escrows and Reserves. At origination, the borrower deposited $770,000 for outstanding tenant improvements and leasing commissions related to two tenants at the property, $93,078 for real estate taxes, $28,425 for tenant rollover reserves and $7,110 for replacement reserves.

 

Tax Escrows -On a monthly basis, the borrower is required to escrow 1/12 of annual estimated tax payments, which currently equates to $46,539.

 

Insurance Escrows- The requirement for the borrower to make monthly deposits to the insurance escrow is waived so long as (i) no event of default exists and (ii) the borrower provides satisfactory evidence that the property is insured under an acceptable blanket policy in accordance with the loan documents.

 

Replacement Reserves - On a monthly basis, the borrower is required to escrow $7,110 (approximately $0.15 per square foot annually) for ongoing replacement reserves.

 

TI/LC Reserves- On a monthly basis, the borrower is required to escrow $28,425 (approximately $0.62 per square foot annually) for tenant improvements and leasing commissions reserves. The reserve is subject to a cap of $1,500,000 (approximately $2.71 per square foot).

 

Lockbox / Cash Management.The loan is structured with a CMA lockbox. The borrower was required at origination to deliver tenant direction letters instructing all tenants to deposit rents into a lockbox account controlled by the lender. All funds in the lockbox account are required to be transferred each business day into the borrower’s operating account, unless a Cash Sweep Event (as defined below) is continuing, in which event such funds are required to be swept each business day into a cash management account controlled by the lender and disbursed on each payment date in accordance with the loan documents.

 

A “Cash Sweep Event” means the occurrence of (i) an event of default, (ii) a bankruptcy or insolvency action of the borrower or the property manager, (iii) a DSCR Trigger Event (as defined below) or (iv) an Allstate Trigger Event (as defined below).

 

A “DSCR Trigger Event” means the trailing three-month debt service coverage ratio as calculated in accordance with the loan documents is less than 1.25x.

 

An “Allstate Trigger Event” means (i) Allstate terminates or gives notice that it intends to terminate any portion of its leases or (ii) the failure of the borrower to provide evidence that Allstate has renewed its leases in their entirety by exercising one of its two, seven-year renewal options on or before the date that is 12 months prior to each expiration date and extended expiration date of Allstate’s leases.

 

A Cash Sweep Event may be cured by the following: if the Cash Sweep Event is caused solely by (a) clause (i) above, the acceptance by the lender of a cure of such event of default, (b) clause (ii) above, only with respect to the property manager, the borrower replacing such property manager with a qualified manager under a replacement management agreement within 60 days, (c) clause (iii) above, the achievement of a debt service coverage ratio for two consecutive quarters of 1.25x or greater based on the trailing three-month period or (d) clause (iv) above, Allstate renews its leases or the borrower leases such space to a replacement tenant or tenants in accordance with the loan documents (each of the foregoing, a “Cash Sweep Event Cure”). Each Cash Sweep Event Cure is also subject to the following limitations: (1) there is no other event of default continuing under the loan documents, (2) a Cash Sweep Event caused by a bankruptcy or insolvency action of the property manager or an Allstate Trigger Event may be cured no more than three times during the term of the loan, (3) the borrower pays all of the lender’s reasonable expenses incurred in connection with such Cash Sweep Event Cure and (4) the borrower may not cure a bankruptcy or insolvency action of the borrower.

 

Right of First Refusal. Allstate has a right of first refusal to purchase the West Building and the East Building (if the offer covers the East Building) in the event the borrower receives an offer to purchase from a bona fide third party buyer. The tenant has signed a subordination, non-disturbance and attornment agreement that subordinates the right to any foreclosure or deed-in-lieu or any subsequent transfer by the lender or its designee.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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(GRAPHICS) 

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

(JP MORGAN LOGO) 78 of 125  

 

 

 

Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Landmark Square

 

(GRAPHICS) 

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
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 (GRAPHICS)

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
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 (GRAPHICS)

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
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 (GRAPHICS)

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
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 (GRAPHICS)

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
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(MAP) 

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Landmark Square

 

Mortgage Loan Information Property Information
Mortgage Loan Seller:JPMCB Single Asset / Portfolio:Single Asset
Original Principal Balance(1):$51,000,000 Title:Fee / Leasehold
Cut-off Date Principal Balance(1):$51,000,000 Property Type - Subtype:Mixed Use – Office/Retail
% of Pool by IPB:4.7% Net Rentable Area (SF):757,917
Loan Purpose:Refinance Location:Stamford, CT
Borrower:Landmark Square 1-6 LLC Year Built / Renovated:1974, 1976, 1977, 1981, 1983,
Sponsor:SL Green Operating Partnership,  2006 / N/A
 L.P. Occupancy:84.9%
Interest Rate:4.97000% Occupancy Date:12/31/2016
Note Date:12/2/2016 Number of Tenants:113
Maturity Date:1/1/2027 2013 NOI:$9,916,119
Interest-only Period:120 months 2014 NOI(3):$10,446,258
Original Term:120 months 2015 NOI(3):$7,467,129
Original Amortization:None TTM NOI (as of 12/2016)(3)(4):$9,724,228
Amortization Type:Interest Only UW Economic Occupancy(4):85.4%
Call Protection(2):L(26),Def(90),O(4) UW Revenues:$24,368,179
Lockbox:CMA UW Expenses:$12,347,514
Additional Debt:Yes UW NOI(4):$12,020,665
Additional Debt Balance:$40,000,000 UW NCF:$11,058,110
Additional Debt Type:Pari Passu Appraised Value / Per SF:$175,700,000 / $232
   Appraisal Date:11/9/2016
     

 

Escrows and Reserves(5) Financial Information(1)
 InitialMonthlyInitial Cap Cut-off Date Loan / SF: $132 
Taxes:$1,325,844$220,974N/A Maturity Date Loan / SF: $132 
Insurance:$0SpringingN/A Cut-off Date LTV: 56.9% 
Replacement Reserves:$0Springing$500,000 Maturity Date LTV: 56.9% 
TI/LC:$0SpringingN/A UW NCF DSCR: 2.19x 
Other:$0$0N/A UW NOI Debt Yield: 12.0% 
        
 
Sources and Uses
SourcesProceeds% of Total UsesProceeds% of Total
Mortgage Loan(1)$100,000,000100.0% Payoff Existing Debt$78,204,09878.2%
    Return of Equity19,056,99919.1   
    Closing Costs1,413,0591.4   
    Upfront Reserves1,325,8441.3   
Total Sources$100,000,000100.0% Total Uses$100,000,000100.0%
          
(1)The Landmark Square loan is part of a whole loan evidenced by twopari passu notes with an aggregate outstanding principal balance as of the Cut-off Date of $100.0 million. The Financial Information presented in the chart above reflects the Cut-off Date balance of the $100.0 million Landmark Square Whole Loan, as defined in “The Loan” below.
(2)The lockout period will be at least 26 payments beginning with and including the first payment date of February 1, 2017. Defeasance of the full $100.0 million Landmark Square Whole Loan is permitted at any time after the earlier to occur of (A) two years after the closing date of the final REMIC trust that holds the last note evidencing the Landmark Square Whole Loan to be securitized or (B) February 1, 2020.
(3)The decrease from 2014 NOI to 2015 NOI is primarily due to rent abatements for tenants which signed leases in 2015. The increase from 2015 NOI to TTM NOI is primarily due to rent abatements burning off from the leases executed in 2015 and an increase in other income related to licensee rent, lease buy out income and miscellaneous income in the amount of $699,848.
(4)The increase in UW NOI from TTM NOI is primarily due to rent abatements burning off, additional leasing and contractual rent steps though January 1, 2018.
(5)For a full description of Escrows and Reserves, please refer to“Escrows and Reserves”below.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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The Loan.The Landmark Square loan is secured by a first mortgage lien on the borrower’s fee and leasehold interests in a mixed use office and retail complex located in downtown Stamford, Connecticut, consisting of 757,917 square feet. The whole loan has an outstanding principal balance as of the Cut-off Date of $100.0 million (the “Landmark Square Whole Loan”), and is comprised of twopari passu notes, each as described below. Note A-1, with an outstanding principal balance as of the Cut-off Date of $51.0 million, is the controlling note and is being contributed to the JPMCC 2017-JP5 Trust. Note A-2, with an outstanding principal balance as of the Cut-off Date of $49.0 million, is expected to be contributed to one or more future securitization trusts. The Landmark Square Whole Loan has a 10-year term and is interest-only for the entire term.

 

Whole Loan Summary
NoteOriginal BalanceCut-off Date Balance Note HolderControlling Piece
A-1$51,000,000$51,000,000 JPMCC 2017-JP5Yes
A-249,000,00049,000,000 JPMCBNo
Total$100,000,000$100,000,000   

 

The Borrower. The borrowing entity for the Landmark Square Whole Loan is Landmark Square 1-6 LLC, a Delaware limited liability company and special purpose entity.

 

The Loan Sponsor.The loan sponsor of the borrower and nonrecourse carve-out guarantor is SL Green Operating Partnership, L.P. (“SL Green”) (NYSE: “SLG”; rated Baa3/BBB-/BBB- by Moody’s, S&P and Fitch) which is an S&P 500 company and New York City’s largest office landlord. As of December 31, 2016, SL Green held interests in 127 Manhattan properties totaling 47.8 million square feet. In addition to the Landmark Square property, the loan sponsor owns four other office buildings (680, 750, 1055 and 1010 Washington Boulevard) totaling over 650,000 square feet in Stamford, Connecticut.

 

The property was acquired by the loan sponsor through its acquisition of Reckson Operating Partnership LP in January 2007 for an allocated purchase price of approximately $256.0 million ($338 per square foot). According to the loan sponsor, it invested approximately $36.5 million ($48 per square foot) on capital improvements including new building and garage entrances, fully renovated lobbies, elevator modernization, universal key card access, main arcade renovations, exterior plaza upgrades and a sustainability program that encompassed a complete exterior LED lighting retrofit along with various mechanical improvements and upgrades.

 

The Property.The Landmark Square property consists of 757,917 square feet of office and retail space and is situated on a 6.30 acre site in downtown Stamford, Connecticut. Landmark Square is comprised of seven buildings ranging in size from 12,880 square feet to 272,578 square feet that were built in various phases between 1974 and 2006. The largest building, 1 Landmark Square, is the tallest office building in Stamford at 22 stories and offers expansive views of the Long Island Sound and the New York City skyline. The remaining buildings are two to nine stories each. Due to its varying floorplates, the Landmark Square property is able to accommodate tenants ranging in size from approximately 55,000 square feet to less than 1,000 square feet at a wide range of price points. Property amenities include on-site parking consisting of 1,100 spaces (resulting in a parking ratio of 1.45 spaces per 1,000 square feet) with optional valet parking, a private shuttle to and from the Metro North/Amtrak transportation hub which is 0.5 miles from the property, numerous on-site restaurants including Del Frisco’s Grill and a full-time concierge for tenants. Of the total square footage, approximately 81,879 square feet is retail. Of the retail square footage, 50,247 square feet is leased to Bow Tie Cinemas movie theater, which is located at 5 Landmark Square, while the remainder of the retail space is located within 1, 3, 4 and 7 Landmark Square. The property also features a 21,500 square foot health club, complete with squash courts, cardio rooms, weight rooms and full locker room facilities, which is available exclusively to tenants for a monthly fee of $30.00. Tenants also have access to a state-of-the-art 50-seat conference facility, barbershop and on-site tailor and dry cleaners. Approximately 10.8% of the property’s net rentable area is attributable to retail tenants.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Property Summary

Building Name
LocationNet Rentable Area (SF)(1)Year BuiltNumber of StoriesNumber of Tenants(2)OccupancyMajor Tenants
1 Landmark SquareStamford, CT272,57819812261 79.7%Allegis Global Solutions
2 Landmark SquareStamford, CT37,715197436 62.4%SAC Acquisition, Katon Partners
3 Landmark SquareStamford, CT131,5561977620 81.8%NBC Universal Media, Boardroom, Inc.
4 Landmark SquareStamford, CT103,4311976515 93.7%Silgan Holdings, Inc
5 Landmark SquareStamford, CT58,000197433 100.0%Bow Tie Cinemas
6 Landmark SquareStamford, CT141,757198397 90.0%Cummings & Lockwood, Finn Dixon & Herling
7 Landmark SquareStamford, CT12,880200622 100.0%Del Frisco’s Grille, HSBC
Total/Wtd. Avg. 757,917   114 84.9% 
(1)Net rentable area excludes all storage space, the conference center and fitness center.
(2)The total number of tenants does not equal 113 because Sacred Heart University leases space at 3 and 4 Landmark Square.

 

As of December 31, 2016, the property was 84.9% leased to 113 tenants, across a wide-range of industries including legal, accounting, financial services, publishing, software, advertising, food packaging, liquor import, recruiting, human resources and mail order retail, among others. The largest tenant at the property, Cummings & Lockwood, leases 55,643 square feet (7.3% of the net rentable area) through April 2026 and has been in occupancy since 2005. Cummings & Lockwood has two five-year renewal options which would extend its lease out to 2036. Cummings & Lockwood is a law firm founded in 1909 that provides legal counsel to both private clients and commercial enterprises with one of the largest trust and estate practices in the United States. Cummings & Lockwood employs nearly 100 attorneys across six offices located in Connecticut and Florida. The second largest tenant, B and E Theaters LLC (“Bow Tie Cinemas”), leases 50,247 square feet (6.6% of the net rentable area) of the ground floor of 5 Landmark Square and has been a tenant at the property since 1996. The theater features nine screens and has an entrance from Stamford Town Center Mall. Bow Tie Cinemas’ lease expires in May 2021 and it has one five-year renewal option which would extend its lease out to 2026. Founded in 1900, Bow Tie Cinemas is a privately-held theater company with more than 400 screens across 50 theaters in Colorado, Connecticut, Maryland, New Jersey, New York and Virginia. The third largest tenant, Finn Dixon & Herling, leases 26,385 square feet (3.5% of the net rentable area). Finn Dixon & Herling is a corporate law firm headquartered at the property, which was founded in 1987 and employs more than 50 attorneys. The firm specializes in bankruptcy and corporate reorganizations, commercial litigation, banking, mergers and acquisitions, securities, private equity, public finance, executive compensation and tax law. Finn Dixon & Herling has been at the property since April 2016 and its lease expires in December 2032. The Landmark Square property has had 26 renewal or new leases since January 2016 totaling 207,147 square feet (27.3% of total net rentable area).

 

Historical and Current Occupancy(1)
201320142015Current(2)
82.4%84.9%87.6%84.9%
(1)Historical Occupancies are as of December 31 of each respective year.
(2)Current Occupancy is as of December 31, 2016.

 

The Landmark Square property is located within the Stamford central business district adjacent to Veterans Memorial Park and connected via an enclosed arcade to the adjacent Stamford Town Center Mall, an 853,000 square foot retail complex featuring more than 100 retailers and anchored by Macy’s and Saks Fifth Avenue OFF Fifth. Within one block of the property are Palace Theater, Ferguson Library and Old Town Hall, a public exhibition and event space, Courtyard by Marriott Stamford Downtown, Target and the University of Connecticut – Stamford. The property is located within three blocks of the Stamford Innovation Center which serves as an incubator and co-working space for technology start-ups. The Landmark Square property is also located within 0.75 miles of the Stamford train station, which allows for access to Manhattan in approximately 50 minutes. The property is located just north of Interstate 95 which provides access to State Routes 7 and 8 and connects to the Merritt Parkway and other points in the northern sector of the state.

 

Stamford is home to numerous national and multinational corporations such as Sikorsky Aircraft, General Electric Corporation, Gen Re, Pitney Bowes, UBS, Reuters, Bridgewater Associates, Vineyard Vines and Royal Bank of Scotland, among others. According to the appraisal, Stamford is a global financial center with a strong high tech manufacturing and defense industry presence which benefits from a highly educated labor force. Stamford has a growing number of residential projects including Harbor Point, Parcel 38 and Bedford House. Harbor Point, the largest development within Stamford is a mixed-use redevelopment encompassing 82 acres, currently consisting of more than 2,360 apartments and is anticipated to expand to more than 4,000 units. Harbor Point also features a significant retail component including 30 retailers with more than a dozen restaurants, 20 acres of public parks, four marinas and a water taxi. Parcel 38 and Bedford House are two additional developments projected to add approximately 754 residential units.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Landmark Square

 

The property is located within the Stamford central business district office submarket which, according to the appraisal, as of the third quarter of 2016 had an overall vacancy rate of 21.3% and an overall availability rate of 31.7%. However, a significant amount of office vacancy in the Stamford central business district is situated in three buildings (677 Washington Boulevard, 695 East Main Street and 1 Elmcroft Road) that comprise 16.1% of the total submarket office inventory. According to the appraisal, 677 Washington Boulevard, 695 East Main Street and 1 Elmcroft Road are not directly competitive with the property since they were designed as corporate headquarters with very large floor plans, long corridors, and are inefficiently designed for a multi-tenant building while the property caters to small and medium sized tenants. Excluding these three buildings from the Stamford central business district inventory, the availability rate decreases from 31.7% to 19.1%.

 

According to the appraisal, as of third quarter 2016, the Stamford central business district office and retail submarket rental rates were $43.41 per square foot gross and $34.31 triple net, respectively. The appraisal identified seven competitive properties built between 1980 and 1989 and ranging in size from 133,000 square feet to 501,448 square feet. The comparable properties reported occupancies ranging from 72.0% to 99.0% with a weighted average occupancy of approximately 86.2%. The appraisal concluded a stabilized occupancy rate of 90.0% for the property and an office market rental range of $33.00 to $44.00 per square foot gross for the property. Additionally, the appraisal concluded a retail market rental range of $15.00 to $35.00 per square foot triple net.

 

Tenant Summary(1)
TenantRetail / Office ComponentRatings(2)
Moody’s/S&P/Fitch
Net Rentable Area (SF)% of
Total NRA
Base Rent PSF% of Total
Base Rent
Lease
Expiration Date
Cummings & Lockwood(3)OfficeNA / NA / NA55,6437.3%$35.009.5%4/30/2026
Bow Tie CinemasRetailNA / NA / NA50,2476.6% $7.461.8%5/31/2021
Finn Dixon & Herling(4)OfficeNA / NA / NA26,3853.5%$35.004.5%12/31/2032
Morgan Stanley Smith Barney(5)OfficeA3 / BBB+ / A23,0623.0%$36.504.1%11/30/2020
Blaire Corp.OfficeNA / NA / NA21,8402.9%$21.022.3%6/30/2025
NBC Universal MediaOfficeA3 / NA / A-16,7742.2%$32.252.7%7/31/2017
Silgan Holdings, Inc(6)OfficeNA / NA / NA16,2232.1%$32.002.5%4/30/2023
Allegis Global Solutions(7)OfficeNA / NA / NA15,0272.0%$31.382.3%5/31/2017

Sacred Heart University

OfficeNA / NA / NA14,9872.0%$31.002.3%8/31/2018
Luxury Mortgage Corporation(8)OfficeNA / NA / NA14,6431.9%$17.211.2%MTM
(1)Based on the underwritten rent roll dated December 31, 2016.
(2)Ratings provided are for the parent company of the entity listed in the “Tenant” field whether or not the parent company guarantees the lease.
(3)Cummings & Lockwood has the right to contract 5,000-10,000 square feet of its leased space as of April 30, 2021, with 12 months’ notice and the payment of a contraction fee.
(4)Finn Dixon & Herling has the right to terminate 3,240 square feet of its 26,385 total square feet as of January 1, 2023 with 18 months’ written notice and the payment of a contraction fee.
(5)Morgan Stanley Smith Barney has the right to terminate its lease beginning August 23, 2019 with 12 months’ written notice and the payment of a termination fee.
(6)Silgan Holdings, Inc has the right to terminate its lease as of July 1, 2019 with 12 months’ written notice and the payment of a termination fee approximately equal to $700,000.
(7)Allegis Global Solutions may terminate its lease at any time with 30 days’ written notice.
(8)Luxury Mortgage Corporation may terminate its lease at any time with 30 days’ written notice.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Landmark Square

 

Lease Rollover Schedule(1)
YearNumber of Leases
Expiring
Net
Rentable
Area
Expiring
% of NRA ExpiringBase Rent Expiring% of Base
Rent
Expiring
Cumulative
Net Rentable
Area
Expiring
Cumulative
% of NRA Expiring
Cumulative
Base Rent Expiring
Cumulative
% of Base
Rent
Expiring
VacantNAP114,08415.1%NAPNAP114,08415.1%NAPNAP
2017 & MTM26126,528 16.7$4,086,66120.0%240,61231.7%$4,086,66120.0%
20181963,1168.32,119,06810.4303,72840.1%$6,205,72830.4%
20191128,4113.7985,6724.8332,13943.8%$7,191,40035.3%
20201460,5848.02,133,34210.5392,72351.8%$9,324,74345.7%
20211085,718 11.31,652,1808.1478,44163.1%$10,976,92353.8%
20221366,3528.82,412,93811.8544,79371.9%$13,389,86165.7%
2023432,5564.31,206,0245.9577,34976.2%$14,595,88571.6%
2024212,6831.7410,5452.0590,03277.8%$15,006,43073.6%
2025546,5986.11,309,3276.4636,63084.0%$16,315,75780.0%
2026472,2349.52,525,89212.4708,86493.5%$18,841,64992.4%
2027110,074 1.3272,0001.3718,93894.9%$19,113,64993.7%
2028 & Beyond438,979 5.11,279,5636.3757,917100.0%$20,393,211100.0%
Total113757,917100.0%$20,393,211100.0%    
(1)Based on the underwritten rent roll dated December 31, 2016 and includes rent steps through January 1, 2018.

 

Operating History and Underwritten Net Cash Flow
 2013201420152016UnderwrittenPer Square Foot %(1)
Rents in Place$17,688,150$17,808,307$18,668,997$19,376,081$20,393,211$26.9174.1%
Vacant Income00004,030,4905.3214.6%
Gross Potential Rent$17,688,150$17,808,307$18,668,997$19,376,081$24,423,701$32.2288.7%
Total Reimbursements2,769,7073,591,2153,078,3493,353,8473,105,6604.1011.3%
Net Rental Income$20,457,856$21,399,521$21,747,346$22,729,928$27,529,361$36.32100.0%
(Vacancy/Credit Loss)(2)(431,586)(705,825)(2,869,221)(2,162,927) (4,030,490) (5.32)  (14.6)--
Other Income(3)1,063,7621,513,068973,8971,673,745 869,308  1.15 3.2%
Effective Gross Income$21,090,032$22,206,765$19,852,023$22,240,746$24,368,179$32.15 88.5%
        
Total Expenses$11,173,914$11,760,507$12,384,894$12,516,518$12,347,514$16.2950.7%
        
Net Operating Income(4)$9,916,119$10,446,258$7,467,129$9,724,228$12,020,665$15.8649.3%
        
Total TI/LC, Capex/RR0000962,5551.274.0%
        
Net Cash Flow$9,916,119$10,446,258$7,467,129$9,724,228$11,058,110$14.5945.4%
(1)% column represents percent of Net Rental Income for all revenue lines and represents percent of Effective Gross Income for the remainder of the fields.
(2)Historical Vacancy/Credit Loss consists primarily of free rent.
(3)Other Income consists of licensee rent, lease buy out income and miscellaneous income. Lease buy out income has not been underwritten.
(4)The decrease in Net Operating Income from 2014 to 2015 is primarily due to rent abatements for tenants which signed leases in 2015. The increase in Net Operating Income from 2015 to 2016 is primarily due to rent abatements burning off from the leases executed in 2015 and an increase in other income related to licensee rent, lease buy out income and miscellaneous income in the amount of $698,848. The increase in Net Operating Income from 2016 to Underwritten is primarily due to rent abatements burning off, additional leasing and contractual rent steps though January 1, 2018.

 

Property Management. The property is managed by SL Green Management LLC, an affiliate of the borrower.

 

Escrows and Reserves. At origination, the borrower deposited $1,325,844 for real estate taxes. The guarantor also delivered the guaranty referenced below in“Reserve Waiver Guaranty”.

 

THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2017-JP5
 
Landmark Square

 

Reserve Waiver Guaranty. So long as an affiliate of the borrower maintains a long term unsecured debt rating of “BBB-” (or its equivalent) from each of Moody’s and Fitch or has total assets in excess of $500.0 million and maintains a net worth of at least $250.0 million (in each case, exclusive of any interest in the property), the borrower may deliver a partial payment guaranty from such entity in lieu of the borrower’s requirement to make (i) the initial deposit in the amount of $2,500,000 required at origination and monthly deposits into the tenant improvement and leasing commission reserve, (ii) the initial deposit into the free rent reserve in the amount of $2,309,168, (iii) the initial deposit into the outstanding tenant improvement and leasing commission reserve in the amount of $1,437,315 required at origination and (iv) the initial and monthly deposits into the replacement reserve. The borrower is also permitted to deliver a letter of credit in an amount required by the loan documents in lieu of such deposits or any combination of cash, a letter of credit or a partial payment guaranty. The amount of this partial payment guaranty is equal to the lesser of (A) the amount that would be contained in each reserve if not for the delivery of the partial payment guaranty and (B) the then outstanding principal balance of the Whole Loan.