KBRA Assigns Preliminary Ratings to Ready Capital Mortgage Trust 2022-7 – Benzin… – Press Release

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KBRA is pleased to announce the assignment of preliminary ratings to eight classes of Ready Capital Mortgage Trust 2022-7, a $276.8 million small balance transaction collateralized by 30 commercial mortgage loans secured by 36 properties.

The collateral properties are located throughout 19 MSAs, of which the three largest are Columbus (12.3%); Salinas, CA (9.9%); and Inland Empire (9.0%). The subject transaction has exposure to most major property type segments, with the top three being retail (43.5%), industrial (20.1%), and office (15.6%). The loans have outstanding principal balances ranging from $1.1 million to $27.4 million for the largest loan in the pool, Spring Hill Suites Monterey Beach (9.9%), which is a 106-key, select service hotel located in Marina, California, approximately nine miles north of Monterey. The five largest loans, which also include Anchor Hocking (9.7%), Stater Bros. Plaza (9.0%), Delco Plaza (8.7%), and Shoprite Warwick (6.1%) represent 43.4% of the initial pool balance, while the top 10 loans represent 64.7%.

KBRA’s analysis of the transaction incorporated our multi-borrower rating process that begins with our analysts’ evaluation of the underlying collateral properties’ financial and operating performance, which determines KBRA’s estimate of sustainable net cash flow (KNCF) and KBRA value using our U.S. CMBS Property Evaluation Methodology. On an aggregate basis, KNCF was 11.0% less than the issuer cash flow. KBRA capitalization rates were applied to each asset’s KNCF to derive values that were, on an aggregate basis, 45.7% less than third party appraisal values. The pool has an in-trust KLTV of 117.4% and an all-in KLTV of 121.5%. The model deploys rent and occupancy stresses, probability of default regressions, and loss given default calculations to determine losses for each collateral loan that are then used to assign our credit ratings.

Click here to view the report. To access ratings and relevant documents, click here.

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