Kroll Bond Rating Agency Europe Limited (KBRA) releases research regarding Salus (ELOC No. 33), a KBRA-rated single-asset single-borrower (SASB) CMBS transaction with exposure to coworking office tenants. The transaction collateral is secured by CityPoint, a 708,594 square foot office building in London.
The UK government recently extended measures through at least early May to reduce the spread of the coronavirus (COVID-19) pandemic, including the requirement for people to stay at home, except for very limited purposes. In this context, KBRA reviewed loans with exposure to coworking office tenants that operate shared workspaces. The loan that serves as collateral for the Salus (ELOC No. 33) transaction has a sizable (20.1% of total contracted rent) coworking tenant concentration. In recent dialogue with the transaction servicer, KBRA found that the subject's two coworking tenants had requested a rent holiday. In addition, in our surveillance review in December 2019, KBRA previously noted that the property was operating below market occupancy levels due to the recent departure of three tenants.
As a result, KBRA assigns a KBRA Performance Outlook (KPO) of Underperform for the loan that serves as collateral for the Salus (ELOC No. 33) transaction. A KPO is an assessment of Outperform, Perform, or Underperform based on recent and expected collateral performance.
As events surrounding the crisis unfold, our thoughts are with the individuals and families who have been affected by the virus.
Click here to view the report.
Related Publications
- Coronavirus (COVID-19): Sponsor Support and Structural Features to Insulate UK CMBS from Rent Disruptions
- Coronavirus (COVID-19): Kanaal CMBS Finance 2019 Retail Exposure
- Salus (ELOC No. 33) DAC Surveillance Report
About KBRA and KBRA Europe
KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) with the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA. Kroll Bond Rating Agency Europe Limited is located at 6-8 College Green, Dublin 2, Ireland.
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Contacts:
Analytical
Matthew Horner, Director
+353 1 588 1240
mhorner@kbra.com
Stephen Hughes, Director
+44 208 148 1004
shughes@kbra.com
Yee Cent Wong, Senior Managing Director
+1 (646) 731-2374
ywong@kbra.com
Business Development
Mauricio Noé, Senior Managing Director, Head of Europe
+44 208 148 1010
mnoe@kbra.com
