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CMBS Backed by Second Most-Visited Mall Enters Pipeline: Fitch

DEC 6, 2013 12:17pm ET
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A more than $1 billion sequential-pay commercial mortgage-backed securitization backed by the second most-visited mall is coming to market, according to a Fitch Ratings presale report.

The Aventura Mall is second only to Minnesota’s giant Mall of America when it comes to visitors, according to Fitch. It draws more than 38 million visitors per year.

Sponsors are getting a return of roughly $593 million from the loan’s proceeds. The loan also is refinancing about $510 million in existing debt, funding under $4 million in upfront reserves, and paying defeasance and closing costs equal to almost $93 million.

Class A received Fitch’s top triple-A sf expected rating and is $747 million in size. This tranche has almost 38% credit enhancement. Fitch also assigned its top expected rating to an interest-only tranche with notional value. Fitch left give other tranches, one with notional value, unrated.

Strong asset quality, low occupancy costs, a diverse customer base, and strong ownership and management are among the deal’s strengths, according to Fitch. Turnberry Development LLC has managed the collateral property since 1983. Turnberry is the sponsor of roughly two-thirds of the loan and Simon Property Group sponsors the remaining one-third of it.

The single-asset nature of the CMBS transaction exposes it to some risks, Fitch notes in its presale report.

JPMorgan Chase serves as a loan seller, depositor, joint bookrunner and co-lead manager of the CMBS through various entities. The other joint bookrunners and co-lead managers are Deutsche Bank, Morgan Stanley and Wells Fargo entities. Wells and Morgan Stanley also are loan sellers, as is German American Capital Corp. A Deutsche Bank entity also serves as the certificate administrator. U.S. Bank is the trustee.

Midland Loan Services, a division of PNC Bank, serves as the master and special servicer for the transaction.

TAGS: origination, secondary, risk management

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