| FILED PURSUANT TO RULE 424(h) | ||
| REGISTRATION FILE NO.: 333-260277-01 | ||
The information in this preliminary prospectus is not complete and may be changed. This preliminary prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
THIS PRELIMINARY PROSPECTUS, DATED MARCH 24, 2022, MAY BE AMENDED OR COMPLETED PRIOR TO THE TIME OF SALE
PROSPECTUS
$650,391,000 (Approximate)
Benchmark 2022-B34 Mortgage Trust
(Central Index Key Number 0001912509)
Issuing Entity
Deutsche Mortgage & Asset Receiving Corporation
(Central Index Key Number 0001013454)
Depositor
German American Capital Corporation
(Central Index Key Number 0001541294)
Citi Real Estate Funding Inc.
(Central Index Key Number 0001701238)
Goldman Sachs Mortgage Company
(Central Index Key Number 0001541502)
JPMorgan Chase Bank, National Association
(Central Index Key Number 0000835271)
Sponsors and Mortgage Loan Sellers
Benchmark
2022-B34 Mortgage Trust
Commercial Mortgage Pass-Through Certificates, Series 2022-B34
Deutsche Mortgage & Asset Receiving Corporation is offering certain classes of the Benchmark 2022-B34 Mortgage Trust Commercial Mortgage Pass-Through Certificates, Series 2022-B34 identified in the table below. The offered certificates (and the non-offered certificates identified under “Summary of Certificates”) will represent the ownership interests in the issuing entity, Benchmark 2022-B34 Mortgage Trust, a New York common law trust. The assets of the issuing entity will primarily consist of a pool of fixed rate commercial mortgage loans, which are generally the sole source of payments on the certificates. Credit enhancement will be provided solely by certain classes of subordinate certificates that will be subordinate to certain classes of senior certificates as described under “Description of the Certificates—Subordination; Allocation of Realized Losses”. Each class of certificates will be entitled to receive monthly distributions of interest and/or principal on the 4th business day following the 11th day of each month (or if the 11th is not a business day, the next business day), commencing in May 2022. The rated final distribution date for each class of offered certificates is the distribution date in April 2055.
Class |
Initial Certificate Balance or Notional Amount(1) |
Approx. Initial Pass-Through Rate |
Pass-Through Rate Description |
Assumed Final Distribution Date(2) | ||
| Class A-1 | $ | 13,310,000 | % | (3) | November 2026 | |
| Class A-2 | $ | 114,778,000 | % | (3) | March 2027 | |
| Class A-SB | $ | 18,021,000 | % | (3) | December 2031 | |
| Class A-4 | (4) | % | (3) | (4) | ||
| Class A-5 | (4) | % | (3) | (4) | ||
| Class X-A | $ | 675,717,000 | (5) | % | Variable(6) | March 2032 |
| Class A-M | $ | 67,354,000 | % | (3) | March 2032 | |
| Class B | $ | 43,455,000 | % | (3) | March 2032 | |
| Class C | $ | 41,282,000 | % | (3) | April 2032 | |
(Footnotes on table begin on page 3)
You should carefully consider the summary of risk factors and the risk factors beginning on page 59 and page 61, respectively, of this prospectus.
Neither the certificates nor the mortgage loans are insured or guaranteed by any governmental agency, instrumentality or private issuer or any other person or entity.
The certificates will represent interests in the issuing entity only. They will not represent interests in or obligations of the sponsors, the depositor, any of their affiliates or any other entity.
The United States Securities and Exchange Commission and state regulators have not approved or disapproved of the offered certificates or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. Deutsche Mortgage & Asset Receiving Corporation will not list the offered certificates on any securities exchange or on any automated quotation system of any securities association.
The issuing entity will be relying on an exclusion or exemption from the definition of “investment company” under the Investment Company Act of 1940, as amended (the “Investment Company Act”), contained in Section 3(c)(5) of the Investment Company Act or Rule 3a-7 under the Investment Company Act, although there may be additional exclusions or exemptions available to the issuing entity. The issuing entity is being structured so as not to constitute a “covered fund” for purposes of the Volcker Rule under the Dodd-Frank Act (both as defined in this prospectus).
The underwriters, Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Academy Securities, Inc. and Drexel Hamilton, LLC will purchase the offered certificates from Deutsche Mortgage & Asset Receiving Corporation and will offer them to the public at negotiated prices, plus, in certain cases, accrued interest, determined at the time of sale. Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC, are acting as co-lead managers and joint bookrunners in the following manner: Deutsche Bank Securities Inc. is acting as sole bookrunning manager with respect to approximately 30.2% of each class of offered certificates, Citigroup Global Markets Inc. is acting as sole bookrunning manager with respect to approximately 36.5% of each class of offered certificates, Goldman Sachs & Co. LLC is acting as sole bookrunning manager with respect to approximately 20.8% of each class of offered certificates of each class of offered certificates and J.P. Morgan Securities LLC is acting as sole bookrunning manager with respect to approximately 12.5%. Academy Securities, Inc. and Drexel Hamilton, LLC are acting as co-managers.
The underwriters expect to deliver the offered certificates to purchasers in book-entry form only through the facilities of The Depository Trust Company in the United States and Clearstream Banking, Luxembourg and Euroclear Bank, as operator of the Euroclear System, in Europe, against payment in New York, New York on or about April 14, 2022. Deutsche Mortgage & Asset Receiving Corporation expects to receive from this offering approximately % of the aggregate certificate balance of the offered certificates, plus accrued interest from April 1, 2022, before deducting expenses payable by the depositor.
CALCULATION OF REGISTRATION FEE
Title of each class of securities to be registered |
Amount to be registered |
Proposed maximum offering price per unit(1) |
Proposed maximum aggregate offering price(1) |
Amount of registration fee(2) |
| Commercial Mortgage Pass-Through Certificates | $650,391,000 | 100% | $650,391,000 | $60,291.25 |
| (1) | Estimated solely for the purpose of calculating the registration fee. |
| (2) | Calculated according to Rule 457(s) of the Securities Act of 1933. |
| Deutsche Bank Securities | Goldman Sachs & Co. LLC | J.P. Morgan | Citigroup | ||
| Co-Lead Managers and Joint Bookrunners | |||||
| Academy
Securities Co-Manager |
Drexel Hamilton Co-Manager | ||||
March , 2022
(THIS PAGE INTENTIONALLY LEFT BLANK)
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SUMMARY OF CERTIFICATES
Class |
Initial Certificate Balance or Notional Amount(1) |
Approx. Initial Credit Support(7) |
Approx. Initial Pass-Through Rate |
Pass-Through Rate Description |
Assumed |
Weighted
Average |
Principal Window (months)(8) | ||
| Offered Certificates | |||||||||
| Class A-1 | $ | 13,310,000 | 30.000% | % | (3) | November 2026 | 2.66 | 1 – 55 | |
| Class A-2 | $ | 114,778,000 | 30.000% | % | (3) | March 2027 | 4.77 | 55 – 59 | |
| Class A-SB | $ | 18,021,000 | 30.000% | % | (3) | December 2031 | 7.36 | 59 – 116 | |
| Class A-4 | (4) | 30.000% | % | (3) | (4) | (4) | (4) | ||
| Class A-5 | (4) | 30.000% | % | (3) | (4) | (4) | (4) | ||
| Class X-A | $ | 675,717,000 | (5) | N/A | % | Variable(6) | March 2032 | N/A | N/A |
| Class A-M | $ | 67,354,000 | 22.250% | % | (3) | March 2032 | 9.92 | 119 - 119 | |
| Class B | $ | 43,455,000 | 17.250% | % | (3) | March 2032 | 9.92 | 119 - 119 | |
| Class C | $ | 41,282,000 | 12.500% | % | (3) | April 2032 | 9.97 | 119 - 120 | |
| Non-Offered Certificates(9) | |||||||||
| Class A-3 | $ | 110,063,000 | 30.000% | % | (3) | February 2029 | 6.77 | 81 – 82 | |
| Class X-B | $ | 43,455,000 | (5) | N/A | % | Variable(6) | March 2032 | N/A | N/A |
| Class X-D | $ | 44,540,000 | (5) | N/A | % | Variable(6) | April 2032 | N/A | N/A |
| Class X-F | $ | 26,073,000 | (5) | N/A | % | Variable(6) | April 2032 | N/A | N/A |
| Class X-G | $ | 8,691,000 | (5) | N/A | % | Variable(6) | April 2032 | N/A | N/A |
| Class X-H | $ | 29,332,336 | (5) | N/A | % | Variable(6) | April 2032 | N/A | N/A |
| Class D | $ | 27,159,000 | 9.375% | % | (3) | April 2032 | 10.00 | 120 – 120 | |
| Class E | $ | 17,381,000 | 7.375% | % | (3) | April 2032 | 10.00 | 120 – 120 | |
| Class F | $ | 26,073,000 | 4.375% | % | (3) | April 2032 | 10.00 | 120 – 120 | |
| Class G | $ | 8,691,000 | 3.375% | % | (3) | April 2032 | 10.00 | 120 – 120 | |
| Class H | $ | 29,332,336 | 0.000% | % | (3) | April 2032 | 10.00 | 120 – 120 | |
| Class S(10) | N/A | N/A | N/A | N/A | N/A | N/A | N/A | ||
| Class R(11) | N/A | N/A | N/A | N/A | N/A | N/A | N/A | ||
| VRR Interest(12) | $ | 45,741,597 | N/A | % | (13) | April 2032 | 8.64 | 1 - 120 | |
| (1) | Approximate, subject to a variance of plus or minus 5%. The certificate balance of the VRR Interest is not included in the certificate balance or notional amount of any other class of certificates set forth under “Offered Certificates” or “Non-Offered Certificates”, and the VRR Interest is not offered by this prospectus. |
| (2) | The assumed final distribution dates set forth in this prospectus have been determined on the basis of the assumptions described in “Description of the Certificates—Assumed Final Distribution Date; Rated Final Distribution Date”. |
| (3) | The pass-through rates for the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4, Class A-5, Class A-M, Class B, Class C, Class D, Class E, Class F, Class G and Class H certificates (collectively, the “principal balance certificates”), in each case, will be one of (i) a fixed per annum rate, (ii) the weighted average of the net mortgage rates on the mortgage loans (in each case, adjusted, if necessary, to accrue on the basis of a 360-day year consisting of twelve 30-day months) as of their respective due dates in the month preceding the month in which such distribution date occurs (the “WAC rate”), (iii) a rate equal to the lesser of a specified pass-through rate and the WAC rate, or (iv) the WAC rate, less a specified rate, but in any case not less than 0.000%. See “Description of the Certificates—Distributions—Pass-Through Rates”. |
| (4) | The exact certificate balances of the Class A-4 and Class A-5 certificates are unknown and will be determined based on the final pricing of those classes of certificates. However, the respective initial certificate balances, assumed final distribution dates, weighted average lives and principal windows of the Class A-4 and Class A-5 certificates are expected to be within the applicable ranges reflected in the following chart. The aggregate initial certificate balance of the Class A-4 and Class A-5 certificates is expected to be approximately $352,191,000, subject to a variance of plus or minus 5%. |
Class of Certificates |
Expected Range of Initial Certificate Balance |
Expected Range of Assumed Final Distribution Date |
Expected Range of Weighted Avg. Life (Yrs) |
Expected Range of Principal Window |
| Class A-4 | $0 – $110,716,000 | NAP – January 2032 | NAP – 9.63 | NAP / 95 – 117 |
| Class A-5 | $241,475,000 – $352,191,000 | March 2032 | 9.86 – 9.79 | 117 – 119 / 95 – 119 |
| (5) | The Class X-A, Class X-B, Class X-D, Class X-F, Class X-G and Class X-H certificates (collectively, the “Class X certificates”) will not have certificate balances. The notional amount of the Class X-A certificates will be equal to the aggregate certificate balance of the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4, Class A-5 and Class A-M certificates. The notional amount of the Class X-B certificates will be equal to the certificate balance of the Class B certificates. The notional amount of the Class X-D certificates will be equal to the aggregate certificate balance of the Class D and Class E certificates. The notional amount of the Class X-F certificates will be equal to the certificate balance of the Class F certificates. The notional amount of the Class X-G certificates will be equal to the certificate balance of the Class G certificates. The notional amount of the Class X-H certificates will be equal to the certificate balance of the Class H certificates. The notional amount of each class of Class X certificates is subject to change depending upon the final pricing of the principal balance certificates, as follows: (1) if as a result of such pricing the pass-through rate of any class of principal balance certificates whose certificate balance comprises such notional amount is equal to the WAC rate, the certificate balance of such class of principal balance certificates may not be part of, and reduce accordingly, such notional amount of such class of Class X certificates (or, if as a result of such pricing the pass-through rate of such class of Class X certificates is equal to zero, such class of Class X certificates may not be issued on the closing date), and/or (2) if as a result of such pricing the pass-through rate of any class of principal balance certificates that does not comprise such notional amount of such class of Class X certificates is less than the WAC rate, such class of principal balance certificates may become a part of, and increase accordingly, such notional amount of such class of Class X certificates. See “Description of the Certificates—Distributions—Pass-Through Rates”. |
| (6) | Each class of Class X certificates will not be entitled to distributions of principal. Each class of Class X certificates will accrue interest on their respective notional amount and at their respective pass-through rate as described in “Description of the Certificates—Distributions—Pass-Through Rates”. |
| (7) | The approximate initial credit support percentages set forth for the certificates are approximate and, for the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4 and Class A-5 certificates, are represented in the aggregate. The approximate initial credit support percentages shown in the table above do not take into account the VRR Interest. However, losses incurred on the mortgage loans will |
3
be allocated between the VRR Interest and the principal balance certificates, pro rata in accordance with their respective percentage allocation entitlement. See “Credit Risk Retention” and “Description of the Certificates”.
| (8) | The weighted average life and principal window during which distributions of principal would be received as set forth in the foregoing table with respect to each class of principal balance certificates are based on the assumptions set forth under “Yield and Maturity Considerations—Weighted Average Life” and on the assumptions that there are no prepayments, modifications or losses in respect of the mortgage loans and that there are no extensions or forbearances of maturity dates or anticipated repayment dates of the mortgage loans. The weighted average life and principal window of the Class A-4 and Class A-5 certificates are expected to be within the applicable ranges reflected in the chart set forth in footnote (4) above. |
| (9) | The classes of certificates set forth under “Non-Offered Certificates” in the table above are not offered by this prospectus. Any information in this prospectus concerning the non-offered certificates is presented solely to enhance your understanding of the offered certificates. |
| (10) | The Class S certificates will not have a certificate balance, notional amount, pass-through rate, assumed final distribution date or rating. Excess interest accruing after the related anticipated repayment date on any mortgage loan with an anticipated repayment date will, to the extent collected, be allocated to the Class S certificates and the VRR Interest. The Class S certificates will not be entitled to distributions in respect of principal or interest other than the Non-VRR percentage of any excess interest. |
| (11) | The Class R certificates will not have a certificate balance, notional amount, pass-through rate, assumed final distribution date or rating. The Class R certificates will represent the residual interests in each Trust REMIC, as further described in this prospectus. The Class R certificates will not be entitled to distributions of principal or interest. |
| (12) | German American Capital Corporation, as retaining sponsor, is expected to acquire from the depositor, on the closing date, an “eligible vertical interest” (as defined in Regulation RR) in the form of a single vertical security (the “VRR Interest”) The VRR Interest represents the right to receive approximately 5.00% of all amounts collected on the mortgage loans (net of all expenses of the issuing entity) that are available for distribution to the non-VRR certificates and the VRR Interest on each Distribution Date. For more information regarding the VRR Interest, see “Credit Risk Retention”. The VRR Interest will be retained by certain retaining parties in accordance with the credit risk retention rules applicable to this securitization transaction. The VRR Interest is a class of certificates. |
| (13) | Although it does not have a specified pass-through rate (other than for tax reporting purposes), the effective interest rate for the VRR Interest will be the WAC rate. |
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TABLE OF CONTENTS
| SUMMARY OF CERTIFICATES | 3 |
| IMPORTANT NOTICE REGARDING THE OFFERED CERTIFICATES | 13 |
| IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS | 14 |
| SUMMARY OF TERMS | 23 |
| SUMMARY OF RISK FACTORS | 59 |
| Special Risks | 59 |
| Risks Relating to the Mortgage Loans | 59 |
| Risks Relating to Shari’ah Compliant Loans | 60 |
| Risks Relating to Conflicts of Interest | 60 |
| Other Risks Relating to the Certificates | 61 |
| RISK FACTORS | 61 |
| Special Risks | 61 |
| Coronavirus Pandemic Has Adversely Affected the Global Economy and Will Likely Adversely Affect the Performance of the Mortgage Loans | 61 |
| Risks Relating to the Mortgage Loans | 65 |
| Mortgage Loans Are Non-Recourse and Are Not Insured or Guaranteed | 65 |
| Risks of Commercial and Multifamily Lending Generally | 65 |
| Performance of the Mortgage Loans Will Be Highly Dependent on the Performance of Tenants and Tenant Leases | 67 |
| Retail Properties Have Special Risks | 72 |
| Office Properties Have Special Risks | 74 |
| Multifamily Properties Have Special Risks | 75 |
| Industrial Properties Have Special Risks | 78 |
| Hospitality Properties Have Special Risks | 79 |
| Mixed Use Properties Have Special Risks | 82 |
| Leased Fee Properties Have Special Risks | 82 |
| Mortgaged Properties Leased to Startup Companies Have Special Risks | 82 |
| Risks Relating to Enforceability of Cross-Collateralization | 83 |
| Parking Properties Have Special Risks | 83 |
| Data Centers Have Special Risks | 84 |
| Condominium Ownership May Limit Use and Improvements | 84 |
| Operation of a Mortgaged Property Depends on the Property Manager’s Performance | 86 |
| Climate Change May Directly or Indirectly Have an Adverse Effect on the Mortgage Pool | 86 |
| Concentrations Based on Property Type, Geography, Related Borrowers and Other Factors May Disproportionately Increase Losses | 87 |
| Adverse Environmental Conditions at or Near Mortgaged Properties May Result in Losses | 88 |
| Risks Related to Redevelopment, Expansion and Renovation at Mortgaged Properties | 89 |
| Some Mortgaged Properties May Not Be Readily Convertible to Alternative Uses | 90 |
| Risks Related to Zoning Non-Compliance and Use Restrictions | 92 |
| Risks Relating to Inspections of Properties | 93 |
| Risks Relating to Costs of Compliance with Applicable Laws and Regulations | 93 |
| Insurance May Not Be Available or Adequate | 93 |
| Terrorism Insurance May Not Be Available for All Mortgaged Properties | 96 |
| Risks Associated with Blanket Insurance Policies or Self-Insurance | 97 |
| Condemnation of a Mortgaged Property May Adversely Affect Distributions on Certificates | 97 |
| Limited Information Causes Uncertainty | 98 |
| Underwritten Net Cash Flow Could Be Based On Incorrect or Failed Assumptions | 98 |
| Frequent and Early Occurrence of Borrower Delinquencies and Defaults May Adversely Affect Your Investment | 99 |
5
| The Mortgage Loans Have Not Been Reviewed or Re-Underwritten by Us | 100 |
| Static Pool Data Would Not Be Indicative of the Performance of this Pool | 100 |
| Appraisals May Not Reflect Current or Future Market Value of Each Property | 101 |
| Seasoned Mortgage Loans Present Additional Risk of Repayment | 102 |
| The Performance of a Mortgage Loan and Its Related Mortgaged Property Depends in Part on Who Controls the Borrower and Mortgaged Property | 103 |
| The Borrower’s Form of Entity May Cause Special Risks | 103 |
| A Bankruptcy Proceeding May Result in Losses and Delays in Realizing on the Mortgage Loans | 105 |
| Litigation Regarding the Mortgaged Properties or Borrowers May Impair Your Distributions | 106 |
| Other Financings or Ability to Incur Other Indebtedness Entails Risk | 107 |
| Tenancies-in-Common May Hinder Recovery | 108 |
| Risks Relating to Enforceability of Yield Maintenance Charges, Prepayment Premiums or Defeasance Provisions | 109 |
| Risks Associated with One Action Rules | 109 |
| State Law Limitations on Assignments of Leases and Rents May Entail Risks | 109 |
| Various Other Laws Could Affect the Exercise of Lender’s Rights | 109 |
| Risks of Anticipated Repayment Date Loans | 110 |
| Borrower May Be Unable To Repay Remaining Principal Balance on Maturity Date or Anticipated Repayment Date; Longer Amortization Schedules and Interest-Only Provisions Increase Risk | 110 |
| Risks Related to Ground Leases and Other Leasehold Interests | 112 |
| Energy Efficiency and Greenhouse Gas Emission Standards Set By New York City’s Local Law 97 May Adversely Affect Future Net |
|
Operating Income at Mortgaged Real Properties Located in New York City |
113 |
| Increases in Real Estate Taxes May Reduce Available Funds | 113 |
| Collective Bargaining Activity May Disrupt Operations, Increase Labor Costs or Interfere with Business Strategies | 114 |
| State and Local Mortgage Recording Taxes May Apply Upon a Foreclosure or Deed in Lieu of Foreclosure and Reduce Net Proceeds | 114 |
| Risks Related to Conflicts of Interest | 114 |
| Interests and Incentives of the Originators, the Sponsors and Their Affiliates May Not Be Aligned With Your Interests | 114 |
| The Servicing of the Servicing Shift Whole Loans Will Shift to Other Servicers | 116 |
| Interests and Incentives of the Underwriter Entities May Not Be Aligned With Your Interests | 117 |
| Potential Conflicts of Interest of the Master Servicer and the Special Servicer | 118 |
| Potential Conflicts of Interest of the Operating Advisor | 120 |
| Potential Conflicts of Interest of the Asset Representations Reviewer | 121 |
| Potential Conflicts of Interest of the Directing Holder and the Companion Loan Holders | 122 |
| Potential Conflicts of Interest in the Selection of the Underlying Mortgage Loans | 124 |
| Conflicts of Interest May Occur as a Result of the Rights of the Applicable Directing Holder To Terminate the Special Servicer of the Applicable Whole Loan | 125 |
| Other Potential Conflicts of Interest May Affect Your Investment | 125 |
| Other Risks Relating to the Certificates | 125 |
| The Certificates Are Limited Obligations | 125 |
| The Certificates May Have Limited Liquidity and the Market Value of the Certificates May Decline | 126 |
| Nationally Recognized Statistical Rating Organizations May Assign Different Ratings to the Certificates; Ratings of the |
6
|
Certificates Reflect Only the Views of the Applicable Rating Agencies as of the Dates Such Ratings Were Issued; Ratings May Affect ERISA Eligibility; Ratings May Be Downgraded |
126 |
| Subordination of the Subordinate Certificates Will Affect the Timing of Distributions and the Application of Losses on the Subordinate Certificates | 128 |
| Your Yield May Be Affected by Defaults, Prepayments and Other Factors | 129 |
| Your Lack of Control Over the Issuing Entity and the Mortgage Loans Can Impact Your Investment | 132 |
| Risks Relating to Modifications of the Mortgage Loans | 137 |
| Sponsors May Not Make Required Repurchases or Substitutions of Defective Mortgage Loans or Pay Any Loss of Value Payment Sufficient to Cover All Losses on a Defective Mortgage Loan | 138 |
| Payments Allocated to the VRR Interest Will Not Be Available to Make Payments on the Non-VRR Certificates, and Payments Allocated to the Non-VRR Certificates Will Not Be Available to Make Payments on the VRR Interest | 138 |
| Risks Relating to Interest on Advances and Special Servicing Compensation | 139 |
| Bankruptcy of a Servicer May Adversely Affect Collections on the Mortgage Loans and the Ability to Replace the Servicer | 139 |
| The Originators, the Sponsors, the Depositor and the Issuing Entity Are Subject to Bankruptcy or Insolvency Laws That May Affect the Issuing Entity’s Ownership of the Mortgage Loans | 139 |
| The Requirement of the Special Servicer to Obtain FIRREA-Compliant Appraisals May Result in an Increased Cost to the Issuing Entity | 141 |
| Tax Matters and Changes in Tax Law May Adversely Impact the Mortgage Loans or Your Investment | 141 |
| General Risk Factors | 143 |
| Combination or “Layering” of Multiple Risks May Significantly Increase Risk of Loss | 143 |
| The Certificates May Not Be a Suitable Investment for You | 143 |
| The Volatile Economy, Credit Crisis and Downturn in the Real Estate Market Have Adversely Affected and May Continue To Adversely Affect the Value of CMBS | 144 |
| Other Events May Affect the Value and Liquidity of Your Investment | 144 |
| Legal and Regulatory Provisions Affecting Investors Could Adversely Affect the Liquidity of the Certificates | 144 |
| The Master Servicer, any Sub-Servicer, the Special Servicer, the Trustee, the Certificate Administrator or the Custodian May Have Difficulty Performing Under the Pooling and Servicing Agreement or a Related Sub Servicing Agreement | 148 |
| DESCRIPTION OF THE MORTGAGE POOL | 148 |
| General | 148 |
| Co-Originated or Unaffiliated Third-Party Originated Mortgage Loans | 150 |
| Certain Calculations and Definitions | 150 |
| Definitions | 151 |
| Mortgage Pool Characteristics | 158 |
| Overview | 158 |
| Property Types | 158 |
| Specialty Use Concentrations. | 162 |
| Multi-Property Mortgage Loans and Related Borrower Mortgage Loans | 164 |
| Geographic Concentrations | 165 |
| Mortgaged Properties With Limited Prior Operating History | 165 |
| Tenancies-in-Common or Diversified Ownership | 166 |
| Condominium and Other Shared Interests | 166 |
| Fee & Leasehold Estates; Ground Leases | 167 |
| COVID-19 Considerations | 168 |
| Environmental Considerations | 169 |
| Redevelopment, Renovation and Expansion | 171 |
| Assessment of Property Value and Condition | 172 |
| Litigation and Other Considerations | 173 |
7
| Loan Purpose; Default History, Bankruptcy Issues and Other Proceedings | 173 |
| Loan Purpose | 173 |
| Default History, Bankruptcy Issues and Other Proceedings | 174 |
| Tenant Issues | 175 |
| Tenant Concentrations | 175 |
| Lease Expirations and Terminations | 175 |
| Purchase Options and Rights of First Refusal | 184 |
| Affiliated Leases | 184 |
| Insurance Considerations | 185 |
| Use Restrictions | 186 |
| Appraised Value | 187 |
| Non-Recourse Carveout Limitations | 188 |
| Real Estate and Other Tax Considerations | 189 |
| Delinquency Information | 189 |
| Certain Terms of the Mortgage Loans | 190 |
| Amortization of Principal | 190 |
| Due Dates; Mortgage Rates; Calculations of Interest | 190 |
| ARD Loans | 190 |
| Prepayment Protections and Certain Involuntary Prepayments | 191 |
| “Due-On-Sale” and “Due-On-Encumbrance” Provisions | 194 |
| Defeasance; Collateral Substitution | 195 |
| Partial Releases | 196 |
| Substitutions | 198 |
| Escrows | 198 |
| Mortgaged Property Accounts | 199 |
| Shari’ah Compliant Lending Structure | 199 |
| Delaware Statutory Trusts | 200 |
| Exceptions to Underwriting Guidelines | 200 |
| Additional Indebtedness | 201 |
| General | 201 |
| Whole Loans | 201 |
| Mezzanine Indebtedness | 201 |
| Preferred Equity | 203 |
| Other Unsecured Indebtedness | 203 |
| The Whole Loans | 204 |
| General | 204 |
| The Serviced Pari Passu Whole Loans | 209 |
| The Non-Serviced Pari Passu Whole Loans | 211 |
| The Non-Serviced AB Whole Loans | 214 |
| Additional Information | 219 |
| TRANSACTION PARTIES | 220 |
| The Sponsors and Mortgage Loan Sellers | 220 |
| German American Capital Corporation | 220 |
| Citi Real Estate Funding Inc. | 228 |
| Goldman Sachs Mortgage Company | 237 |
| JPMorgan Chase Bank, National Association | 246 |
| Compensation of the Sponsors | 253 |
| The Depositor | 254 |
| The Issuing Entity | 254 |
| The Certificate Administrator | 255 |
| The Trustee | 257 |
| The Master Servicer and the Outside Special Servicer | 258 |
| The Outside Primary Servicer | 261 |
| Midland Loan Services, a Division of PNC Bank, National Association | 261 |
| The Special Servicer | 263 |
| The Operating Advisor and Asset Representations Reviewer | 268 |
| CREDIT RISK RETENTION | 269 |
| Qualifying CRE Loans | 269 |
| The VRR Interest | 270 |
| Material Terms of the VRR Interest | 270 |
| Hedging, Transfer and Financing Restrictions | 272 |
| DESCRIPTION OF THE CERTIFICATES | 272 |
| General | 272 |
| Distributions | 275 |
| Method, Timing and Amount | 275 |
| Available Funds | 276 |
| Priority of Distributions | 277 |
| Pass-Through Rates | 280 |
| Interest Distribution Amount | 283 |
| Principal Distribution Amount | 283 |
| Certain Calculations with Respect to Individual Mortgage Loans | 285 |
| Excess Interest | 286 |
| Application Priority of Mortgage Loan Collections or Whole Loan Collections | 286 |
| Allocation of Yield Maintenance Charges and Prepayment Premiums | 289 |
| Assumed Final Distribution Date; Rated Final Distribution Date | 290 |
| Prepayment Interest Shortfalls | 291 |
8
| Subordination; Allocation of Realized Losses | 293 |
| Reports to Certificateholders; Certain Available Information | 294 |
| Certificate Administrator Reports | 294 |
| Information Available Electronically | 300 |
| Voting Rights | 304 |
| Delivery, Form, Transfer and Denomination | 305 |
| Denomination | 305 |
| Book-Entry Registration | 305 |
| Definitive Certificates | 308 |
| Certificateholder Communication | 308 |
| Access to Certificateholders’ Names and Addresses | 308 |
| Requests to Communicate | 308 |
| List of Certificateholders | 309 |
| DESCRIPTION OF THE MORTGAGE LOAN PURCHASE AGREEMENTS | 309 |
| General | 309 |
| Dispute Resolution Provisions | 320 |
| Asset Review Obligations | 320 |
| POOLING AND SERVICING AGREEMENT | 320 |
| General | 320 |
| Assignment of the Mortgage Loans | 321 |
| Servicing Standard | 322 |
| Subservicing | 323 |
| Advances | 324 |
| P&I Advances | 324 |
| Servicing Advances | 325 |
| Nonrecoverable Advances | 326 |
| Recovery of Advances | 326 |
| Accounts | 328 |
| Withdrawals from the Collection Account | 330 |
| Servicing and Other Compensation and Payment of Expenses | 332 |
| General | 332 |
| Master Servicing Compensation | 337 |
| Special Servicing Compensation | 339 |
| Disclosable Special Servicer Fees | 343 |
| Certificate Administrator and Trustee Compensation | 344 |
| Operating Advisor Compensation | 344 |
| Asset Representations Reviewer Compensation | 345 |
| CREFC® Intellectual Property Royalty License Fee | 346 |
| Appraisal Reduction Amounts | 346 |
| Maintenance of Insurance | 353 |
| Modifications, Waivers and Amendments | 356 |
| Mortgage Loans with “Due-on-Sale” and “Due-on-Encumbrance” Provisions | 359 |
| Inspections | 361 |
| Collection of Operating Information | 361 |
| Special Servicing Transfer Event | 362 |
| Asset Status Report | 364 |
| Realization Upon Mortgage Loans | 367 |
| Sale of Defaulted Loans and REO Properties | 369 |
| The Directing Holder | 372 |
| General | 372 |
| Major Decisions | 374 |
| Asset Status Report | 377 |
| Replacement of the Special Servicer | 377 |
| Control Termination Event and Consultation Termination Event | 377 |
| Servicing Override | 379 |
| Rights of Holders of Companion Loans | 379 |
| Limitation on Liability of Directing Holder | 380 |
| The Operating Advisor | 380 |
| General | 380 |
| Duties of the Operating Advisor While No Control Termination Event is Continuing | 381 |
| Duties of the Operating Advisor While A Control Termination Event is Continuing | 381 |
| Annual Report | 383 |
| Recommendation of the Replacement of the Special Servicer | 384 |
| Eligibility of Operating Advisor | 384 |
| Other Obligations of Operating Advisor | 385 |
| Delegation of Operating Advisor’s Duties | 385 |
| Termination of the Operating Advisor With Cause | 386 |
| Rights Upon Operating Advisor Termination Event | 387 |
| Waiver of Operating Advisor Termination Event | 387 |
| Termination of the Operating Advisor Without Cause | 387 |
| Resignation of the Operating Advisor | 388 |
| Operating Advisor Compensation | 388 |
| The Asset Representations Reviewer | 388 |
9
| Asset Review | 388 |
| Eligibility of Asset Representations Reviewer | 393 |
| Other Obligations of Asset Representations Reviewer | 394 |
| Delegation of Asset Representations Reviewer’s Duties | 394 |
| Assignment of Asset Representations Reviewer’s Rights and Obligations | 394 |
| Asset Representations Reviewer Termination Events | 395 |
| Rights Upon Asset Representations Reviewer Termination Event | 396 |
| Termination of the Asset Representations Reviewer Without Cause | 396 |
| Resignation of Asset Representations Reviewer | 396 |
| Asset Representations Reviewer Compensation | 396 |
| Limitation on Liability of the Risk Retention Consultation Parties | 397 |
| Replacement of the Special Servicer Without Cause | 397 |
| Replacement of the Special Servicer After Operating Advisor Recommendation and Certificateholder Vote | 400 |
| Termination of the Master Servicer and the Special Servicer for Cause | 401 |
| Servicer Termination Events | 401 |
| Rights Upon Servicer Termination Event | 402 |
| Waiver of Servicer Termination Event | 404 |
| Resignation of the Master Servicer and Special Servicer | 404 |
| Limitation on Liability; Indemnification | 405 |
| Enforcement of Mortgage Loan Seller’s Obligations Under the MLPA | 407 |
| Dispute Resolution Provisions | 408 |
| Certificateholder’s Rights When a Repurchase Request is Initially Delivered By a Certificateholder | 408 |
| Repurchase Request Delivered by a Party to the PSA | 409 |
| Resolution of a Repurchase Request | 409 |
| Mediation and Arbitration Provisions | 412 |
| Servicing of the Non-Serviced Mortgage Loans | 413 |
| General | 413 |
| Servicing of the 601 Lexington Avenue Mortgage Loan | 416 |
| Servicing of the Servicing Shift Mortgage Loans | 417 |
| Rating Agency Confirmations | 417 |
| Evidence as to Compliance | 419 |
| Limitation on Rights of Certificateholders to Institute a Proceeding | 420 |
| Termination; Retirement of Certificates | 420 |
| Amendment | 422 |
| Resignation and Removal of the Trustee and the Certificate Administrator | 424 |
| Governing Law; Waiver of Jury Trial; and Consent to Jurisdiction | 425 |
| CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS | 425 |
| California | 425 |
| New York | 426 |
| Michigan | 426 |
| General | 427 |
| Types of Mortgage Instruments | 427 |
| Leases and Rents | 427 |
| Personalty | 428 |
| Foreclosure | 428 |
| General | 428 |
| Foreclosure Procedures Vary from State to State | 428 |
| Judicial Foreclosure | 428 |
| Equitable and Other Limitations on Enforceability of Certain Provisions | 429 |
| Nonjudicial Foreclosure/Power of Sale | 429 |
| Public Sale | 429 |
| Rights of Redemption | 430 |
| Anti-Deficiency Legislation | 431 |
| Leasehold Considerations | 431 |
| Cooperative Shares | 432 |
| Bankruptcy Laws | 432 |
| Environmental Considerations | 437 |
| General | 437 |
| Superlien Laws | 438 |
| CERCLA | 438 |
| Certain Other Federal and State Laws | 438 |
| Additional Considerations | 439 |
| Due-on-Sale and Due-on-Encumbrance Provisions | 439 |
| Subordinate Financing | 439 |
| Default Interest and Limitations on Prepayments | 440 |
| Applicability of Usury Laws | 440 |
| Americans with Disabilities Act | 440 |
| Servicemembers Civil Relief Act | 440 |
10
| Anti-Money Laundering, Economic Sanctions and Bribery | 441 |
| Potential Forfeiture of Assets | 441 |
| CERTAIN AFFILIATIONS, RELATIONSHIPS AND RELATED TRANSACTIONS INVOLVING TRANSACTION PARTIES | 442 |
| PENDING LEGAL PROCEEDINGS INVOLVING TRANSACTION PARTIES | 443 |
| USE OF PROCEEDS | 443 |
| YIELD AND MATURITY CONSIDERATIONS | 444 |
| Yield Considerations | 444 |
| General | 444 |
| Rate and Timing of Principal Payments | 444 |
| Losses and Shortfalls | 445 |
| Certain Relevant Factors Affecting Loan Payments and Defaults | 446 |
| Delay in Payment of Distributions | 447 |
| Yield on the Certificates with Notional Amounts | 447 |
| Weighted Average Life | 447 |
| Pre-Tax Yield to Maturity Tables | 454 |
| MATERIAL FEDERAL INCOME TAX CONSIDERATIONS | 456 |
| General | 456 |
| Qualification as a REMIC | 457 |
| Status of Offered Certificates | 459 |
| Taxation of Regular Interests | 459 |
| General | 459 |
| Original Issue Discount | 459 |
| Acquisition Premium | 461 |
| Market Discount | 462 |
| Premium | 463 |
| Election To Treat All Interest Under the Constant Yield Method | 463 |
| Treatment of Losses | 463 |
| Yield Maintenance Charges and Prepayment Provisions | 464 |
| Sale or Exchange of Regular Interests | 464 |
| Taxes That May Be Imposed on a REMIC | 465 |
| Prohibited Transactions | 465 |
| Contributions to a REMIC After the Startup Day | 465 |
| Net Income from Foreclosure Property | 466 |
| REMIC Partnership Representative | 466 |
| Taxation of Certain Foreign Investors | 466 |
| FATCA | 467 |
| Backup Withholding | 467 |
| Information Reporting | 468 |
| 3.8% Medicare Tax on “Net Investment Income” | 468 |
| Reporting Requirements | 468 |
| CERTAIN STATE AND LOCAL TAX CONSIDERATIONS | 469 |
| METHOD OF DISTRIBUTION (CONFLICTS OF INTEREST) | 469 |
| INCORPORATION OF CERTAIN INFORMATION BY REFERENCE | 472 |
| WHERE YOU CAN FIND MORE INFORMATION | 472 |
| FINANCIAL INFORMATION | 472 |
| CERTAIN ERISA CONSIDERATIONS | 473 |
| General | 473 |
| Plan Asset Regulations | 473 |
| Administrative Exemption | 474 |
| Insurance Company General Accounts | 476 |
| LEGAL INVESTMENT | 476 |
| LEGAL MATTERS | 477 |
| RATINGS | 477 |
| INDEX OF DEFINED TERMS | 480 |
11
| ANNEX A-1 | CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES |
| ANNEX A-2 | CERTAIN POOL CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES |
| ANNEX A-3 | DESCRIPTION OF TOP FIFTEEN MORTGAGE LOANS AND ADDITIONAL MORTGAGE LOAN INFORMATION |
| ANNEX B | FORM OF REPORT TO CERTIFICATEHOLDERS |
| ANNEX C | FORM OF OPERATING ADVISOR ANNUAL REPORT |
| ANNEX D-1 | GERMAN AMERICAN CAPITAL CORPORATION AND CITI REAL ESTATE FUNDING INC. MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES |
| ANNEX D-2 | EXCEPTIONS TO GACC MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES |
| ANNEX D-3 | EXCEPTIONS TO CREFI MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES |
| ANNEX E-1 | JPMORGAN CHASE BANK, NATIONAL ASSOCIATION MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES |
| ANNEX E-2 | EXCEPTIONS TO JPMCB MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES |
| ANNEX F-1 | GOLDMAN SACHS MORTGAGE COMPANY MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES |
| ANNEX F-2 | EXCEPTIONS TO GSMC MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES |
| ANNEX G | CLASS A-SB PLANNED PRINCIPAL BALANCE SCHEDULE |
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IMPORTANT NOTICE REGARDING THE OFFERED CERTIFICATES
WE HAVE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, WITH RESPECT TO THE CERTIFICATES OFFERED IN THIS PROSPECTUS. HOWEVER, THIS PROSPECTUS DOES NOT CONTAIN ALL OF THE INFORMATION CONTAINED IN OUR REGISTRATION STATEMENT. FOR FURTHER INFORMATION REGARDING THE DOCUMENTS REFERRED TO IN THIS PROSPECTUS, YOU SHOULD REFER TO OUR REGISTRATION STATEMENT AND THE EXHIBITS TO IT. OUR REGISTRATION STATEMENT AND THE EXHIBITS TO IT CAN BE ACCESSED ELECTRONICALLY AT HTTP://WWW.SEC.GOV.
THIS PROSPECTUS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY STATE OR OTHER JURISDICTION WHERE SUCH OFFER, SOLICITATION OR SALE IS NOT PERMITTED.
THE INFORMATION IN THIS PROSPECTUS IS PRELIMINARY AND MAY BE SUPPLEMENTED OR AMENDED PRIOR TO THE TIME OF SALE.
IN ADDITION, THE OFFERED CERTIFICATES REFERRED TO IN THIS PROSPECTUS, AND THE ASSET POOL BACKING THEM, ARE SUBJECT TO MODIFICATION OR REVISION (INCLUDING THE POSSIBILITY THAT ONE OR MORE CLASSES OF OFFERED CERTIFICATES MAY BE SPLIT, COMBINED OR ELIMINATED) AT ANY TIME PRIOR TO ISSUANCE, AND ARE OFFERED ON A “WHEN, AS AND IF ISSUED” BASIS.
THE UNDERWRITERS DESCRIBED IN THESE MATERIALS 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 RESPECTIVE EMPLOYEES MAY FROM TIME TO TIME HAVE A LONG OR SHORT POSITION IN ANY CONTRACT OR CERTIFICATE DISCUSSED IN THESE MATERIALS.
THE INFORMATION CONTAINED IN THIS PROSPECTUS SUPERSEDES ANY PREVIOUS SUCH INFORMATION DELIVERED TO ANY PROSPECTIVE INVESTOR AND MAY BE SUPERSEDED BY INFORMATION DELIVERED TO SUCH PROSPECTIVE INVESTOR PRIOR TO THE TIME OF SALE.
THE OFFERED CERTIFICATES DO NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE DEPOSITOR, THE SPONSORS, THE MORTGAGE LOAN SELLERS, THE MASTER SERVICER, THE SPECIAL SERVICER, THE TRUSTEE, THE OPERATING ADVISOR, THE ASSET REPRESENTATIONS REVIEWER, THE CERTIFICATE ADMINISTRATOR, THE DIRECTING HOLDER, THE RISK RETENTION CONSULTATION PARTIES, THE UNDERWRITERS OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THE OFFERED CERTIFICATES NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY OR PRIVATE INSURER.
THERE IS CURRENTLY NO SECONDARY MARKET FOR THE OFFERED CERTIFICATES. WE CANNOT ASSURE YOU THAT A SECONDARY MARKET WILL DEVELOP OR, IF A SECONDARY MARKET DOES DEVELOP, THAT IT WILL PROVIDE HOLDERS OF THE OFFERED CERTIFICATES WITH LIQUIDITY OF INVESTMENT OR THAT IT WILL CONTINUE FOR THE TERM OF THE OFFERED CERTIFICATES. THE UNDERWRITERS CURRENTLY INTEND TO MAKE A MARKET IN THE OFFERED CERTIFICATES BUT ARE UNDER NO OBLIGATION TO DO SO. THE ABILITY OF THE UNDERWRITERS TO MAKE A MARKET IN THE OFFERED CERTIFICATES MAY BE IMPACTED BY CHANGES IN ANY REGULATORY REQUIREMENTS APPLICABLE TO THE MARKETING, HOLDING AND SELLING OF, AND ISSUING QUOTATIONS WITH RESPECT TO, THE OFFERED CERTIFICATES OR CMBS GENERALLY (INCLUDING, WITHOUT LIMITATION, THE APPLICATION OF RULE 15C2-11 UNDER THE EXCHANGE ACT TO THE PUBLICATION OR SUBMISSION OF QUOTATIONS, DIRECTLY OR INDIRECTLY, IN ANY QUOTATION MEDIUM BY A BROKER OR DEALER FOR SECURITIES SUCH AS THE OFFERED CERTIFICATES). ACCORDINGLY, PURCHASERS MUST BE PREPARED TO BEAR THE RISKS OF THEIR INVESTMENTS FOR AN INDEFINITE PERIOD. SEE “RISK FACTORS—OTHER RISKS RELATING TO THE CERTIFICATES—
13
THE CERTIFICATES MAY HAVE LIMITED LIQUIDITY AND THE MARKET VALUE OF THE CERTIFICATES MAY DECLINE”.
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS
You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information that is different from that contained in this prospectus. The information contained in this prospectus is accurate only as of the date of this prospectus.
This prospectus begins with several introductory sections describing the certificates and the issuing entity in abbreviated form:
| ● | “Summary of Certificates”, which sets forth important statistical information relating to the certificates; |
| ● | “Summary of Terms”, which gives a brief introduction of the key features of the certificates and a description of the mortgage loans; and |
| ● | “Summary of Risk Factors” and “Risk Factors”, which describe risks that apply to the certificates. |
This prospectus includes cross references to sections in this prospectus where you can find further related discussions. The table of contents in this prospectus identifies the pages where these sections are located.
Certain capitalized terms are defined and used in this prospectus to assist you in understanding the terms of the offered certificates and this offering. The capitalized terms used in this prospectus are defined on the pages indicated under the caption “Index of Defined Terms”.
All annexes and schedules attached to this prospectus are a part of this prospectus.
In this prospectus:
| ● | the terms “depositor”, “we”, “us” and “our” refer to Deutsche Mortgage & Asset Receiving Corporation. |
| ● | references to “lender” or “mortgage lender” with respect to a mortgage loan generally should be construed to mean, from and after the date of initial issuance of the offered certificates, the trustee on behalf of the issuing entity as the holder of record title to the mortgage loans or the master servicer or special servicer, as applicable, with respect to the obligations and rights of the lender as described under “Pooling and Servicing Agreement”. |
| ● | unless otherwise specified, (i) references to a mortgaged property (or portfolio of mortgaged properties) by name refer to such mortgaged property (or portfolio of mortgaged properties) so identified on Annex A-1, (ii) references to a mortgage loan by name refer to such mortgage loan secured by the related mortgaged property (or portfolio of mortgaged properties) so identified on Annex A-1, (iii) any parenthetical with a percent next to a mortgaged property name (or portfolio of mortgaged properties name) indicates the approximate percent (or approximate aggregate percent) that the outstanding principal balance of the related mortgage loan (or, if applicable, the allocated loan amount with respect to such mortgaged property) represents of the aggregate outstanding principal balance of the pool of mortgage loans as of the cut-off date for this securitization, and (iv) any parenthetical with a percent next to a mortgage loan name or a group of mortgage loans indicates the approximate percent (or approximate aggregate percent) that the outstanding principal balance of such mortgage loan or the aggregate outstanding principal balance of such group of mortgage loans, as applicable, represents of the aggregate outstanding principal balance of the pool of mortgage loans as of the cut-off date for this securitization. |
This prospectus is not an offer to sell or a solicitation of an offer to buy these securities in any state or other jurisdiction where such offer, solicitation or sale is not permitted.
14
NOTICE TO INVESTORS IN THE EUROPEAN ECONOMIC AREA
PROHIBITION ON SALES TO EEA RETAIL INVESTORS
THE OFFERED CERTIFICATES ARE NOT INTENDED TO BE OFFERED, SOLD OR OTHERWISE MADE AVAILABLE TO AND SHOULD NOT BE OFFERED, SOLD OR OTHERWISE MADE AVAILABLE TO ANY EEA RETAIL INVESTOR IN THE EUROPEAN ECONOMIC AREA (“EEA”). FOR THESE PURPOSES, AN “EEA RETAIL INVESTOR” MEANS A PERSON WHO IS ONE (OR MORE) OF THE FOLLOWING: (I) A RETAIL CLIENT AS DEFINED IN POINT (11) OF ARTICLE 4(1) OF DIRECTIVE 2014/65/EU, AS AMENDED (“MIFID II”); OR (II) A CUSTOMER WITHIN THE MEANING OF DIRECTIVE (EU) 2016/97, WHERE THAT CUSTOMER WOULD NOT QUALIFY AS A PROFESSIONAL CLIENT AS DEFINED IN POINT (10) OF ARTICLE 4(1) OF MIFID II; OR (III) NOT A QUALIFIED INVESTOR AS DEFINED IN ARTICLE 2 OF REGULATION (EU) 2017/1129 (AS AMENDED, THE “EU PROSPECTUS REGULATION”).
CONSEQUENTLY NO KEY INFORMATION DOCUMENT REQUIRED BY REGULATION (EU) NO 1286/2014 (AS AMENDED, THE “EU PRIIPS REGULATION”) FOR OFFERING OR SELLING THE OFFERED CERTIFICATES OR OTHERWISE MAKING THEM AVAILABLE TO EEA RETAIL INVESTORS IN THE EEA HAS BEEN PREPARED AND THEREFORE OFFERING OR SELLING THE OFFERED CERTIFICATES OR OTHERWISE MAKING THEM AVAILABLE TO ANY EEA RETAIL INVESTOR IN THE EEA MAY BE UNLAWFUL UNDER THE EEA PRIIPS REGULATION.
MIFID II PRODUCT GOVERNANCE
SOLELY FOR THE PURPOSES OF EACH MANUFACTURER’S PRODUCT APPROVAL PROCESS, THE TARGET MARKET ASSESSMENT IN RESPECT OF THE OFFERED CERTIFICATES HAS LED TO THE CONCLUSION THAT: (I) THE TARGET MARKET FOR THE OFFERED CERTIFICATES IS ELIGIBLE COUNTERPARTIES AND PROFESSIONAL CLIENTS ONLY, EACH AS DEFINED IN MIFID II; AND (II) ALL CHANNELS FOR DISTRIBUTION OF THE OFFERED CERTIFICATES TO ELIGIBLE COUNTERPARTIES AND PROFESSIONAL CLIENTS ARE APPROPRIATE. ANY PERSON SUBSEQUENTLY OFFERING, SELLING OR RECOMMENDING THE OFFERED CERTIFICATES (A “DISTRIBUTOR”) SHOULD TAKE INTO CONSIDERATION THE MANUFACTURERS; TARGET MARKET ASSESSMENT; HOWEVER, A DISTRIBUTOR SUBJECT TO MIFID II IS RESPONSIBLE FOR UNDERTAKING ITS OWN TARGET MARKET ASSESSMENT IN RESPECT OF THE OFFERED CERTIFICATES (BY EITHER ADOPTING OR REFINING THE MANUFACTURERS’ TARGET MARKET ASSESSMENT) AND DETERMINING APPROPRIATE DISTRIBUTION CHANNELS.
NOTICE TO INVESTORS IN THE UNITED KINGDOM
PROHIBITION ON SALES TO UK RETAIL INVESTORS
THE OFFERED CERTIFICATES ARE NOT INTENDED TO BE OFFERED, SOLD OR OTHERWISE MADE AVAILABLE TO AND SHOULD NOT BE OFFERED, SOLD OR OTHERWISE MADE AVAILABLE TO ANY UK RETAIL INVESTOR IN THE UNITED KINGDOM (THE “UK”). FOR THESE PURPOSES, A “UK RETAIL INVESTOR” MEANS A PERSON WHO IS ONE (OR MORE) OF THE FOLLOWING: (I) A RETAIL CLIENT AS DEFINED IN POINT (8) OF ARTICLE 2 OF REGULATION (EU) 2017/565 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (AS AMENDED, THE “EUWA”); OR (II) A CUSTOMER WITHIN THE MEANING OF THE PROVISIONS OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (AS AMENDED, THE “FSMA”) AND ANY RULES OR REGULATIONS MADE UNDER THE FSMA TO IMPLEMENT DIRECTIVE (EU) 2016/97, WHERE THAT CUSTOMER WOULD NOT QUALIFY AS A PROFESSIONAL CLIENT, AS DEFINED IN POINT (8) OF ARTICLE 2(1) OF REGULATION (EU) NO 600/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUWA; OR (III) NOT A QUALIFIED INVESTOR AS DEFINED IN ARTICLE 2 OF REGULATION (EU) 2017/1129 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUWA.
CONSEQUENTLY NO KEY INFORMATION DOCUMENT REQUIRED BY REGULATION (EU) NO 1286/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUWA (AS AMENDED,
15
THE “UK PRIIPS REGULATION”) FOR OFFERING OR SELLING THE OFFERED CERTIFICATES OR OTHERWISE MAKING THEM AVAILABLE TO UK RETAIL INVESTORS HAS BEEN PREPARED AND THEREFORE OFFERING OR SELLING THE OFFERED CERTIFICATES OR OTHERWISE MAKING THEM AVAILABLE TO UK RETAIL INVESTORS IN THE UK MAY BE UNLAWFUL UNDER THE UK PRIIPS REGULATION.
UK PRODUCT GOVERNANCE
SOLELY FOR THE PURPOSES OF EACH MANUFACTURER’S PRODUCT APPROVAL PROCESS, THE TARGET MARKET ASSESSMENT IN RESPECT OF THE OFFERED CERTIFICATES HAS LED TO THE CONCLUSION THAT: (I) THE TARGET MARKET FOR THE OFFERED CERTIFICATES IS ONLY ELIGIBLE COUNTERPARTIES, AS DEFINED IN THE FCA HANDBOOK CONDUCT OF BUSINESS SOURCEBOOK, AND PROFESSIONAL CLIENTS, AS DEFINED IN REGULATION (EU) NO 6000/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUWA; AND (II) ALL CHANNELS FOR DISTRIBUTION OF THE OFFERED CERTIFICATES TO ELIGIBLE COUNTERPARTIES AND PROFESSIONAL CLIENTS ARE APPROPRIATE. ANY PERSON SUBSEQUENTLY OFFERING, SELLING OR RECOMMENDING THE OFFERED CERTIFICATES (A “DISTRIBUTOR”) SHOULD TAKE INTO CONSIDERATION THE MANUFACTURERS; TARGET MARKET ASSESSMENT; HOWEVER, A DISTRIBUTOR SUBJECT TO THE FCA HANDBOOK PRODUCT INTERVENTION AND PRODUCT GOVERNANCE SOURCEBOOK IS RESPONSIBLE FOR UNDERTAKING ITS OWN TARGET MARKET ASSESSMENT IN RESPECT OF THE OFFERED CERTIFICATES (BY EITHER ADOPTING OR REFINING THE MANUFACTURERS’ TARGET MARKET ASSESSMENT) AND DETERMINING APPROPRIATE DISTRIBUTION CHANNELS.
EEA AND UK SELLING RESTRICTIONS
EACH UNDERWRITER HAS REPRESENTED AND AGREED THAT:
(a) IT HAS NOT OFFERED, SOLD OR OTHERWISE MADE AVAILABLE AND WILL NOT OFFER, SELL OR OTHERWISE MAKE AVAILABLE ANY OFFERED CERTIFICATES TO ANY EEA RETAIL INVESTOR IN THE EEA. FOR THE PURPOSES OF THIS PROVISION:
(i) THE EXPRESSION “EEA RETAIL INVESTOR” MEANS A PERSON WHO IS ONE (OR MORE) OF THE FOLLOWING:
(A) A RETAIL CLIENT AS DEFINED IN POINT (11) OF ARTICLE 4(1) OF DIRECTIVE 2014/65/EU (AS AMENDED, “MIFID II”); OR
(B) A CUSTOMER WITHIN THE MEANING OF DIRECTIVE (EU) 2016/97, WHERE THAT CUSTOMER WOULD NOT QUALIFY AS A PROFESSIONAL CLIENT AS DEFINED IN POINT (10) OF ARTICLE 4(1) OF MIFID II; OR
(C) NOT A QUALIFIED INVESTOR AS DEFINED IN ARTICLE 2 OF REGULATION (EU) 2017/1129; AND
(ii) THE EXPRESSION “OFFER” INCLUDES THE COMMUNICATION IN ANY FORM AND BY ANY MEANS OF SUFFICIENT INFORMATION ON THE TERMS OF THE OFFER AND THE OFFERED CERTIFICATES TO BE OFFERED SO AS TO ENABLE AN INVESTOR TO DECIDE TO PURCHASE OR SUBSCRIBE FOR THE OFFERED CERTIFICATES;
(b) IT HAS NOT OFFERED, SOLD OR OTHERWISE MADE AVAILABLE AND WILL NOT OFFER, SELL OR OTHERWISE MAKE AVAILABLE ANY OFFERED CERTIFICATES TO ANY UK RETAIL INVESTOR IN THE UK. FOR THE PURPOSES OF THIS PROVISION:
(i) THE EXPRESSION “UK RETAIL INVESTOR” MEANS A PERSON WHO IS ONE (OR MORE) OF THE FOLLOWING:
(A) A RETAIL CLIENT AS DEFINED IN POINT (8) OF ARTICLE 2 OF REGULATION (EU) 2017/565 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (AS AMENDED, THE “EUWA”); OR
16
(B) A CUSTOMER WITHIN THE MEANING OF THE PROVISIONS OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (AS AMENDED, THE “FSMA”) AND ANY RULES OR REGULATIONS MADE UNDER THE FSMA TO IMPLEMENT DIRECTIVE (EU) 2016/97, WHERE THAT CUSTOMER WOULD NOT QUALIFY AS A PROFESSIONAL CLIENT, AS DEFINED IN POINT (8) OF ARTICLE 2(1) OF REGULATION (EU) NO 600/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUWA; OR
(C) NOT A QUALIFIED INVESTOR AS DEFINED IN ARTICLE 2 OF REGULATION (EU) 2017/1129 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUWA; AND
(ii) THE EXPRESSION “OFFER” INCLUDES THE COMMUNICATION IN ANY FORM AND BY ANY MEANS OF SUFFICIENT INFORMATION ON THE TERMS OF THE OFFER AND THE OFFERED CERTIFICATES TO BE OFFERED SO AS TO ENABLE AN INVESTOR TO DECIDE TO PURCHASE OR SUBSCRIBE FOR THE OFFERED CERTIFICATES.
(c) IT HAS ONLY COMMUNICATED OR CAUSED TO BE COMMUNICATED AND WILL ONLY COMMUNICATE OR CAUSE TO BE COMMUNICATED AN INVITATION OR INDUCEMENT TO ENGAGE IN INVESTMENT ACTIVITY (WITHIN THE MEANING OF SECTION 21 OF THE FSMA) RECEIVED BY IT IN CONNECTION WITH THE ISSUE OR SALE OF THE OFFERED CERTIFICATES IN CIRCUMSTANCES IN WHICH SECTION 21(1) OF THE FSMA DOES NOT APPLY TO THE ISSUING ENTITY OR THE DEPOSITOR; AND
(d) IT HAS COMPLIED AND WILL COMPLY WITH ALL APPLICABLE PROVISIONS OF THE FSMA WITH RESPECT TO ANYTHING DONE BY IT IN RELATION TO THE OFFERED CERTIFICATES IN, FROM OR OTHERWISE INVOLVING THE UNITED KINGDOM.
EU SECURITIZATION REGULATION AND UK SECURITIZATION REGULATION
NONE OF THE SPONSORS, THE DEPOSITOR, THE ISSUING ENTITY, THE UNDERWRITERS OR ANY OTHER PARTY TO THE TRANSACTION INTENDS TO RETAIN A MATERIAL NET ECONOMIC INTEREST IN THE SECURITIZATION TRANSACTION CONSTITUTED BY THE ISSUE OF THE CERTIFICATES, OR TAKE ANY OTHER ACTION, IN A MANNER PRESCRIBED BY (A) EUROPEAN UNION REGULATION 2017/2402 (THE “EU SECURITIZATION REGULATION”) OR (B) REGULATION (EU) 2017/2402, AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUWA, AND AS AMENDED BY THE SECURITISATION (AMENDMENT) (EU EXIT) REGULATIONS 2019 (THE “UK SECURITIZATION REGULATION”). IN ADDITION, NO SUCH PARTY WILL TAKE ANY ACTION THAT MAY BE REQUIRED BY ANY PROSPECTIVE INVESTOR OR CERTIFICATEHOLDER FOR THE PURPOSES OF ITS COMPLIANCE WITH ANY REQUIREMENT OF THE EU SECURITIZATION REGULATION OR THE UK SECURITIZATION REGULATION.
CONSEQUENTLY, THE OFFERED CERTIFICATES MAY NOT BE A SUITABLE INVESTMENT FOR ANY PERSON THAT IS NOW OR MAY IN THE FUTURE BE SUBJECT TO ANY REQUIREMENT OF THE EU SECURITIZATION REGULATION OR THE UK SECURITIZATION REGULATION.
FOR ADDITIONAL INFORMATION REGARDING THE EU SECURITIZATION REGULATION AND THE UK SECURITIZATION REGULATION, SEE “RISK FACTORS—GENERAL RISK FACTORS—LEGAL AND REGULATORY PROVISIONS AFFECTING INVESTORS COULD ADVERSELY AFFECT THE LIQUIDITY OF THE CERTIFICATES”.
UK FINANCIAL PROMOTION REGIME AND PROMOTION OF COLLECTIVE INVESTMENT SCHEMES REGIME
THE ISSUING ENTITY MAY CONSTITUTE A “COLLECTIVE INVESTMENT SCHEME” AS DEFINED BY SECTION 235 OF THE FSMA THAT IS NOT A “RECOGNISED COLLECTIVE INVESTMENT SCHEME” FOR THE PURPOSES OF THE FSMA AND THAT HAS NOT BEEN AUTHORIZED, REGULATED OR OTHERWISE RECOGNIZED OR APPROVED. AS AN UNREGULATED SCHEME, THE OFFERED CERTIFICATES CANNOT BE MARKETED IN THE UNITED KINGDOM TO THE GENERAL PUBLIC, EXCEPT IN ACCORDANCE WITH THE FSMA.
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THE COMMUNICATION OF THIS PROSPECTUS (A) IF MADE BY A PERSON WHO IS NOT AN AUTHORIZED PERSON UNDER THE FSMA, IS BEING MADE ONLY TO, OR DIRECTED ONLY AT, PERSONS WHO (I) ARE OUTSIDE THE UNITED KINGDOM, OR (II) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND QUALIFY AS INVESTMENT PROFESSIONALS IN ACCORDANCE WITH ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (AS AMENDED, THE “FINANCIAL PROMOTION ORDER”), OR (III) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) THROUGH (D) (“HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.”) OF THE FINANCIAL PROMOTION ORDER, OR (IV) ARE PERSONS TO WHICH THIS PROSPECTUS MAY OTHERWISE LAWFULLY BE COMMUNICATED OR DIRECTED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS “FPO PERSONS”), OR (V) ARE ANY OTHER PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED OR DIRECTED; AND (B) IF MADE BY A PERSON WHO IS AN AUTHORIZED PERSON UNDER THE FSMA, IS BEING MADE ONLY TO, AND DIRECTED ONLY AT, PERSONS WHO (I) ARE OUTSIDE THE UNITED KINGDOM, OR (II) HAVE PROFESSIONAL EXPERIENCE OF PARTICIPATING IN UNREGULATED SCHEMES (AS DEFINED FOR PURPOSES OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (PROMOTION OF COLLECTIVE INVESTMENT SCHEMES) (EXEMPTIONS) ORDER 2001 (AS AMENDED, THE “PROMOTION OF COLLECTIVE INVESTMENT SCHEMES EXEMPTIONS ORDER”)) AND QUALIFY AS INVESTMENT PROFESSIONALS IN ACCORDANCE WITH ARTICLE 14(5) OF THE PROMOTION OF COLLECTIVE INVESTMENT SCHEMES EXEMPTIONS ORDER, OR (III) ARE PERSONS FALLING WITHIN ARTICLE 22(2)(A) THROUGH (D) (“HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.”) OF THE PROMOTION OF COLLECTIVE INVESTMENT SCHEMES EXEMPTIONS ORDER, OR (IV) ARE PERSONS TO WHOM THE ISSUING ENTITY MAY LAWFULLY BE PROMOTED IN ACCORDANCE WITH CHAPTER 4.12 OF THE FCA HANDBOOK CONDUCT AUTHORITY’S CONDUCT OF BUSINESS SOURCEBOOK (ALL SUCH PERSONS TOGETHER WITH FPO PERSONS, “RELEVANT PERSONS”).
THIS PROSPECTUS MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS PROSPECTUS RELATES, INCLUDING THE OFFERED CERTIFICATES, IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. ANY PERSONS OTHER THAN RELEVANT PERSONS SHOULD NOT ACT OR RELY ON THIS PROSPECTUS.
POTENTIAL INVESTORS IN THE UNITED KINGDOM ARE ADVISED THAT ALL, OR MOST, OF THE PROTECTIONS AFFORDED BY THE UNITED KINGDOM REGULATORY SYSTEM WILL NOT APPLY TO AN INVESTMENT IN THE OFFERED CERTIFICATES AND THAT COMPENSATION WILL NOT BE AVAILABLE UNDER THE UNITED KINGDOM FINANCIAL SERVICES COMPENSATION SCHEME.
PEOPLE’S REPUBLIC OF CHINA
THE OFFERED CERTIFICATES WILL NOT BE OFFERED OR SOLD IN THE PEOPLE’S REPUBLIC OF CHINA (EXCLUDING HONG KONG, MACAU AND TAIWAN, THE “PRC”) AS PART OF THE INITIAL DISTRIBUTION OF THE OFFERED CERTIFICATES BUT MAY BE AVAILABLE FOR PURCHASE BY INVESTORS RESIDENT IN THE PRC FROM OUTSIDE THE PRC.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES IN THE PRC TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE THE OFFER OR SOLICITATION IN THE PRC.
THE DEPOSITOR DOES NOT REPRESENT THAT THIS PROSPECTUS MAY BE LAWFULLY DISTRIBUTED, OR THAT ANY OFFERED CERTIFICATES MAY BE LAWFULLY OFFERED, IN COMPLIANCE WITH ANY APPLICABLE REGISTRATION OR OTHER REQUIREMENTS IN THE PRC, OR PURSUANT TO AN EXEMPTION AVAILABLE THEREUNDER, OR ASSUME ANY RESPONSIBILITY FOR FACILITATING ANY SUCH DISTRIBUTION OR OFFERING. IN PARTICULAR, NO ACTION HAS BEEN TAKEN BY THE DEPOSITOR WHICH WOULD PERMIT AN OFFERING OF ANY OFFERED CERTIFICATES OR THE DISTRIBUTION OF THIS PROSPECTUS IN THE PRC.
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ACCORDINGLY, THE OFFERED CERTIFICATES ARE NOT BEING OFFERED OR SOLD WITHIN THE PRC BY MEANS OF THIS PROSPECTUS OR ANY OTHER DOCUMENT. NEITHER THIS PROSPECTUS NOR ANY ADVERTISEMENT OR OTHER OFFERING MATERIAL MAY BE DISTRIBUTED OR PUBLISHED IN THE PRC, EXCEPT UNDER CIRCUMSTANCES THAT WILL RESULT IN COMPLIANCE WITH ANY APPLICABLE LAWS AND REGULATIONS.
HONG KONG
NO PERSON HAS ISSUED OR DISTRIBUTED OR HAD IN ITS POSSESSION FOR THE PURPOSES OF ISSUE OR DISTRIBUTION, OR WILL ISSUE OR DISTRIBUTE OR HAVE IN ITS POSSESSION FOR THE PURPOSES OF ISSUE OR DISTRIBUTION, WHETHER IN HONG KONG OR ELSEWHERE, ANY ADVERTISEMENT, INVITATION OR DOCUMENT RELATING TO THE OFFERED CERTIFICATES, WHICH IS DIRECTED AT, OR THE CONTENTS OF WHICH ARE LIKELY TO BE ACCESSED OR READ BY, THE PUBLIC OF HONG KONG (EXCEPT IF PERMITTED TO DO SO UNDER THE SECURITIES LAWS OF HONG KONG) OTHER THAN WITH RESPECT TO OFFERED CERTIFICATES WHICH ARE OR ARE INTENDED TO BE DISPOSED OF (A) ONLY TO PERSONS OUTSIDE HONG KONG OR (B) ONLY TO “PROFESSIONAL INVESTORS” WITHIN THE MEANING OF THE SECURITIES AND FUTURES ORDINANCE (CAP. 571 OF THE LAWS OF HONG KONG) (THE “SFO”) AND ANY RULES OR REGULATIONS MADE UNDER THE SFO.
THE OFFERED CERTIFICATES (IF THEY ARE NOT A “STRUCTURED PRODUCT” AS DEFINED IN THE SECURITIES AND FUTURES ORDINANCE (CAP. 571 OF THE LAWS OF HONG KONG)) HAVE NOT BEEN OFFERED OR SOLD AND WILL NOT BE OFFERED OR SOLD, BY MEANS OF ANY DOCUMENT, OTHER THAN (A) TO “PROFESSIONAL INVESTORS” AS DEFINED IN THE SFO AND ANY RULES OR REGULATIONS MADE UNDER THE SFO, OR (B) IN OTHER CIRCUMSTANCES WHICH DO NOT RESULT IN THE DOCUMENT CONSTITUTING A “PROSPECTUS” AS DEFINED IN THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE (CAP. 32 OF THE LAWS OF HONG KONG) OR WHICH DO NOT CONSTITUTE AN OFFER TO THE PUBLIC WITHIN THE MEANING OF THE COMPANIES ORDINANCE (CAP. 622 OF THE LAWS OF HONG KONG). FURTHER, THE CONTENTS OF THIS PROSPECTUS HAVE NOT BEEN REVIEWED OR APPROVED BY THE SECURITIES AND FUTURES COMMISSION OF HONG KONG OR ANY OTHER REGULATORY AUTHORITY IN HONG KONG. YOU ARE ADVISED TO EXERCISE CAUTION IN RELATION TO THE OFFERING CONTEMPLATED IN THIS PROSPECTUS.
W A R N I N G
IF YOU ARE IN ANY DOUBT ABOUT ANY OF THE CONTENTS OF THIS PROSPECTUS, YOU SHOULD OBTAIN INDEPENDENT PROFESSIONAL ADVICE.
SINGAPORE
NEITHER THIS PROSPECTUS NOR ANY OTHER DOCUMENT OR MATERIAL IN CONNECTION WITH ANY OFFER OF THE OFFERED CERTIFICATES HAS BEEN OR WILL BE LODGED OR REGISTERED AS A PROSPECTUS WITH THE MONETARY AUTHORITY OF SINGAPORE (“MAS”) UNDER THE SECURITIES AND FUTURES ACT (CAP. 289) OF SINGAPORE (THE “SFA”). ACCORDINGLY, MAS ASSUMES NO RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS. THIS PROSPECTUS IS NOT A PROSPECTUS AS DEFINED IN THE SFA AND STATUTORY LIABILITY UNDER THE SFA IN RELATION TO THE CONTENTS OF PROSPECTUSES WOULD NOT APPLY. PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY WHETHER THE INVESTMENT IS SUITABLE FOR IT.
THIS PROSPECTUS AND ANY OTHER DOCUMENTS OR MATERIALS IN CONNECTION WITH THE OFFER OR SALE, OR INVITATION FOR SUBSCRIPTION OR PURCHASE, OF THE OFFERED CERTIFICATES MAY NOT BE DIRECTLY OR INDIRECTLY ISSUED, CIRCULATED OR DISTRIBUTED, NOR MAY THE OFFERED CERTIFICATES BE OFFERED OR SOLD, OR BE MADE THE SUBJECT OF AN INVITATION FOR SUBSCRIPTION OR PURCHASE, WHETHER DIRECTLY OR INDIRECTLY, TO PERSONS IN SINGAPORE OTHER THAN TO AN INSTITUTIONAL INVESTOR (AS DEFINED IN SECTION 4A(1)(C) OF THE SFA) (“INSTITUTIONAL INVESTOR”) PURSUANT TO SECTION 304 OF THE SFA.
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UNLESS SUCH OFFERED CERTIFICATES ARE OF THE SAME CLASS AS OTHER OFFERED CERTIFICATES OF THE ISSUING ENTITY THAT ARE LISTED FOR QUOTATION ON AN APPROVED EXCHANGE (AS DEFINED IN SECTION 2(1) OF THE SFA) (“APPROVED EXCHANGE”) AND IN RESPECT OF WHICH ANY OFFER INFORMATION STATEMENT, INTRODUCTORY DOCUMENT, SHAREHOLDERS’ CIRCULAR FOR A REVERSE TAKE-OVER, DOCUMENT ISSUED FOR THE PURPOSES OF A TRUST SCHEME, OR ANY OTHER SIMILAR DOCUMENT APPROVED BY AN APPROVED EXCHANGE, WAS ISSUED IN CONNECTION WITH AN OFFER, OR THE LISTING FOR QUOTATION, OF THOSE OFFERED CERTIFICATES, ANY SUBSEQUENT OFFERS IN SINGAPORE OF OFFERED CERTIFICATES ACQUIRED PURSUANT TO AN INITIAL OFFER MADE HEREUNDER MAY ONLY BE MADE, PURSUANT TO THE REQUIREMENTS OF SECTION 304A, TO PERSONS WHO ARE INSTITUTIONAL INVESTORS.
AS THE OFFERED CERTIFICATES ARE ONLY OFFERED TO PERSONS IN SINGAPORE WHO QUALIFY AS AN INSTITUTIONAL INVESTOR, THE ISSUING ENTITY IS NOT REQUIRED TO DETERMINE THE CLASSIFICATION OF THE OFFERED CERTIFICATES PURSUANT TO SECTION 309B OF THE SFA.
NOTHING SET OUT IN THIS NOTICE SHALL BE CONSTRUED AS LEGAL ADVICE AND EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS OWN LEGAL COUNSEL. THIS NOTICE IS FURTHER SUBJECT TO THE PROVISIONS OF THE SFA AND ITS REGULATIONS, AS THE SAME MAY BE AMENDED OR CONSOLIDATED FROM TIME TO TIME, AND DOES NOT PURPORT TO BE EXHAUSTIVE IN ANY RESPECT.
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
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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.
JAPANESE RETENTION REQUIREMENT
THE JAPANESE FINANCIAL SERVICES AGENCY (“JFSA”) PUBLISHED A RISK RETENTION RULE AS PART OF THE REGULATORY CAPITAL REGULATION OF CERTAIN CATEGORIES OF JAPANESE INVESTORS SEEKING TO INVEST IN SECURITIZATION TRANSACTIONS (THE “JRR RULE”). THE JRR RULE MANDATES AN “INDIRECT” COMPLIANCE REQUIREMENT, MEANING THAT CERTAIN CATEGORIES OF JAPANESE INVESTORS WILL BE REQUIRED TO APPLY HIGHER RISK WEIGHTING TO SECURITIZATION EXPOSURES THEY HOLD UNLESS THE RELEVANT ORIGINATOR COMMITS TO HOLD A RETENTION INTEREST IN THE SECURITIES ISSUED IN THE SECURITIZATION TRANSACTION EQUAL TO AT LEAST 5% OF THE EXPOSURE OF THE TOTAL UNDERLYING ASSETS IN THE SECURITIZATION TRANSACTION (THE “JAPANESE RETENTION REQUIREMENT”), OR SUCH INVESTORS DETERMINE THAT THE UNDERLYING ASSETS WERE NOT “INAPPROPRIATELY ORIGINATED.” IN THE ABSENCE OF SUCH A DETERMINATION BY SUCH INVESTORS THAT SUCH UNDERLYING ASSETS WERE NOT “INAPPROPRIATELY ORIGINATED,” THE JAPANESE RETENTION REQUIREMENT WOULD APPLY TO AN INVESTMENT BY SUCH INVESTORS IN SUCH SECURITIES.
NO PARTY TO THE TRANSACTION DESCRIBED IN THIS PROSPECTUS HAS COMMITTED TO HOLD A RISK RETENTION INTEREST IN COMPLIANCE WITH THE JAPANESE RETENTION REQUIREMENT, AND WE MAKE NO REPRESENTATION AS TO WHETHER THE TRANSACTION DESCRIBED IN THIS PROSPECTUS WOULD OTHERWISE COMPLY WITH THE JRR RULE.
NOTICE TO RESIDENTS OF CANADA
THE OFFERED CERTIFICATES MAY BE SOLD IN CANADA ONLY TO PURCHASERS PURCHASING, OR DEEMED TO BE PURCHASING, AS PRINCIPAL THAT ARE ACCREDITED INVESTORS, AS DEFINED IN NATIONAL INSTRUMENT 45-106 PROSPECTUS EXEMPTIONS OR SUBSECTION 73.3(1) OF THE SECURITIES ACT (ONTARIO), AND ARE PERMITTED CLIENTS, AS DEFINED IN NATIONAL INSTRUMENT 31-103 REGISTRATION REQUIREMENTS, EXEMPTIONS AND ONGOING REGISTRANT OBLIGATIONS. ANY RESALE OF THE OFFERED CERTIFICATES MUST BE MADE IN ACCORDANCE WITH AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE PROSPECTUS REQUIREMENTS OF APPLICABLE SECURITIES LAWS.
SECURITIES LEGISLATION IN CERTAIN PROVINCES OR TERRITORIES OF CANADA MAY PROVIDE A PURCHASER WITH REMEDIES FOR RESCISSION OR DAMAGES IF THIS PROSPECTUS (INCLUDING ANY AMENDMENT THERETO) CONTAINS A MISREPRESENTATION, PROVIDED THAT THE REMEDIES FOR RESCISSION OR DAMAGES ARE EXERCISED BY THE PURCHASER WITHIN THE TIME LIMIT PRESCRIBED BY THE SECURITIES LEGISLATION OF THE PURCHASER’S PROVINCE OR TERRITORY. THE PURCHASER SHOULD REFER TO ANY APPLICABLE PROVISIONS OF THE SECURITIES LEGISLATION OF THE PURCHASER’S PROVINCE OR TERRITORY FOR PARTICULARS OF THESE RIGHTS OR CONSULT WITH A LEGAL ADVISOR.
PURSUANT TO SECTION 3A.3 OF NATIONAL INSTRUMENT 33-105 UNDERWRITING CONFLICTS (“NI 33-105”), THE UNDERWRITERS ARE NOT REQUIRED TO COMPLY WITH THE DISCLOSURE REQUIREMENTS OF NI 33-105 REGARDING UNDERWRITER CONFLICTS OF INTEREST IN CONNECTION WITH THIS OFFERING.
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SUMMARY OF TERMS
This summary highlights selected information from this prospectus. It does not contain all of the information you need to consider in making your investment decision. To understand all of the terms of the offering of the offered certificates, read this entire document carefully.
Relevant Parties
| Depositor | Deutsche Mortgage & Asset Receiving Corporation, a Delaware corporation. The depositor’s principal offices are located at 1 Columbus Circle, New York, New York 10019, and its telephone number is (212) 250-2500. See “Transaction Parties—The Depositor”. |
| Issuing Entity | Benchmark 2022-B34 Mortgage Trust, a New York common law trust. The issuing entity will be established on the closing date pursuant to the pooling and servicing agreement that will be entered into between certain parties to this securitization transaction. See “Transaction Parties—The Issuing Entity”. |
| Sponsors | The sponsors of this transaction are: |
| ● | German American Capital Corporation, a Maryland corporation; |
| ● | Citi Real Estate Funding Inc., a New York corporation; |
| ● | Goldman Sachs Mortgage Company, a New York limited partnership; and |
| ● | JPMorgan Chase Bank, National Association, a national banking association organized under the laws of the United States of America. |
| The sponsors are sometimes also referred to in this prospectus as the “mortgage loan sellers”. |
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| The sponsors originated, co-originated or acquired (or, on or prior to the closing date, will acquire) and will transfer to the depositor the mortgage loans set forth in the following chart: |
Mortgage Loan Seller(1) | Number of Mortgage Loans | Aggregate
Cut-off Date Principal Balance of Mortgage Loans | Approx.
% | ||||||||
| German American Capital Corporation | 9 | $ | 233,069,443 | 25.5 | % | ||||||
| Citi Real Estate Funding Inc. | 18 | 292,776,731 | 32.0 | ||||||||
| Goldman Sachs Mortgage Company | 6 | 189,985,759 | 20.8 | ||||||||
| JPMorgan Chase Bank, National Association | 3 | 114,000,000 | 12.5 | ||||||||
| German American Capital Corporation / Citi Real Estate Funding Inc. (3) | 1 | 85,000,000 | 9.3 | ||||||||
| Total | 37 | $ | 914,831,933 | 100.0 | % | ||||||
| (1) | Each mortgage loan was originated by its respective mortgage loan seller or its affiliate, except those certain mortgage loans that were originated by an unaffiliated third-party or are part of larger whole loan structures that were co-originated by the applicable mortgage loan seller or its affiliate with one or more other lenders. See “Description of the Mortgage Pool—Co-Originated or Unaffiliated Third-Party Originated Mortgage Loans” for additional information. |
| (2) | The sum of the numerical data in this column does not equal the indicated total due to rounding. |
| (3) | The 601 Lexington Avenue mortgage loan (9.3%) is part of a whole loan as to which separate notes are being sold by German American Capital Corporation and Citi Real Estate Funding Inc. The 601 Lexington Avenue whole loan was co-originated by DBR Investments Co. Limited, Citi Real Estate Funding Inc., Morgan Stanley Bank, N.A. and Wells Fargo Bank, National Association. The 601 Lexington Avenue mortgage loan is evidenced by two (2) promissory notes: (i) note A-2-C2-1, with an outstanding principal balance of $43,479,070 as of the cut-off date, as to which German American Capital Corporation is acting as mortgage loan seller; and (ii) note A-4-C2-1, with an outstanding principal balance of $41,520,930 as of the cut-off date, as to which Citi Real Estate Funding Inc. is acting as mortgage loan seller. |
| See “Transaction Parties—The Sponsors and Mortgage Loan Sellers”. |
| Master Servicer | KeyBank National Association, a national banking association, is expected to act as the master servicer and will be responsible for the master servicing and administration of the serviced mortgage loans and any related serviced companion loans pursuant to the pooling and servicing agreement. The principal commercial mortgage master servicing office of the master servicer is located at 11501 Outlook Street, Suite 300, Overland Park, Kansas 66211. See “Transaction Parties—The Master Servicer” and “Pooling and Servicing Agreement”. |
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| Prior to the related servicing shift securitization date, each servicing shift whole loan will be serviced by the master servicer under the pooling and servicing agreement. From and after a related servicing shift securitization date, the related servicing shift whole loan will be serviced under, and by the master servicer designated in, the related servicing shift pooling and servicing agreement. See “Description of the Mortgage Pool—The Whole Loans—The Serviced Pari Passu Whole Loans”, “—The Non Serviced Pari Passu Whole Loans” and “Pooling and Servicing Agreement—Servicing of the Servicing Shift Mortgage Loans”. |
| Outside Primary Servicer | Midland Loan Services, a Division of PNC Bank, National Association, is acting as the primary servicer of certain non-serviced whole loans and master servicer of certain non-serviced companion loans. See “Transaction Parties—Outside Primary Servicer—Midland Loan Services, a Division of PNC Bank, National Association”. |
| Special Servicer | LNR Partners, LLC, a Florida limited liability company, is expected to act as special servicer with respect to the serviced mortgage loans (other than any applicable excluded special servicer loan) and any related serviced companion loans. The special servicer will be primarily responsible for (i) making decisions and performing certain servicing functions with respect to such serviced mortgage loans and any related serviced companion loans as to which a special servicing transfer event (such as a default or an imminent default) is continuing and (ii) in certain circumstances, reviewing, evaluating, processing and providing or withholding consent as to “major decisions” and other transactions and performing certain enforcement actions relating to such serviced mortgage loans and any related serviced companion loans for which a special servicing transfer event has not occurred, in each case pursuant to the pooling and servicing agreement. The principal servicing office of LNR Partners, LLC is located at 2340 Collins Avenue, Suite 700, Miami Beach, Florida 33139. See “Transaction Parties—The Special Servicer” and “Pooling and Servicing Agreement”. |
| If the special servicer obtains knowledge that it has become a borrower party with respect to any serviced mortgage loan and any related serviced companion loan (referred to as an “excluded special servicer loan”), if any, the special servicer will be required to resign as special servicer of that excluded special servicer loan. See “Pooling and Servicing Agreement—Termination of the Master Servicer and the Special Servicer for Cause”. |
| LNR Partners, LLC is expected to be appointed as the special servicer by Eightfold Real Estate Capital Fund V, L.P. or its affiliate, which is expected to purchase each of the Class F, Class G, Class H, Class X-F, Class X-G and Class X-H certificates and receive the Class S certificates and, on the closing date, is expected to appoint itself or its affiliate to be the initial directing holder with respect to each serviced mortgage loan (other than any applicable excluded loans and any servicing |
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| shift mortgage loan) and any related serviced companion loans. See “Pooling and Servicing Agreement—The Directing Holder”. |
| LNR Partners, LLC, or its affiliate, assisted Eightfold Real Estate Capital Fund V, L.P. or its affiliate with due diligence relating to the mortgage loans to be included in the mortgage pool. |
| Prior to the related servicing shift securitization date, each servicing shift whole loan, if necessary, will be specially serviced by the special servicer under the pooling and servicing agreement. From and after a related servicing shift securitization date, the related servicing shift whole loan will be specially serviced, if necessary, under, and by the special servicer designated in, the related servicing shift pooling and servicing agreement. See “Description of the Mortgage Pool—The Whole Loans—The Serviced Pari Passu Whole Loans”, “—The Non Serviced Pari Passu Whole Loans” and “Pooling and Servicing Agreement—Servicing of the Servicing Shift Mortgage Loans”. |
| Outside Special Servicer | KeyBank National Association, a national banking association, is the special servicer with respect to certain of the non-serviced whole loans as set forth in the table entitled “Non-Serviced Whole Loans” under “The Mortgage Pool—Whole Loans” below. See “Transaction Parties—The Master Servicer and the Outside Special Servicer”. |
| Trustee | Wilmington Trust, National Association, a national banking association, will be the trustee. The corporate trust office of Wilmington Trust, National Association is located at 1100 North Market Street, Wilmington, Delaware 19890. Following the transfer of the mortgage loans to the issuing entity, the trustee, on behalf of the issuing entity, will become the mortgagee of record for each serviced mortgage loan and any related serviced companion loans. See “Transaction Parties—The Trustee” and “Pooling and Servicing Agreement”. |
| The initial mortgagee of record with respect to each servicing shift mortgage loan will be the trustee under the pooling and servicing agreement. From and after a related servicing shift securitization date, the mortgagee of record with respect to the related servicing shift mortgage loan will be the trustee designated in the related servicing shift pooling and servicing agreement. See “Description of the Mortgage Pool—The Whole Loans—The Serviced Pari Passu Whole Loans”, “—The Non Serviced Pari Passu Whole Loans” and “Pooling and Servicing Agreement—Servicing of the Servicing Shift Mortgage Loans”. |
| Certificate Administrator | Computershare Trust Company, N.A., a national banking association, will be certificate administrator. The certificate administrator will also be required to act as custodian, 17g-5 information provider, certificate registrar and authenticating agent. The corporate trust offices of Computershare Trust Company, N.A., in its capacity as certificate administrator, are located at 9062 Old Annapolis Road, Columbia, Maryland 21045, and for certificate transfer services, Computershare Trust Company, N.A., 600 South 4th Street, 7th Floor, Minneapolis, |
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| Minnesota 55415. See “Transaction Parties—The Certificate Administrator” and “Pooling and Servicing Agreement”. |
| The custodian with respect to each servicing shift mortgage loan will be the certificate administrator, in its capacity as custodian under the pooling and servicing agreement. After a related servicing shift securitization date, the custodian of the related mortgage file (other than the promissory note evidencing the related servicing shift mortgage loan) will be the custodian under the related servicing shift pooling and servicing agreement. See “Description of the Mortgage Pool—The Whole Loans—The Serviced Pari Passu Whole Loans”, “—The Non Serviced Pari Passu Whole Loans” and “Pooling and Servicing Agreement—Servicing of the Servicing Shift Mortgage Loans”. |
| Operating Advisor | Park Bridge Lender Services LLC, a New York limited liability company and an indirect wholly owned subsidiary of Park Bridge Financial LLC, will be the operating advisor. The operating advisor will have certain review and reporting responsibilities with respect to the performance of the special servicer and, in certain circumstances may recommend to the certificateholders that the special servicer be replaced. The operating advisor will generally have no obligations or consultation rights as operating advisor under the pooling and servicing agreement for this transaction with respect to any non-serviced mortgage loan or any related REO property. See “Transaction Parties—The Operating Advisor and Asset Representations Reviewer” and “Pooling and Servicing Agreement—The Operating Advisor”. |
| Asset Representations Reviewer | Park Bridge Lender Services LLC, a New York limited liability company and an indirect wholly owned subsidiary of Park Bridge Financial LLC, will also be the asset representations reviewer. The asset representations reviewer will be required to review certain delinquent mortgage loans after a specified delinquency threshold has been exceeded and notification from the certificate administrator that the required percentage of certificateholders have voted to direct a review of such delinquent mortgage loans. |
| See “Transaction Parties—The Operating Advisor and Asset Representations Reviewer” and “Pooling and Servicing Agreement—The Asset Representations Reviewer”. |
| Directing Holder | The directing holder will have certain consent and consultation rights in certain circumstances with respect to the serviced mortgage loans (other than any applicable excluded loan) and any related serviced companion loans, as further described in this prospectus. The directing holder with respect to each serviced mortgage loan (other than any applicable excluded loan and any servicing shift mortgage loan) and any related serviced companion loans will be the trust directing holder. The “trust directing holder” will generally be the controlling class certificateholder (or its representative) selected by more than a specified percentage of the controlling class certificateholders (by certificate balance, as certified by the certificate registrar from time to time as provided for in the pooling and servicing agreement). See “Pooling and Servicing Agreement—The Directing Holder”. However, in certain circumstances there may |
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| be no directing holder even if there is a controlling class, and in other circumstances there will be no controlling class. |
| With respect to the directing holder, an “excluded loan” is a mortgage loan or whole loan with respect to which the directing holder or (solely in the case of the trust directing holder) the holder of the majority of the controlling class certificates (by certificate balance) is a borrower, a mortgagor, a manager of a mortgaged property, the holder of a mezzanine loan that has accelerated the related mezzanine loan or commenced foreclosure or enforcement proceedings against the equity collateral pledged to secure the related mezzanine loan, or any borrower party affiliate thereof. |
| The controlling class will be the most subordinate class of the Class G and Class H certificates then-outstanding that has an aggregate certificate balance, as notionally reduced by any cumulative appraisal reduction amounts allocable to such class, at least equal to 25% of the initial certificate balance of that class. No class of certificates, other than as described above, will be eligible to act as the controlling class or appoint a directing holder. |
| Eightfold Real Estate Capital Fund V, L.P. or its affiliate is expected to purchase each of the Class F, Class G, Class H, Class X-F, Class X-G and Class X-H certificates and receive the Class S certificates and, on the closing date, is expected to appoint itself or its affiliate as the initial directing holder with respect to each serviced mortgage loan (other than any excluded loans and any servicing shift mortgage loan) and any related serviced companion loans. |
| With respect to the servicing shift whole loans, the holder of the related controlling companion loan will be the related controlling noteholder, and will be entitled to certain consent and consultation rights with respect to the related servicing shift whole loan under the related intercreditor agreement. From and after the related servicing shift securitization date, the controlling noteholder of the related servicing shift whole loan is expected to be the directing holder (or equivalent party) under the related servicing shift pooling and servicing agreement and will be entitled to certain consent and consultation rights with respect to the related servicing shift whole loan, which are substantially similar to, but not necessarily identical to, those of the trust directing holder related to this securitization transaction. The trust directing holder of this securitization will only have limited consultation rights with respect to certain servicing matters or mortgage loan modifications affecting the servicing shift mortgage loans. See “Description of the Mortgage Pool—The Whole Loans—The Serviced Pari Passu Whole Loans” and “—The Non-Serviced Pari Passu Whole Loans”. |
| Risk Retention | ||
| Consultation Party | The “risk retention consultation parties” will be (i) a party selected by Deutsche Bank AG, New York Branch, and (ii) a party selected by Citi Real Estate Funding Inc., in each case, as a holder of the VRR Interest. Each risk retention consultation |
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| party will have certain non-binding consultation rights in certain circumstances (i) for so long as no consultation termination event is continuing, with respect to any serviced mortgage loan (other than any applicable excluded loan or any servicing shift mortgage loan) and any related serviced companion loans that is a specially serviced loan, and (ii) during the continuance of a consultation termination event, with respect to any serviced mortgage loan (other than any applicable excluded loan or servicing shift mortgage loan) and any related serviced companion loans, as further described in this prospectus. For the avoidance of doubt, no risk retention consultation party will have any consultation rights with respect to any applicable excluded loan. Deutsche Bank AG, New York Branch and Citi Real Estate Funding Inc. (in each case, or an affiliate thereof) are expected to be appointed as the initial risk retention consultation parties. |
| With respect to any risk retention consultation party, an “excluded loan” is a mortgage loan or whole loan with respect to which such risk retention consultation party or the person entitled to appoint such risk retention consultation party is a borrower, a mortgagor, a manager of a mortgaged property, the holder of a mezzanine loan that has accelerated the related mezzanine loan or commenced foreclosure or enforcement proceedings against the equity collateral pledged to secure the related mezzanine loan, or any borrower party affiliate thereof. |
| Non-Serviced Mortgage Loan | ||
| Related Parties | With respect to each non-serviced mortgage loan, the entities acting or expected to act as of the date of this prospectus as master servicer, special servicer, trustee, custodian, directing holder (or equivalent party), operating advisor and asset representations reviewer (or, in each case, in similar capacities) are identified in the table titled “Non-Serviced Whole Loans” under “—Whole Loans” below in connection with the related securitization transactions. See “Description of the Mortgage Pool—The Whole Loans” and “Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans”. |
| Certain Affiliations | The originators, the sponsors, the underwriters and parties to the pooling and servicing agreement have various roles in this transaction as well as certain relationships with parties to this transaction and certain of their affiliates. These roles and other potential relationships may give rise to conflicts of interest as further described under “Risk Factors—Risks Related to Conflicts of Interest” and “Certain Affiliations, Relationships and Related Transactions Involving Transaction Parties”. |
Relevant Dates and Periods
| Cut-off Date | With respect to each mortgage loan, the later of the related due date of such mortgage loan in April 2022 (or, in the case of any mortgage loan that has its first due date after April 2022, the date that would have been its due date in April 2022 under the terms of that mortgage loan if a monthly payment were scheduled to be due in that month) and the date of origination of such mortgage loan. |
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| Closing Date | On or about April 14, 2022. |
| Distribution Date | The 4th business day following each determination date. The first distribution date will be in May 2022. |
| Determination Date | The 11th day of each month or, if the 11th day is not a business day, then the business day immediately following such 11th day. |
| Record Date | With respect to any distribution date, the last business day of the month preceding the month in which that distribution date occurs. |
| Interest Accrual Period | Interest will accrue on the offered certificates during the calendar month immediately preceding the related distribution date. Interest will be calculated on the offered certificates based on a 360-day year consisting of 30-day months, or a “30/360 basis”. |
| Collection Period | For any mortgage loan to be held by the issuing entity and any distribution date, the period commencing on the day immediately following the due date for such mortgage loan in the month preceding the month in which that distribution date occurs and ending on and including the due date for such mortgage loan occurring in the month in which that distribution date occurs. However, in the event that the last day of a collection period (or applicable grace period) is not a business day, any periodic payments received with respect to the mortgage loans relating to that collection period on the business day immediately following that last day will be deemed to have been received during that collection period and not during any other collection period. |
| Assumed Final Distribution Date; | ||
| Rated Final Distribution Date | Each class of offered certificates will have the assumed final distribution dates set forth below, which have been determined on the basis of the assumptions described in “Description of the Certificates—Assumed Final Distribution Date; Rated Final Distribution Date”: |
| Class A-1 | November 2026 | |
| Class A-2 | March 2027 | |
| Class A-SB | December 2031 | |
| Class A-4 | NAP – January 2032(1) | |
| Class A-5 | March 2032 | |
| Class X-A | March 2032 | |
| Class A-M | March 2032 | |
| Class B | March 2032 | |
| Class C | April 2032 |
| (1) | The range of Assumed Final Distribution Dates is based on the initial certificate balance of the Class A-4 certificates ranging from $0 to $110,716,000. |
| The rated final distribution date for each class of offered certificates will be the distribution date in April 2055. |
Transaction Overview
On the closing date, each sponsor will sell its respective mortgage loans to the depositor, which will in turn deposit the mortgage loans into the issuing entity, a common law trust created on the closing date. The issuing entity will be formed pursuant to the pooling and servicing agreement.
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The transfers of the mortgage loans from the sponsors to the depositor and from the depositor to the issuing entity in exchange for the offered certificates are illustrated below:
The foregoing illustration does not take into account the sale of any non-offered certificates.
Offered Certificates
| General | We are offering the following classes of Benchmark 2022-B34 Mortgage Trust Commercial Mortgage Pass-Through Certificates, Series 2022-B34 set forth below (referred to as the “offered certificates”): |
| ● | Class A-1 |
| ● | Class A-2 |
| ● | Class A-SB |
| ● | Class A-4 |
| ● | Class A-5 |
| ● | Class X-A |
| ● | Class A-M |
| ● | Class B |
| ● | Class C |
| The certificates will consist of (i) the offered certificates and (ii) each class of non-offered certificates, which consists of the Class A-3, Class X-B, Class X-D, Class X-F, Class X-G, Class X-H, Class D, Class E, Class F, Class G, Class H, Class S and |
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| Class R certificates and the VRR Interest (the “non-offered certificates”). The offered certificates and the non-offered certificates (other than the Class R certificates and the VRR Interest) are collectively referred to as the “non-VRR certificates”. |
| Certificate Balances and | ||
| Notional Amounts | Each class of offered certificates will have the approximate aggregate initial certificate balance or notional amount set forth below, subject to a variance of plus or minus 5%: |
| Initial
Certificate Balance or Notional Amount | |||||
| Class A-1 | $ | 13,310,000 | |||
| Class A-2 | $ | 114,778,000 | |||
| Class A-SB(1) | $ | 18,021,000 | |||
| Class A-4 | (2) | ||||
| Class A-5 | (2) | ||||
| Class X-A(3) | $ | 675,717,000 | |||
| Class A-M | $ | 67,354,000 | |||
| Class B | $ | 43,455,000 | |||
| Class C | $ | 41,282,000 | |||
| (1) | The Class A-SB certificates have certain priority with respect to reducing the principal balance of those certificates to their planned principal balance, as described in this prospectus. |
| (2) | The exact initial certificate balances of the Class A-4 and Class A-5 certificates are unknown and will be determined based on the final pricing of those classes of certificates. The initial certificate balance of the Class A-4 certificates will be between $0 and $110,716,000, and the initial certificate balance of the Class A-5 certificates will be between $241,475,000 and $352,191,000. |
| (3) | The notional amount of the Class X-A certificates is subject to change depending upon the final pricing of the principal balance certificates, as follows: (1) if as a result of such pricing the pass-through rate of any class of principal balance certificates whose certificate balance comprises such notional amount is equal to the WAC rate, the certificate balance of such class of principal balance certificates may not be part of, and reduce accordingly, such notional amount of the Class X-A certificates (or, if as a result of such pricing the pass-through rate of the Class X-A certificates is equal to zero, such Class X-A certificates may not be issued on the closing date), and/or (2) if as a result of such pricing the pass-through rate of any class of principal balance certificates that does not comprise such notional amount of the Class X-A certificates is less than the WAC rate, such class of principal balance certificates may become a part of, and increase accordingly, such notional amount of the Class X-A certificates. |
Pass-Through Rates
| A. Offered Certificates | Each class of offered certificates will accrue interest at an annual rate called a pass-through rate. The initial approximate pass-through rate for each class of offered certificates is set forth below: |
| Class A-1 | %(1) | ||
| Class A-2 | %(1) | ||
| Class A-SB | %(1) | ||
| Class A-4 | %(1) | ||
| Class A-5 | %(1) | ||
| Class X-A | %(2) | ||
| Class A-M | %(1) | ||
| Class B | %(1) | ||
| Class C | %(1) |
| (1) | The pass-through rates for the Class A-1, Class A-2, Class A-SB, Class A-4, Class A-5, Class A-M, Class B and Class C certificates, in each case, will be one of (i) a fixed per annum rate, (ii) the WAC rate, (iii) a rate equal to the lesser of a |
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| specified pass-through rate and the WAC rate, or (iv) the WAC rate, less a specified rate, but in any case not less than 0.000%. |
| (2) | The pass-through rate for the Class X-A certificates for any distribution date will equal the excess, if any, of (a) the WAC rate, over (b) the weighted average of the pass-through rates of the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4, Class A-5 and Class A-M certificates for that distribution date, weighted on the basis of their respective certificate balances outstanding immediately prior to that distribution date. |
| See “Description of the Certificates—Distributions—Pass-Through Rates”. |
| B. Interest Rate Calculation | ||
| Convention | Interest on the offered certificates at their applicable pass-through rates will be calculated based on a 30/360 basis. |
| For purposes of calculating the pass-through rates on each class of Class X certificates and any other class of certificates that has a pass-through rate limited by, equal to or based on the weighted average net mortgage interest rate (which calculation does not include any companion loan interest rate), the mortgage loan interest rates will not reflect any default interest rate, any loan term modifications agreed to by the special servicer or any modifications resulting from a borrower’s bankruptcy or insolvency. |
| For purposes of calculating the pass-through rates on the offered certificates, the interest rate for each mortgage loan that accrues interest based on the actual number of days in each month and assuming a 360-day year (“actual/360 basis”), will be recalculated, if necessary, so that the amount of interest that would accrue at that recalculated rate in the applicable month, calculated on a 30/360 basis, will equal the amount of interest that is required to be paid on that mortgage loan in that month, subject to certain adjustments as described in “Description of the Certificates—Distributions—Pass-Through Rates” and “—Interest Distribution Amount”. |
| C. Servicing and | ||
| Administration Fees | The master servicer and the special servicer will be entitled to a master servicing fee and a special servicing fee, respectively, from the payments on each mortgage loan (other than a non-serviced mortgage loan with respect to the special servicing fee only), any related serviced companion loans and any related REO loans and, (a) with respect to the master servicing fee, if unpaid after final recovery on the related mortgage loan, out of general collections with respect to the other mortgage loans and (b) with respect to the special servicing fees, if the related loan interest payments (or other collections in respect of the related mortgage loan or mortgaged property) are insufficient, then from general collections on all mortgage loans. The servicing fee for each distribution date, including the master servicing fee and the portion of the servicing fee payable to any primary servicer or subservicer, is calculated on the stated principal amount of each mortgage loan and any related serviced companion loans at the servicing fee rate equal to a per annum rate ranging from 0.00250% to 0.05125%. |
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| The principal compensation to be paid to the special servicer in respect of its special servicing activities will be the special servicing fee, the workout fee and the liquidation fee. |
| The special servicing fee for each distribution date is calculated based on the stated principal amount of each serviced mortgage loan and any related serviced companion loans as to which a special servicing transfer event is continuing (including any REO loans), on a loan-by-loan basis at the special servicing fee rate equal to 0.25% per annum with a minimum monthly fee of $3,500. The special servicer will not be entitled to a special servicing fee with respect to any non-serviced mortgage loan. |
| The workout fee will generally be payable with respect to each specially serviced loan and any related serviced companion loans which has become a “corrected loan” (which will occur (i) with respect to a specially serviced loan as to which there has been a payment default, when the borrower has brought the mortgage loan current and thereafter made three consecutive full and timely monthly payments, including pursuant to any workout and (ii) with respect to any other specially serviced loan, when the related default is cured or the other circumstances pursuant to which it became a specially serviced loan cease to exist in the commercially reasonable judgment of the special servicer). The workout fee will be payable out of each collection of interest and principal (including scheduled payments, prepayments, balloon payments, and payments at maturity) received on the related mortgage loan (or serviced whole loan, as applicable) for so long as it remains a corrected mortgage loan, in an amount equal to the lesser of (1) 1.0% of each such collection of interest and principal (or, if such rate would result in an aggregate workout fee of less than $25,000, then such higher rate as would result in an aggregate workout fee equal to $25,000) and (2) $1,000,000 in the aggregate with respect to any particular workout of a specially serviced loan. |
| A liquidation fee will generally be payable with respect to each specially serviced loan (and any related serviced companion loans) and any related REO property, each mortgage loan (and any related serviced companion loan) repurchased by a mortgage loan seller or other applicable party or that is subject to a loss of value payment or each defaulted mortgage loan that is a non-serviced mortgage loan sold by the special servicer, as to which the special servicer obtains a full, partial or discounted payoff from the related borrower, loan purchaser or which is repurchased by the related mortgage loan seller outside the applicable cure period and, except as otherwise described in this prospectus, with respect to any specially serviced loan or REO property as to which the special servicer receives any liquidation proceeds. The liquidation fee for each mortgage loan (and any related serviced companion loans) and REO property will be payable from the related payment or proceeds in an amount equal to the lesser of (1) 1.0% of such payment or proceeds (or, if such rate would result in an aggregate liquidation fee of less than $25,000, then the liquidation fee rate will be equal to such |
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| higher rate as would result in an aggregate liquidation fee equal to $25,000) and (2) $1,000,000. |
| Workout fees and liquidation fees paid by the issuing entity with respect to each serviced mortgage loan and any related serviced companion loans will be subject to an aggregate cap per serviced mortgage loan and any related serviced companion loans of $1,000,000 as described in “Pooling and Servicing Agreement—Servicing and Other Compensation and Payment of Expenses—Special Servicing Compensation”. Any workout fees or liquidation fees paid to a predecessor or successor special servicer will not be taken into account in determining the cap. |
| Any primary servicing fees or sub-servicing fees with respect to each serviced mortgage loan and any related serviced companion loan will be paid by the master servicer out of the fees described above. |
| The master servicer and the special servicer are also entitled to additional fees and amounts, including income on the amounts held in certain accounts and certain permitted investments. See “Pooling and Servicing Agreement—Servicing and Other Compensation and Payment of Expenses”. |
| The certificate administrator fee for each distribution date is calculated on the stated principal amount of each serviced mortgage loan and REO loan at a per annum rate equal to 0.00869%. The trustee fee will be payable by the certificate administrator from the certificate administrator fee. |
| The operating advisor will be entitled to a fee on each distribution date calculated on the stated principal amount of each mortgage loan and REO loan (including non-serviced mortgage loans but excluding any companion loans) at a per annum rate equal to 0.00198%. |
| The asset representations reviewer will be entitled to a reasonable hourly fee (to be paid by the applicable mortgage loan seller except as described in “Pooling and Servicing Agreement—Servicing and Other Compensation and Payment of Expenses”) upon the completion of the review it conducts with respect to certain delinquent mortgage loans, which will be subject to a cap as described in “Pooling and Servicing Agreement—Servicing and Other Compensation and Payment of Expenses—Asset Representations Reviewer Compensation”. |
| Each party to the pooling and servicing agreement will also be entitled to be reimbursed by the issuing entity for costs, expenses and liabilities borne by them in certain circumstances. Fees and expenses payable by the issuing entity to any party to the pooling and servicing agreement will be generally payable prior to any distributions to certificateholders. |
| Additionally, with respect to each distribution date, an amount equal to the product of 0.00050% per annum multiplied by the stated principal amount of each mortgage loan and any REO loan will be payable to CRE Finance Council© as a license fee for |
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| use of its name and trademarks, including an investor reporting package. This fee will be payable prior to any distributions to certificateholders. |
| Payment of the fees and reimbursement of the costs and expenses described above will generally have priority over the distribution of amounts payable to the certificateholders. See “Pooling and Servicing Agreement—Servicing and Other Compensation and Payment of Expenses” and “—Limitation on Liability; Indemnification”. |
| With respect to each non-serviced mortgage loan set forth in the following table, the related master servicer under the related pooling and servicing agreement governing the servicing of that mortgage loan will be entitled to a primary servicing fee (which includes any sub-servicing fee) at a rate equal to a per annum rate set forth in the following table, and the related special servicer under the related pooling and servicing agreement will be entitled to a special servicing fee at a rate equal to the per annum rate set forth below. In addition, each party to the related pooling and servicing agreement governing the servicing of such non-serviced whole loan will be entitled to receive other fees and reimbursements with respect to the related non-serviced mortgage loan in amounts, from sources, and at frequencies, that are similar, but not necessarily identical, to those described above and, in certain cases (for example, with respect to unreimbursed special servicing fees and servicing advances with respect to the related non-serviced whole loan), such amounts will be reimbursable from general collections on the mortgage loans to the extent not recoverable from the related non-serviced whole loan and to the extent allocable to the related non-serviced mortgage loan pursuant to the related intercreditor agreement. See “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced Pari Passu Whole Loans”, “—The Non-Serviced AB Whole Loans” and “Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans”. |
Non-Serviced Whole Loans(1)
Non-Serviced Loan |
Primary |
Special | |
| 601 Lexington Avenue | 0.00500% | 0.1500% | |
| One Wilshire | 0.01125% | 0.2500% | |
| Bedrock Portfolio | 0.05000% | 0.2500% | |
| Novo Nordisk HQ | 0.00125% | 0.2500% | |
| JW Marriott Desert Springs | 0.00125% | 0.2500% | |
| Glen Forest Office Portfolio | 0.01250% | 0.2500% |
| (1) | Does not reflect the Shearer’s Industrial Portfolio mortgage loan, a servicing shift mortgage loan. With respect to each servicing shift mortgage loan, after the securitization of the related controlling pari passu companion loan, such mortgage loan will be a non-serviced mortgage loan, and the related servicing shift master servicer and related servicing shift special servicer under the related servicing shift pooling and servicing agreement will be entitled to a primary servicing fee and special servicing fee, respectively, as will be set forth in such related servicing shift pooling and servicing agreement. |
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| (2) | The fees related to the whole loans listed in the above chart relate to securitization transactions that have either closed or are expected to close on or prior to the closing date, and, in certain instances are based on publicly available information. |
| (3) | In the case of certain mortgage loans, the Special Servicing Fee Rate will be subject to a cap or floor amount. |
| Distributions | ||
| A. Allocation Between VRR Interest | ||
| and Non-VRR Certificates | The aggregate amount available for distribution to holders of the certificates (including the VRR Interest) on each distribution date will be: (i) the gross amount of interest, principal, yield maintenance charges and prepayment premiums collected with respect to the mortgage loans in the applicable one-month collection period (other than any excess interest accrued after the related anticipated repayment date on any mortgage loan with an anticipated repayment date), net of specified expenses of the issuing entity, including fees payable therefrom to, and losses, liabilities, costs and expenses reimbursable or indemnifiable therefrom to, the master servicer, the special servicer, the certificate administrator, the trustee, the operating advisor, the asset representations reviewer and CREFC®; and (ii) allocated to amounts available for distribution to the holders of the VRR Interest, on the one hand, and amounts available for distribution to the holders of the non-VRR certificates, on the other hand. On each distribution date, the portion of such aggregate available funds allocable to: (a) the VRR Interest will be the product of such aggregate available funds multiplied by a fraction, expressed as a percentage, the numerator of which is the initial certificate balance of the VRR Interest, and the denominator of which is the aggregate initial certificate balance of all of the classes of principal balance certificates and the initial certificate balance of the VRR Interest; and (b) the non-VRR certificates will at all times be the product of such aggregate available funds multiplied by the difference between 100% and the percentage referenced in clause (a). With respect to each of the VRR Interest and the non-VRR certificates, the percentage referred to in the preceding sentence is referred to in this prospectus as its “percentage allocation entitlement”. |
| B. Amount and Order of Distributions | On each distribution date, funds available for distribution to the holders of the non-VRR certificates (other than the Class S certificates) (exclusive of any portion thereof that represents the related percentage allocation entitlement of any yield maintenance charges and prepayment premiums) and the Class R certificates will be distributed in the following amounts and order of priority: |
| First, to the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4, Class A-5, Class X-A, Class X-B, Class X-D, Class X-F, Class X-G and Class X-H certificates, in respect of interest, up to an amount equal to, and pro rata in accordance with, the interest entitlements for those classes; |
| Second, to the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4 and Class A-5 certificates, in reduction of the certificate balances of those classes, in the following priority: |
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| First, to principal on the Class A-SB certificates, until the certificate balance of the Class A-SB certificates has been reduced to the planned principal balance for the related distribution date set forth in Annex G; |
| Second, to principal on the Class A-1 certificates, until the certificate balance of the Class A-1 certificates has been reduced to zero; |
| Third, to principal on the Class A-2 certificates, until the certificate balance of the Class A-2 certificates has been reduced to zero; |
| Fourth, to principal on the Class A-3 certificates, until the certificate balance of the Class A-3 certificates has been reduced to zero; |
| Fifth, to principal on the Class A-4 certificates, until the certificate balance of the Class A-4 certificates has been reduced to zero; and |
| Sixth, to principal on the Class A-5 certificates, until the certificate balance of the Class A-5 certificates has been reduced to zero; and |
| Seventh, to principal on the Class A-SB certificates, until the certificate balance of the Class A-SB certificates has been reduced to zero. |
| However, if the certificate balances of each class of principal balance certificates, other than the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4 and Class A-5 certificates, have been reduced to zero, funds available for distributions of principal will be distributed to the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4 and Class A-5 certificates, pro rata, based on their respective certificate balances and without regard to the Class A-SB planned principal balance; |
| Third, to the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4 and Class A-5 certificates, pro rata, based on the aggregate unreimbursed losses, for any previously unreimbursed losses on the mortgage loans allocable to principal that were previously borne by those classes; |
| Fourth, to the Class A-M certificates, as follows: (a) to interest on the Class A-M certificates in the amount of its interest entitlement; (b) to the extent of funds allocable to principal remaining after distributions in respect of principal to each class with a higher priority (as set forth in prior enumerated clauses set forth above), to principal on the Class A-M certificates until its certificate balance has been reduced to zero; and (c) to reimburse the Class A-M certificates for any previously unreimbursed losses on the mortgage loans that were previously allocated to that class of certificates; |
| Fifth, to the Class B certificates, as follows: (a) to interest on the Class B certificates in the amount of its interest entitlement; |
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| (b) to the extent of funds allocable to principal remaining after distributions in respect of principal to each class with a higher priority (as set forth in prior enumerated clauses set forth above), to principal on the Class B certificates until its certificate balance has been reduced to zero; and (c) to reimburse the Class B certificates for any previously unreimbursed losses on the mortgage loans that were previously allocated to that class of certificates; |
| Sixth, to the Class C certificates, as follows: (a) to interest on the Class C certificates in the amount of its interest entitlement; (b) to the extent of funds allocable to principal remaining after distributions in respect of principal to each class with a higher priority (as set forth in prior enumerated clauses set forth above), to principal on the Class C certificates until its certificate balance has been reduced to zero; and (c) to reimburse the Class C certificates for any previously unreimbursed losses on the mortgage loans that were previously allocated to that class of certificates; |
| Seventh, to the non-offered certificates (other than the Class A-3, Class X-B, Class X-D, Class X-F, Class X-G, Class X-H, Class S and Class R certificates and the VRR Interest), in the amounts and order of priority described in “Description of the Certificates—Distributions”; and |
| Eighth, to the Class R certificates, any remaining amounts. |
| For more detailed information regarding distributions on the certificates, see “Description of the Certificates—Distributions—Priority of Distributions”. |
| C. Interest and Principal Entitlements | A description of the interest entitlement of each class of non-VRR certificates (other than the Class S certificates) can be found in “Description of the Certificates—Distributions—Interest Distribution Amount”. A description of the interest entitlements of the VRR Interest can be found in “Credit Risk Retention—The VRR Interest—Material Terms of the VRR Interest—Priority of Distributions on the VRR Interest”. As described in those sections, there are circumstances in which your interest entitlement for a distribution date could be less than one full month’s interest at the pass-through rate on your certificate’s balance or notional amount. |
| A description of the amount of principal required to be distributed to each class of certificates on a particular distribution date can be found in “Description of the Certificates—Distributions—Principal Distribution Amount” and “Credit Risk Retention—The VRR Interest—Material Terms of the VRR Interest—Priority of Distributions on the VRR Interest”. |
| D. Yield Maintenance Charges, | ||
| Prepayment Premiums | Yield maintenance charges and prepayment premiums with respect to the mortgage loans will be allocated to the holders of the VRR Interest, on the one hand, and to the holders of certain of the non-VRR certificates, on the other hand, in accordance with their respective percentage allocation entitlement as |
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| described in “Description of the Certificates—Allocation of Yield Maintenance Charges and Prepayment Premiums”. Yield maintenance charges and prepayment premiums with respect to the mortgage loans that are allocated to the non-VRR certificates will be further allocated as described in “Description of the Certificates—Allocation of Yield Maintenance Charges and Prepayment Premiums”. |
| For an explanation of the calculation of yield maintenance charges, see “Description of the Mortgage Pool—Certain Terms of the Mortgage Loans”. |
| E. Subordination, Allocation of | ||
| Losses and Certain Expenses | The following chart generally sets forth the manner in which the payment rights of certain classes of non-VRR certificates will be senior or subordinate, as the case may be, to the payment rights of other classes of non-VRR certificates. On any distribution date, the aggregate amount available for distributions on the certificates will be allocated between the VRR Interest and the non-VRR certificates in accordance with their respective percentage allocation entitlement, and principal and interest (other than excess interest that accrues on a mortgage loan that has an anticipated repayment date (if any)) allocated to the non-VRR certificates will be further allocated to the specified classes of those certificates in descending order (beginning with the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4, Class A-5, Class X-A, Class X-B, Class X-D, Class X-F, Class X-G and Class X-H certificates), in each case as set forth in the following chart. Certain payment rights between the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4, Class A-5, Class X-A, Class X-B, Class X-D, Class X-F, Class X-G and Class X-H certificates are more particularly described under “Description of the Certificates—Distributions”. |
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| On any distribution date, mortgage loan losses will be allocated between the VRR Interest and non-VRR certificates in accordance with their respective percentage allocation entitlement, and the mortgage loan losses allocated to the non-VRR certificates will be further allocated to the specified classes of those certificates in ascending order (beginning with certain non-VRR certificates that are not being offered by this prospectus), in each case as set forth in the chart below. | ||
 |
| * | The Class A-SB certificates have certain priority with respect to reducing the principal balance of those certificates to their planned principal balance as described in this prospectus. |
| ** | The Class X-A, Class X-B, Class X-D, Class X-F, Class X-G and Class X-H certificates are interest-only certificates and the Class A-3, Class X-B, Class X-D, Class X-F, Class X-G and Class X-H certificates are not offered by this prospectus. |
| *** | Other than the Class A-3, Class X-B, Class X-D, Class X-F, Class X-G, Class X-H, Class S and Class R certificates and the VRR Interest. |
| Credit enhancement will be provided solely by certain classes of subordinate non-VRR certificates that will be subordinate to certain classes of senior non-VRR certificates as described under “Description of the Certificates—Subordination; Allocation of Realized Losses”. No other form of credit enhancement will be available for the benefit of the holders of the offered certificates. The right to payment of holders of the VRR Interest will be pro rata and pari passu with the right to payment of holders of the non-VRR certificates (as a collective whole), and, as described above, any losses incurred on the mortgage loans will be allocated between the VRR Interest, on the one hand, and the non-VRR certificates, on the other hand, pro rata in accordance with their respective percentage allocation entitlements. |
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| Principal losses and principal payments, if any, on mortgage loans that are allocated to a class of non-VRR certificates (other than the Class X-A, Class X-B, Class X-D, Class X-F, Class X-G, Class X-H or Class S certificates) will reduce the certificate balance of that class of certificates. Principal losses and principal payments, if any, on mortgage loans that are allocated to the VRR Interest will reduce the certificate balance of the VRR Interest. |
| The notional amount of the Class X-A certificates will be reduced by the aggregate amount of principal losses or principal payments, if any, allocated to the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4, Class A-5 and Class A-M certificates. The notional amount of the Class X-B certificates will be reduced by the amount of principal losses or principal payments, if any, allocated to the Class B certificates. The notional amount of the Class X-D certificates will be reduced by the aggregate amount of principal losses or principal payments, if any, allocated to the Class D and Class E certificates. The notional amount of the Class X-F certificates will be reduced by the amount of principal losses or principal payments, if any, allocated to the Class F certificates. The notional amount of the Class X-G certificates will be reduced by the amount of principal losses or principal payments, if any, allocated to the Class G certificates. The notional amount of the Class X-H certificates will be reduced by the amount of principal losses or principal payments, if any, allocated to the Class H certificates. The notional amount of each class of Class X certificates is subject to change depending upon the final pricing of the principal balance certificates, as follows: (1) if as a result of such pricing the pass-through rate of any class of principal balance certificates whose certificate balance comprises such notional amount is equal to the WAC rate, the certificate balance of such class of principal balance certificates may not be part of, and reduce accordingly, such notional amount of such class of Class X certificates (or, if as a result of such pricing the pass-through rate of such class of Class X certificates is equal to zero, such class of Class X certificates may not be issued on the closing date), and/or (2) if as a result of such pricing the pass-through rate of any class of principal balance certificates that does not comprise such notional amount of such class of Class X certificates is less than the WAC rate, such class of principal balance certificates may become a part of, and increase accordingly, such notional amount of such class of Class X certificates. |
| To the extent funds are available on a subsequent distribution date for distribution on your offered certificates, you will be reimbursed for any losses allocated to your offered certificates in accordance with the distribution priorities. |
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| See “Description of the Certificates—Subordination; Allocation of Realized Losses” and “Credit Risk Retention—The VRR Interest—Material Terms of the VRR Interest—Allocation of VRR Realized Losses” for more detailed information regarding the subordination provisions applicable to the certificates and the allocation of losses to the certificates. |
| F. Shortfalls in Available Funds | The following types of shortfalls will reduce the aggregate available funds and will correspondingly reduce the amount allocated to the VRR Interest and the non-VRR certificates. The reduction in amounts available for distribution to the non-VRR certificates will reduce distributions to the classes of non-VRR certificates with the lowest payment priorities: |
| ● | shortfalls resulting from the payment of special servicing fees and other additional compensation that the special servicer is entitled to receive; |
| ● | shortfalls resulting from interest on advances made by the master servicer, the special servicer or the trustee (to the extent not covered by late payment charges or default interest paid by the related borrower); |
| ● | shortfalls resulting from the application of appraisal reductions to reduce interest advances; |
| ● | shortfalls resulting from extraordinary expenses of the issuing entity including indemnification payments payable to the parties to the pooling and servicing agreement; |
| ● | shortfalls resulting from a modification of a mortgage loan’s interest rate or principal balance; and |
| ● | shortfalls resulting from other unanticipated or default-related expenses of the issuing entity. |
| In addition, prepayment interest shortfalls on the mortgage loans that are not covered by certain compensating interest payments made by the master servicer are required to be allocated between the VRR Interest, on the one hand, and the non-VRR certificates, on the other hand, in accordance with their respective percentage allocation entitlement. The prepayment interest shortfalls allocated to the non-VRR certificates (other than the Class S certificates) entitled to interest are required to be further allocated among the classes of non-VRR certificates, on a pro rata basis, to reduce the amount of interest payable on each such class of certificates to the extent described in this prospectus. See “Description of the Certificates—Distributions—Priority of Distributions”. |
| With respect to a whole loan that is comprised of a mortgage loan, one or more subordinate companion loans and, in some cases, one or more pari passu companion loans, shortfalls in available funds resulting from any of the foregoing will result first in a reduction in amounts distributable in accordance with the related intercreditor agreement in respect of the related subordinate companion loan(s), and then, result in a reduction in |
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| amounts distributable in accordance with the related intercreditor agreement in respect of the related mortgage loan (and any pari passu companion loans, on a pro rata basis), which allocations to the related mortgage loan will in turn reduce distributions in respect of the certificates as described above. See “Description of the Mortgage Pool—The Whole Loans” and “Yield and Maturity Considerations—Yield Considerations—Losses and Shortfalls”. |
| G. Excess Interest | On each distribution date, any excess interest in respect of the increase in the interest rate on any mortgage loan with an anticipated repayment date (which accrues after the related anticipated repayment date), to the extent actually collected and applied as interest during a collection period, will be allocated to the holders of the Class S certificates and the VRR Interest on the related distribution date. This excess interest will not be available to make distributions to any other class of certificates, to provide credit support for other classes of certificates, to offset any interest shortfalls or to pay any other amounts to any other party under the pooling and servicing agreement. |
| Advances | ||
| A. P&I Advances | The master servicer will be required to advance a delinquent periodic payment on each mortgage loan (unless the master servicer or the special servicer determines that the advance would be non-recoverable). Neither the master servicer nor the trustee will be required to advance balloon payments due at maturity in excess of the regular periodic payment, interest in excess of a mortgage loan’s regular interest rate, default interest, late payment charges, prepayment premiums or yield maintenance charges. |
| The amount of the interest portion of any advance will be subject to reduction to the extent that an appraisal reduction of the related mortgage loan has occurred (and with respect to any mortgage loan that is part of a whole loan, to the extent such appraisal reduction amount is allocated to the related mortgage loan). There may be other circumstances in which the master servicer will not be required to advance a full month of principal and/or interest. If the master servicer fails to make a required advance, the trustee will be required to make the advance, unless the trustee determines that the advance would be non-recoverable. If an interest advance is made by the master servicer, the master servicer will not advance the portion of interest that constitutes its servicing fee, but will advance the portion of interest that constitutes the regular monthly fees payable to the certificate administrator, the trustee, the operating advisor and the CREFC® license fee. |
| Neither the master servicer nor the trustee will make, or be permitted to make, any principal or interest advance with respect to any companion loan that is not held by the issuing entity. |
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| None of the master servicer, special servicer or trustee will make, or be permitted to make, any advance in connection with the exercise of any cure rights or purchase rights granted to the holder of any subordinate companion loan under the related intercreditor agreement. |
| See “Pooling and Servicing Agreement—Advances”. |
| B. Servicing Advances | The master servicer may be required to make advances with respect to serviced mortgage loans and any related serviced companion loans to pay delinquent real estate taxes, assessments and hazard insurance premiums and similar expenses necessary to: |
| ● | protect and maintain (and in the case of REO properties, lease and manage) the related mortgaged property; |
| ● | maintain the priority of the lien on the related mortgaged property; and/or |
| ● | enforce the related mortgage loan documents. |
| The special servicer will have no obligation to make any servicing advances but may in the special servicer’s discretion make such an advance on an urgent or emergency basis. |
| If the master servicer fails to make a required advance of this type, the trustee will be required to make this advance. None of the master servicer, the special servicer or the trustee is required to advance amounts determined by such party to be non-recoverable. |
| See “Pooling and Servicing Agreement—Advances”. |
| With respect to any non-serviced mortgage loan, the master servicer and/or the special servicer (and the trustee, as applicable) under the related pooling and servicing agreement governing the servicing of the related non-serviced whole loan will be required to make similar advances with respect to delinquent real estate taxes, assessments and hazard insurance premiums as described above. |
| C. Interest on Advances | The master servicer, the special servicer and the trustee, as applicable, will be entitled to interest, compounded annually, on the above described advances at the “Prime Rate” (and solely with respect to the master servicer, subject to a floor rate of 2.0%) as published in The Wall Street Journal, as described in this prospectus. Interest accrued on outstanding advances may result in reductions in amounts otherwise payable on the certificates. Neither the master servicer nor the trustee will be entitled to interest on advances made with respect to principal and interest due on a mortgage loan, until the related due date has passed and any grace period for late payments applicable to the mortgage loan has expired. See “Pooling and Servicing Agreement—Advances”. |
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| With respect to any non-serviced mortgage loan, the applicable makers of advances under the related pooling and servicing agreement governing the servicing of the related non-serviced whole loan will similarly be entitled to interest on advances, and any accrued and unpaid interest on servicing advances made in respect of the related non-serviced mortgage loan may be reimbursed from general collections on the other mortgage loans included in the issuing entity to the extent not recoverable from such non-serviced mortgage loan and to the extent allocable to the related non-serviced mortgage loan in accordance with the related intercreditor agreement. |
The Mortgage Pool
| The Mortgage Pool | The issuing entity’s primary assets will be 37 fixed rate commercial mortgage loans, each evidenced by one or more promissory notes secured by first mortgages, deeds of trust, deeds to secure debt or similar security instruments on the fee simple and/or leasehold estate of the related borrower(s) in 103 commercial and/or multifamily properties. See “Description of the Mortgage Pool—Additional Indebtedness”. |
| The aggregate principal balance of the mortgage loans as of the cut-off date will be approximately $914,831,933. |
| In this prospectus, unless otherwise specified, (i) references to a mortgaged property (or portfolio of mortgaged properties) by name refer to such mortgaged property (or portfolio of mortgaged properties) so identified on Annex A-1, (ii) references to a mortgage loan by name refer to such mortgage loan secured by the related mortgaged property (or portfolio of mortgaged properties) so identified on Annex A-1, (iii) any parenthetical with a percent next to a mortgaged property name (or portfolio of mortgaged properties name) indicates the approximate percent (or approximate aggregate percent) that the outstanding principal balance of the related mortgage loan (or, if applicable, the allocated loan amount with respect to such mortgaged property) represents of the aggregate outstanding principal balance of the pool of mortgage loans as of the cut-off date for this securitization, and (iv) any parenthetical with a percent next to a mortgage loan name or a group of mortgage loans indicates the approximate percent (or approximate aggregate percent) that the outstanding principal balance of such mortgage loan or the aggregate outstanding principal balance of such group of mortgage loans, as applicable, represents of the aggregate outstanding principal balance of the pool of mortgage loans as of the cut-off date for this securitization. | ||
| Whole Loans |
| Unless otherwise expressly stated in this prospectus, the term “mortgage loan” refers to each of the 37 commercial mortgage loans to be held by the issuing entity. Of the mortgage loans, each of the mortgage loans in the following table is part of a larger whole loan, each of which is comprised of (i) the related mortgage loan, (ii) one or more loans that are pari passu in right |
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| of payment to the related mortgage loan (each referred to in this prospectus as a “pari passu companion loan”) and (iii) in the case of one of the mortgage loans in the following table, one or more loans that are subordinate in right of payment to the related mortgage loan and any related pari passu companion loans (each referred to in this prospectus as a “subordinate companion loan”). Each of the pari passu companion loans and the subordinate companion loans are referred to in this prospectus as a “companion loan”. The companion loans, together with their related mortgage loan, are each referred to in this prospectus as a “whole loan”. |
Whole Loan Summary
Mortgage Loan Name |
Mortgage |
%
of |
Pari
Passu |
Subordinate |
Mortgage |
Mortgage |
Mortgage |
Whole
Loan |
Whole
Loan |
Whole
Loan |
| 601 Lexington Avenue | $85,000,000 | 9.3% | $638,300,000 | $276,700,000 | 42.5% | 4.50x | 13.2% | 58.8% | 3.25x | 9.5% |
| One Wilshire | $85,000,000 | 9.3% | $304,250,000 | NAP | 42.6% | 3.37x | 9.6% | 42.6% | 3.37x | 9.6% |
| Bedrock Portfolio | $85,000,000 | 9.3% | $345,000,000 | NAP | 59.4% | 3.30x | 13.6% | 59.4% | 3.30x | 13.6% |
| Shearer’s Industrial Portfolio | $30,000,000 | 3.3% | $107,598,000 | NAP | 62.8% | 1.95x | 8.3% | 62.8% | 1.95x | 8.3% |
| Gem Tower | $28,000,000 | 3.1% | $12,000,000 | NAP | 54.5% | 2.78x | 9.6% | 54.5% | 2.78x | 9.6% |
| Novo Nordisk HQ | $22,167,000 | 2.4% | $188,500,000 | NAP | 63.8% | 3.16x | 9.2% | 63.8% | 3.16x | 9.2% |
| JW Marriott Desert Springs | $20,000,000 | 2.2% | $108,000,000 | NAP | 41.8% | 3.14x | 20.4% | 41.8% | 3.14x | 20.4% |
| Glen Forest Office Portfolio | $9,000,000 | 1.0% | $50,000,000 | NAP | 61.7% | 2.85x | 11.3% | 61.7% | 2.85x | 11.3% |
| (1) | Calculated based on the balance of or debt service on, as applicable, the related whole loan, but excluding any related subordinate companion loans and any related mezzanine debt. |
| (2) | Calculated based on the balance of or debt service on, as applicable, the related whole loan (including any related subordinate companion loans), but excluding any related mezzanine debt. |
| The Gem Tower whole loan will be serviced by the master servicer and the special servicer pursuant to the pooling and servicing agreement for this transaction and is referred to in this prospectus as a “serviced whole loan”, the related companion loans are referred to in this prospectus as “serviced companion loans” and any related pari passu companion loan is referred to in this prospectus as a “serviced pari passu companion loan”. |
| The Shearer’s Industrial Portfolio whole loan (a “servicing shift whole loan”) will initially be serviced by the master servicer and the special servicer pursuant to the pooling and servicing agreement for this transaction. From and after the date on which the related controlling pari passu companion loan is securitized (the “servicing shift securitization date”), it is anticipated that the related servicing shift whole loan will be serviced under, and by the master servicer designated in, the related pooling and servicing agreement or trust and servicing agreement, as applicable, entered into in connection with such securitization (each, a “servicing shift pooling and servicing agreement”). Prior to the related servicing shift securitization date, such servicing shift whole loan will be a “serviced whole loan”. On and after a related servicing shift securitization date, the related servicing shift whole loan will be a “non-serviced whole loan”. |
| Each mortgage loan identified in the following table will not be serviced under the pooling and servicing agreement for this |
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| transaction and instead will be serviced under a separate pooling and servicing agreement or trust and servicing agreement, as applicable, identified in the following table relating to the securitization of a related companion loan and is, together with the related companion loan(s), referred to in this prospectus as a “non-serviced whole loan”. Each related mortgage loan is referred to as a “non-serviced mortgage loan” and each of the related companion loans are referred to in this prospectus as a “non-serviced companion loan”. See “Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans”. |
Non-Serviced Whole Loans(1)
Loan Name |
Transaction/ Pooling/Trust and Servicing Agreement(2) |
% of Initial Pool Balance |
Master Servicer |
Special Servicer |
Trustee |
Certificate Administrator and Custodian |
Initial Directing Party(3) |
Operating Advisor |
Asset Representations Reviewer |
| 601 Lexington Avenue | BXP 2021-601L | 9.3% | Wells Fargo Bank, National Association | Situs Holdings, LLC | Computershare Trust Company, N.A. | Computershare Trust Company, N.A. | N/A(4) | N/A | N/A |
| One Wilshire | Benchmark 2022-B32 | 9.3% | Midland Loan Services, a Division of PNC Bank, National Association | KeyBank National Association | Wilmington Trust, National Association | Computershare Trust Company, N.A. | ECMBS LLC | Pentalpha Surveillance LLC | Pentalpha Surveillance LLC |
| Bedrock Portfolio | Benchmark 2022-B32 | 9.3% | Midland Loan Services, a Division of PNC Bank, National Association | KeyBank National Association | Wilmington Trust, National Association | Computershare Trust Company, N.A. | ECMBS LLC | Pentalpha Surveillance LLC | Pentalpha Surveillance LLC |
| Novo Nordisk HQ | Benchmark 2021-B31 | 2.4% | Midland Loan Services, a Division of PNC Bank, National Association | Rialto Capital Advisors, LLC | Wilmington Trust, National Association | Citibank, N.A. | RREF IV Debt AIV, LP | Pentalpha Surveillance LLC | Pentalpha Surveillance LLC |
| JW Marriott Desert Springs | Benchmark 2022-B32 | 2.2% | Midland Loan Services, a Division of PNC Bank, National Association | KeyBank National Association | Wilmington Trust, National Association | Computershare Trust Company, N.A. | ECMBS LLC | Pentalpha Surveillance LLC | Pentalpha Surveillance LLC |
| Glen Forest Office Portfolio | Benchmark 2022-B32 | 1.0% | Midland Loan Services, a Division of PNC Bank, National Association | KeyBank National Association | Wilmington Trust, National Association | Computershare Trust Company, N.A. | ECMBS LLC | Pentalpha Surveillance LLC | Pentalpha Surveillance LLC |
| (1) | Does not reflect the Shearer’s Industrial Portfolio whole loan, which is a servicing shift mortgage loan. With respect to the servicing shift mortgage loan, on and after the related servicing shift securitization date, the servicing shift mortgage loan will also be a non-serviced mortgage loan and the related whole loan will be a non-serviced whole loan. |
| (2) | The identification of a “Transaction/Pooling and Servicing Agreement” above indicates that we have identified a securitization trust that has closed or priced or as to which a preliminary prospectus (or preliminary offering circular) or final prospectus (or final offering circular) has printed that has included, or is expected to include, the related controlling note for such whole loan. |
| (3) | The entity listed as the “Initial Directing Party” reflects the party entitled to exercise control and consultation rights with respect to the related mortgage loan until such party’s rights are terminated pursuant to the related pooling and servicing agreement, trust and servicing agreement or intercreditor agreement, as applicable. |
| (4) | With respect to the 601 Lexington Avenue mortgage loan, the BXP 2021-601L trust and servicing agreement provides for a directing holder; however, the certificateholders entitled to make such an appointment have not done so as of the date hereof, but may do so in the future. |
| For further information regarding the whole loans, see “Description of the Mortgage Pool—The Whole Loans”, and for information regarding the servicing of the non-serviced whole loan, see “Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans”. |
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| Mortgage Loan Characteristics |
| The following table sets forth certain anticipated characteristics of the mortgage loans as of the cut-off date (unless otherwise indicated). Except as specifically provided in this prospectus, various information presented in this prospectus (including loan-to-value ratios, debt service coverage ratios, debt yields and cut-off date balances per net rentable square foot, pad, room or unit, as applicable) with respect to any mortgage loan with one or more pari passu companion loans or subordinate companion loans is calculated including the principal balance and debt service payment of the related pari passu companion loan(s), but is calculated excluding any related subordinate companion loans, mezzanine debt or preferred equity. However, unless specifically indicated, for the purpose of numerical and statistical information with respect to the composition of the mortgage pool contained in this prospectus (including any tables, charts and information set forth on Annex A-1, A-2 and A-3), no subordinate companion loan is reflected in this prospectus. |
| The sum of the numerical data in any column may not equal the indicated total due to rounding. Unless otherwise indicated, all figures and percentages presented in this “Summary of Terms” are calculated as described under “Description of the Mortgage Pool—Additional Information” and, unless otherwise indicated, such figures and percentages are approximate and in each case, represent the indicated figure or percentage of the aggregate principal balance of the pool of mortgage loans as of the cut-off date. The principal balance of each mortgage loan as of the cut-off date assumes the timely receipt of principal scheduled to be paid on or before the cut-off date and no defaults, delinquencies or prepayments on, or modifications of, any mortgage loan on or prior to the cut-off date. Whenever percentages and other information in this prospectus are presented on the mortgaged property level rather than the mortgage loan level, the information for mortgage loans secured by more than one mortgaged property is based on allocated loan amounts as stated in Annex A-1. |
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| The mortgage loans will have the following approximate characteristics as of the cut-off date: |
| Cut-off Date Mortgage Loan Characteristics |
|
All Mortgage Loans | ||
| Initial Pool Balance(1) | $914,831,933 | |
| Number of mortgage loans | 37 | |
| Number of mortgaged properties | 103 | |
| Range of Cut-off Date Balances | $4,250,000 to $85,000,000 | |
| Average Cut-off Date Balance | $24,725,187 | |
| Range of Mortgage Rates | 2.7760% to 5.1840% | |
| Weighted average Mortgage Rate | 3.8551% | |
| Range of original terms to maturity(2) | 60 months to 120 months | |
| Weighted average original term to maturity(2) | 107 months | |
| Range of remaining terms to maturity(2) | 55 months to 120 months | |
| Weighted average remaining term to maturity(2) | 106 months | |
| Range of original amortization term(3) | 360 months to 360 months | |
| Weighted average original amortization term(3) | 360 months | |
| Range of remaining amortization terms(3) | 358 months to 360 months | |
| Weighted average remaining amortization term(3) | 359 months | |
| Range of LTV Ratios as of the Cut-off Date(4)(5) | 30.0% to 73.8% | |
| Weighted average LTV Ratio as of the Cut-off Date(4)(5) | 57.3% | |
| Range of LTV Ratios as of the maturity date/ARD(2)(4)(5) | 24.1% to 66.6% | |
| Weighted average LTV Ratio as of the maturity date/ARD(2)(4)(5) | 54.8% | |
| Range of UW NCF DSCR(5)(6) | 1.24x to 4.50x | |
| Weighted average UW NCF DSCR(5)(6) | 2.55x | |
| Range of UW NOI Debt Yield(5) | 7.2% to 20.4% | |
| Weighted average UW NOI Debt Yield(5) | 10.6% | |
| Percentage of Initial Pool Balance consisting of: | ||
| Interest Only | 64.6% | |
| Interest Only, then Amortizing Balloon | 13.7% | |
| Interest Only, ARD | 11.7% | |
| Amortizing Balloon | 9.9% |
| (1) | Subject to a variance of plus or minus 5%. |
| (2) | With respect to any mortgage loan with an anticipated repayment date, calculated through or as of, as applicable, such anticipated repayment date. |
| (3) | Does not include mortgage loans that pay interest-only until their maturity dates or anticipated repayment dates. |
| (4) | Unless otherwise indicated under “Description of the Mortgage Pool—Appraised Value”, each of the cut-off date loan-to-value ratio and the maturity date/ARD loan-to-value ratio has been calculated using the “as-is” appraised value (which in certain cases may reflect a portfolio premium valuation). However, with respect to one mortgaged property (0.4%) that secures (in whole or in part) one mortgage loan (3.3%), the related cut-off date loan-to-value ratio and the maturity |
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| date/ARD loan-to-value ratio was calculated based upon a valuation other than an “as is” value or each related mortgaged property. The mortgage loan is identified under “Description of the Mortgage Pool—Appraised Value.” For further information, see Annex A-1. See also “Risk Factors—Risks Relating to the Mortgage Loans—Appraisals May Not Reflect Current or Future Market Value of Each Property” and “Description of the Mortgage Pool—Appraised Value.” |
| (5) | In the case of eight mortgage loans (39.8%), each of which has one or more pari passu companion loans and, in certain cases, one or more subordinate companion loans that are not included in the issuing entity, the debt service coverage ratios, loan-to-value ratios and debt yields have been calculated including the related pari passu companion loan(s), but excluding any related subordinate companion loan(s). See the table titled “Whole Loan Summary” under “Description of the Mortgage Pool—The Whole Loans” for information about the debt service coverage ratios, loan-to-value ratios and debt yields including the subordinate companion loans. |
| (6) | Debt service coverage ratios are calculated using the average of the principal and interest payments for the first twelve payment periods of the mortgage loan following the cut-off date (but without regard to any leap year adjustments), provided that (i) in the case of a mortgage loan that provides for interest-only payments through maturity date or anticipated repayment date, as applicable, such items are calculated based on the interest payments scheduled to be due on the first due date following the cut-off date and the 11 due dates thereafter for such mortgage loan and (ii) in the case of a mortgage loan that provides for an initial interest-only period that ends prior to its maturity date or anticipated repayment date, as applicable, and provides for scheduled amortization payments thereafter, such items are calculated based on the monthly payment of principal and interest payable immediately following the expiration of the interest-only period. |
| All of the mortgage loans accrue interest on an actual/360 basis. |
| For further information regarding the Mortgage Loans, see “Description of the Mortgage Pool”. |
| Modified and Refinanced Loans | As of the cut-off date, none of the mortgage loans were modified due to a delinquency. However, the STK Chicago mortgage loan (0.8%) was modified to permit the borrower to use funds in a rollover reserve to pay debt service after the sole tenant, a restaurant, defaulted on rent payments during the COVID-19 pandemic. See “Description of the Mortgage Pool—COVID-19 Considerations.” |
| Loans Underwritten Based on | ||
| Projections of Future Income | Fifty (50) mortgaged properties, securing, in whole or in part, 11 mortgage loans (18.8%), (i) were constructed, in a lease-up period or the subject of a major renovation that was completed within 12 calendar months prior to the cut-off date and, therefore, the related mortgaged property has no or limited prior operating history or the mortgage loan seller did not take the operating history into account in the underwriting of the related mortgage loan, (ii) were acquired by the related borrower or an affiliate of the borrower within 12 calendar months prior to the cut-off date and such borrower or affiliate was unable to provide the related mortgage loan seller with historical financial information (or provided limited historical financial information) for such acquired mortgaged property or (iii) are subject to a triple-net or modified gross lease with the related sole tenant and, therefore, have no or limited prior operating history and/or lack historical financial figures and information. |
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| See “Description of the Mortgage Pool—Mortgage Pool Characteristics—Mortgaged Properties With Limited Prior Operating History”. |
| Certain Variances from | ||
| Underwriting Standards | None of the mortgage loans vary from the underwriting guidelines described under “Transaction Parties—The Sponsors and Mortgage Loan Sellers” with respect to the related third party reports requirements. See “Description of the Mortgage Pool—Exceptions to Underwriting Guidelines”. |
| The mortgage loans to be contributed by German American Capital Corporation were originated in accordance with the underwriting standards of DBR Investments Co. Limited or Deutsche Bank AG, New York Branch, as described under “Transaction Parties—The Sponsors and Mortgage Loan Sellers—German American Capital Corporation—DB Originators’ Underwriting Guidelines and Processes”. The mortgage loans to be contributed by Citi Real Estate Funding Inc. were originated in accordance with Citi Real Estate Funding Inc.’s underwriting standards as described under “Transaction Parties—The Sponsors and Mortgage Loan Sellers—Citi Real Estate Funding Inc.—CREFI’s Underwriting Guidelines and Processes”. The Mortgage Loans to be contributed by Goldman Sachs Mortgage Company were originated in accordance with Goldman Sachs Mortgage Company’s underwriting standards as described under “Transaction Parties—The Sponsors and Mortgage Loan Sellers—Goldman Sachs Mortgage Company—Goldman Originator’s Underwriting Guidelines and Processes”. The mortgage loans to be contributed by JPMorgan Chase Bank, National Association were originated in accordance with JPMorgan Chase Bank, National Association’s underwriting standards as described under “Transaction Parties—The Sponsors and Mortgage Loan Sellers—JPMorgan Chase Bank, National Association—JPMCB’s Underwriting Guidelines and Processes”. |
Additional Aspects of Certificates
| Denominations | The offered certificates with certificate balances will be issued, maintained and transferred only in minimum denominations of $10,000 and integral multiples of $1 in excess of $10,000. The offered certificates with notional amounts will be issued, maintained and transferred only in minimum denominations of authorized initial notional amounts of not less than $100,000 and in integral multiples of $1 in excess of $100,000. |
| Registration, Clearance | ||
| and Settlement | Each class of offered certificates will initially be registered in the name of Cede & Co., as nominee of The Depository Trust Company, or DTC. |
| You may hold offered certificates through: (1) DTC in the United States; or (2) Clearstream Banking, Luxembourg or Euroclear Bank, as operator of the Euroclear System, in Europe. Transfers within DTC, Clearstream Banking, Luxembourg or Euroclear |
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| Bank, as operator of the Euroclear System, in Europe, will be made in accordance with the usual rules and operating procedures of those systems. |
| We may elect to terminate the book-entry system through DTC (with the consent of the DTC participants), Clearstream Banking, Luxembourg or Euroclear Bank, as operator of the Euroclear System, in Europe, with respect to all or any portion of any class of the offered certificates. |
| See “Description of the Certificates—Delivery, Form, Transfer and Denomination—Book-Entry Registration”. |
| Credit Risk Retention | For a discussion of the manner by which German American Capital Corporation, as retaining sponsor, intends to satisfy the credit risk retention requirements of the credit risk retention rules, see “Credit Risk Retention”. |
| None of the sponsors, the depositor, the issuing entity, the underwriters or any other party to the transaction intends to retain a material net economic interest in the securitization transaction constituted by the issue of the certificates, or take any other action, in a manner prescribed by (A) European Union Regulation (EU) 2017/2402 or (B) Regulation (EU) 2017/2402, as it forms part of UK Domestic Law by virtue of the EUWA, and as amended by the Securitization (Amendment) (EU Exit) Regulations 2019. In addition, no such party will take any action that may be required by any prospective investor or certificateholder for the purposes of its compliance with any requirement of such regulations. Furthermore, the arrangements described under “Credit Risk Retention” have not been structured with the objective of ensuring compliance by any person with any requirements of such regulations. Consequently, the certificates may not be a suitable investment for investors which are subject to any such requirements. See “Risk Factors—General Risk Factors—Legal and Regulatory Provisions Affecting Investors Could Adversely Affect the Liquidity of the Certificates”. |
| Information Available to | ||
| Certificateholders | On each distribution date, the certificate administrator will prepare and make available to each certificateholder a statement as to the distributions being made on that date. Additionally, under certain circumstances, certificateholders of record may be entitled to certain other information regarding the issuing entity. See “Description of the Certificates—Reports to Certificateholders; Certain Available Information”. |
| Deal Information/Analytics | Certain information concerning the mortgage loans and the certificates may be available to subscribers through the following services: |
| ● | BlackRock Financial Management, Inc., Moody’s Analytics, Bloomberg Financial Markets, L.P., RealINSIGHT, CMBS.com, Inc., Trepp, LLC, Intex Solutions, Inc., Interactive Data Corporation, Markit LLC, Thomson Reuters Corporation and KBRA Analytics, LLC; |
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| ● | The certificate administrator’s website initially located at www.ctslink.com; and |
| ● | The master servicer’s website initially located at www.key.com/key2cre. |
| Optional Termination | On any distribution date on which the aggregate principal balance of the pool of mortgage loans remaining in the issuing entity is less than 1.0% of the aggregate principal balance of the mortgage loans as of the cut-off date (solely for the purposes of this calculation, if a mortgage loan with an anticipated repayment date is still an asset of the issuing entity and such right is being exercised after its respective anticipated repayment date, then such mortgage loan will be excluded from the then-aggregate principal balance of the pool of mortgage loans and from the aggregate principal balance of the mortgage loans as of the cut-off date), certain entities specified in this prospectus will have the option to purchase all of the remaining mortgage loans (and all property acquired through exercise of remedies in respect of any mortgage loan) at the price specified in this prospectus. |
| The issuing entity may also be terminated in connection with a voluntary exchange of all the then-outstanding certificates (other than the Class S and Class R certificates) for the mortgage loans held by the issuing entity, provided that (i) the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4, Class A-5, Class A-M, Class B, Class C, Class D and Class E certificates are no longer outstanding and (ii) there is only one holder (or multiple holders acting unanimously) of the outstanding certificates (other than the Class S and Class R certificates). |
| See “Pooling and Servicing Agreement—Termination; Retirement of Certificates”. |
| Required Repurchases or | ||
| Substitutions of Mortgage | ||
| Loans; Loss of Value Payment | Under certain circumstances, the related mortgage loan seller may be obligated to (i) repurchase (without payment of any yield maintenance charge or prepayment premium) or substitute for an affected mortgage loan from the issuing entity or (ii) make a cash payment that would be deemed sufficient to compensate the issuing entity in the event of a document defect or a breach of a representation and warranty made by the related mortgage loan seller with respect to the mortgage loan in the mortgage loan purchase agreement that materially and adversely affects the value of the mortgage loan the value of the related mortgaged property or the interests of the trust or any certificateholders in the mortgage loan or mortgaged property or causes the mortgage loan to be other than a “qualified mortgage” within the meaning of Code Section 860G(a)(3)(but without regard to the rule of Treas. Reg. Section 1.860G-2(f)(2) that causes a defective loan to be treated as a “qualified mortgage”); provided that with respect to the 601 Lexington Avenue mortgage loan, each of German American Capital Corporation and Citi Real Estate Funding Inc., will be obligated to take the above remedial actions only with respect to the related |
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| promissory note(s) sold by such mortgage loan seller to the depositor as if the note(s) contributed by each such mortgage loan seller and evidencing such mortgage loan were a separate mortgage loan. See “Description of the Mortgage Loan Purchase Agreements”. |
| Sale of Defaulted Loans | Pursuant to the pooling and servicing agreement, the special servicer is required to use reasonable efforts to solicit offers for defaulted serviced mortgage loans and any related serviced companion loans and/or related REO properties and accept the first (and, if multiple offers are received, the highest) cash offer from any person that constitutes a fair price for such defaulted serviced mortgage loan and any related serviced companion loans or related REO property, determined as described in “Pooling and Servicing Agreement—Realization Upon Mortgage Loans” and “—Sale of Defaulted Loans and REO Properties”, unless the special servicer determines, in accordance with the servicing standard, that rejection of such offer would be in the best interests of the certificateholders and the related companion loan holders (as a collective whole as if such certificateholders and such companion loan holders constituted a single lender, taking into account the subordinate nature of any subordinate companion loan). |
| If a non-serviced mortgage loan with a related pari passu companion loan becomes a defaulted mortgage loan and the special servicer under the related pooling and servicing agreement or trust and servicing agreement, as applicable, for the related pari passu companion loan determines to sell such pari passu companion loan, then that special servicer will be required to sell such non-serviced mortgage loan together with the related pari passu companion loan and any related subordinate companion loans, in a manner similar to that described above. See “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced Pari Passu Whole Loans” and “—The Non-Serviced AB Whole Loans”. |
| Pursuant to each mezzanine loan intercreditor agreement with respect to the mortgage loans with mezzanine indebtedness, the holder of the related mezzanine loan has the right to purchase the related mortgage loan as described in “Description of the Mortgage Pool—Additional Indebtedness”. Additionally, in the case of mortgage loans that permit certain equity owners of the borrower to incur future mezzanine debt as described in “Description of the Mortgage Pool—Additional Indebtedness”, the related mezzanine lender may have the option to purchase the related mortgage loan after certain defaults. See “Pooling and Servicing Agreement—Realization Upon Mortgage Loans”, “—Sale of Defaulted Loans and REO Properties” and “Description of the Mortgage Pool—The Whole Loans”. |
| Tax Status | Elections will be made to treat designated portions of the issuing entity (exclusive of interest that is deferred after the anticipated repayment date of a mortgage loan with an anticipated repayment date and the excess interest distribution account) as two separate REMICs (the “Lower-Tier REMIC” and the |
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| “Upper-Tier REMIC” and, together with the STK Chicago Loan REMIC (as defined below), a “Trust REMIC”) for federal income tax purposes. |
| In addition, (1) the portions of the issuing entity consisting of (i) the excess interest accrued on a mortgage loan with an anticipated repayment date and the related distribution account, and (ii) the uncertificated regular interests in the Upper-Tier REMIC corresponding to the VRR Interest and distributions thereon, will be classified as a trust under Treasury Regulations section 301.7701-4(c), (the “Grantor Trust”), (2) the Class S certificates and the VRR Interest will represent beneficial ownership of the excess interest and related distribution account, (3) the VRR Interest will represent beneficial ownership of the uncertificated regular interests in the Upper-Tier REMIC corresponding to the VRR Interest and distributions thereon and (4) the Class R certificates will represent beneficial ownership of the residual interests in each Trust REMIC. |
| Pertinent federal income tax consequences of an investment in the offered certificates include: |
| ● | Each class of offered certificates will constitute REMIC “regular interests”. |
| ● | The offered certificates will be treated as newly originated debt instruments for federal income tax purposes. |
| ● | You will be required to report income on your offered certificates using the accrual method of accounting. |
| ● | It is anticipated that the Class certificates will be issued with original issue discount, that the Class certificates will be issued with de minimis original issue discount and that the Class certificates will be issued at a premium for federal income tax purposes. |
| See “Material Federal Income Tax Considerations”. |
| Certain ERISA Considerations | Subject to important considerations described under “Certain ERISA Considerations”, the offered certificates are eligible for purchase by persons investing assets of employee benefit plans or individual retirement accounts. |
| Legal Investment | None of the certificates will constitute “mortgage related securities” for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended. |
| If your investment activities are subject to legal investment laws and regulations, regulatory capital requirements, or review by regulatory authorities, then you may be subject to restrictions on investment in the certificates. You should consult your own legal advisors for assistance in determining the suitability of and consequences to you of the purchase, ownership, and sale of the certificates. |
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| The issuing entity will not be registered under the Investment Company Act of 1940, as amended. The issuing entity will be relying on an exclusion or exemption from the definition of “investment company” under the Investment Company Act of 1940, as amended contained in Section 3(c)(5) of the Investment Company Act of 1940, as amended, or Rule 3a-7 under the Investment Company Act of 1940, as amended, although there may be additional exclusions or exemptions available to the issuing entity. The issuing entity is being structured so as not to constitute a “covered fund” for purposes of the Volcker Rule under the Dodd-Frank Act (both as defined in this prospectus). |
| See “Legal Investment”. |
| Ratings | The offered certificates will not be issued unless each of the offered classes receives a credit rating from one or more of the nationally recognized statistical rating organizations engaged by the depositor to rate the offered certificates. The decision not to engage one or more other rating agencies in the rating of certain classes of certificates to be issued in connection with this transaction may negatively impact the liquidity, market value and regulatory characteristics of those classes of certificates. Neither the depositor nor any other person or entity will have any duty to notify you if any other nationally recognized statistical rating organization issues, or delivers notice of its intention to issue, unsolicited ratings on one or more classes of certificates after the date of this prospectus. |
| See “Risk Factors—Other Risks Relating to the Certificates—Nationally Recognized Statistical Rating Organizations May Assign Different Ratings to the Certificates; Ratings of the Certificates Reflect Only the Views of the Applicable Rating Agencies as of the Dates Such Ratings Were Issued; Ratings May Affect ERISA Eligibility; Ratings May Be Downgraded” and “Ratings”. |
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SUMMARY OF RISK FACTORS
Investing in the certificates involves risks. Any of the risks set forth in this prospectus under the heading “Risk Factors” may have a material adverse effect on the cash flow on one or more mortgaged properties, the related borrowers’ ability to meet their respective payment obligations under the mortgage loans, and/or on your certificates. As a result, the market price of the certificates could decline significantly and you could lose a part or all of your investment. You should carefully consider all the information set forth in this prospectus and, in particular, evaluate the risks set forth in this prospectus under the heading “Risk Factors” before deciding to invest in the certificates. The following is a summary of some of the principal risks associated with an investment in the certificates:
Special Risks
| ● | COVID-19: Economic conditions and restrictions on enforcing landlord rights due to the COVID-19 pandemic and related governmental countermeasures may adversely affect the borrowers and/or the tenants and, therefore, the certificates. In addition, the underwriting of certain mortgage loans and the appraisals and property condition reports for certain mortgaged properties may not reflect current conditions with respect to the mortgaged properties or the borrowers. |
Risks Relating to the Mortgage Loans
| ● | Non-Recourse Loans: The mortgage loans are non-recourse loans, and in the event of a default on a mortgage loan, recourse generally may only be had against the specific mortgaged property(ies) and other assets that have been pledged to secure the mortgage loan. Consequently, payment on the certificates is dependent primarily on the sufficiency of the net operating income or market value of the mortgaged properties, each of which may be volatile. |
| ● | Borrowers: Frequent and early occurrence of borrower delinquencies and defaults may adversely affect your investment. Bankruptcy proceedings involving borrowers, borrower organizational structures and additional debt incurred by a borrower or its sponsors may increase risk of loss. In addition, borrowers may be unable to refinance or repay their mortgage loans at the maturity date or anticipated repayment date. |
| ● | Property Performance: Certificateholders are exposed to risks associated with the performance of the mortgaged properties, including location, competition, condition (including environmental conditions), maintenance, ownership, management, and litigation. Property values may decrease even when current operating income does not. The property type (e.g., office, mixed use, hospitality, retail, industrial, self-storage and multifamily) may present additional risks. |
| ● | Loan Concentration: Certain of the mortgage loans represent significant concentrations of the mortgage pool as of the cut-off date. A default on one or more of such mortgage loans may have a disproportionate impact on the performance of the certificates. |
| ● | Property Type Concentration: Certain property types represent significant concentrations of the mortgaged properties securing the mortgage pool as of the cut-off date, based on allocated loan amounts. Adverse developments with respect to those property types or related industries may have a disproportionate impact on the performance of the certificates. |
| ● | Other Concentrations: Losses on loans to related borrowers or cross-collateralized and cross-defaulted loan groups, geographical concentration of the mortgaged properties, and concentration of tenants among the mortgaged properties, may disproportionately affect distributions on the offered certificates. |
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| ● | Tenant Performance: The repayment of a commercial or multifamily mortgage loan is typically dependent upon the ability of the related mortgaged property to produce cash flow through the collection of rents. Therefore, the performance of the mortgage loans will be highly dependent on the performance of tenants and tenant leases. |
| ● | Significant Tenants: Properties that are leased to a single tenant or a tenant that comprises a significant portion of the rental income are disproportionately susceptible to interruptions of cash flow in the event of a lease expiration or termination or a downturn in the tenant’s business. |
| ● | Underwritten Net Cash Flow: Underwritten net cash flow for the mortgaged properties could be based on incorrect or flawed assumptions. |
| ● | Appraisals: Appraisals may not reflect the current or future market value of the mortgaged properties. |
| ● | Inspections: Property inspections may not identify all conditions requiring repair or replacement. |
| ● | Insurance: The absence or inadequacy of terrorism, fire, flood, earthquake and other insurance may adversely affect payment on the certificates. |
| ● | Zoning: Changes in zoning laws may affect the ability to repair or restore a mortgaged property. Properties or structures considered to be “legal non-conforming” may not be able to be restored or rebuilt “as-is” following a casualty or loss. |
Risks Relating to Shari’ah Compliant Loans
Certain of the mortgage loans may be structured to comply with Islamic law (Shari’ah). The related borrower, which is a non-Shari’ah compliant party, holds the fee interest in the mortgaged property and is owned by a U.S. division of the borrower sponsor. The related borrower has master leased the related mortgaged property to a master lessee, which is directly or indirectly owned in whole or in part by certain investors of the Islamic faith. The rent payable pursuant to the applicable master lease is intended to cover the debt service payments required under the related mortgage loan, as well as (in some cases) reserve payments and any other sums due under the mortgage loan. By its terms, the master lease is expressly subordinate to the related mortgage loan.
There is a risk that in a bankruptcy case of a master lessee, the master lease could be recharacterized as a financing lease in connection with an acquisition of the mortgaged property by the master lessee. If such recharacterization occurred, the master lessee could be deemed to own the fee interest in the related mortgaged property and the master lease would be viewed as a loan. In Shari’ah compliant mortgage loans, the master lessee typically does not grant a leasehold mortgage to the lender. Therefore, there is a risk that if the master lease were recharacterized as a financing lease, the lender could lose its mortgage on the property. To mitigate the effect of such recharacterization, (i) each master lessee has been formed and is obligated to continue as a single purpose entity, (ii) a bankruptcy by a master lessee is a “bad act” that would trigger guarantor liability under the recourse carveout guaranty for the related mortgage loan, (iii) the master lease is expressly subordinate to the related mortgage loan, and (iv) title insurance was obtained insuring that the related borrower is the fee owner of the related mortgaged property.
Risks Relating to Conflicts of Interest
| ● | Transaction Parties: Conflicts of interest may arise from the transaction parties’ relationships with each other or their economic interests in the transaction. |
| ● | Directing Holder and Companion Holders: Certain certificateholders and companion loan holders have control and/or consent rights regarding the servicing of the mortgage loans and related whole loans. Such rights include rights to remove and replace the special servicer without cause and/or to direct or recommend the applicable special servicer or non-serviced special |
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| servicer to take actions that conflict with the interests of holders of certain classes of certificates. The right to remove and replace the special servicer may give the directing holder the ability to influence the special servicer’s servicing actions in a manner that may be more favorable to the directing holder relative to other certificateholders. |
Other Risks Relating to the Certificates
| ● | Limited Obligations: The certificates will only represent ownership interests in the issuing entity, and will not be guaranteed by the sponsors, the depositor or any other person. The issuing entity’s assets may be insufficient to repay the offered certificates in full. |
| ● | Uncertain Yields to Maturity: The offered certificates have uncertain yields to maturity. Prepayments on the underlying mortgage loans will affect the average lives of the certificates; and the rate and timing of prepayments may be highly unpredictable. Optional early termination of the issuing entity may also adversely impact your yield or may result in a loss. |
| ● | Rating Agency Feedback: Future events could adversely impact the credit ratings and value of your certificates. |
| ● | Limited Credit Support: Credit support provided by subordination of certain certificates is limited and may not be sufficient to prevent loss on the offered certificates. |
RISK FACTORS
You should carefully consider the following risks before making an investment decision. In particular, distributions on your certificates will depend on payments received on, and other recoveries with respect to, the mortgage loans. Therefore, you should carefully consider the risk factors relating to the mortgage loans and the mortgaged properties.
If any of the following events or circumstances identified as risks actually occur or materialize, your investment could be materially and adversely affected. We note that additional risks and uncertainties not presently known to us may also impair your investment.
This prospectus also contains forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks described below and elsewhere in this prospectus.
Special Risks
Coronavirus Pandemic Has Adversely Affected the Global Economy and Will Likely Adversely Affect the Performance of the Mortgage Loans
There has been a global outbreak of a novel coronavirus (SARS-CoV-2) and a related respiratory disease (“COVID-19”) that has spread throughout the world, including the United States, causing a global pandemic. The COVID-19 pandemic has been declared to be a public health emergency of international concern by the World Health Organization, and the president of the United States has made a declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act. A significant number of countries and the majority of state governments in the United States have also made emergency declarations and have attempted to slow the spread of the virus by providing social distancing guidelines, issuing stay-at-home orders and mandating the closure of certain non-essential businesses. We cannot assure you as to if and when states will permit full resumption of economic activity, as to whether or when people will feel comfortable in resuming economic activity, that containment or other measures will be successful in limiting the spread of the virus or that future regional or broader outbreaks of COVID-19 or other diseases will not result in resumed or additional countermeasures from governments.
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The COVID-19 pandemic and the responses thereto have led, and will likely continue to lead, to severe disruptions in the global supply chain, the financial and other markets, significant increases in unemployment, significant reductions in consumer demand and downturns in the economies of many nations, including the United States, and the global economy in general. The long-term effects of the social, economic and financial disruptions caused by the COVID-19 pandemic are unknown. While the United States government and other governments have implemented unprecedented financial support and relief measures (such as the Coronavirus Aid, Relief and Economic Security Act, the Consolidated Appropriations Act, 2021 and the American Rescue Plan Act of 2021), the effectiveness of such measures cannot be predicted. The United States economy has experienced contraction and expansion during the pandemic, and it is unclear when any contractions will resume and when steady economic expansion will cease.
With respect to the mortgage pool, it is unclear how many borrowers have been adversely affected by the COVID-19 pandemic. It is expected that many borrowers will be (or continue to be) adversely affected by the cumulative effects of COVID-19 and the measures implemented by governments to combat the pandemic. As a result, borrowers may not and/or may be unable to meet their payment obligations under the mortgage loans, which may result in significant losses, including shortfalls in distributions of interest and/or principal to the holders of the certificates, and ultimately losses on the certificates. Shortfalls and losses will be particularly pronounced to the extent that the related mortgaged properties are located in geographic areas with significant numbers of COVID-19 cases or relatively restrictive COVID-19 countermeasures.
Certain geographic regions of the United States have experienced a larger concentration of COVID-19 infections and deaths than other regions, which is expected to result in slower resumption of economic activity than in other less-impacted regions. However, as the COVID-19 emergency has continued, various regions of the United States have seen fluctuations in rates of COVID-19 cases. Therefore, we cannot assure you that any region will not experience an increase in such rates, and corresponding governmental countermeasures and economic distress.
While the COVID-19 pandemic has created personnel, supply-chain and other logistical issues that affect all property types, the effects are particularly severe for certain property types. For example:
| ● | retail properties, due to store closures, either government-mandated or voluntary, declining interest in visiting large shared spaces such as shopping malls, restaurants, bars and movie theatres, and tenants (including certain national and regional chains) refusing to pay rent, and restrictions on and reduced interest in social gatherings, on which retail properties rely; |
| ● | multifamily and manufactured housing community properties, which also have rental payment streams that are sensitive to unemployment and reductions in disposable income, as well as federal, state and local moratoria on eviction proceedings and other mandated tenant forbearance programs, and with respect to student housing properties, may be affected by closures of, or ongoing social distancing measures instituted at, colleges and universities; |
| ● | hospitality properties, due to travel limitations implemented by governments and businesses as well as reduced interest in travel generally; |
| ● | office properties, particularly those with significant tenants who operate co-working or office-sharing spaces, due to restrictions on such spaces or declining interest in such spaces by their users, who typically are unaffiliated and license or sublease space for shorter durations; and |
| ● | properties with significant tenants with executed leases that are not yet in place and whose leases are conditioned on tenant improvements being completed, the delivery of premises, or the vacancy of a current tenant by a date certain, due to lack of access to the mortgaged property and disruptions in labor and the global supply chain. |
With respect to all the property types listed above, the borrowers with respect to mortgage loans secured by such property types may face increased incidence of non-payment of rent due to the COVID-
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19 pandemic and may have difficulty evicting non-paying tenants due to a variety of factors including (but not limited to): government-mandated moratoriums on evictions, court closures and local officials refusing to enforce eviction orders. We cannot assure you that borrowers of mortgage loans secured by any of the property types will not request forbearance or modifications or otherwise fail to make timely debt service payments due to the ongoing COVID-19 pandemic.
In addition, leases for certain of the tenants at the mortgaged properties, including single tenants or major tenants, may include provisions which allow the tenants to abate or delay rent payments, or in certain circumstances, to terminate the related lease, if the tenant is required to suspend its business operations, or its business operations are otherwise disrupted, as a result of the COVID-19 pandemic or other pandemic or epidemic. Such provisions have become increasingly common following the COVID-19 pandemic.
In addition, businesses are adjusting their business plans in response to government actions and new industry practices in order to change how, how many and from where staff members work. Such changes may lead to reduced or modified levels of service, including in the services provided by the master servicer, the special servicer, the certificate administrator and the other parties to this transaction. Such parties’ ability to perform their respective obligations under the transaction documents may be adversely affected by such changes. Furthermore, because the master servicer and special servicer operate according to a servicing standard that is in part based on accepted industry practices, the servicing actions taken by such parties may vary from historical norms to the extent that such accepted industry practices change.
The loss models used by the rating agencies to rate the certificates may not have accounted for the possible economic effects of the COVID-19 pandemic or the borrowers’ ability to make payments on the mortgage loans. We cannot assure you that the decline in economic conditions precipitated by COVID-19 and the measures implemented by governments to combat the pandemic will not result in downgrades to the ratings of the certificates after the closing date.
Tenants may be unable to meet their rent obligations as a result of extended periods of unemployment and business slowdowns and shutdowns. Accordingly, tenants at the mortgaged properties have sought and are expected to continue to seek rent relief at the mortgaged properties, and it would be expected that rent collections and/or occupancy rates may decline. Even as areas of the country reopen, we cannot assure you as to if and when the operations of commercial tenants will reach pre-COVID-19 pandemic levels. Prospective investors should also consider, as the country reopens, the impact that a continued surge in (as well as any future prolonged waves of) COVID-19 cases could have on economic conditions.
Some borrowers may seek forbearance arrangements at some point in the future. We cannot assure you that the borrowers will be able to make debt service payments after the expiration of any such forbearance period. Some borrowers may also seek to use funds on deposit in reserve or escrow accounts to make debt service payments, rather than for the explicit purpose set forth in the mortgage loan documents. We cannot assure you that the cash flow at the mortgaged properties will be sufficient for the borrowers to replenish those reserves or escrows, which would then be unavailable for their original intended use.
Although each mortgage loan generally requires the related borrower to maintain business interruption insurance, certain insurance companies have reportedly taken the position that such insurance does not cover closures due to the COVID-19 emergency. In addition, the COVID-19 emergency could adversely affect future availability and coverage of business interruption insurance. Furthermore, it is unclear whether such closures due to COVID-19 will trigger co-tenancy provisions.
Investors should understand that the underwriting of mortgage loans originated prior to or during the COVID-19 pandemic may be based on assumptions that do not reflect current conditions. When evaluating the financial information, occupancy percentages and mortgaged property valuations presented in this prospectus (including certain information set forth in “Summary of Certificates”, “Description of the Mortgage Pool—Mortgage Pool Characteristics”, “Description of the Mortgage Pool—
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Certain Calculations and Definitions”, Annex A-1, Annex A-2 and Annex A-3), investors should take into consideration the dates as of which historical financial information and occupancy percentages are presented and appraisals and property condition reports were conducted and that the underwritten information may not reflect (or fully reflect) the events described in this risk factor or any potential impacts of the COVID-19 pandemic. Because a pandemic of the scale and scope the COVID-19 pandemic has not occurred in recent history, historical delinquency and loss experience is unlikely to accurately predict the performance of the mortgage loans in the mortgage pool. Investors should expect higher-than-average delinquencies and losses on the mortgage loans. The aggregate number and size of delinquent loans in a given collection period may be significant, and the master servicer may determine that advances of payments on such mortgage loans are not or would not be recoverable or may not be able to make such advances given the severity of delinquencies (in this transaction or other transactions), which would result in shortfalls and losses on the certificates. See “Description of the Mortgage Pool—Certain Calculation and Definitions—Definitions”.
In addition, you should be prepared for the possibility that a significant number of borrowers may not make timely payment on their mortgage loans at some point during the continuance of the COVID-19 pandemic. In response, the master servicer and the special servicer may implement a range of actions with respect to affected borrowers and the related mortgage loans to forbear or extend or otherwise modify the loan terms consistent with the applicable servicer’s customary servicing practices. Such actions may also lead to shortfalls and losses on the certificates.
In addition, servicers have reported an increase in borrower requests as a result of the COVID-19 pandemic. Increased volume of borrower requests and communication may result in delays in the servicers’ ability to respond to such requests and their ability to perform their respective obligations under the related transaction documents.
The borrowers have provided additional information regarding the status of the mortgage loans and mortgaged properties, which is described under “Description of the Mortgage Pool—COVID-19 Considerations”, as of the dates set forth in that section. We cannot assure you that the information in that section is indicative of future performance or that tenants or borrowers will not seek rent or debt service relief (including forbearance arrangements) or other lease or loan modifications in the future. Such actions may lead to shortfalls and losses on the certificates.
Although the borrowers and tenants may have made their recent debt service and rent payments, we cannot assure you that they will be able to make future payments. While certain mortgage loans may provide for debt service or rent reserves, we cannot assure you that any such reserve will be sufficient to satisfy any or all debt service payments on the affected mortgage loans.
Furthermore, we cannot assure you that future failure to make rent or debt service payments will not trigger cash sweeps or defaults under the mortgage loan documents.
Further, some federal, state and local administrative offices and courts were at one time closed due to the outbreak of the COVID-19 pandemic. Foreclosures, recordings of assignments and similar activities may be further delayed as such offices and courts address any backlogs of such actions that accumulated during the period they were closed. Furthermore, to the extent the related jurisdiction has implemented a moratorium on foreclosures as discussed above, any processing of foreclosure actions would not commence until such moratorium has ended.
The mortgage loan sellers will agree to make certain limited representations and warranties with respect to the mortgage loans as set forth on Annex D, Annex E and Annex F hereto; however, absent a breach of such a representation or warranty, no mortgage loan seller will have any obligation to repurchase a mortgage loan with respect to which the related borrower was adversely affected by the COVID-19 pandemic. See also “—Other Risks Relating to the Certificates—Sponsors May Not Make Required Repurchases or Substitutions of Defective Mortgage Loans or Pay Any Loss of Value Payment Sufficient to Cover All Losses on a Defective Mortgage Loan.”
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The widespread and cascading effects of the COVID-19 pandemic, including those described above, also heighten many of the other risks described in this “Risk Factors” section, such as those related to timely payments by borrowers and tenants, mortgaged property values and the performance, market value, credit ratings and secondary market liquidity of your certificates.
Risks Relating to the Mortgage Loans
Mortgage Loans Are Non-Recourse and Are Not Insured or Guaranteed
The mortgage loans are not insured or guaranteed by any person or entity, governmental or otherwise.
Investors should treat each mortgage loan as a non-recourse loan. If a default occurs, recourse generally may be had only against the specific mortgaged properties and other assets that have been pledged to secure the mortgage loan. Consequently, payment prior to maturity is dependent primarily on the sufficiency of the net operating income of the mortgaged property. Payment at maturity or anticipated repayment date is primarily dependent upon the market value of the mortgaged property or the borrower’s ability to refinance the mortgaged property.
Although the mortgage loans generally are non-recourse in nature, certain mortgage loans contain non-recourse carveouts for liabilities such as a result of fraud by the borrower, certain voluntary insolvency proceedings or other matters. Certain mortgage loans set forth under “Description of the Mortgage Pool—Non-Recourse Carveout Limitations” either do not contain non-recourse carveouts or contain material limitations to non-recourse carveouts. Often these obligations are guaranteed by an affiliate of the related borrower, although liability under any such guaranty may be capped or otherwise limited in amount or scope. Furthermore, the guarantor’s net worth and liquidity may be less (and in some cases, materially less) than amounts due under the related mortgage loan or the guarantor’s sole asset may be its interest in the related borrower. Certain mortgage loans may have the benefit of a general payment guaranty of a portion of the indebtedness under the mortgage loan. In all cases, however, the mortgage loans should be considered to be non-recourse obligations because neither the depositor nor the sponsors make any representation or warranty as to the obligation or ability of any borrower or guarantor to pay any deficiencies between any foreclosure proceeds and the mortgage loan indebtedness. In addition, certain mortgage loans may provide for recourse to a guarantor for a portion of the indebtedness or for any loss or costs that may be incurred by the borrower or the lender with respect to certain borrower obligations under the related mortgage loan documents. In such cases, we cannot assure you any recovery from such guarantor will be made or that such guarantor will have assets sufficient to pay any otherwise recoverable claim under a guaranty.
Risks of Commercial and Multifamily Lending Generally
The mortgage loans will be secured by various income producing commercial, multifamily and manufactured housing (if any) properties. The repayment of a commercial, multifamily or manufactured housing loan is typically dependent upon the ability of the related mortgaged property to produce cash flow through the collection of rents. Even the liquidation value of a commercial property is determined, in substantial part, by the capitalization of the property’s ability to produce cash flow. However, net operating income can be volatile and may be insufficient to cover debt service on the loan at any given time.
The net operating incomes and property values of the mortgaged properties may be adversely affected by a large number of factors. Some of these factors relate to the properties themselves, such as:
| ● | the age, design and construction quality of the properties; |
| ● | perceptions regarding the safety, convenience and attractiveness of the properties; |
| ● | the characteristics and desirability of the area where the property is located; |
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| ● | the strength and nature of the local economy, including labor costs and quality, tax environment and quality of life for employees; |
| ● | the proximity and attractiveness of competing properties; |
| ● | the adequacy of the property’s management and maintenance; |
| ● | increases in interest rates, real estate taxes and operating expenses at the property and in relation to competing properties; |
| ● | an increase in the capital expenditures needed to maintain the properties or make improvements; |
| ● | a decline in the businesses operated by tenants or in their financial condition; |
| ● | an increase in vacancy rates; and |
| ● | a decline in rental rates as leases are renewed or entered into with new tenants. |
Other factors are more general in nature, such as:
| ● | national or regional economic conditions, including plant closings, military base closings, industry slowdowns and unemployment rates; |
| ● | local real estate conditions, such as an oversupply of competing properties; |
| ● | demographic factors; |
| ● | consumer confidence; |
| ● | consumer tastes and preferences; |
| ● | retroactive changes in building codes; |
| ● | changes or continued weakness in specific industry segments; |
| ● | location of certain mortgaged properties in less densely populated or less affluent areas; and |
| ● | the public perception of safety for customers and clients. |
The volatility of net operating income will be influenced by many of the foregoing factors, as well as by:
| ● | the length of tenant leases (including that in certain cases, all or substantially all of the tenants, or one or more sole, anchor or other major tenants, at a particular mortgaged property may have leases that expire or permit the tenant(s) to terminate its lease during the term of the loan); |
| ● | the quality and creditworthiness of tenants; |
| ● | tenant defaults; |
| ● | in the case of rental properties, the rate at which new rentals occur; and |
| ● | the property’s “operating leverage”, which is generally the percentage of total property expenses in relation to revenue, the ratio of fixed operating expenses to those that vary with revenues, and the level of capital expenditures required to maintain the property and to retain or replace tenants. |
A decline in the real estate market or in the financial condition of a major tenant will tend to have a more immediate effect on the net operating income of properties with relatively higher operating leverage
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or short term revenue sources, such as short term or month to month leases, and may lead to higher rates of delinquency or defaults.
Performance of the Mortgage Loans Will Be Highly Dependent on the Performance of Tenants and Tenant Leases
General. Any tenant may, from time to time, experience a downturn in its business, which may weaken its financial condition and result in a reduction or failure to make rental payments when due. If tenants’ sales were to decline, percentage rents may decline and, further, tenants may be unable to pay their base rent or other occupancy costs. Factors unrelated to a tenant’s operations at a particular mortgaged property may also result in the tenant’s failure to make payments under its lease (including, for example, economic sanctions imposed on the tenant’s parent company or other financial distress experienced by affiliates of the tenant). If a tenant defaults in its obligations to a property owner, that property owner may experience delays in enforcing its rights as lessor and may incur substantial costs and experience significant delays associated with protecting its investment, including costs incurred in renovating and reletting the property.
Additionally, the income from, and market value of, the mortgaged properties leased to various tenants would be adversely affected if:
| ● | space in the mortgaged properties could not be leased or re-leased or substantial re-leasing costs were required and/or the cost of performing landlord obligations under existing leases materially increased; |
| ● | leasing or re-leasing is restricted by exclusive rights of tenants to lease the mortgaged properties or other covenants not to lease space for certain uses or activities, or covenants limiting the types of tenants to which space may be leased; |
| ● | a significant tenant were to become a debtor in a bankruptcy case; |
| ● | rental payments could not be collected for any other reason; or |
| ● | a borrower fails to perform its obligations under a lease resulting in the related tenant having a right to terminate such lease. |
There may be (and there may exist from time to time) pending or threatened legal proceedings against, or disputes with, certain tenants and/or their parent companies that may have a material adverse effect on the related tenant’s ability to pay rent or remain open for business. It is also possible that, under certain extraordinary circumstances, economic or other sanctions may be imposed upon such entities or any individuals that own interests in such entities. We have not undertaken a search for all legal proceedings that relate to the borrowers, borrower sponsors, managers for the mortgaged properties or their respective affiliates or owners. Potential investors are advised and encouraged to perform their own searches related to such matters to the extent relevant to their investment decision. Any of the foregoing issues, even if ultimately settled or resolved, may materially impair distributions to certificateholders. For example, property income may not be available to make debt service payments if borrowers must use property income to pay judgments, legal fees or litigation costs. Similarly, borrowers’ and borrower sponsors’ operations at the related mortgaged properties may be restricted, including the use of property income or borrower sponsor contributions to pay debt service or otherwise support mortgaged property operations.
Certain tenants currently may be in a rent abatement period. We cannot assure you that such tenants will be in a position to pay full rent when the abatement period expires. We cannot assure you that the net operating income contributed by the mortgaged properties will remain at its current or past levels. See “Description of the Mortgage Pool—Tenant Issues”.
A Tenant Concentration May Result in Increased Losses. Mortgaged properties that are owner-occupied or leased to a single tenant, or a tenant that makes up a significant portion of the rental income,
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also are more susceptible to interruptions of cash flow if that tenant’s business operations are negatively impacted or if such tenant fails to renew its lease. This is so because:
| ● | the financial effect of the absence of rental income may be severe; |
| ● | more time may be required to re-lease the space; and |
| ● | substantial capital costs may be incurred to make the space appropriate for replacement tenants. |
In the event of a default by that tenant, if the related lease expires prior to the mortgage loan maturity date and the related tenant fails to renew its lease or if such tenant exercises an early termination option, there would likely be an interruption of rental payments under the lease and, accordingly, insufficient funds available to the borrower to pay the debt service on the mortgage loan. In certain cases where the tenant owns the improvements on the mortgaged property, the related borrower may be required to purchase such improvements in connection with the exercise of its remedies.
With respect to certain of these mortgaged properties that are leased to a single tenant, the related leases may expire prior to, or soon after, the maturity dates of the mortgage loans or the related tenant may have the right to terminate the lease prior to the maturity date of the mortgage loan. If the current tenant does not renew its lease on comparable economic terms to the expired lease, if a single tenant terminates its lease or if a suitable replacement tenant does not enter into a new lease on similar economic terms, there could be a negative impact on the payments on the related mortgage loan.
A deterioration in the financial condition of a tenant, the failure of a tenant to renew its lease or the exercise by a tenant of an early termination right can be particularly significant if a mortgaged property is owner-occupied, leased to a single tenant, or if any tenant makes up a significant portion of the rental income at the mortgaged property.
Concentrations of particular tenants among the mortgaged properties or within a particular business or industry at one or multiple mortgaged properties increase the possibility that financial problems with such tenants or such business or industry sectors could affect the mortgage loans. In addition, the mortgage loans may be adversely affected if a tenant at the mortgaged property is highly specialized, or dependent on a single industry or only a few customers for its revenue. See “—Tenant Bankruptcy Could Result in a Rejection of the Related Lease” below and “Description of the Mortgage Pool—Tenant Issues—Tenant Concentrations” for information on tenant concentrations in the mortgage pool.
Mortgaged Properties Leased to Multiple Tenants Also Have Risks. If a mortgaged property has multiple tenants, re-leasing expenditures may be more frequent than in the case of mortgaged properties with fewer tenants, thereby reducing the cash flow available for payments on the related mortgage loan. Multi-tenant mortgaged properties also may experience higher continuing vacancy rates and greater volatility in rental income and expenses. See Annex A-1 for tenant lease expiration dates for the five largest tenants at each mortgaged property.
Mortgaged Properties Leased to Borrowers or Borrower Affiliated Entities Also Have Risks. If a mortgaged property is leased in whole or substantial part to the borrower under the mortgage loan or to an affiliate of the borrower, there may be conflicts. For instance, it is more likely a landlord will waive lease conditions for an affiliated tenant than it would for an unaffiliated tenant. We cannot assure you that the conflicts arising where a borrower is affiliated with a tenant at a mortgaged property will not adversely impact the value of the related mortgage loan.
In certain cases, an affiliated lessee may be a tenant under a master lease with the related borrower, under which the tenant is obligated to make rent payments but does not occupy any space at the mortgaged property. Master leases in these circumstances may be used to bring occupancy to a “stabilized” level with the intent of finding additional tenants to occupy some or all of the master leased space, but may not provide additional economic support for the mortgage loan. If a mortgaged property is leased in whole or substantial part to the borrower or to an affiliate of the borrower, a deterioration in the financial condition of the borrower or its affiliates could significantly affect the borrower’s ability to perform
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under the mortgage loan as it would directly interrupt the cash flow from the mortgaged property if the borrower’s or its affiliate’s financial condition worsens. We cannot assure you that any space leased by a borrower or an affiliate of the borrower will eventually be occupied by third party tenants.
In the case of certain mortgage loans included in the mortgage pool, it may be possible that the related master lease could be construed in a bankruptcy as a financing lease or other arrangement under which the related master lessee (and/or its affiliates) would be deemed as effectively the owner of the related mortgaged property, rather than a tenant, which could result in potentially adverse consequences for the trust, as the holder of such mortgage loan, including treatment of the mortgage loan as an unsecured obligation, a potentially greater risk of an unfavorable plan of reorganization and competing claims of creditors of the related master lessee and/or its affiliates.
See “Description of the Mortgage Pool—Tenant Issues—Affiliated Leases” for information on properties leased in whole or in part to borrowers and their affiliates.
Tenant Bankruptcy Could Result in a Rejection of the Related Lease. The bankruptcy or insolvency of a major tenant or a number of smaller tenants, such as in retail properties, may have an adverse impact on the mortgaged properties affected and the income produced by such mortgaged properties. Under the federal bankruptcy code, a tenant has the option of assuming or rejecting or, subject to certain conditions, assuming and assigning to a third party, any unexpired lease. If the tenant rejects the lease, the landlord’s claim for breach of the lease would (absent collateral securing the claim) be treated as a general unsecured claim against the tenant and a lessor’s damages for lease rejection are generally subject to certain limitations. We cannot assure you that tenants of the mortgaged properties will continue making payments under their leases or that tenants will not file for bankruptcy protection in the future or, if any tenants do file, that they will continue to make rental payments in a timely manner. See “Certain Legal Aspects of Mortgage Loans—Bankruptcy Laws”. See “Description of the Mortgage Pool—Loan Purpose; Default History, Bankruptcy Issues and Other Proceedings” for information regarding bankruptcy issues with respect to certain mortgage loans.
Leases That Are Not Subordinated to the Lien of the Mortgage or Do Not Contain Attornment Provisions May Have an Adverse Impact at Foreclosure. In certain jurisdictions, if tenant leases are subordinated to the liens created by the mortgage but do not contain attornment provisions that require the tenant to subordinate the lease if the mortgagee agrees to enter into a non-disturbance agreement, the tenants may terminate their leases upon the transfer of the property to a foreclosing lender or purchaser at foreclosure. Accordingly, if a mortgaged property is located in such a jurisdiction and is leased to one or more desirable tenants under leases that are subordinate to the mortgage and do not contain attornment provisions, such mortgaged property could experience a further decline in value if such tenants’ leases were terminated. This is particularly likely if those tenants were paying above-market rents or could not be replaced. If a lease is not subordinate to a mortgage, the issuing entity will not possess the right to dispossess the tenant upon foreclosure of the mortgaged property (unless otherwise agreed to with the tenant). Also, if the lease contains provisions inconsistent with the mortgage (e.g., provisions relating to application of insurance proceeds or condemnation awards) or which could affect the enforcement of the lender’s rights (e.g., a right of first refusal to purchase the property), the provisions of the lease will take precedence over the provisions of the mortgage. Not all leases were reviewed to ascertain the existence of attornment or subordination provisions.
With respect to certain of the mortgage loans, the related borrower may have given to certain tenants or others an option to purchase, a right of first refusal to purchase and/or a right of first offer to purchase all or a portion of the mortgaged property in the event a sale is contemplated, and such right may not be subordinate to the related mortgage. This may impede the mortgagee’s ability to sell the related mortgaged property at foreclosure, or, upon foreclosure, this may affect the value and/or marketability of the related mortgaged property. See “Description of the Mortgage Pool—Tenant Issues—Purchase Options and Rights of First Refusal” for information regarding material purchase options and/or rights of first refusal or first offer, if any, with respect to mortgaged properties securing certain mortgage loans.
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Early Lease Termination Options May Reduce Cash Flow. Leases often give tenants the right to terminate the related lease, abate or reduce the related rent, and/or exercise certain remedies against the related borrower for various reasons or upon various conditions, including:
| ● | if the related borrower allows uses at the mortgaged property in violation of use restrictions in current tenant leases; |
| ● | if the related borrower or any of its affiliates owns other properties within a certain radius of the mortgaged property and allows uses at those properties in violation of use restrictions; |
| ● | if the related borrower fails to provide a designated number of parking spaces; |
| ● | if there is construction at the related mortgaged property or an adjacent property (whether or not such adjacent property is owned or controlled by the borrower or any of its affiliates) that may interfere with visibility of, access to or a tenant’s use of the mortgaged property or otherwise violate the terms of a tenant’s lease; |
| ● | upon casualty or condemnation with respect to all or a portion of the mortgaged property that renders such mortgaged property unsuitable for a tenant’s use or if the borrower fails to rebuild such mortgaged property within a certain time or if the casualty or condemnation occurs within a specified period of the lease expiration date; |
| ● | if a tenant’s use is not permitted by zoning or applicable law; |
| ● | if the tenant is unable to exercise an expansion right; |
| ● | if the landlord defaults on its obligations under the lease; |
| ● | if a landlord leases space at the mortgaged property or within a certain radius of the mortgaged property to a competitor; |
| ● | if the tenant fails to meet certain sales targets or other business objectives for a specified period of time; |
| ● | if significant or specified tenants at the subject property go dark or terminate their leases, or if a specified percentage of the mortgaged property is unoccupied; |
| ● | if the landlord violates the tenant’s exclusive use rights for a specified period of time; |
| ● | in the case of government sponsored tenants, any time or for lack of appropriations; or |
| ● | if the related borrower violates covenants under the related lease or if third parties take certain actions that adversely affect such tenants’ business or operations. |
In certain cases, compliance or satisfaction of landlord covenants may be the responsibility of a third party affiliated with the borrower or, in the event that partial releases of the applicable mortgaged property are permitted, an unaffiliated or affiliated third party.
Any exercise of a termination right by a tenant at a mortgaged property could result in vacant space at the related mortgaged property, renegotiation of the lease with the related tenant or re-letting of the space. Any such vacated space may not be re-let. Furthermore, such foregoing termination and/or abatement rights may arise in the future or materially adversely affect the related borrower’s ability to meet its obligations under the related loan documents. See “Description of the Mortgage Pool—Tenant Issues—Lease Expirations and Terminations” for information on material tenant lease expirations and early termination options.
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Government Tenants Have Special Risks. With respect to tenants that constitute United States government agencies or entities, generally if the related mortgaged property is transferred, the leases require the United States and the transferee to enter into novation agreements; however, if the United States determines that recognizing the transferee as landlord is not in its interest, it may continue to hold the transferor liable for performance of obligations under the lease. The United States’ obligation to pay rent to the transferee would be suspended until government transfer procedures are completed, and the United States has determined that recognizing the transferee is in its interest. The foregoing provisions may delay or impede the ability of the lender to realize on the related mortgaged properties following a default. In addition, the borrowers may be subject to certain requirements regarding management of the mortgaged property and the borrowers required by certain United States agencies.
Mortgaged Properties Leased to Not-for-Profit Tenants Also Have Risks. Certain mortgaged properties may have tenants that are charitable institutions that generally rely on contributions from individuals and government grants or other subsidies to pay rent on office space and other operating expenses. We cannot assure you that the rate, frequency and level of individual contributions or governmental grants and subsidies will continue with respect to any such institution. A reduction in contributions or grants may impact the ability of the related institution to pay rent, and we cannot assure you that the related borrower will be in a position to meet its obligations under the related mortgage loan documents if such tenant fails to pay its rent.
Sale-Leaseback Transactions Also Have Risks. Each of the 1500 Volta Drive Mortgaged Property (1.1%) and the Shearer’s Industrial Portfolio Mortgaged Properties (3.3%) was the subject of a sale-leaseback transaction in connection with the acquisition of such property by the related borrower or an affiliate. Each of these mortgaged properties is leased to a tenant, who is the former owner of the related mortgaged property (or is affiliated with or a successor to the former owner of the related mortgaged property), pursuant to a lease. We cannot assure you that any of these tenants will not file for bankruptcy protection.
A bankruptcy with respect to a tenant in a sale-leaseback transaction could result in the related lease being recharacterized as a loan from the borrower to the tenant. If the lease were recharacterized as a loan, the lease would be a deemed loan and the tenant would gain a number of potential benefits in a bankruptcy case. The tenant could retain possession of the mortgaged property during the pendency of its bankruptcy case without having to comply with the ongoing post-petition rent requirements of section 365(d)(3) of the Bankruptcy Code, which requires a tenant to start paying rent within 60 days following the commencement of its bankruptcy case, while deciding whether to assume or reject a lease of nonresidential real property. The tenant desiring to remain in possession of the mortgaged property would not have to assume the lease within 210 days following the commencement of its bankruptcy case pursuant to section 365(d)(4) of the Bankruptcy Code or comply with the conditions precedent to assumption, including curing all defaults, compensating for damages and giving adequate assurance of future performance. To the extent the deemed loan is under-secured, the tenant would be able to limit the secured claim to the then-current value of the mortgaged property and treat the balance as a general unsecured claim. The tenant also might assert that the entire claim on the deemed loan is an unsecured claim. In Liona Corp., Inc. v. PCH Associates (In re PCH Associates), 949 F.2d 585 (2d Cir. 1991), the court considered the effect of recharacterizing a sale-leaseback transaction as a financing rather than a true lease. The court held that the landlord’s record title to the leased property should be treated as an equitable mortgage securing the deemed loan. Under the reasoning of that case, if a lease were recharacterized as a loan, the related borrower would have a claim against the tenant secured by an equitable mortgage. Here, that secured claim has been collaterally assigned to the mortgagees. However, the legal authority considering the effects of such a recharacterization is limited, and we cannot assure you that a bankruptcy court would follow the reasoning of the PCH Associates case.
There is also a risk that a tenant that files for bankruptcy protection may reject the related lease. It is likely that each lease constitutes an “unexpired lease” for purposes of the Bankruptcy Code. Federal bankruptcy law provides generally that rights and obligations under an unexpired lease of a debtor may not be terminated or modified at any time after the commencement of a case under the Bankruptcy Code solely on the basis of a provision in such lease providing for the termination or modification of such rights
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or obligations upon the filing of a bankruptcy petition or the occurrence of certain other similar events. This prohibition on so called “ipso facto clauses” could limit the ability of a borrower to exercise certain contractual remedies with respect to a lease. In addition, the Bankruptcy Code provides that a trustee in bankruptcy or debtor in possession may, subject to approval of the court, (a) assume an unexpired lease and (i) retain it or (ii) unless applicable law excuses a party other than the debtor from accepting performance from or rendering performance to an entity other than the debtor, assign it to a third party (notwithstanding any other restrictions or prohibitions on assignment) or (b) reject such contract. In a bankruptcy case of a tenant, if the lease were to be assumed, the trustee in bankruptcy on behalf of the tenant, or the tenant as debtor in possession, or the assignee, if applicable, must cure any defaults under the lease, compensate the related borrower for its losses and provide such borrower with “adequate assurance” of future performance. Such remedies may be insufficient, however, as the borrower may be forced to continue under the lease with a tenant that is a poor credit risk or an unfamiliar tenant if the lease was assigned (if applicable state law does not otherwise prevent such an assignment), and any assurances provided to the borrower may, in fact, be inadequate. If the lease is rejected, such rejection generally constitutes a breach of the lease immediately before the date of the filing of the petition. As a consequence, the borrower would have only an unsecured claim against the tenant for damages resulting from such breach, which could adversely affect the security for the certificates.
Furthermore, there is likely to be a period of time between the date upon which a tenant files a bankruptcy petition and the date upon which the lease is assumed or rejected. Although the tenant is obligated to make all lease payments within 60 days following the commencement of the bankruptcy case, there is a risk that such payments will not be made due to the tenant’s poor financial condition. If the lease is rejected, the lessor will be treated as an unsecured creditor with respect to its claim for damages for termination of the lease and the borrower must re-let the mortgaged property before the flow of lease payments will recommence. Pursuant to section 502(b)(6) of the Bankruptcy Code, a lessor’s damages for lease rejection are limited to the amount owed for the unpaid rent reserved under the lease for the periods prior to the bankruptcy petition (or earlier surrender of the leased premises) which are unrelated to the rejection, plus the greater of one year’s rent or 15% of the remaining rent reserved under the lease (but not to exceed three (3) years’ rent).
As discussed above, bankruptcy courts, in the exercise of their equitable powers, have the authority to recharacterize a lease as a financing. We cannot assure you such recharacterization would not occur with respect to the mortgage loans that are subject to a sale-leaseback transaction.
The application of any of these doctrines to any of the sale-leaseback transactions could result in substantial, direct and material impairment of the rights of the certificateholders.
Retail Properties Have Special Risks
Some of the mortgage loans are secured by retail properties. See “Description of the Mortgage Pool—Mortgage Pool Characteristics—Property Types—Retail Properties.” The value of retail properties is significantly affected by the quality of the tenants as well as fundamental aspects of real estate, such as location and market demographics, as well as changes in shopping methods and choices. Some of the risks related to these matters are further described in “—Risks of Commercial and Multifamily Lending Generally” and “—Performance of the Mortgage Loans Will Be Highly Dependent on the Performance of Tenants and Tenant Leases” above, and “—Changes in the Retail Sector, Such as Online Shopping and Other Uses of Technology, Could Affect the Business Models and Viability of Retailers,” “—The Performance of the Retail Properties is Subject to Conditions Affecting the Retail Sector” and “—Some Retail Properties Depend on Anchor Stores or Major Tenants to Attract Shoppers and Could be Materially Adversely Affected by the Loss of, or a Store Closure by, One or More of These Anchor Stores or Major Tenants” below.
Rental payments from tenants of retail properties typically comprise the largest portion of the net operating income of those mortgaged properties. The correlation between success of tenant business and a retail property’s value may be more direct with respect to retail properties than other types of commercial property because a component of the total rent paid by certain retail tenants is often tied to a
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percentage of gross sales. We cannot assure you that the net operating income contributed by the mortgaged retail properties or the rates of occupancy at the retail stores will remain at the levels specified in this prospectus or remain consistent with past performance. In addition, some or all of the rental payments from tenants may be tied to tenant’s gross sales. To the extent that a tenant changes the manner in which its gross sales are reported it could result in lower rent paid by that tenant. For example, if a tenant takes into account customer returns of merchandise purchased online and reduces the gross sales, this could result in lower gross sales relative to gross sales previously reported at that location even if the actual performance of the store remained unchanged.
Some Retail Properties Depend on Anchor Stores or Major Tenants to Attract Shoppers and Could be Materially Adversely Affected by the Loss of, or a Store Closure by, One or More of These Anchor Stores or Major Tenants
The presence or absence of an “anchor tenant” or a “shadow anchor tenant” in or near a retail property also can be important to the performance of a retail property because anchors play a key role in generating customer traffic and making a retail property desirable for other tenants. Retail properties may also have shadow anchor tenants. An “anchor tenant” is located on the related mortgaged property, usually proportionately larger in size than most or all other tenants in the mortgaged property and is vital in attracting customers to a retail property. A “shadow anchor tenant” is usually proportionally larger in size than most tenants in the mortgaged property, is important in attracting customers to a retail property and is located sufficiently close and convenient to the mortgaged property so as to influence and attract potential customers, but is not located on the mortgaged property.
If anchor stores in a mortgaged property were to close, the related borrower may be unable to replace those anchors in a timely manner or without suffering adverse economic consequences. In addition, anchor tenants and non-anchor tenants at anchored or shadowed anchored retail centers may have co-tenancy clauses and/or operating covenants in their leases or operating agreements that permit those tenants or anchor stores to cease operating, reduce rent or terminate their leases if the anchor or shadow anchor tenant goes dark or is otherwise no longer in occupancy, if the subject store is not meeting the minimum sales requirements under its lease or if a specified percentage of the related mortgaged property is vacant. Even if non-anchor tenants do not have termination or rent abatement rights, the loss of an anchor tenant or a shadow anchor tenant may have a material adverse impact on the non-anchor tenant’s ability to operate because the anchor or shadow anchor tenant plays a key role in generating customer traffic and making a center desirable for other tenants. This, in turn, may adversely impact the borrower’s ability to meet its obligations under the related loan. In addition, in the event that a “shadow anchor” fails to renew its lease, terminates its lease or otherwise ceases to conduct business within a close proximity to the mortgaged property, customer traffic at the mortgaged property may be substantially reduced. If an anchor tenant goes dark, generally the borrower’s only remedy may be to terminate that lease after the anchor tenant has been dark for a specified amount of time.
If anchor tenants or shadow anchor tenants at a particular mortgaged property were to close or otherwise become vacant or remain vacant, we cannot assure you that the related borrower’s ability to repay its mortgage loan would not be materially and adversely affected.
Certain tenant estoppels will have been obtained in connection with the origination of the mortgage loans. These estoppels may identify disputes between the related borrower and the applicable tenant, or alleged defaults or potential defaults by the applicable property owner under the lease or a reciprocal easement and/or operating agreement (each, an “REA”). Such disputes, defaults or potential defaults, could lead to a termination or attempted termination of the applicable lease or REA by the tenant or to the tenant withholding some or all of its rental payments or to litigation against the related borrower. We cannot assure you that the tenant estoppels obtained identify all potential disputes that may arise with the subject tenants or with respect to the mortgaged retail properties, or that anchor tenant or tenant disputes will not have a material adverse effect on the ability of borrowers to repay their mortgage loans.
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Changes in the Retail Sector, Such as Online Shopping and Other Uses of Technology, Could Affect the Business Models and Viability of Retailers
Online shopping and the use of technology, such as smartphone shopping applications, to transact purchases or to aid purchasing decisions have increased in recent years and are expected to continue to increase in the future. This trend is affecting business models, sales and profitability of some retailers and could adversely affect the demand for retail real estate and occupancy at retail properties securing the mortgage loans. Any resulting decreases in rental revenue could have a material adverse effect on the value of retail properties securing the mortgage loans.
Some of these developments in the retail sector have led to retail companies, including several national retailers, filing for bankruptcy and/or voluntarily closing certain of their stores. Borrowers may be unable to re-lease such space or to re-lease it on comparable or more favorable terms. As a result, the bankruptcy or closure of a national tenant may adversely affect a retail borrower’s revenues. In addition, such closings may allow other tenants to modify their leases to terms that are less favorable for borrowers or to terminate their leases, also adversely impacting their revenues. See also “—Some Retail Properties Depend on Anchor Stores or Major Tenants to Attract Shoppers and Could be Materially Adversely Affected by the Loss of, or a Store Closure by, One or More of These Anchor Stores or Major Tenants” below.
In addition to competition from online shopping, retail properties face competition from sources outside a specific geographical real estate market. For example, all of the following compete with more traditional retail properties for consumer dollars: factory outlet centers, discount shopping centers and clubs, catalogue retailers, home shopping networks, and telemarketing. Continued growth of these alternative retail outlets (which often have lower operating costs) could adversely affect the rents collectible at the retail properties included in the pool of mortgage loans, as well as the income from, and market value of, the mortgaged properties and the related borrower’s ability to refinance such property. Moreover, additional competing retail properties may be built in the areas where the retail properties are located.
We cannot assure you that these developments in the retail sector will not adversely affect the performance of retail properties securing the mortgage loans.
The Performance of the Retail Properties is Subject to Conditions Affecting the Retail Sector
Retail properties are also subject to conditions that could negatively affect the retail sector, such as increased unemployment, increased federal income and payroll taxes, increased health care costs, increased state and local taxes, increased real estate taxes, industry slowdowns, lack of availability of consumer credit, weak income growth, increased levels of consumer debt, poor housing market conditions, adverse weather conditions, natural disasters, plant closings, and other factors. Similarly, local real estate conditions, such as an oversupply of, or a reduction in demand for, retail space or retail goods, and the supply and creditworthiness of current and prospective tenants may negatively impact those retail properties.
In addition, the limited adaptability of certain shopping malls that have proven unprofitable may result in high (and possibly extremely high) loss severities on mortgage loans secured by those shopping malls. For example, it is possible that a significant amount of advances made by the applicable servicer(s) of a mortgage loan secured by a shopping mall property, combined with low liquidation proceeds in respect of that property, may result in a loss severity exceeding 100% of the outstanding principal balance of that mortgage loan.
Office Properties Have Special Risks
In addition to the factors discussed in “—Risks of Commercial and Multifamily Lending Generally” and “—Performance of the Mortgage Loans Will Be Highly Dependent on the Performance of Tenants and Tenant Leases” above, other factors may adversely affect the financial performance and value of office properties, including:
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| ● | the physical attributes of the building in relation to competing buildings (e.g., age, condition, design, appearance, access to transportation and ability to offer certain amenities, such as sophisticated building systems and/or business wiring requirements); |
| ● | the adaptability of the building to changes in the technological needs of the tenants; |
| ● | an adverse change in population, patterns of telecommuting or sharing of office space, and employment growth (which creates demand for office space); |
| ● | in the case of medical office properties, the performance of a medical office property may depend on (a) the proximity of such property to a hospital or other healthcare establishment, (b) reimbursements for patient fees from private or government sponsored insurers, (c) its ability to attract doctors and nurses to be on staff, and (d) its ability to afford and acquire the latest medical equipment. Issues related to reimbursement (ranging from nonpayment to delays in payment) from such insurers could adversely impact cash flow at such mortgaged property; and |
| ● | office space used as lab and/or research and development may rely on funds for research and development from government and/or private sources of funding, which may become unavailable. |
Moreover, the cost of refitting office space for a new tenant is often higher than the cost of refitting other types of properties for new tenants.
If one or more major tenants at a particular office property were to close or remain vacant, we cannot assure you that such tenants would be replaced in a timely manner or without incurring material additional costs to the related borrower and resulting in an adverse effect on the financial performance of the property.
Certain office tenants at the mortgaged properties may use their leased space to create shared workspaces that they lease to other businesses. Shared workspaces are rented by customers on a short term basis. Short term space users may be more impacted by economic fluctuations compared to traditional long term office leases, which has the potential to impact operating profitability of the company offering the shared space and, in turn, its ability to maintain its lease payments. This may subject the related mortgage loan to increased risk of default and loss.
Certain of the mortgaged properties contain life science laboratory and office buildings, leased to a tenant engaged in the life science industry. Properties with life science tenants have unique risk factors that may affect their performance, revenues and/or value. Life science tenants are subject to a number of risks unique to the life science industry, including (but not limited to): (i) high levels of regulation; (ii) failures in the safety and efficacy of their products; (iii) significant funding requirements for product research and development; and (iv) changes in technology, patent expiration, and intellectual property protection. Risks associated with life science laboratory buildings may affect the business, financial condition and results of operations of the related mortgaged property and such risks may adversely affect a life science tenant’s ability to make payments under its lease, and consequently, may materially adversely affect the related borrower(s)’ ability to make payments on the applicable mortgage loan.
See “Description of the Mortgage Pool—Mortgage Pool Characteristics—Property Types—Office Properties”.
Multifamily Properties Have Special Risks
In addition to the factors discussed in “—Risks of Commercial and Multifamily Generally” above, other factors may adversely affect the financial performance and value of multifamily properties, including:
| ● | the quality of property management; |
| ● | the ability of management to provide adequate maintenance and insurance; |
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| ● | the types of services or amenities that the property provides; |
| ● | the property’s reputation; |
| ● | the level of mortgage interest rates, which may encourage tenants to purchase rather than lease housing; |
| ● | the generally short terms of residential leases and the need for continued reletting; |
| ● | rent concessions and month-to-month leases, which may impact cash flow at the property; |
| ● | the tenant mix, such as the tenant population being predominantly students or being heavily dependent on workers from a particular business or industry or personnel from or workers related to a local military base; |
| ● | in the case of student housing facilities or properties leased primarily to students, which may be more susceptible to damage or wear and tear than other types of multifamily housing, the reliance on the financial well-being of the college or university to which it relates, closures of the related college or university due to the COVID-19 pandemic, competition from on campus housing units, which may adversely affect occupancy, the physical layout of the housing, which may not be readily convertible to traditional multifamily use, and that student tenants have a higher turnover rate than other types of multifamily tenants, which in certain cases is compounded by the fact that student leases are available for periods of less than 12 months, and closures of, or ongoing social distancing measures that may be instituted by, colleges and universities due to the COVID-19 pandemic; |
| ● | certain multifamily properties may be considered to be “flexible apartment properties”. Such properties have a significant percentage of units leased to tenants under short-term leases (less than one year in term), which creates a higher turnover rate than for other types of multifamily properties; |
| ● | restrictions on the age of tenants who may reside at the property; |
| ● | dependence upon governmental programs that provide rent subsidies to tenants pursuant to tenant voucher programs, which vouchers may be used at other properties and influence tenant mobility; |
| ● | adverse local, regional or national economic conditions, which may limit the amount of rent that may be charged and may result in a reduction of timely rent payments or a reduction in occupancy levels; |
| ● | state and local regulations, which may affect the building owner’s ability to increase rent to market rent for an equivalent apartment; and |
| ● | the existence of government assistance/rent subsidy programs, and whether or not they continue and provide the same level of assistance or subsidies. |
Certain states regulate the relationship of an owner and its tenants. Commonly, these laws require a written lease, good cause for eviction, disclosure of fees, and notification to residents of changed land use, while prohibiting unreasonable rules, retaliatory evictions, and restrictions on a resident’s choice of unit vendors. Apartment building owners have been the subject of suits under state “Unfair and Deceptive Practices Acts” and other general consumer protection statutes for coercive, abusive or unconscionable leasing and sales practices. A few states offer more significant protection. For example, there are provisions that limit the bases on which a landlord may terminate a tenancy or increase its rent or prohibit a landlord from terminating a tenancy solely by reason of the sale of the owner’s building.
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In addition to state regulation of the landlord tenant relationship, numerous counties and municipalities impose rent control on apartment buildings. These ordinances may limit rent increases to fixed percentages, to percentages of increases in the consumer price index, to increases set or approved by a governmental agency, or to increases determined through mediation or binding arbitration. Any limitations on a borrower’s ability to raise property rents may impair such borrower’s ability to repay its multifamily loan from its net operating income or the proceeds of a sale or refinancing of the related multifamily property.
Some counties and municipalities may later impose stricter rent control regulations on apartment buildings. For example, in New York State, the Housing Stability and Tenant Protection Act of 2019 (the “HSTP Act”), among other things, limits the ability of landlords to increase rents in rent stabilized apartments at the time of lease renewal and after a vacancy. The HSTP Act also limits potential rent increases for major capital improvements and for individual apartment improvements. In addition, the HSTP Act permits certain qualified localities in the State of New York to implement the rent stabilization system.
We cannot assure you that the rent stabilization laws or regulations will not cause a reduction in rental income or the appraised value of mortgage real properties. If rents are reduced, we cannot assure you that any such mortgaged real property will be able to generate sufficient cash flow to satisfy debt service payments and operating expenses.
Certain of the mortgage loans may be secured in the future by mortgaged properties that are subject to certain affordable housing covenants and other covenants and restrictions with respect to various tax credit, city, state and federal housing subsidies, rent stabilization or similar programs, in respect of various units within the mortgaged properties. The limitations and restrictions imposed by these programs could result in losses on the mortgage loans. In addition, in the event that the program is cancelled, it could result in less income for the project. These programs may include, among others:
| ● | rent limitations that would adversely affect the ability of borrowers to increase rents to maintain the condition of their mortgaged properties and satisfy operating expense; and |
| ● | tenant income restrictions that may reduce the number of eligible tenants in those mortgaged properties and result in a reduction in occupancy rates. |
The difference in rents between subsidized or supported properties and other multifamily rental properties in the same area may not be a sufficient economic incentive for some eligible tenants to reside at a subsidized or supported property that may have fewer amenities or be less attractive as a residence. As a result, occupancy levels at a subsidized or supported property may decline, which may adversely affect the value and successful operation of such property.
Certain of the multifamily properties may be residential cooperative buildings where the land under the building is owned or leased by a non-profit residential cooperative corporation. The cooperative owns all the units in the building and all common areas. Its tenants own stock, shares or membership certificates in the corporation. This ownership entitles the tenant-stockholders to proprietary leases or occupancy agreements which confer exclusive rights to occupy specific units. Generally, the tenant-stockholders make monthly maintenance payments which represent their share of the cooperative corporation’s mortgage loan payments, real property taxes, reserve contributions and capital expenditures, maintenance and other expenses, less any income the corporation may receive. These payments are in addition to any payments of principal and interest the tenant-stockholder may be required to make on any loans secured by its shares in the cooperative.
A number of factors may adversely affect the value and successful operation of a residential cooperative property. Some of these factors include:
| ● | the primary dependence of a borrower upon maintenance payments and any rental income from units or commercial areas to meet debt service obligations; |
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| ● | the initial concentration of shares relating to occupied rental units of the sponsor, owner or investor after conversion from rental housing, which may result in an inability to meet debt service obligations on the residential cooperative corporation’s mortgage loan if the sponsor, owner or investor is unable to make the required maintenance payments; |
| ● | the failure of a borrower to qualify for favorable tax treatment as a “cooperative housing corporation” each year, which may reduce the cash flow available to make payments on the related mortgage loan; and |
| ● | that, upon foreclosure, in the event a cooperative property becomes a rental property, certain units could be subject to rent control, stabilization and tenants’ rights laws, at below market rents, which may affect rental income levels and the marketability and sale proceeds of the rental property as a whole. |
See “Description of the Mortgage Pool—Mortgage Pool Characteristics—Property Types—Multifamily Properties”.
Industrial Properties Have Special Risks
In addition to the factors discussed in “—Risks of Commercial and Multifamily Lending Generally” and “—Performance of the Mortgage Loans Will Be Highly Dependent on the Performance of Tenants and Tenant Leases” above, other factors may adversely affect the financial performance and value of industrial properties, including:
| ● | reduced demand for industrial space because of a decline in a particular industry segment; |
| ● | the property becoming functionally obsolete; |
| ● | building design and adaptability; |
| ● | unavailability of labor sources; |
| ● | changes in access, energy prices, strikes, relocation of highways, the construction of additional highways or other factors; |
| ● | changes in proximity of supply sources; |
| ● | the expenses of converting a previously adapted space to general use; and |
| ● | the location of the property. |
Industrial properties may be adversely affected by reduced demand for industrial space occasioned by a decline in a particular industry segment in which the related tenant(s) conduct their businesses (for example, a decline in consumer demand for products sold by a tenant using the property as a distribution center). In addition, a particular industrial or warehouse property that suited the needs of its original tenant may be difficult to relet to another tenant or may become functionally obsolete relative to newer properties. Furthermore, lease terms with respect to industrial properties are generally for shorter periods of time and may result in a substantial percentage of leases expiring in the same year at any particular industrial property. In addition, mortgaged properties used for many industrial purposes are more prone to environmental concerns than other property types.
Aspects of building site design and adaptability affect the value of an industrial property. Site characteristics that are generally desirable to a warehouse/industrial property include high clear ceiling heights, wide column spacing, a large number of bays (loading docks) and large bay depths, divisibility, a layout that can accommodate large truck minimum turning radii and overall functionality and accessibility.
In addition, because of unique construction requirements of many industrial properties, any vacant industrial property space may not be easily converted to other uses. Thus, if the operation of any of the
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industrial properties becomes unprofitable due to competition, age of the improvements or other factors such that the borrower becomes unable to meet its obligations on the related mortgage loan, the liquidation value of that industrial property may be substantially less, relative to the amount owing on the related mortgage loan, than would be the case if the industrial property were readily adaptable to other uses.
Location is also important because an industrial property requires the availability of labor sources, proximity to supply sources and customers and accessibility to rail lines, major roadways and other distribution channels.
Further, certain of the industrial properties may have tenants that are subject to risks unique to their business, such as cold storage facilities. Cold storage facilities may have unique risks such as short lease terms due to seasonal use, making income potentially more volatile than for properties with longer term leases, and customized refrigeration design, rendering such facilities less readily convertible to alternative uses. Because of seasonal use, leases at such facilities are customarily for shorter terms, making income potentially more volatile than for properties with longer term leases. In addition, such facilities require customized refrigeration design, rendering them less readily convertible to alternative uses.
Hospitality Properties Have Special Risks
In addition to the factors discussed in “—Risks of Commercial Multifamily Lending Generally” above, various other factors may adversely affect the financial performance and value of hospitality properties, including:
| ● | adverse economic and social conditions, either local, regional or national (which may limit the amount that can be charged for a room and reduce occupancy levels); |
| ● | continuing expenditures for modernizing, refurbishing and maintaining existing facilities prior to the expiration of their anticipated useful lives; |
| ● | ability to convert to alternative uses which may not be readily made; |
| ● | a deterioration in the financial strength or managerial capabilities of the owner or operator of a hospitality property; |
| ● | changes in travel patterns caused by general adverse economic conditions, fear of terrorist attacks, adverse weather conditions, pandemics and changes in access, energy prices, strikes, travel costs, relocation of highways, the construction of additional highways, concerns about travel safety or other factors; and |
| ● | relative illiquidity of hospitality investments which limits the ability of the borrowers and property managers to respond to changes in economic or other conditions. |
Because rooms are generally rented for short periods of time, the financial performance of hospitality properties tends to be affected by adverse economic conditions and competition more quickly than other commercial properties. Additionally, as a result of high operating costs, relatively small decreases in revenue can cause significant stress on a property’s cash flow.
Moreover, the hospitality and lodging industry is generally seasonal in nature and different seasons affect different hospitality properties differently depending on type and location. This seasonality can be expected to cause periodic fluctuations in a hospitality property’s room and restaurant revenues, occupancy levels, room rates and operating expenses. We cannot assure you that cash flow will be sufficient to offset any shortfalls that occur at the mortgaged property during slower periods or that the related mortgage loans provide for seasonality reserves, or if seasonality reserves are provided for, that such reserves will be funded or will be sufficient or available to fund such shortfalls.
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In addition, some of the hospitality properties are limited-service, select service or extended stay hotels. Hospitality properties that are limited-service, select service or extended stay hotels may subject a lender to more risk than full-service hospitality properties as they generally require less capital for construction than full-service hospitality properties. In addition, as limited-service, select service or extended stay hotels generally offer fewer amenities than full-service hospitality properties, they are less distinguishable from each other. As a result, it is easier for limited-service, select service or extended stay hotels to experience increased or unforeseen competition.
In addition to hotel operations, some hospitality properties also operate entertainment and sports complexes that include restaurants, theaters, lounges, bars, nightclubs and/or banquet and meeting spaces and may derive a significant portion of the related property’s revenue from such operations. Consumer demand for entertainment resorts is particularly sensitive to downturns in the economy and the corresponding impact on discretionary spending on leisure activities. Changes in discretionary consumer spending or consumer preferences could be driven by factors such as perceived or actual general economic conditions, high energy, fuel and food costs, the increased cost of travel, the weakened job market, perceived or actual disposable consumer income and wealth, fears of recession and changes in consumer confidence in the economy, or fears of war and future acts of terrorism. These factors could reduce consumer demand for the leisure activities that the property offers, thus imposing practical limits on pricing and harming operations. Restaurants, theaters, lounges, bars and nightclubs are particularly vulnerable to changes in consumer preferences. In addition, a nightclub’s, restaurant’s, lounge’s or bar’s revenue is extremely dependent on its popularity and perception. These characteristics are subject to change rapidly and we cannot assure you that any of a hospitality property’s nightclubs, restaurants, theaters, lounges or bars will maintain their current level of popularity or perception in the market. With respect to mortgaged properties that operate entertainment venues, the entertainment industry’s brand perception of the mortgaged property’s entertainment venue may have a significant impact on the ability to book talent and sell shows at the property. Any change in perception of entertainment venues by consumers or by the entertainment industry could have a material adverse effect on the net cash flow of the property. Furthermore, because of the unique construction requirements of restaurants, theaters, lounges, bars or nightclubs, the space at those hospitality properties would not easily be converted to other uses.
Some of the hospitality properties have liquor licenses associated with the mortgaged property. The liquor licenses for these mortgaged properties are generally held by affiliates of the related borrowers, unaffiliated managers or operating lessees. The laws and regulations relating to liquor licenses generally prohibit the transfer of such licenses to any person, or condition such transfer on the prior approval of the governmental authority that issued the license. In the event of a foreclosure of a hospitality property that holds a liquor license, the special servicer on behalf of the issuing entity or a purchaser in a foreclosure sale would likely have to apply for a new license, which might not be granted or might be granted only after a delay that could be significant. We cannot assure you that a new license could be obtained promptly or at all. The lack of a liquor license in a hospitality property could have an adverse impact on the revenue from the related mortgaged property or on the hospitality property’s occupancy rate.
In addition, hospitality properties may be structured with a master lease (or operating lease) in order to minimize potential liabilities of the borrower. Under the master lease structure, an operating lessee (typically affiliated with the borrower) is also an obligor under the related mortgage loan and the operating lessee borrower pays rent to the fee owner borrower. In addition, certain state laws prohibit the assignment of liquor revenues. In such case, the lender may not be able to obtain a security interest in such revenues, which may constitute a material portion of the revenues at the related hospitality property. As a result, the lender may lose its ability to obtain such revenues in a foreclosure in certain scenarios, including if there is bankruptcy of the liquor license holder. In certain cases, the liquor license holder may not be a single purpose entity.
Further, liquor licenses are subject to extensive regulation. A revocation of the liquor license at a hospitality property, particularly a property with a significant revenues from nightclubs, casinos, other entertainment venues, restaurants and lounges, could have a material adverse effect on revenues from such property.
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In addition, there may be risks associated with hospitality properties that have not entered into or become a party to any franchise agreement, license agreement or other “flag”. Hospitality properties often enter into these types of agreements in order to align the hospitality property with a certain public perception or to benefit from a centralized reservation system. We cannot assure you that hospitality properties that lack such benefits will be able to operate successfully on an independent basis.
With respect to certain hospitality properties, including hospitality properties that are unflagged, the collateral may include the collateral assignment of the rights of the borrower in certain intellectual property and brand names used in connection with the operation of the properties. The success of the operation of the mortgaged property depends in part on the borrower’s continued ability to use this intellectual property and on adequate protection and enforcement of this intellectual property, as well as related brands, logos and branded merchandise, including to increase brand awareness and further develop the property’s brand. Not all of the trademarks, copyrights, proprietary technology or other intellectual property rights used in the operation of such a mortgaged property may have been registered, and some of these trademarks and other intellectual property rights may never be registered. Despite the borrower’s efforts to protect their proprietary rights, third parties may infringe or otherwise violate such intellectual property rights, and use information that the borrower regards as proprietary, and the borrower’s rights may be invalidated or rendered unenforceable.
See “Description of the Mortgage Pool—Mortgage Pool Characteristics—Property Types—Hospitality Properties”.
Risks Relating to Affiliation with a Franchise or Hotel Management Company
The performance of a hospitality property affiliated with a franchise or hotel management company depends in part on:
| ● | the continued existence and financial strength of the franchisor or hotel management company; |
| ● | the public perception of the franchise or hotel chain service mark; and |
| ● | the duration of the franchise licensing or management agreements. |
The continuation of a franchise agreement, license agreement or hotel management agreement is subject to specified operating standards and other terms and conditions set forth in such agreements. The failure of a borrower to maintain such standards or adhere to other applicable terms and conditions, such as property improvement plans, could result in the loss or cancellation of their rights under the franchise, license or management agreement. We cannot assure you that a replacement franchise could be obtained in the event of termination. In addition, replacement franchises, licenses and/or hospitality property managers may require significantly higher fees as well as the investment of capital to bring the hospitality property into compliance with the requirements of the replacement franchisor, licensor and/or hospitality property manager. Any provision in a franchise agreement or management agreement providing for termination because of a bankruptcy of a franchisor or manager generally will not be enforceable.
The transferability of franchise agreements, license agreements and property management agreements may be restricted. In the event of a foreclosure, the lender may not have the right to use the franchise license without the franchisor’s consent or the manager might be able to terminate the management agreement. Conversely, in the case of certain mortgage loans, the lender may be unable to remove a franchisor/licensor or a hotel management company that it desires to replace following a foreclosure and, further, may be limited as regards the pool of potential transferees for a foreclosure, licensor or real estate owned property.
In some cases where a hospitality property is subject to a license or franchise agreement, the licensor or franchisor has required or may in the future require the completion of various repairs and/or renovations pursuant to a property improvement plan issued by the licensor or franchisor. See “Description of the Mortgage Pool—Redevelopment, Renovation and Expansion”. Failure to complete
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those repairs and/or renovations in accordance with the plan could result in the hospitality property losing its license or franchise. Annex A-1 and the related footnotes set forth the amount of reserves, if any, established under the related mortgage loans in connection with any of those repairs and/or renovations. We cannot assure you that any amounts reserved will be sufficient to complete the repairs and/or renovations required with respect to any affected hospitality property. In addition, in some cases, those reserves will be maintained by the franchisor or property manager. Furthermore, the lender may not require a reserve for repairs and/or renovations in all instances.
See “Description of the Mortgage Pool—Mortgage Pool Characteristics—Property Types—Hospitality Properties”.
Mixed Use Properties Have Special Risks
Certain properties are mixed use properties. Such mortgaged properties are subject to the risks relating to the property types described in “—Office Properties Have Special Risks”, and/or “—Industrial Properties Have Special Risks”. See Annex A-1 for the 5 largest tenants (by net rentable area leased) at the mixed use property. A mixed use property may be subject to additional risks, including the property manager’s inexperience in managing the different property types that comprise such mixed use property.
See “Description of the Mortgage Pool—Mortgage Pool Characteristics—Property Types—Mixed Use Properties”.
Leased Fee Properties Have Special Risks
Land subject to a ground lease presents special risks. In such cases, where the borrower owns the fee interest but not the related improvements, such borrower will only receive the rental income from the ground lease and not from the operation of any related improvements. Any default by the ground lessee would adversely affect the borrower’s ability to make payments on the related mortgage loan. While ground leases may contain certain restrictions on the use and operation of the related mortgaged property, the ground lessee generally enjoys the rights and privileges of a fee owner, including the right to construct, alter and remove improvements and fixtures from the land and to assign and sublet the ground leasehold interest. However, the borrower has the same risk of interruptions in cash flow if such ground lessee defaults under its lease as it would on another single tenant commercial property, without the control over the premises that it would ordinarily have as landlord. In addition, in the event of a condemnation, the borrower would only be entitled to an allocable share of the condemnation proceeds. Furthermore, the insurance requirements are often governed by the terms of the ground lease and, in some cases, certain tenants or subtenants may be allowed to self-insure. The ground lessee is commonly permitted to mortgage its ground leasehold interest, and the leasehold lender will often have notice and cure rights with respect to material defaults under the ground lease. In addition, leased fee interests are less frequently purchased and sold than other interests in commercial real property. It may be difficult for the issuing entity, if it became a foreclosing lender, to sell the fee interests if the tenant and its improvements remain on the land. In addition, if the improvements are nearing the end of their useful life, there could be a risk that the tenant defaults in lieu of performing any obligations it may otherwise have to raze the structure and return the land in raw form to the developer. Furthermore, leased fee interests are generally subject to the same risks associated with the property type of the ground lessee’s use of the premises because that use is a source of revenue for the payment of ground rent. See “—Retail Properties Have Special Risks”.
Mortgaged Properties Leased to Startup Companies Have Special Risks
Certain mortgaged properties may have tenants that are startup companies. Startup companies are companies that are seeking to develop a scalable business model. Startup companies have heightened risks. Many startup companies do not generate positive cash flow, and may in fact experience significant negative cash flow. Startup companies that operate at a loss may experience rapid growth through venture capital investments; however, if the source of funding loses confidence in the business model, or is unwilling or unable to continue funding for other reasons, the startup company may be faced with
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significant losses and be without a source of funding to continue its business or pay its obligations. Furthermore, valuations based on venture capital investment may rapidly decline. Many startups may produce only a single product or service, and therefore face a binary risk of failure if such product or service does not find market acceptance, meets with competition or is otherwise unsuccessful. Further, startup companies may be run by founders who lack significant business or finance experience. Startup companies generally have a low success rate. Accordingly, mortgaged properties leased to startup companies face the risk that the tenant may be unable to pay rent under its lease and may default on its lease.
Risks Relating to Enforceability of Cross-Collateralization
Cross-collateralization arrangements may be terminated in certain circumstances under the terms of the related mortgage loan documents. Cross-collateralization arrangements whereby multiple borrowers grant their respective mortgaged properties as security for one or more mortgage loans could be challenged as fraudulent conveyances by the creditors or the bankruptcy estate of any of the related borrowers.
Among other things, a legal challenge to the granting of the liens may focus on the benefits realized by that borrower from the respective mortgage loan proceeds, as well as the overall cross-collateralization. If a court were to conclude that the granting of the liens was an avoidable fraudulent conveyance, that court could subordinate all or part of the mortgage loan to other debt of that borrower, recover prior payments made on that mortgage loan, or take other actions such as invalidating the mortgage loan or the mortgages securing the cross-collateralization. See “Certain Legal Aspects of Mortgage Loans—Bankruptcy Laws”.
In addition, when multiple real properties secure a mortgage loan, the amount of the mortgage encumbering any particular one of those properties may be less than the full amount of the related aggregate mortgage loan indebtedness, to minimize recording tax. This mortgage amount is generally established at 100% to 150% of the appraised value or allocated loan amount for the mortgaged property and will limit the extent to which proceeds from the property will be available to offset declines in value of the other properties securing the same mortgage loan.
The borrowers under certain of the mortgage loans secured by multiple mortgaged properties may be permitted, subject to the satisfaction of certain conditions, to obtain the release of one or more mortgaged properties from the lien of the mortgage and substitute other properties as collateral. A substitute property generally is required to meet certain criteria under the related loan documents. However, notwithstanding the substitution criteria, a substitute mortgaged property may have different characteristics from those of the replaced mortgaged property. We cannot assure you that a substitute mortgaged property will perform in the same manner as the replaced mortgaged property and that a substitution will not adversely affect the performance of the mortgage loan.
See “Description of the Mortgage Pool—Mortgage Pool Characteristics” for a description of any mortgage loans that are cross-collateralized and cross-defaulted with each other or that are secured by multiple properties owned by multiple borrowers.
Parking Properties Have Special Risks
Certain of the mortgaged properties are comprised in whole or in part of, or contain, a parking lot or parking garage. The primary source of income for parking lots and garages is the rental fees charged for parking spaces (or in the case of a parking lot or parking garage leased in whole or part to a parking garage or parking lot operator, rents from such operating lease). Factors affecting the success of a parking lot or garage include:
| ● | the number of rentable parking spaces and rates charged; |
| ● | the location of the lot or garage and, in particular, its proximity to places where large numbers of people work, shop or live; |
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| ● | the amount of alternative parking spaces in the area; |
| ● | the availability of mass transit; and |
| ● | the perceptions of the safety, convenience and services of the lot or garage. |
Aspects of building site design and adaptability affect the value of a parking garage facility. Site characteristics that are valuable to a parking garage facility include location, clear ceiling heights, column spacing, zoning restrictions, number of spaces and overall functionality and accessibility.
In addition, because of the unique construction requirements of many parking garages and because a parking lot is often vacant paved land without any structure, a vacant parking garage facility or parking lot may not be easily converted to other uses. See “—Some Mortgaged Properties May Not Be Readily Convertible to Alternative Uses”.
With respect to parking properties leased to a parking garage, parking lot operator or single tenant user, such leases generally provide the parking operator the right to terminate such leases upon various contingencies, which may include if there are specified reductions in gross receipts, or specified income targets are not met, if certain subleases of such parking properties are terminated or reduced, or upon a specified amount of capital expenditures to such properties being required in order to comply with applicable law, or other adverse events. We cannot assure you that the operating lessee of a parking property will not terminate its lease upon such an event.
Data Centers Have Special Risks
Certain of the tenants operate their space as a data center. The primary function of a data center is to provide a secure location for data storage. Data centers are subject to similar risks as office buildings. The value of a data center will be affected by its telecommunications capacity, availability of sufficient power, and availability of support systems including environmental, temperature and hazard risk control, physical security, and redundant backup systems. As data centers contain sensitive and high cost equipment and connections, they are subject to heightened risk in the event of fire, natural disaster or terrorism. In addition, because data centers require substantial quantities of water for cooling, data centers located in areas that are subject to drought, such as California, are also subject to heightened risks. In addition, data centers can be the subject of build-to-suit construction to specific user requirements. For example, “powered shells” are data center properties whereby the landlord makes the initial capital investment required to complete an exterior structure with access to power and fiber optics, with tenants providing all additional capital required in order to build-out the interior and convert the asset into a fully operational data center. As such, if the lease with a data center user is terminated for any reason, the cost and time to adapt the space to other users may be considerable. Further, data center properties may not be readily convertible (or convertible at all) to alternative uses if those properties were to become unprofitable, or if the leased spaces were to become vacant, for any reason.
Condominium Ownership May Limit Use and Improvements
The management and operation of a condominium is generally controlled by a condominium board representing the owners of the individual condominium units, subject to the terms of the related condominium rules or by-laws. Generally, the consent of a majority of the board members is required for any actions of the condominium board and a unit owner’s ability to control decisions of the board are generally related to the number of units owned by such owner as a percentage of the total number of units in the condominium. In certain cases, the related borrower does not have a majority of votes on the condominium board, which result in the related borrower not having control of the related condominium or owners association.
The board of managers or directors of the related condominium generally has discretion to make decisions affecting the condominium, and we cannot assure you that the related borrower under a mortgage loan secured by one or more interests in that condominium will have any control over decisions made by the related board of managers or directors. Even if a borrower or its designated board members,
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either through control of the appointment and voting of sufficient members of the related condominium board or by virtue of other provisions in the related condominium documents, has consent rights over actions by the related condominium associations or owners, we cannot assure you that the related condominium board will not take actions that would materially adversely affect the related borrower’s unit. Thus, decisions made by that board of managers or directors, including regarding assessments to be paid by the unit owners, insurance to be maintained on the condominium and many other decisions affecting the maintenance of that condominium, may have a significant adverse impact on the related mortgage loans in the issuing entity that are secured by mortgaged properties consisting of such condominium interests. We cannot assure you that the related board of managers or directors will always act in the best interests of the related borrower under the related mortgage loans.
The condominium board is generally responsible for administration of the affairs of the condominium, including providing for maintenance and repair of common areas, adopting rules and regulations regarding common areas, and obtaining insurance and repairing and restoring the common areas of the property after a casualty. Notwithstanding the insurance and casualty provisions of the related mortgage loan documents, the condominium board may have the right to control the use of casualty proceeds.
In addition, the condominium board generally has the right to assess individual unit owners for their share of expenses related to the operation and maintenance of the common elements. In the event that an owner of another unit fails to pay its allocated assessments, the related borrower may be required to pay such assessments in order to properly maintain and operate the common elements of the property. Although the condominium board generally may obtain a lien against any unit owner for common expenses that are not paid, such lien generally is extinguished if a lender takes possession pursuant to a foreclosure. Each unit owner is responsible for maintenance of its respective unit and retains essential operational control over its unit.
In addition, due to the nature of condominiums, a default on the part of the borrower with respect to such mortgaged properties will not allow the special servicer the same flexibility in realizing on the collateral as is generally available with respect to commercial properties that are not condominium units. The rights of other unit or property owners, the documents governing the management of the condominium units and the state and local laws applicable to condominium units must be considered. In addition, in the event of a casualty with respect to a condominium, due to the possible existence of multiple loss payees on any insurance policy covering such property, there could be a delay in the allocation of related insurance proceeds, if any. Consequently, servicing and realizing upon the collateral described above could subject the certificateholders to a greater delay, expense and risk than with respect to a mortgage loan secured by a commercial property that is not a condominium unit.
Certain condominium declarations and/or local laws provide for the withdrawal of a property from a condominium structure under certain circumstances. For example, the New York Condominium Act provides for a withdrawal of the property from a condominium structure by vote of 80% of unit owners. If the condominium is terminated, the building will be subject to an action for partition by any unit owner or lienor as if owned in common. This could cause an early and unanticipated prepayment of the mortgage loan. We cannot assure you that the proceeds from partition would be sufficient to satisfy borrower’s obligations under the mortgage loan. See also “—Risks Related to Zoning Non-Compliance and Use Restrictions” for certain risks relating to use restrictions imposed pursuant to condominium declarations or other condominium especially in a situation where the mortgaged property does not represent the entire condominium building.
Shared Interest Structures
Vertical subdivisions and “fee above a plane” structures are property ownership structures in which owners have a fee simple interest in certain ground-level and above-ground parcels. A vertical subdivision or “fee above a plane” structure is generally governed by a declaration or similar agreement defining the respective owner’s fee estates and relationship where one or more owners typically relies on one or more other owners’ parcels for structural support. Each owner is responsible for maintenance of its respective parcel and retains essential operational control over its parcel. We cannot assure you that owners of parcels supporting collateral interests in vertical subdivision and “fee above a plane” parcels
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will perform any maintenance and repair obligations that may be required under the declaration with respect to the supporting parcel, or that proceeds following a casualty would be used to reconstruct a supporting parcel. Owners of interests in a vertical subdivision or “fee above a plane” structure may be required under the related declaration to pay certain assessments relating to any shared interests in the related property, and a lien may be attached for failure to pay such assessments. See “Description of the Mortgage Pool—Mortgage Pool Characteristics—Condominium and Other Shared Interests”.
Operation of a Mortgaged Property Depends on the Property Manager’s Performance
The successful operation of a real estate project depends upon the property manager’s performance and viability. The property manager is responsible for:
| ● | responding to changes in the local market; |
| ● | planning and implementing the rental structure; |
| ● | operating the property and providing building services; |
| ● | managing operating expenses; and |
| ● | assuring that maintenance and capital improvements are carried out in a timely fashion. |
Properties deriving revenues primarily from short term sources, such as hotel guests or short term or month to month leases, are generally more management intensive than properties leased to creditworthy tenants under long term leases.
Certain of the mortgaged properties will be managed by affiliates of the related borrower. If a mortgage loan is in default or undergoing special servicing, such relationship could disrupt the management of the related mortgaged property, which may adversely affect cash flow. However, the related mortgage loans will generally permit, in the case of mortgaged properties managed by borrower affiliates, the lender to remove the related property manager upon the occurrence of an event of default under the related mortgage loan beyond applicable cure periods (or, in some cases, in the event of a foreclosure following such default), and in some cases a decline in cash flow below a specified level or the failure to satisfy some other specified performance trigger.
Climate Change May Directly or Indirectly Have an Adverse Effect on the Mortgage Pool
Climate change and legal, technological and political developments related to climate change could have an adverse effect on the underlying mortgaged properties and borrowers and consequently on an investment in the certificates. Such developments include the adoption of local laws or regulations designed to improve energy efficiency or reduce greenhouse gas emissions that have been linked to climate change, which could require borrowers to incur significant costs to retrofit the related properties to comply or subject the borrowers to fines. For example:
| ● | New York City Local Law 97 of 2019 generally requires, with some exceptions, that (i) buildings that exceed 25,000 gross square feet, (ii) two or more buildings on the same tax lot that together exceed 50,000 square feet and (iii) two or more buildings owned by a condominium association that are governed by the same board of managers and that together exceed 50,000 square feet meet new energy efficiency and greenhouse gas emissions limits by 2024, with stricter limits coming into effect in 2030. Noncompliant building owners may face fines starting in 2025, unless they are able to bring their building into timely compliance by retrofitting their buildings. |
Also, properties that are less energy efficient or that produce higher greenhouse gas emissions may be at a competitive disadvantage to more efficient or cleaner properties in attracting potential tenants.
Similarly, tenants at certain properties may be in, or may be dependent upon, industries, such as oil and gas, that are or may become subject to heightened regulation due to climate change or the
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development of competing “green” technologies, which may have a material adverse effect on such tenants and lead to, among other things, vacancies or tenant bankruptcies at certain mortgaged properties.
Climate change may also have other effects, such as increasing the likelihood of extreme weather and natural disasters in certain geographic areas. See “—Concentrations Based on Property Type, Geography, Related Borrowers and Other Factors May Disproportionately Increase Losses”.
We cannot assure you that any retrofitting of the mortgaged properties to comply with new laws or regulations or any change in tenant mix due to the characteristics of the mortgaged property will improve the operations at, or increase the value of, the related mortgaged property. However, failure to comply with any required retrofitting or a concentration of tenants in industries subject to heightened regulation or “green” competition could have a material negative impact on the related mortgaged property, which could affect the ability of the related borrower to repay the related mortgage loan.
Concentrations Based on Property Type, Geography, Related Borrowers and Other Factors May Disproportionately Increase Losses
The effect of mortgage pool loan losses will be more severe if the losses relate to mortgage loans that account for a disproportionately large percentage of the pool’s aggregate principal balance. As mortgage loans pay down or properties are released, the remaining certificateholders may face a higher risk with respect to the diversity of property types and property characteristics and with respect to the number of borrowers.
See the table titled “Stated Remaining Term (Mos.)” in Annex A-2 for a stratification of the remaining terms to maturity of the mortgage loans. Because principal on the certificates is payable in sequential order of payment priority, and a class receives principal only after the preceding class(es), if any, have been paid in full, classes that have a lower sequential priority are more likely to face these types of risk of concentration than classes with a higher sequential priority.
Several of the mortgage loans have cut-off date balances that are substantially higher than the average cut-off date balance. In general, concentrations in mortgage loans with larger-than-average balances can result in losses that are more severe, relative to the size of the mortgage loan pool, than would be the case if the aggregate balance of the mortgage loan pool were more evenly distributed.
A concentration of mortgage loans secured by the same mortgaged property types can increase the risk that a decline in a particular industry or business would have a disproportionately large impact on the pool of mortgage loans. Mortgaged property types representing 5.0% or more of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (based on allocated loan amount) are office, retail, multifamily and industrial. See “Description of the Mortgage Pool—Mortgage Pool Characteristics—Property Types” for information on the types of mortgaged properties securing the mortgage loans in the mortgage pool.
Repayments by borrowers and the market value of the related mortgaged properties could be affected by economic conditions generally or specific to particular geographic areas or regions of the United States, and concentrations of mortgaged properties in particular geographic areas may increase the risk that conditions in the real estate market where the mortgaged property is located, or other adverse economic or other developments or natural disasters (e.g., earthquakes, floods, forest fires, tornadoes or hurricanes or changes in governmental rules or fiscal policies) affecting a particular region of the country, could increase the frequency and severity of losses on mortgage loans secured by those mortgaged properties.
Mortgaged properties securing 5.0% or more of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (based on allocated loan amount) are located in California, New York, Michigan and Ohio. See “Description of the Mortgage Pool—Mortgage Pool Characteristics—Geographic Concentrations”.
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Some of the mortgaged properties are located in areas that, based on low population density, poor economic demographics (such as higher than average unemployment rates, lower than average annual household income and/or overall loss of jobs) and/or negative trends in such regards, would be considered secondary or tertiary markets.
A concentration of mortgage loans with the same borrower or related borrowers also can pose increased risks:
| ● | if a borrower that owns or controls several mortgaged properties (whether or not all of them secure mortgage loans in the mortgage pool) experiences financial difficulty at one mortgaged property, it could defer maintenance at another mortgaged property in order to satisfy current expenses with respect to the first mortgaged property; |
| ● | a borrower could also attempt to avert foreclosure by filing a bankruptcy petition that might have the effect of interrupting debt service payments on the mortgage loans in the mortgage pool secured by that borrower’s mortgaged properties (subject to the master servicer’s and the trustee’s obligation to make advances for monthly payments) for an indefinite period; and |
| ● | mortgaged properties owned by the same borrower or related borrowers are likely to have common management, common general partners and/or common managing members increasing the risk that financial or other difficulties experienced by such related parties could have a greater impact on the pool of mortgage loans. See “—A Bankruptcy Proceeding May Result in Losses and Delays in Realizing on the Mortgage Loans” below. |
See “Description of the Mortgage Pool—Mortgage Pool Characteristics” for information on the composition of the mortgage pool by property type and geographic distribution and loan concentration.
Adverse Environmental Conditions at or Near Mortgaged Properties May Result in Losses
The issuing entity could become liable for a material adverse environmental condition at an underlying mortgaged property. Any such potential liability could reduce or delay payments on the offered certificates.
Each of the mortgaged properties was either (i) subject to environmental site assessments prior to the time of origination of the related mortgage loan including Phase I environmental site assessments or updates of previously performed Phase I environmental site assessments, or (ii) subject to a secured creditor environmental insurance policy or other environmental insurance policy. See “Description of the Mortgage Pool—Environmental Considerations”.
We cannot assure you that the environmental assessments revealed all existing or potential environmental risks or that all adverse environmental conditions have been or will be completely abated or remediated or that any reserves, insurance or operations and maintenance plans will be sufficient to remediate the environmental conditions.
Moreover, we cannot assure you that:
| ● | future laws, ordinances or regulations will not impose any material environmental liability; or |
| ● | the current environmental condition of the mortgaged properties will not be adversely affected by tenants or by the condition of land or operations in the vicinity of the mortgaged properties (such as underground storage tanks). |
We cannot assure you that with respect to any mortgaged property, any remediation plan or any projected remedial costs or time is accurate or sufficient to complete the remediation objectives, or that no additional contamination requiring environmental investigation or remediation will be discovered on any mortgaged property. Likewise, all environmental policies naming the lender as named insured cover certain risks or events specifically identified in the policy, but the coverage is limited by its terms, conditions, limitations and exclusions, and does not purport to cover all environmental conditions
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whatsoever affecting the applicable mortgaged property, and we cannot assure you that any environmental conditions currently known, suspected, or unknown and discovered in the future will be covered by the terms of the policy.
Before the trustee, the special servicer or the master servicer, as applicable, acquires title to a mortgaged property on behalf of the issuing entity or assumes operation of the property, it will be required to obtain an environmental assessment of such mortgaged property, or rely on a recent environmental assessment. This requirement is intended to mitigate the risk that the issuing entity will become liable under any environmental law. There is accordingly some risk that the mortgaged property will decline in value while this assessment is being obtained or remedial action is being taken. Moreover, we cannot assure you that this requirement will effectively insulate the issuing entity from potential liability under environmental laws. Any such potential liability could reduce or delay distributions to certificateholders.
See “Description of the Mortgage Pool—Environmental Considerations” for additional information on environmental conditions at mortgaged properties securing certain mortgage loans in the issuing entity. See also representation and warranty number 40 in Annex D-1, representation and warranty number 43 in Annex E-1, representation and warranty number 40 in Annex F-1, and the identified exceptions to those representations and warranties in Annex D-2, Annex D-3, Annex E-2 or Annex F-2, as applicable.
See “Transaction Parties—The Sponsors and Mortgage Loan Sellers—German American Capital Corporation”, “—Citi Real Estate Funding Inc.”, “—Goldman Sachs Mortgage Company”, “—JPMorgan Chase Bank, National Association”, “Pooling and Servicing Agreement—Realization Upon Mortgage Loans” and “Certain Legal Aspects of Mortgage Loans”.
See “Certain Legal Aspects of Mortgage Loans—Environmental Considerations”.
Risks Related to Redevelopment, Expansion and Renovation at Mortgaged Properties
Certain of the mortgaged properties are currently undergoing or, in the future, are expected to undergo redevelopment, expansion or renovation. In addition, the related borrower may be permitted under the related mortgage loan documents, at its option and cost but subject to certain conditions, to undergo future construction, renovation or alterations of the mortgaged property. To the extent applicable, we cannot assure you that any escrow or reserve collected, if any, will be sufficient to complete the current renovation or be otherwise sufficient to satisfy any tenant improvement expenses at a mortgaged property. Failure to complete those planned improvements may have a material adverse effect on the cash flow at the mortgaged property and the related borrower’s ability to meet its payment obligations under the mortgage loan documents. In addition, such renovations or expansions may be required under tenant leases and a failure to timely complete such renovations or expansions may result in a termination of such lease(s) and may have a material adverse effect on the cash flow at the mortgaged property and the related borrower’s ability to meet its payment obligations under the mortgage loan documents.
Certain of the hospitality properties securing the mortgage loans are currently undergoing or are scheduled to undergo renovations or property improvement plans (“PIPs”). In some circumstances, these renovations or PIPs may necessitate taking a portion of the available guest rooms temporarily offline, temporarily decreasing the number of available rooms and the revenue generating capacity of the related hospitality property. In other cases, these renovations may involve renovations of common spaces or external features of the related hospitality property, which may cause disruptions or otherwise decrease the attractiveness of the related hospitality property to potential guests. These PIPs may be required under the related franchise or management agreement and a failure to timely complete them may result in a termination or expiration of a franchise or management agreement and may be an event of default under the related mortgage loan.
We cannot assure you that current or planned redevelopment, expansion or renovation will be completed at all, that such redevelopment, expansion or renovation will be completed in the time frame contemplated, or that, when and if such redevelopment, expansion or renovation is completed, such redevelopment, expansion or renovation will improve the operations at, or increase the value of, the related mortgaged property. Failure of any of the foregoing to occur could have a material negative
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impact on the related mortgaged property, which could affect the ability of the related borrower to repay the related mortgage loan.
In the event the related borrower fails to pay the costs for work completed or material delivered in connection with such ongoing redevelopment, expansion or renovation, the portion of the mortgaged property on which there are renovations may be subject to mechanic’s or materialmen’s liens that may be senior to the lien of the related mortgage loan.
The existence of construction or renovation at a mortgaged property may take rental units or rooms or leasable space “off-line” or otherwise make space unavailable for rental, impair access or traffic at or near the mortgaged property, or, in general, make that mortgaged property less attractive to tenants or their customers, and accordingly could have a negative effect on net operating income. In addition, any such construction or renovation at a mortgaged property may temporarily interfere with the use and operation of any portion of such mortgaged property. See “Description of the Mortgage Pool—Redevelopment, Renovation and Expansion” for information regarding mortgaged properties which are currently undergoing or, in the future, are expected to undergo redevelopment, expansion or renovation. See also Annex A-3 for additional information on redevelopment, renovation and expansion at the mortgaged properties securing the 10 largest mortgage loans.
Some Mortgaged Properties May Not Be Readily Convertible to Alternative Uses
Certain mortgaged properties securing the mortgage loans may have specialty use tenants and may not be readily convertible (or convertible at all) to alternative uses if those properties were to become unprofitable for any reason.
For example, retail, mixed-use or office properties may have theater tenants. Properties with theater tenants are exposed to certain unique risks. Aspects of building site design and adaptability affect the value of a theater. In addition, decreasing attendance at a theater could adversely affect revenue of the theater, which may, in turn, cause the tenant to experience financial difficulties, resulting in downgrades in their credit ratings and, in certain cases, bankruptcy filings. In addition, because of unique construction requirements of theaters, any vacant theater space would not easily be converted to other uses.
Retail, mixed-use or office properties may also have health clubs as tenants. Several factors may adversely affect the value and successful operation of a health club, including:
| ● | the physical attributes of the health club (e.g., its age, appearance and layout); |
| ● | the reputation, safety, convenience and attractiveness of the property to users; |
| ● | management’s ability to control membership growth and attrition; |
| ● | competition in the tenant’s marketplace from other health clubs and alternatives to health clubs; and |
| ● | adverse changes in economic and social conditions and demographic changes (e.g., population decreases or changes in average age or income), which may result in decreased demand. |
In addition, there may be significant costs associated with changing consumer preferences (e.g., multipurpose clubs from single-purpose clubs or varieties of equipment, classes, services and amenities). In addition, health clubs may not be readily convertible to alternative uses if those properties were to become unprofitable for any reason. The liquidation value of any such health club consequently may be less than would be the case if the property were readily adaptable to changing consumer preferences for other uses.
Certain retail, mixed use or office properties may be partially comprised of a parking garage. Parking garages and parking lots present risks not associated with other properties. The primary source of income for parking lots and garages is the rental fees charged for parking spaces.
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Factors affecting the success of a parking lot or garage include:
| ● | the number of rentable parking spaces and rates charged; |
| ● | the location of the lot or garage and, in particular, its proximity to places where large numbers of people work, shop or live; |
| ● | the amount of alternative parking spaces in the area; |
| ● | the availability of mass transit; and |
| ● | the perceptions of the safety, convenience and services of the lot or garage. |
Aspects of building site design and adaptability affect the value of a parking garage facility. Site characteristics that are valuable to a parking garage facility include location, clear ceiling heights, column spacing, zoning restrictions, number of spaces and overall functionality and accessibility.
In addition, because of the unique construction requirements of many parking garages and because a parking lot is often vacant paved land without any structure, a vacant parking garage facility or parking lot may not be easily converted to other uses.
Mortgaged properties may have other specialty use tenants, such as medical and dental offices, fitness centers, lab space, gas stations, dry cleaners, bank branches, data centers, urgent care facilities, schools, daycare centers and/or restaurants, as part of the mortgaged property. Re-tenanting certain specialty use tenants, such as gas stations and dry cleaners, may also involve substantial costs related to environmental remediation.
In the case of specialty use tenants such as bank branches, restaurants and theaters, aspects of building site design and adaptability affect the value of such properties and other retailers at the mortgaged property. Decreasing patronage at such properties could adversely affect revenue of the property, which may, in turn, cause the tenants to experience financial difficulties, resulting in downgrades in their credit, lease defaults, ratings and, in certain cases, bankruptcy filings. See “—Performance of the Mortgage Loans Will Be Highly Dependent on the Performance of Tenants and Tenant Leases—Tenant Bankruptcy Could Result in a Rejection of the Related Lease” above. Additionally, receipts at such properties are also affected not only by objective factors but by subjective factors. For instance, restaurant receipts are affected by such varied influences as the current personal income levels in the community, an individual consumer’s preference for type of food, style of dining and restaurant atmosphere, the perceived popularity of the restaurant, food safety concerns related to personal health with the handling of food items at the restaurant or by food suppliers and the actions and/or behaviors of staff and management and level of service to the customers. In addition, because of unique construction requirements of such properties, any vacant space would not easily be converted to other uses.
Mortgaged properties with specialty use tenants may not be readily convertible (or convertible at all) to alternative uses if those properties were to become unprofitable, or the leased spaces were to become vacant, for any reason due to their unique construction requirements. In addition, converting commercial properties to alternate uses generally requires substantial capital expenditures and could result in a significant adverse effect on, or interruption of, the revenues generated by such properties.
In addition, a mortgaged property may not be readily convertible due to restrictive covenants related to such mortgaged property, including in the case of mortgaged properties that are subject to a condominium regime or subject to a ground lease, the use and other restrictions imposed by the condominium declaration and other related documents, especially in a situation where a mortgaged property does not represent the entire condominium regime. See “—Condominium Ownership May Limit Use and Improvements” above.
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Some of the mortgaged properties may be part of tax-reduction programs that apply only if the mortgaged properties are used for certain purposes. Such properties may be restricted from being converted to alternative uses because of such restrictions.
Some of the mortgaged properties have government tenants or other tenants which may have space that was “built to suit” that particular tenant’s uses and needs. For example, a government tenant may require enhanced security features that required additional construction or renovation costs and for which the related tenant may pay above market rent. However, such enhanced features may not be necessary for a new tenant (and such new tenant may not be willing to pay the higher rent associated with such features). While a government office building or government leased space may be usable as a regular office building or tenant space, the rents that may be collected in the event the government tenant does not renew its lease may be significantly lower than the rent currently collected.
Additionally, zoning, historical preservation or other restrictions also may prevent alternative uses. See “—Risks Related to Zoning Non-Compliance and Use Restrictions” below.
Risks Related to Zoning Non-Compliance and Use Restrictions
Certain of the mortgaged properties may not comply with current zoning laws, including density, use, parking, height, landscaping, open space and set back requirements, due to changes in zoning requirements after such mortgaged properties were constructed. These properties, as well as those for which variances or special permits were issued or for which non-conformity with current zoning laws is otherwise permitted, are considered to be a “legal non-conforming use” and/or the improvements are considered to be “legal non-conforming structures”. This means that the borrower is not required to alter its structure to comply with the existing or new law; however, the borrower may not be able to rebuild the premises “as-is” in the event of a substantial casualty loss. This may adversely affect the cash flow of the property following the loss. If a substantial casualty were to occur, we cannot assure you that insurance proceeds would be available to pay the mortgage loan in full. In addition, if a non-conforming use were to be discontinued and/or the property were repaired or restored in conformity with the current law, the value of the property or the revenue-producing potential of the property may not be equal to that before the casualty.
In addition, certain of the mortgaged properties that do not conform to current zoning laws may not be “legal non-conforming uses” or “legal non-conforming structures”. The failure of a mortgaged property to comply with zoning laws or to be a “legal non-conforming use” or “legal non-conforming structure” may adversely affect market value of the mortgaged property or the borrower’s ability to continue to use it in the manner it is currently being used or may necessitate material additional expenditures to remedy non-conformities. In some cases, the related borrower has obtained law and ordinance insurance to cover additional costs that result from rebuilding the mortgaged property in accordance with current zoning requirements. However, if as a result of the applicable zoning laws the rebuilt improvements are smaller or less attractive to tenants than the original improvements, the resulting loss in income will generally not be covered by law and ordinance insurance. Zoning protection insurance will generally reimburse the lender for the difference between (i) the mortgage loan balance on the date of damage loss to the mortgaged property from an insured peril and (ii) the total insurance proceeds at the time of the damage to the mortgaged property if such mortgaged property cannot be rebuilt to its former use due to new zoning ordinances.
In addition, certain of the mortgaged properties may be subject to certain use restrictions and/or operational requirements imposed pursuant to development agreements, ground leases, restrictive covenants, reciprocal easement agreements or operating agreements or historical landmark designations or, in the case of those mortgaged properties that are condominiums, vertical subdivisions and related structures, the related declarations or other use restrictions or regulations, especially in a situation where the mortgaged property does not represent the entire building. Such use restrictions could include, for example, limitations on the character of the improvements or the properties, limitations affecting noise and parking requirements, among other things, and limitations on the borrowers’ right to operate certain types of facilities within a prescribed radius. These limitations impose upon the borrower stricter
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requirements with respect to repairs and alterations, including following a casualty loss. These limitations could adversely affect the ability of the related borrower to lease the mortgaged property on favorable terms, thus adversely affecting the borrower’s ability to fulfill its obligations under the related mortgage loan. In addition, any alteration, reconstruction, demolition, or new construction affecting a mortgaged property designated a historical landmark may require prior approval. Any such approval process, even if successful, could delay any redevelopment or alteration of a related property. The liquidation value of such property, to the extent subject to limitations of the kind described above or other limitations on convertibility of use, may be substantially less than would be the case if such property was readily adaptable to other uses or redevelopment. See “Description of the Mortgage Pool—Use Restrictions” for examples of mortgaged properties that are subject to restrictions relating to the use of the mortgaged properties.
Additionally, some of the mortgaged properties may have current or past tenants that handle or have handled hazardous materials and, in some cases, related contamination at some of the mortgaged properties was previously investigated and, as warranted, remediated with regulatory closure, the conditions of which in some cases may include restrictions against any future redevelopment for residential use or other land use restrictions. See “Description of the Mortgage Pool—Environmental Considerations” for additional information on environmental conditions at mortgaged properties securing certain mortgage loans in the issuing entity. See also representation and warranty number 40 in Annex D-1, representation and warranty number 43 in Annex E-1, representation and warranty number 40 in Annex F-1, and the identified exceptions to those representations and warranties in Annex D-2, Annex D-3, Annex E-2 or Annex F-2, as applicable.
Risks Relating to Inspections of Properties
Licensed engineers or consultants inspected the mortgaged properties at or about the time of the origination of the mortgage loans to assess items such as structural integrity of the buildings and other improvements on the mortgaged property, including exterior walls, roofing, interior construction, mechanical and electrical systems and general condition of the site, buildings and other improvements. However, we cannot assure you that all conditions requiring repair or replacement were identified. No additional property inspections were conducted in connection with the issuance of the offered certificates.
Risks Relating to Costs of Compliance with Applicable Laws and Regulations
A borrower may be required to incur costs to comply with various existing and future federal, state or local laws and regulations applicable to the related mortgaged property, for example, zoning laws and the Americans with Disabilities Act of 1990, as amended, which requires all public accommodations to meet certain federal requirements related to access and use by persons with disabilities. See “Certain Legal Aspects of Mortgage Loans—Americans with Disabilities Act”. The expenditure of these costs or the imposition of injunctive relief, penalties or fines in connection with the borrower’s noncompliance could negatively impact the borrower’s cash flow and, consequently, its ability to pay its mortgage loan.
Insurance May Not Be Available or Adequate
Although the mortgaged properties are required to be insured, or self-insured by a sole or major tenant of a related building or group of buildings, against certain risks, there is a possibility of casualty loss with respect to the mortgaged properties for which insurance proceeds may not be adequate or which may result from risks not covered by insurance.
Certain Risks Are Not Covered under Standard Insurance Policies. In general (other than where the mortgage loan documents permit the borrower to rely on a tenant (including a ground tenant) or other third party (such as a condominium association, if applicable) to obtain the insurance coverage, on self-insurance provided by a tenant or on a tenant’s agreement to rebuild or continue paying rent), the master servicer and special servicer will be required to cause the borrower on each mortgage loan to maintain such insurance coverage in respect of the related mortgaged property as is required under the related mortgage loan documents. See “Description of the Mortgage Pool—Insurance Considerations”. In
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general, the standard form of fire and extended coverage policy covers physical damage to or destruction of the improvements of a property by fire, lightning, explosion, smoke, windstorm and hail, and riot, strike and civil commotion, subject to the conditions and exclusions specified in each policy (windstorm is a common exclusion for properties located in certain locations). Most policies typically do not cover any physical damage resulting from, among other things:
| ● | war; |
| ● | revolution; |
| ● | terrorism; |
| ● | nuclear, biological or chemical materials; |
| ● | governmental actions; |
| ● | floods and other water related causes; |
| ● | earth movement, including earthquakes, landslides and mudflows; |
| ● | wet or dry rot; |
| ● | vermin; and |
| ● | domestic animals. |
Unless the related mortgage loan documents specifically require the borrower to insure against physical damage arising from such causes, then, the resulting losses may be borne by you as a holder of certificates.
Standard Insurance May Be Inadequate Even for Types of Losses That Are Insured Against. Even if a type of loss is covered by the insurance policies required to be in place at the mortgaged properties, the mortgaged properties may suffer losses for which the insurance coverage is inadequate. For example:
| ● | in a case where terrorism coverage is included under a policy, if the terrorist attack is, for example, nuclear, biological or chemical in nature, the policy may include an exclusion that precludes coverage for such terrorist attack; |
| ● | in certain cases, particularly where land values are high, the insurable value (at the time of origination of the mortgage loan) of the mortgaged property may be significantly lower than the principal balance of the mortgage loan; |
| ● | with respect to mortgaged properties located in flood prone areas where flood insurance is required, the related mortgaged property may only have federal flood insurance (which only covers up to $500,000), not private flood insurance, and the related mortgaged property may suffer losses that exceed the amounts covered by the federal flood insurance; |
| ● | the mortgage loan documents may limit the requirement to obtain related insurance to where the premium amounts are “commercially reasonable” or a similar limitation; and |
| ● | if reconstruction or major repairs are required, changes in laws may materially affect the borrower’s ability to effect any reconstruction or major repairs and/or may materially increase the costs of the reconstruction or repairs and insurance may not cover or sufficiently compensate the insured. |
We Cannot Assure You That Required Insurance Will Be Maintained. We cannot assure you that borrowers have maintained or will maintain the insurance required under the mortgage loan documents or that such insurance will be adequate.
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Even if the mortgage loan documents specify that the related borrower must maintain standard extended coverage casualty insurance or other insurance that covers acts of terrorism, the borrower may fail to maintain such insurance and the master servicer or the special servicer may not enforce such default or cause the borrower to obtain such insurance if the special servicer has determined, in accordance with the servicing standard and subject to the discussion under “Pooling and Servicing Agreement—The Directing Holder” and “—The Operating Advisor”, that either (a) such insurance is not available at commercially reasonable rates and the subject hazards are not commonly insured against by prudent owners of similar real properties located in or near the geographic region in which the mortgaged property is located (but only by reference to such insurance that has been obtained by such owners at current market rates), or (b) such insurance is not available at any rate. Additionally, if the related borrower fails to maintain such terrorism insurance coverage, neither the master servicer nor the special servicer will be required to maintain such terrorism insurance coverage if the special servicer determines, in accordance with the servicing standard, that such terrorism insurance coverage is not available for the reasons set forth in the preceding sentence. Furthermore, at the time existing insurance policies are subject to renewal, we cannot assure you that terrorism insurance coverage will be available and covered under the new policies or, if covered, whether such coverage will be adequate. Most insurance policies covering commercial real properties such as the mortgaged properties are subject to renewal on an annual basis. If this coverage is not currently in effect, is not adequate or is ultimately not continued with respect to some of the mortgaged properties and one of those properties suffers a casualty loss as a result of a terrorist act, then the resulting casualty loss could reduce the amount available to make distributions on your certificates.
In addition, certain types of mortgaged properties, such as manufactured housing and recreational vehicle communities, have few or no insurable buildings or improvements and thus do not have casualty insurance or low limits of casualty insurance in comparison with the related mortgage loan balances.
In addition, hazard insurance policies will typically contain co-insurance clauses that in effect require an insured at all times to carry insurance of a specified percentage, generally 80% to 90%, of the full replacement value of the improvements on the related mortgaged property in order to recover the full amount of any partial loss. As a result, even if insurance coverage is maintained, if the insured’s coverage falls below this specified percentage, those clauses generally provide that the insurer’s liability in the event of partial loss does not exceed the lesser of (1) the replacement cost of the improvements less physical depreciation and (2) that proportion of the loss as the amount of insurance carried bears to the specified percentage of the full replacement cost of those improvements.
Furthermore, with respect to certain mortgage loans, the insurable value of the related mortgaged property as of the origination date of the related mortgage loan was lower than the principal balance of the related mortgage loan. In the event of a casualty when a borrower is not required to rebuild or cannot rebuild, we cannot assure you that the insurance required with respect to the related mortgaged property will be sufficient to pay the related mortgage loan in full and there is no “gap” insurance required under such mortgage loan to cover any difference. In those circumstances, a casualty that occurs near the maturity date may result in an extension of the maturity date of the mortgage loan if the master servicer, in accordance with the servicing standard, determines that such extension was in the best interest of certificateholders.
The mortgage loans do not all require flood insurance on the related mortgaged properties unless they are in a flood zone and flood insurance is available and, in certain instances, even where the related mortgaged property was in a flood zone and flood insurance was available, flood insurance was not required.
The National Flood Insurance Program’s (“NFIP”) is scheduled to expire on September 20, 2022. We cannot assure you if or when NFIP will be reauthorized. If NFIP is not reauthorized, it could have an adverse effect on the value of properties in flood zones or their ability to repair or rebuild after flood damage.
We cannot assure you that the borrowers will in the future be able to comply with requirements to maintain adequate insurance with respect to the mortgaged properties, and any uninsured loss could
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have a material adverse impact on the amount available to make payments on the related mortgage loan, and consequently, the offered certificates. As with all real estate, if reconstruction (for example, following fire or other casualty) or any major repair or improvement is required to the damaged property, changes in laws and governmental regulations may be applicable and may materially affect the cost to, or ability of, the borrowers to effect such reconstruction, major repair or improvement. As a result, the amount realized with respect to the mortgaged properties, and the amount available to make payments on the related mortgage loan, and consequently, the offered certificates, could be reduced. In addition, we cannot assure you that the amount of insurance required or provided would be sufficient to cover damages caused by any casualty, or that such insurance will be available in the future at commercially reasonable rates. See representation and warranty number 16 on Annex D-1, representation and warranty number 18 on Annex E-1 and representation and warranty number 16 on Annex F-1 and the identified exceptions to those representations and warranties, if any, on Annex D-2, Annex E-2 and Annex F-2, respectively, for additional information.
Terrorism Insurance May Not Be Available for All Mortgaged Properties
The occurrence or the possibility of terrorist attacks could (1) lead to damage to one or more of the mortgaged properties if any terrorist attacks occur or (2) result in higher costs for security and insurance premiums or diminish the availability of insurance coverage for losses related to terrorist attacks, particularly for large properties, which could adversely affect the cash flow at those mortgaged properties.
After the September 11, 2001 terrorist attacks in New York City and the Washington, D.C. area, all forms of insurance were impacted, particularly from a cost and availability perspective, including comprehensive general liability and business interruption or rent loss insurance policies required by typical mortgage loans. To give time for private markets to develop a pricing mechanism for terrorism risk and to build capacity to absorb future losses that may occur due to terrorism, the Terrorism Risk Insurance Act of 2002 was enacted on November 26, 2002, establishing the Terrorism Insurance Program. The Terrorism Insurance Program was reauthorized on December 20, 2019 through December 31, 2027 pursuant to the Terrorism Risk Insurance Program Reauthorization Act of 2019 (“TRIPRA”).
The Terrorism Insurance Program requires insurance carriers to provide terrorism coverage in their basic “all-risk” policies. Any commercial property and casualty terrorism insurance exclusion that was in force on November 26, 2002 is automatically void to the extent that it excluded losses that would otherwise be insured losses. Any state approval of those types of exclusions in force on November 26, 2002 is also void.
Under the Terrorism Insurance Program, the federal government shares in the risk of losses occurring within the United States resulting from acts committed in an effort to influence or coerce United States civilians or the United States government. The federal share of compensation for insured losses of an insurer will be equal to 80% of the portion of such insured losses that exceed a deductible equal to 20% of the value of the insurer’s direct earned premiums over the calendar year immediately preceding that program year. Federal compensation in any program year is capped at $100 billion (with insurers being liable for any amount that exceeds such cap), and no compensation is payable with respect to a terrorist act unless the aggregate industry losses relating to such act exceed $200 million. The Terrorism Insurance Program does not cover nuclear, biological, chemical or radiological attacks. Unless a borrower obtains separate coverage for events that do not meet the thresholds or other requirements above, such events will not be covered.
If the Terrorism Insurance Program is not reenacted after its expiration in 2027, premiums for terrorism insurance coverage will likely increase and the terms of such insurance policies may be materially amended to increase stated exclusions or to otherwise effectively decrease the scope of coverage available (perhaps to the point where it is effectively not available). In addition, to the extent that any insurance policies contain a “sunset clause” (i.e., clauses that void terrorism coverage if the federal insurance backstop program is not renewed), then such policies may cease to provide terrorism insurance upon the expiration of the Terrorism Insurance Program. We cannot assure you that the
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Terrorism Insurance Program or any successor program will create any long term changes in the availability and cost of such insurance. Moreover, future legislation, including regulations expected to be adopted by the Treasury Department pursuant to TRIPRA, may have a material effect on the availability of federal assistance in the terrorism insurance market. To the extent that uninsured or underinsured casualty losses occur with respect to the related mortgaged properties, losses on the mortgage loans may result. In addition, the failure to maintain such terrorism insurance may constitute a default under the related mortgage loan.
Some of the mortgage loans do not require the related borrower to maintain terrorism insurance. In addition, most of the mortgage loans contain limitations on the related borrower’s obligation to obtain terrorism insurance, such as (i) waiving the requirement that such borrower maintain terrorism insurance if such insurance is not available at commercially reasonable rates, (ii) providing that the related borrower is not required to spend in excess of a specified dollar amount (or in some cases, a specified multiple of what is spent on other insurance) in order to obtain such terrorism insurance, (iii) requiring coverage only for as long as the TRIPRA is in effect, or (iv) requiring coverage only for losses arising from domestic acts of terrorism or from terrorist acts certified by the federal government as “acts of terrorism” under the TRIPRA. See “Annex A-3—Description of Top Fifteen Mortgage Loans and Additional Mortgage Loan Information” for a summary of the terrorism insurance requirements under each of the ten largest mortgage loans.
We cannot assure you that all of the mortgaged properties will be insured against the risks of terrorism and similar acts. As a result of any of the foregoing, the amount available to make distributions on your certificates could be reduced.
We cannot assure you that the conflicts arising where a borrower sponsor is affiliated with a tenant at the Mortgaged Property will not adversely impact the value of your Mortgage Loans.
Other mortgaged properties securing mortgage loans may also be insured under a blanket policy or self-insured or insured by a sole tenant. See “—Risks Associated with Blanket Insurance Policies or Self-Insurance” below.
Risks Associated with Blanket Insurance Policies or Self-Insurance
Certain of the mortgaged properties are covered by blanket insurance policies, which also cover other properties of the related borrower or its affiliates (including certain properties in close proximity to the mortgaged properties). In the event that such policies are drawn on to cover losses on such other properties, the amount of insurance coverage available under such policies would thereby be reduced and could be insufficient to cover each mortgaged property’s insurable risks. In addition, with respect to some of the mortgaged properties, a sole or significant tenant is allowed to provide self-insurance against risks.
Additionally, if the mortgage loans that allow coverage under blanket insurance policies are part of a group of mortgage loans with related borrowers, then all of the related mortgaged properties may be covered under the same blanket policy, which may also cover other properties owned by affiliates of such borrowers.
Certain mortgaged properties may also be insured or self-insured by a sole or significant tenant, as further described under “Description of the Mortgage Pool—Insurance Considerations”.
Condemnation of a Mortgaged Property May Adversely Affect Distributions on Certificates
From time to time, there may be condemnations pending or threatened against one or more of the mortgaged properties securing the mortgage loans. The proceeds payable in connection with a total condemnation may not be sufficient to restore the related mortgaged property or to satisfy the remaining indebtedness of the related mortgage loan. The occurrence of a partial condemnation may have a material adverse effect on the continued use of, or income generated by, the affected mortgaged
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property. Therefore, we cannot assure you that the occurrence of any condemnation will not have a negative impact upon distributions on your offered certificates.
Limited Information Causes Uncertainty
Historical Information. Some of the mortgage loans that we intend to include in the issuing entity are secured in whole or in part by mortgaged properties for which limited or no historical operating information is available. As a result, you may find it difficult to analyze the historical performance of those mortgaged properties.
A mortgaged property may lack prior operating history or historical financial information because it is newly constructed or renovated, it is a recent acquisition by the related borrower or it is a single-tenant property that is subject to a triple net lease. In addition, a tenant’s lease may contain confidentiality provisions that restrict the sponsors’ access to or disclosure of such tenant’s financial information. The underwritten net cash flows and underwritten net operating income for such mortgaged properties are derived principally from current rent rolls or tenant leases and historical expenses, adjusted to account for, among other things, inflation, significant occupancy increases and/or a market rate management fee. In some cases, underwritten net cash flows and underwritten net operating income for mortgaged properties are based all or in part on leases (or letters of intent) that are not yet in place (and may still be under negotiation) or on tenants that may have signed a lease (or letter of intent), or lease amendment expanding the leased space, but are not yet in occupancy and/or paying rent, which present certain risks described in “—Underwritten Net Cash Flow Could Be Based On Incorrect or Failed Assumptions” below.
See Annex A-1 for certain historical financial information relating to the mortgaged properties, including net operating income for the most recent reporting period and prior three calendar years, to the extent available.
Ongoing Information. The primary source of ongoing information regarding the offered certificates, including information regarding the status of the related mortgage loans and any credit support for the offered certificates, will be the periodic reports delivered to you. See “Description of the Certificates—Reports to Certificateholders; Certain Available Information”. We cannot assure you that any additional ongoing information regarding the offered certificates will be available through any other source. The limited nature of the available information in respect of the offered certificates may adversely affect their liquidity, even if a secondary market for the offered certificates does develop.
We are not aware of any source through which pricing information regarding the offered certificates will be generally available on an ongoing basis or on any particular date.
Underwritten Net Cash Flow Could Be Based On Incorrect or Failed Assumptions
As described under “Description of the Mortgage Pool—Additional Information”, underwritten net cash flow generally includes cash flow (including any cash flow from master leases) adjusted based on a number of assumptions used by the sponsors. We make no representation that the underwritten net cash flow set forth in this prospectus as of the cut-off date or any other date represents actual future net cash flows. For example, with respect to certain mortgage loans included in the issuing entity, the occupancy of the related mortgaged property reflects tenants that (i) may not have yet actually executed leases (or letters of intent), (ii) have signed leases but have not yet taken occupancy and/or are not paying full contractual rent, (iii) are seeking or may in the future seek to sublet all or a portion of their respective spaces, (iv) are “dark” tenants but paying rent, or (v) are affiliates of the related borrower and are leasing space pursuant to a master lease or a space lease. Similarly, with respect to certain mortgage loans included in the issuing entity, the underwritten net cash flow may be based on certain tenants that have not yet executed leases or that have signed leases but are not yet in place and/or are not yet paying rent, or have a signed lease or lease amendment expanding the leased space, but are not yet in occupancy of all or a portion of their space and/or paying rent, or may assume that future contractual rent steps (during some or all of the remaining term of a lease) have occurred. In many cases, co-tenancy provisions were assumed to be satisfied and vacant space was assumed to be occupied and space that was due to expire was assumed to have been re-let, in each case at market rates that may have exceeded current rent. You
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should review these and other similar assumptions and make your own determination of the appropriate assumptions to be used in determining underwritten net cash flow.
In addition, underwritten or adjusted cash flows, by their nature, are speculative and are based upon certain assumptions and projections. For example, as described under “—Special Risks—Coronavirus Pandemic Has Adversely Affected the Global Economy and Will Likely Adversely Affect the Performance of the Mortgage Loans”, the assumptions and projections used to prepare underwritten information for the mortgage pool may not reflect any potential impacts of the COVID-19 pandemic. The failure of these assumptions or projections in whole or in part could cause the underwritten net operating income (calculated as described in “Description of the Mortgage Pool—Additional Information”) to vary substantially from the actual net operating income of a mortgaged property.
In the event of the inaccuracy of any assumptions or projections used in connection with the calculation of underwritten net cash flow, the actual net cash flow could be significantly different (and, in some cases, may be materially less) than the underwritten net cash flow presented in this prospectus, and this would change other numerical information presented in this prospectus based on or derived from the underwritten net cash flow, such as the debt service coverage ratios or debt yield presented in this prospectus. We cannot assure you that any such assumptions or projections made with respect to any mortgaged property will, in fact, be consistent with that mortgaged property’s actual performance.
Frequent and Early Occurrence of Borrower Delinquencies and Defaults May Adversely Affect Your Investment
If you calculate the anticipated yield of your offered certificates based on a rate of default or amount of losses lower than that actually experienced on the mortgage loans and those additional losses result in a reduction of the total distributions on, or the certificate balance of, your offered certificates, your actual yield to maturity will be lower than expected and could be negative under certain extreme scenarios. The timing of any loss on a liquidated mortgage loan that results in a reduction of the total distributions on or the certificate balance of your offered certificates will also affect the actual yield to maturity of your offered certificates, even if the rate of defaults and severity of losses are consistent with your expectations. In general, the earlier a loss is borne by you, the greater the effect on your yield to maturity.
Delinquencies on the mortgage loans, if the delinquent amounts are not advanced, may result in shortfalls in distributions of interest and/or principal to the holders of the offered certificates for the current month. Furthermore, no interest will accrue on this shortfall during the period of time that the payment is delinquent. Additionally, in instances where the principal portion of any balloon payment scheduled with respect to a mortgage loan is collected by the master servicer following the end of the related collection period, no portion of the principal received on such payment will be passed through for distribution to the certificateholders until the subsequent distribution date, which may result in shortfalls in distributions of interest to the holders of the offered certificates in the following month. Furthermore, in such instances no provision is made for the master servicer or any other party to cover any such interest shortfalls that may occur as a result. In addition, if interest and/or principal advances and/or servicing advances are made with respect to a mortgage loan after a default and the related mortgage loan is thereafter worked out under terms that do not provide for the repayment of those advances in full at the time of the workout, then any reimbursements of those advances prior to the actual collection of the amount for which the advance was made may also result in shortfalls in distributions of principal to the holders of the offered certificates with certificate balances for the current month. Even if losses on the mortgage loans are not allocated to a particular class of offered certificates with certificate balances, the losses may affect the weighted average life and yield to maturity of that class of offered certificates. In the case of any material monetary or material non-monetary default, the special servicer may accelerate the maturity of the related mortgage loan, which could result in an acceleration of principal distributions to the certificateholders. The special servicer may also extend or modify a mortgage loan, which could result in a substantial delay in principal distributions to the certificateholders. In addition, losses on the mortgage loans, even if not allocated to a class of offered certificates with certificate balances, may result in a higher percentage ownership interest evidenced by those offered certificates in the remaining mortgage loans than would otherwise have resulted absent the loss. The consequent effect on the weighted average life and yield to
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maturity of the offered certificates will depend upon the characteristics of those remaining mortgage loans in the issuing entity.
Due to the COVID-19 pandemic, the aggregate number and size of delinquent loans in a given collection period may be significant, and the master servicer may determine that advances of payments on such mortgage loans are not or would not be recoverable or may not be able to make such advances given the severity of delinquencies (in this transaction or other transactions), which would result in shortfalls and losses on the certificates. See also “—Special Risks—Coronavirus Pandemic Has Adversely Affected the Global Economy and Will Likely Adversely Affect the Performance of the Mortgage Loans”.
The Mortgage Loans Have Not Been Reviewed or Re-Underwritten by Us
Although the sponsors have conducted a review of the mortgage loans to be sold to us for this securitization transaction, we, as the depositor for this securitization transaction, have neither originated the mortgage loans nor conducted a review or re-underwriting of the mortgage loans. Instead, we have relied on the representations and warranties made by the applicable sponsors and the remedies for breach of a representation and warranty as described under “Description of the Mortgage Loan Purchase Agreements” and the sponsor’s description of its underwriting criteria described under “Transaction Parties—The Sponsors and Mortgage Loan Sellers—German American Capital Corporation—DB Originators’ Underwriting Guidelines and Processes”, “—Citi Real Estate Funding Inc.—CREFI’s Underwriting Guidelines and Processes”, “—Goldman Sachs Mortgage Company—Goldman Originator’s Underwriting Guidelines and Processes” and “—JPMorgan Chase Bank, National Association—JPMCB’s Underwriting Guidelines and Processes”. A description of the review conducted by each sponsor for this securitization transaction is set forth under “Transaction Parties—The Sponsors and Mortgage Loan Sellers—German American Capital Corporation—Review of GACC Mortgage Loans”, “—Citi Real Estate Funding Inc.—Review of the CREFI Mortgage Loans”, “—Goldman Sachs Mortgage Company—Review of GSMC Mortgage Loans” and “—JPMorgan Chase Bank, National Association—Review of JPMCB Mortgage Loans”.
The representations and warranties made by the sponsors may not cover all of the matters that one would review in underwriting a mortgage loan and you should not view them as a substitute for re-underwriting the mortgage loans. Furthermore, these representations and warranties in some respects represent an allocation of risk rather than a confirmed description of the mortgage loans. If we had re-underwritten the mortgage loans, it is possible that the re-underwriting process may have revealed problems with a mortgage loan not covered by a representation or warranty or may have revealed inaccuracies in the representations and warranties. See “—Other Risks Relating to the Certificates—Sponsors May Not Make Required Repurchases or Substitutions of Defective Mortgage Loans or Pay Any Loss of Value Payment Sufficient to Cover All Losses on a Defective Mortgage Loan” below, and “Description of the Mortgage Loan Purchase Agreements”.
As a result of the foregoing, you are advised and encouraged to make your own investment decision based on a careful review of the information set forth in this prospectus and your own view of the mortgage pool.
Static Pool Data Would Not Be Indicative of the Performance of this Pool
As a result of the distinct nature of each pool of commercial mortgage loans, and the separate mortgage loans within the pool, this prospectus does not include disclosure concerning the delinquency and loss experience of static pools of periodic originations by any sponsor of assets of the type to be securitized (known as “static pool data”). In particular, static pool data showing a low level of delinquencies and defaults would not be indicative of the performance of this pool or any other pools of mortgage loans originated by the same sponsor or sponsors.
While there may be certain common factors affecting the performance and value of income-producing real properties in general, those factors do not apply equally to all income-producing real properties and, in many cases, there are unique factors that will affect the performance and/or value of a particular
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income-producing real property. Moreover, the effect of a given factor on a particular real property will depend on a number of variables, including but not limited to property type, geographic location, competition, sponsorship and other characteristics of the property and the related commercial mortgage loan. Each income-producing real property represents a separate and distinct business venture and, as a result, each of the mortgage loans requires a unique underwriting analysis. Furthermore, economic and other conditions affecting real properties, whether worldwide, national, regional or local, vary over time. The performance of a pool of mortgage loans originated and outstanding under a given set of economic conditions may vary significantly from the performance of an otherwise comparable mortgage pool originated and outstanding under a different set of economic conditions.
Therefore, you should evaluate this offering on the basis of the information set forth in this prospectus with respect to the mortgage loans, and not on the basis of the performance of other pools of securitized commercial mortgage loans.
See also “Risk Factors—Special Risks—Current Coronavirus Pandemic Has Adversely Affected the Global Economy and Will Likely Adversely Affect the Performance of the Mortgage Loans”.
Appraisals May Not Reflect Current or Future Market Value of Each Property
Appraisals were obtained with respect to each of the mortgaged properties at or about the time of origination of the applicable mortgage loan (or whole loan, if applicable). See Annex A-1 for the dates of the latest appraisals for the mortgaged properties. We have not obtained new appraisals of the mortgaged properties or assigned new valuations to the mortgage loans in connection with the offering of the offered certificates. The market values of the mortgaged properties could have declined since the origination of the related mortgage loans.
In general, appraisals represent the analysis and opinion of qualified appraisers and are not guarantees of present or future value. One appraiser may reach a different conclusion than that of a different appraiser with respect to the same property. The appraisals seek to establish the amount a typically motivated buyer would pay a typically motivated seller and, in certain cases, may have taken into consideration the purchase price paid by the borrower. The amount could be significantly higher than the amount obtained from the sale of a mortgaged property in a distress or liquidation sale.
Information regarding the appraised values of the mortgaged properties (including loan-to-value ratios) presented in this prospectus is not intended to be a representation as to the past, present or future market values of the mortgaged properties. For example, in some cases, a borrower or its affiliate may have acquired the related mortgaged property for a price or otherwise for consideration in an amount that is less than the related appraised value specified on Annex A-1, including at a foreclosure sale or through acceptance of a deed-in-lieu of foreclosure. Historical operating results of the mortgaged properties used in these appraisals, as adjusted by various assumptions, estimates and subjective judgments on the part of the appraiser, may not be comparable to future operating results. In addition, certain appraisals may be based on extraordinary assumptions, including without limitation, that certain tenants are in-place and paying rent when such tenants have not yet taken occupancy or that certain renovations or property improvement plans have been completed. Such capital expenditures are not required and have not been reserved for under the mortgage loan documents, and we cannot assure you that they will be made. Additionally, certain appraisals with respect to mortgage loans secured by multiple mortgaged properties may have been conducted on a portfolio basis rather than on an individual property basis, and the sum of the values of the individual properties may be different from (and in some cases may be less than) the appraised value of the aggregate of such properties on a portfolio basis. In addition, other factors may impair the mortgaged properties’ value without affecting their current net operating income, including:
| ● | changes in governmental regulations, zoning or tax laws; |
| ● | potential environmental or other legal liabilities; |
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| ● | the availability of refinancing; and |
| ● | changes in interest rate levels. |
In certain cases, appraisals may reflect the “as-is” value or other than “as-is” values. However, the appraised value reflected in this prospectus with respect to each mortgaged property reflects the “as-is” value, except as described under “Description of the Mortgage Pool—Certain Calculations and Definitions” and “—Appraised Value”, where, to the extent another value is used, such value and the satisfaction of the related conditions or assumptions are described, which may contain certain assumptions, such as future construction completion, projected re-tenanting or increased tenant occupancies. See “Description of the Mortgage Pool”.
In addition, investors should be aware that the appraisals for the mortgaged properties may have been obtained prior to the COVID-19 pandemic, or may not reflect the complete effects of the COVID-19 pandemic on the related mortgaged properties as the cumulative impact of the pandemic may not be known for some time. Similarly, net operating income and occupancy information used in underwriting the mortgage loans may not reflect current conditions, and in particular, the effects of the COVID-19 pandemic. As a result, appraised values, net operating income, occupancy, and related metrics, such as loan-to-value ratios, debt service coverage ratios and debt yields, may not accurately reflect the current conditions at the mortgaged properties.
Additionally, with respect to the appraisals setting forth assumptions, particularly those setting forth extraordinary assumptions, as to the “as-is” and other than “as-is” values or similar hypothetical values, we cannot assure you that those assumptions are or will be accurate or that such value will be the value of the related mortgaged property at the indicated stabilization or other relevant date or at maturity or anticipated repayment date. Any engineering report, site inspection or appraisal represents only the analysis of the individual consultant, engineer or inspector preparing such report at the time of such report, and may not reveal all necessary or desirable repairs, maintenance and capital improvement items. For additional information regarding the appraisals obtained by the sponsors or, in the case of any mortgage loan acquired by the related sponsor, appraisal(s) obtained by the related originator and relied upon by such sponsor, see “Transaction Parties—The Sponsors and Mortgage Loan Sellers—German American Capital Corporation”, “—Citi Real Estate Funding Inc.”, “—Goldman Sachs Mortgage Company” and “—JPMorgan Chase Bank, National Association”. We cannot assure you that the information set forth in this prospectus regarding the appraised values or loan-to-value ratios accurately reflects past, present or future market values of the mortgaged properties or the amount that would be realized upon a sale of the related mortgaged property.
Seasoned Mortgage Loans Present Additional Risk of Repayment
One (1) of the mortgage loans (0.8%) is a seasoned mortgage loan that was originated at least 25 months prior to the cut-off date. There are a number of risks associated with seasoned mortgage loans that are not present, or are present to a lesser degree, with more recently originated mortgage loans. For example:
| ● | property values and surrounding areas have likely changed since origination; |
| ● | origination standards at the time the mortgage loans were originated may have been different than current origination standards; |
| ● | the business circumstances and financial condition of the related borrowers and tenants may have changed since the mortgage loans were originated; |
| ● | the environmental circumstances at the mortgaged properties may have changed since the mortgage loans were originated; |
| ● | the physical condition of the mortgaged properties or improvements may have changed since origination; and |
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| ● | the circumstances of the mortgaged properties, the borrower and the tenants may have changed in other respects since. |
In addition, any seasoned mortgage loan may not satisfy all of the related sponsor’s underwriting standards. See “Transaction Parties—The Sponsors and the Mortgage Loan Sellers”.
The Performance of a Mortgage Loan and Its Related Mortgaged Property Depends in Part on Who Controls the Borrower and Mortgaged Property
The operation and performance of a mortgage loan will depend in part on the identity of the persons or entities who control the borrower and the mortgaged property. The performance of a mortgage loan may be adversely affected if control of a borrower changes, which may occur, for example, by means of transfers of direct or indirect ownership interests in the borrower, or if the mortgage loan is assigned to and assumed by another person or entity along with a transfer of the property to that person or entity.
Many of the mortgage loans generally place certain restrictions on the transfer and/or pledging of general partnership and managing member equity interests in a borrower, such as specific percentage or control limitations, although some have current or permit future mezzanine or subordinate debt. We cannot assure you the ownership of any of the borrowers would not change during the term of the related mortgage loan and result in a material adverse effect on your certificates. See “Description of the Mortgage Pool—Additional Indebtedness” and “—Certain Terms of the Mortgage Loans—“Due-On-Sale” and “Due-On-Encumbrance” Provisions”.
The Borrower’s Form of Entity May Cause Special Risks
The borrowers are legal entities rather than individuals. Mortgage loans made to legal entities may entail greater risks of loss than those associated with mortgage loans made to individuals. For example, a legal entity, as opposed to an individual, may be more inclined to seek legal protection from its creditors under the bankruptcy laws. Unlike individuals involved in bankruptcies, most entities generally, but not in all cases, do not have personal assets and creditworthiness at stake. The terms of certain of the mortgage loans require that the borrowers be single-purpose entities and, in most cases, such borrowers’ organizational documents or the terms of the mortgage loans limit their activities to the ownership of only the related mortgaged property or mortgaged properties and limit the borrowers’ ability to incur additional indebtedness. Such provisions are designed to mitigate the possibility that the borrower’s financial condition would be adversely impacted by factors unrelated to the related mortgaged property and mortgage loan. Such borrower may also have previously owned property other than the related mortgaged property or may be a so-called “recycled” single-purpose entity that previously had other business activities and liabilities. However, we cannot assure you that such borrowers have in the past complied, and will comply, with such requirements, and in some cases unsecured debt exists and/or is allowed in the future. Furthermore, in many cases such borrowers are not required to observe all covenants and conditions which typically are required in order for such borrowers to be viewed under standard rating agency criteria as “single purpose entities”.
Although a borrower may currently be a single purpose entity, in certain cases the borrowers were not originally formed as single purpose entities, but at origination of the related mortgage loan their organizational documents were amended. That borrower may have previously owned property other than the related mortgaged property and may not have observed all covenants that typically are required to consider a borrower a “single purpose entity” and thus may have liabilities arising from events prior to becoming a single purpose entity.
The organizational documents of a borrower or the direct or indirect managing partner or member of a borrower may also contain requirements that there be one or two independent directors, managers or trustees (depending on the entity form of such borrower) whose vote is required before the borrower files a voluntary bankruptcy or insolvency petition or otherwise institutes insolvency proceedings. Generally, but not always, the independent directors, managers or trustees may only be replaced with certain other independent successors. Although the requirement of having independent directors, managers or
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trustees is designed to mitigate the risk of a voluntary bankruptcy filing by a solvent borrower, a borrower could file for bankruptcy without obtaining the consent of its independent director(s)(and we cannot assure you that such bankruptcy would be dismissed as an unauthorized filing), and in any case the independent directors, managers or trustees may determine that a bankruptcy filing is an appropriate course of action to be taken by such borrower. Although the independent directors, managers or trustees generally owe no fiduciary duties to entities other than the borrower itself, such determination might take into account the interests and financial condition of such borrower’s parent entities and such parent entities’ other subsidiaries in addition to those of the borrower. Consequently, the financial distress of an affiliate of a borrower might increase the likelihood of a bankruptcy filing by a borrower.
The bankruptcy of a borrower, or a general partner or managing member of a borrower, may impair the ability of the lender to enforce its rights and remedies under the related mortgage. Certain of the mortgage loans have been made to single purpose limited partnerships that have a general partner or general partners that are not themselves single purpose entities. Such loans are subject to additional bankruptcy risk. The organizational documents of the general partner in such cases do not limit it to acting as the general partner of the partnership. Accordingly there is a greater risk that the general partner may become insolvent for reasons unrelated to the mortgaged property. The bankruptcy of a general partner may dissolve the partnership under applicable state law. In addition, even if the partnership itself is not insolvent, actions by the partnership and/or a bankrupt general partner that are outside the ordinary course of their business, such as refinancing the related mortgage loan, may require prior approval of the bankruptcy court in the general partner’s bankruptcy case. The proceedings required to resolve these issues may be costly and time-consuming.
Any borrower, even an entity structured as a single purpose entity, as an owner of real estate, will be subject to certain potential liabilities and risks as an owner of real estate. We cannot assure you that any borrower will not file for bankruptcy protection or that creditors of a borrower or a corporate or individual general partner or managing member of a borrower will not initiate a bankruptcy or similar proceeding against such borrower or corporate or individual general partner or managing member.
Certain borrowers’ organizational documents or the terms of certain mortgage loans permit an affiliated property manager to maintain a custodial account on behalf of such borrower and certain affiliates of such borrower into which funds available to such borrower under the terms of the related mortgage loans and funds of such affiliates are held, but which funds are and will continue to be separately accounted for as to each item of income and expense for each related mortgaged property and each related borrower. A custodial account structure for affiliated entities, while common among certain real estate investment trusts, institutions or independent owners of multiple properties, presents a risk for consolidation of the assets of such affiliates as commingling of funds is a factor a court may consider in considering a request by other creditors for substantive consolidation. Substantive consolidation is an equitable remedy that could result in an otherwise solvent company becoming subject to the bankruptcy proceedings of an insolvent affiliate, making its assets available to repay the debts of affiliated companies. A court has the discretion to order substantive consolidation in whole or in part and may include non-debtor affiliates of the bankrupt entity in the proceedings. In particular, consolidation may be ordered when corporate funds are commingled and used for a principal’s personal purposes, inadequate records of transfers are made and corporate entities are deemed an alter ego of a principal. Strict adherence to maintaining separate books and records, avoiding commingling of assets and otherwise maintaining corporate policies designed to preserve the separateness of corporate assets and liabilities make it less likely that a court would order substantive consolidation, but we cannot assure you that the related borrowers, property managers or affiliates will comply with these requirements as set forth in the related mortgage loans.
Furthermore, with respect to any affiliated borrowers, creditors of a common parent in bankruptcy may seek to consolidate the assets of such borrowers with those of the parent. Consolidation of the assets of such borrowers would likely have an adverse effect on the funds available to make distributions on your certificates, and may lead to a downgrade, withdrawal or qualification of the ratings of your certificates.
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See “Description of the Mortgage Pool—Loan Purpose; Default History, Bankruptcy Issues and Other Proceedings” and “Certain Legal Aspects of Mortgage Loans—Bankruptcy Laws”.
In addition, borrowers may own a mortgaged property as a Delaware statutory trust or as tenants-in-common. Delaware statutory trusts may be restricted in their ability to actively operate a property, and in the case of a mortgaged property that is owned by a Delaware statutory trust or by tenants-in-common, there is a risk that obtaining the consent of the holders of the beneficial interests in the Delaware statutory trust or the consent of the tenants-in-common will be time consuming and cause delays with respect to the taking of certain actions by or on behalf of the borrower, including with respect to the related mortgaged property. See “—Tenancies-in-Common May Hinder Recovery” below.
In addition, certain of the mortgage loans may have borrowers that are wholly or partially (directly or indirectly) owned by one or more crowd funding investor groups or other diversified ownership structures. Investments in the commercial real estate market through crowd funding investor groups are a relatively recent development and there may be certain unanticipated risks to this new ownership structure which may adversely affect the related mortgage loan. Typically, the crowd funding investor group is made up of a large number of individual investors who invest relatively small amounts in the group pursuant to a securities offering. With respect to an equity investment in the borrower, the crowd funding investor group in turn purchases a stake in the borrower. Accordingly, equity in the borrower is indirectly held by the individual investors in the crowd funding group. We cannot assure you that either the crowd funding investor group or the individual investors in the crowd funding investor group or other diversified ownership structure have relevant expertise in the commercial real estate market. Additionally, crowd funding investor groups are required to comply with various securities regulations related to offerings of securities and we cannot assure you that any enforcement action or legal proceeding regarding failure to comply with such securities regulations would not delay enforcement of the related mortgage loan. Furthermore, we cannot assure you that a bankruptcy proceeding by the crowd funding investor group or other diversified ownership structure will not delay enforcement of the related mortgage loan or otherwise impair the borrower’s ability to operate the related mortgaged property. See “Description of the Mortgage Pool—Mortgage Pool Characteristics—Tenancies-in-Common or Diversified Ownership”. See “—Litigation Regarding the Mortgaged Properties or Borrowers May Impair Your Distributions”, “—Frequent and Early Occurrence of Borrower Delinquencies and Defaults May Adversely Affect Your Investment” and “—The Performance of a Mortgage Loan and Its Related Mortgaged Property Depends in Part on Who Controls the Borrower and Mortgaged Property”.
See representation and warranty number 31 on Annex D-1, representation and warranty number 33 on Annex E-1 and representation and warranty number 31 on Annex F-1 and any identified exceptions to those representations and warranties, if any, on Annex D-2, Annex E-2 and Annex F-2, respectively, for additional information.
A Bankruptcy Proceeding May Result in Losses and Delays in Realizing on the Mortgage Loans
Numerous statutory provisions, including the federal bankruptcy code and state laws affording relief to debtors, may interfere with and delay the ability of a secured mortgage lender to obtain payment of a loan, to realize upon collateral and/or to enforce a deficiency judgment. For example, under the federal bankruptcy code, virtually all actions (including foreclosure actions and deficiency judgment proceedings) are automatically stayed upon the filing of a bankruptcy petition, and, often, no interest or principal payments are made during the course of the bankruptcy proceeding. Also, under federal bankruptcy law, the filing of a petition in bankruptcy by or on behalf of a junior lien holder may stay the senior lender from taking action to foreclose out such junior lien. Certain of the mortgage loans have sponsors that have previously filed bankruptcy and we cannot assure you that such sponsors will not be more likely than other sponsors to utilize their rights in bankruptcy in the event of any threatened action by the mortgagee to enforce its rights under the related mortgage loan documents. As a result, the issuing entity’s recovery with respect to borrowers in bankruptcy proceedings may be significantly delayed, and the aggregate amount ultimately collected may be substantially less than the amount owed. See “—Other Financings or Ability to Incur Other Indebtedness Entails Risk” below, “Description of the Mortgage Pool—Loan
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Purpose; Default History, Bankruptcy Issues and Other Proceedings” and “Certain Legal Aspects of Mortgage Loans—Bankruptcy Laws”.
Additionally, the courts of any state may refuse the foreclosure of a mortgage or deed of trust when an acceleration of the indebtedness would be inequitable or unjust or the circumstances would render the action unconscionable. See “Certain Legal Aspects of Mortgage Loans—Foreclosure”.
See also “—Performance of the Mortgage Loans Will Be Highly Dependent on the Performance of Tenants and Tenant Leases—Tenant Bankruptcy Could Result in a Rejection of the Related Lease” above.
Litigation Regarding the Mortgaged Properties or Borrowers May Impair Your Distributions
There may be (and there may exist from time to time) pending or threatened legal proceedings against, or disputes with, the borrowers, the borrower sponsors, the managers of the mortgaged properties and their respective affiliates arising out of their ordinary business. It is also possible that, under certain extraordinary circumstances, economic or other sanctions may be imposed upon such entities. We have not undertaken a search for all legal proceedings that relate to the borrowers, borrower sponsors, managers for the mortgaged properties or their respective affiliates. Potential investors are advised and encouraged to perform their own searches related to such matters to the extent relevant to their investment decision. Any such litigation or dispute of the foregoing issues, even if ultimately settled or resolved, may materially impair distributions to certificateholders. For example, property income may not be available to make debt service payments if borrowers must use property income to pay judgments, legal fees or litigation costs. Similarly, borrowers’ and borrower sponsors’ operations at the related mortgaged properties may be restricted, including the use of property income or borrower sponsor contributions to pay debt service or otherwise support mortgaged property operations.
Additionally, a borrower or a principal of a borrower or affiliate may have been a party to a bankruptcy, foreclosure, litigation or other proceeding, particularly against a lender, or has been convicted of a crime in the past. In addition, certain of the borrower sponsors, property managers, affiliates of any of the foregoing and/or entities controlled thereby have been a party to bankruptcy proceedings, mortgage loan defaults and restructures, discounted payoffs, foreclosure proceedings or deed-in-lieu of foreclosure transactions, or other material proceedings (including criminal proceedings) in the past, whether or not related to the mortgaged property securing a mortgage loan in this securitization transaction. In some cases, mortgaged properties securing certain of the mortgage loans previously secured other loans that had been in default, restructured or the subject of a discounted payoff, foreclosure or deed-in-lieu of foreclosure.
Certain of the borrower sponsors may have a history of litigation or other proceedings against their lender, in some cases involving various parties to a securitization transaction. We cannot assure you that the borrower sponsors that have engaged in litigation or other proceedings in the past will not commence action against the issuing entity in the future upon any attempt by the special servicer to enforce the mortgage loan documents. Any such actions by the borrower or borrower sponsor may result in significant expense and potential loss to the issuing entity and a shortfall in funds available to make payments on the offered certificates. In addition, certain principals or borrower sponsors may have in the past been convicted of, or pled guilty to, a felony. We cannot assure you that the borrower or principal will not be more likely than other borrowers or principals to avail itself or cause a borrower to avail itself of its legal rights, under the federal bankruptcy code or otherwise, in the event of an action or threatened action by the lender or its servicer to enforce the related mortgage loan documents, or otherwise conduct its operations in a manner that is in the best interests of the lender and/or the mortgaged property. We cannot assure you that any such proceedings or actions will not have a material adverse effect upon distributions on your certificates. Further, borrowers, principals of borrowers, property managers and affiliates of such parties may, in the future, be involved in bankruptcy proceedings, foreclosure proceedings or other material proceedings (including criminal proceedings), whether or not related to the mortgage loans. We cannot assure you that any such proceedings will not negatively impact a borrower’s
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or borrower sponsor’s ability to meet its obligations under the related mortgage loan and, as a result could have a material adverse effect upon your certificates.
Often it is difficult to confirm the identity of owners of all of the equity in a borrower, which means that past issues may not be discovered as to such owners. See “Description of the Mortgage Pool—Litigation and Other Considerations” and “—Loan Purpose; Default History, Bankruptcy Issues and Other Proceedings” for additional information on certain mortgage loans in the issuing entity. See also representation and warranty number 31 in Annex D-1, representation and warranty number 33 in Annex E-1, representation and warranty number 31 in Annex F-1, and the identified exceptions to those representations and warranties in Annex D-2, Annex D-3, Annex E-2 or Annex F-2, as applicable. However, we cannot assure you that there are no undisclosed bankruptcy proceedings, foreclosure proceedings, deed-in-lieu-of-foreclosure transaction and/or mortgage loan workout matters that involved one or more mortgage loans or mortgaged properties, and/or a guarantor, borrower sponsor or other party to a mortgage loan.
In addition, in the event the owner of a borrower experiences financial problems, we cannot assure you that such owner would not attempt to take actions with respect to the mortgaged property that may adversely affect the borrower’s ability to fulfill its obligations under the related mortgage loan. See “Description of the Mortgage Pool—Litigation and Other Considerations” for information regarding litigation matters with respect to certain mortgage loans.
Other Financings or Ability to Incur Other Indebtedness Entails Risk
When a borrower (or its constituent members) also has one or more other outstanding loans (even if they are pari passu, subordinated, mezzanine, preferred equity or unsecured loans or another type of equity pledge), the issuing entity is subjected to additional risk such as:
| ● | the borrower (or its constituent members) may have difficulty servicing and repaying multiple financings; |
| ● | the existence of other financings will generally also make it more difficult for the borrower to obtain refinancing of the related mortgage loan (or whole loan, if applicable) or sell the related mortgaged property and may thereby jeopardize repayment of the mortgage loan (or whole loan, if applicable); |
| ● | the need to service additional financings may reduce the cash flow available to the borrower to operate and maintain the mortgaged property and the value of the mortgaged property may decline as a result; |
| ● | if a borrower (or its constituent members) defaults on its mortgage loan and/or any other financing, actions taken by other lenders such as a suit for collection, foreclosure or an involuntary petition for bankruptcy against the borrower could impair the security available to the issuing entity, including the mortgaged property, or stay the issuing entity’s ability to foreclose during the course of the bankruptcy case; |
| ● | the bankruptcy of another lender also may operate to stay foreclosure by the issuing entity; and |
| ● | the issuing entity may also be subject to the costs and administrative burdens of involvement in foreclosure or bankruptcy proceedings or related litigation. |
Although the companion loans related to the whole loans are not assets of the issuing entity, each related borrower is still obligated to make interest and principal payments on such companion loans. As a result, the issuing entity is subject to additional risks, including:
| ● | the risk that the necessary maintenance of the related mortgaged property could be deferred to allow the borrower to pay the required debt service on these other obligations and that the value of the mortgaged property may fall as a result; and |
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| ● | the risk that it may be more difficult for the borrower to refinance these loans or to sell the related mortgaged property for purposes of making any balloon payment on the entire balance of such loans and the related additional debt at maturity or anticipated repayment date. |
With respect to mezzanine financing (if any), while a mezzanine lender has no security interest in the related mortgaged properties, a default under a mezzanine loan could cause a change in control of the related borrower. With respect to mortgage loans that permit mezzanine financing, the relative rights of the mortgagee and the related mezzanine lender will generally be set forth in an intercreditor agreement, which agreements typically provide that the rights of the mezzanine lender (including the right to payment) against the borrower and mortgaged property are subordinate to the rights of the mortgage lender and that the mezzanine lender may not take any enforcement action against the mortgage borrower and mortgaged property.
In addition, the mortgage loan documents related to certain mortgage loans may have or permit future “preferred equity” structures, where one or more special limited partners or members receive a preferred return in exchange for an infusion of capital or other type of equity pledge that may require payments of a specified return or of excess cash flow. Such arrangements can present risks that resemble mezzanine debt, including dilution of the borrower’s equity in the mortgaged property, stress on the cash flow in the form of a preferred return or excess cash payments, and/or potential changes in the management of the related mortgaged property in the event the preferred return is not satisfied.
Additionally, the terms of certain mortgage loans permit or require the borrowers to post letters of credit and/or surety bonds for the benefit of the related mortgage loan, which may constitute a contingent reimbursement obligation of the related borrower or an affiliate. The issuing bank or surety will not typically agree to subordination and standstill protection benefiting the mortgagee.
In addition, borrowers under most of the mortgage loans are generally permitted to incur trade payables and equipment financing, which may not be limited or may be significant, in order to operate the related mortgaged properties. Also, with respect to certain mortgage loans the related borrower either has incurred or is permitted to incur unsecured debt from an affiliate of either the borrower or the sponsor of the borrower. See “Description of the Mortgage Pool—Additional Indebtedness—Other Unsecured Indebtedness”.
For additional information, see “Description of the Mortgage Pool—Additional Indebtedness” and “Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans”.
Tenancies-in-Common May Hinder Recovery
Certain of the mortgage loans included in the issuing entity have borrowers that own the related mortgaged properties as tenants-in-common. In general, with respect to a tenant-in-common ownership structure, each tenant-in-common owns an undivided share in the property and if such tenant-in-common desires to sell its interest in the property (and is unable to find a buyer or otherwise needs to force a partition) the tenant-in-common has the ability to request that a court order a sale of the property and distribute the proceeds to each tenant in common proportionally. As a result, if a tenant-in-common that has not waived its right of partition or similar right exercises a right of partition, the related mortgage loan may be subject to prepayment. The bankruptcy, dissolution or action for partition by one or more of the tenants-in-common could result in an early repayment of the related mortgage loan, significant delay in recovery against the tenant-in-common borrowers, particularly if the tenant-in-common borrowers file for bankruptcy separately or in series (because each time a tenant-in-common borrower files for bankruptcy, the bankruptcy court stay will be reinstated), a material impairment in property management and a substantial decrease in the amount recoverable upon the related mortgage loan. Not all tenants-in-common under the mortgage loans will be single purpose entities. If a tenant-in-common borrower has waived its right to partition, we cannot assure you that, if challenged, this waiver would be enforceable. In addition, in some cases, the related mortgage loan documents may provide for full recourse (or in an amount equal to its pro rata share of the debt) to the related tenant-in-common borrower or the guarantor if a tenant-in-common files for partition.
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Risks Relating to Enforceability of Yield Maintenance Charges, Prepayment Premiums or Defeasance Provisions
Provisions requiring yield maintenance charges, prepayment premiums or lockout periods may not be enforceable in some states and under federal bankruptcy law. Provisions requiring prepayment premiums or yield maintenance charges also may be interpreted as constituting the collection of interest for usury purposes. Accordingly, we cannot assure you that the obligation to pay a yield maintenance charge or prepayment premium will be enforceable. Also, we cannot assure you that foreclosure proceeds will be sufficient to pay an enforceable yield maintenance charge or prepayment premium.
Additionally, although the collateral substitution provisions related to defeasance do not have the same effect on the certificateholders as prepayment, we cannot assure you that a court would not interpret those provisions as the equivalent of a yield maintenance charge or prepayment premium. In certain jurisdictions those collateral substitution provisions might therefore be deemed unenforceable or usurious under applicable law or public policy.
Risks Associated with One Action Rules
Several states (such as California) have laws that prohibit more than one “judicial action” to enforce a mortgage obligation, and some courts have construed the term “judicial action” broadly. Accordingly, the special servicer will be required to obtain advice of counsel prior to enforcing any of the issuing entity’s rights under any of the mortgage loans that include mortgaged properties where a “one action” rule could be applicable. In the case of a multi-property mortgage loan which is secured by mortgaged properties located in multiple states, the special servicer may be required to foreclose first on properties located in states where “one action” rules apply (and where non-judicial foreclosure is permitted) before foreclosing on properties located in states where judicial foreclosure is the only permitted method of foreclosure. See “Certain Legal Aspects of Mortgage Loans—Foreclosure”.
State Law Limitations on Assignments of Leases and Rents May Entail Risks
Generally mortgage loans included in an issuing entity secured by mortgaged properties that are subject to leases typically will be secured by an assignment of leases and rents pursuant to which the related borrower (or with respect to any indemnity deed of trust structure, the related property owner) assigns to the lender its right, title and interest as landlord under the leases of the related mortgaged properties, and the income derived from those leases, as further security for the related mortgage loan, while retaining a license to collect rents for so long as there is no default. If the borrower defaults, the license terminates and the lender is entitled to collect rents. Some state laws may require that the lender take possession of the related property and obtain a judicial appointment of a receiver before becoming entitled to collect the rents. In addition, if bankruptcy or similar proceedings are commenced by or in respect of the borrower, the lender’s ability to collect the rents may be adversely affected. In particular, with respect to properties that are master leased, state law may provide that the lender will not have a perfected security interest in the underlying rents (even if covered by an assignment of leases and rents), unless there is also a mortgage on the master tenant’s leasehold interest. Such a mortgage is not typically obtained. See “Certain Legal Aspects of Mortgage Loans—Leases and Rents” and “—Bankruptcy Laws”.
Various Other Laws Could Affect the Exercise of Lender’s Rights
The laws of the jurisdictions in which the mortgaged properties are located (which laws may vary substantially) govern many of the legal aspects of the mortgage loans. These laws may affect the ability to foreclose on, and, in turn the ability to realize value from, the mortgaged properties securing the mortgage loans. For example, state law determines:
| ● | what proceedings are required for foreclosure; |
| ● | whether the borrower and any foreclosed junior lienors may redeem the property and the conditions under which these rights of redemption may be exercised; |
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| ● | whether and to what extent recourse to the borrower is permitted; and |
| ● | what rights junior mortgagees have and whether the amount of fees and interest that lenders may charge is limited. |
In addition, the laws of some jurisdictions may render certain provisions of the mortgage loans unenforceable or subject to limitations which may affect lender’s rights under the mortgage loans. Delays in liquidations of defaulted mortgage loans and shortfalls in amounts realized upon liquidation as a result of the application of these laws may create delays and shortfalls in payments to certificateholders. See “Certain Legal Aspects of Mortgage Loans”.
Risks of Anticipated Repayment Date Loans
Two (2) of the mortgage loans (11.7%) provide that, if after a certain date (referred to as the anticipated repayment date) the related borrower has not prepaid the mortgage loan in full, any principal outstanding after that anticipated repayment date will accrue interest at an increased interest rate rather than the stated mortgage loan rate. Although this feature may create an incentive for the borrower to repay the mortgage loan in full on its anticipated repayment date, a substantial payment would be required and the borrower has no obligation to do so. Excess interest, to the extent actually collected, will be paid to the holders of the Class S certificates and the holders of the VRR Interest, neither of which are offered by this prospectus. To the extent that payments are required to be made on a related subordinate companion loan or mezzanine loan prior to application of excess cash flow to repay an anticipated repayment date mortgage loan, the amount of excess cash flow available to repay such mortgage loan will be reduced. See “Description of the Mortgage Pool—Certain Terms of the Mortgage Loans—ARD Loan”.
Borrower May Be Unable To Repay Remaining Principal Balance on Maturity Date or Anticipated Repayment Date; Longer Amortization Schedules and Interest-Only Provisions Increase Risk
Mortgage loans with substantial remaining principal balances at their stated maturity date or anticipated repayment date, as applicable, involve greater risk than fully-amortizing mortgage loans. This is because the borrower may be unable to repay the mortgage loan at that time. In addition, fully amortizing mortgage loans which may pay interest on an “actual/360” basis but have fixed monthly payments may, in effect, have a small balloon payment due at maturity.
All of the mortgage loans have amortization schedules that are significantly longer than their respective terms to maturity or anticipated repayment date, as applicable, and many of the mortgage loans require only payments of interest for part or all of their respective terms. See “Description of the Mortgage Pool—Certain Terms of the Mortgage Loans—Due Dates; Mortgage Rates; Calculations of Interest”. A longer amortization schedule or an interest-only provision in a mortgage loan will result in a higher amount of principal outstanding under the mortgage loan at any particular time, including at the maturity date or anticipated repayment date of the mortgage loan, than would have otherwise been the case had a shorter amortization schedule been used or had the mortgage loan had a shorter interest-only period or not included an interest-only provision at all. That higher principal amount outstanding could both (i) make it more difficult for the related borrower to make the required balloon payment at maturity or repay the outstanding principal amount at the anticipated repayment date and (ii) lead to increased losses for the issuing entity either during the loan term or at maturity or anticipated repayment date if the mortgage loan becomes a defaulted mortgage loan.
A borrower’s ability to repay a mortgage loan on its stated maturity date or anticipated repayment date, as applicable, typically will depend upon its ability either to refinance the mortgage loan or to sell the mortgaged property at a price sufficient to permit repayment. A borrower’s ability to achieve either of these goals will be affected by a number of factors, including:
| ● | the availability of, and competition for, credit for commercial, multifamily or manufactured housing community real estate projects, which fluctuate over time; |
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| ● | the prevailing interest rates; |
| ● | the net operating income generated by the mortgaged property; |
| ● | the fair market value of the related mortgaged property; |
| ● | the borrower’s equity in the related mortgaged property; |
| ● | significant tenant rollover at the related mortgaged properties (see “—Retail Properties Have Special Risks” and “—Office Properties Have Special Risks” above); |
| ● | the borrower’s financial condition; |
| ● | the operating history and occupancy level of the mortgaged property; |
| ● | reductions in applicable government assistance/rent subsidy programs; |
| ● | the tax laws; and |
| ● | prevailing general and regional economic conditions. |
In addition, compliance with legal requirements, such as the credit risk retention regulations under the Dodd-Frank Act, could cause commercial real estate lenders to tighten their lending standards and reduce the availability of debt financing for commercial real estate borrowers. This, in turn, may adversely affect a borrower’s ability to refinance the related mortgage loan or sell the related mortgaged property on or before the related mortgage loan’s maturity date or anticipated repayment date, as applicable.
With respect to any mortgage loan that is part of a whole loan, the risks relating to balloon payment obligations are enhanced by the existence and amount of the related companion loans.
None of the sponsors, any party to the pooling and servicing agreement or any other person will be under any obligation to refinance any mortgage loan. However, in order to maximize recoveries on defaulted mortgage loans, the pooling and servicing agreement permits the special servicer (and each pooling and servicing agreement governing the servicing of a non-serviced whole loan may permit the related special servicer) to extend and modify mortgage loans in a manner consistent with the servicing standard, subject to the limitations described under “Pooling and Servicing Agreement—Realization Upon Mortgage Loans” and “—Modifications, Waivers and Amendments”.
Neither the master servicer nor the special servicer will have the ability to extend or modify a non-serviced mortgage loan because such mortgage loan is being serviced by a master servicer or special servicer pursuant to the pooling and servicing agreement governing the servicing of the applicable non-serviced whole loan. See “Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans”.
We cannot assure you that any extension or modification will increase the present value of recoveries in a given case. Whether or not losses are ultimately sustained, any delay in collection of a balloon payment that would otherwise be distributable on your certificates, whether such delay is due to borrower default or to modification of the related mortgage loan, will likely extend the weighted average life of your certificates.
In any event, we cannot assure you that each borrower under a balloon loan will have the ability to repay the principal balance of such mortgage loan on the related maturity date or anticipated repayment date, as applicable.
See “Description of the Mortgage Pool—Mortgage Pool Characteristics”.
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Risks Related to Ground Leases and Other Leasehold Interests
With respect to certain mortgaged properties, the encumbered interest will be characterized as a “fee interest” if (i) the borrower has a fee interest in all or substantially all of the mortgaged property (provided that if the borrower has a leasehold interest in any portion of the mortgaged property, such portion is not material to the use or operation of the mortgaged property), or (ii) the mortgage loan is secured by the borrower’s leasehold interest in the mortgaged property as well as the borrower’s (or other fee owner’s) overlapping fee interest in the related mortgaged property.
Leasehold mortgage loans are subject to certain risks not associated with mortgage loans secured by a lien on the fee estate of the borrower. The most significant of these risks is that if the related borrower’s leasehold were to be terminated upon a lease default, the lender would lose its security in the leasehold interest. Generally, each related ground lease or a lessor estoppel requires the lessor to give the lender notice of the borrower’s defaults under the ground lease and an opportunity to cure them, permits the leasehold interest to be assigned to the lender or the purchaser at a foreclosure sale, in some cases only upon the consent of the lessor, and contains certain other protective provisions typically included in a “mortgageable” ground lease, although not all these protective provisions are included in each case.
Upon the bankruptcy of a lessor or a lessee under a ground lease, the debtor has the right to assume or reject the lease. If a debtor lessor rejects the lease, the lessee has the right pursuant to the federal bankruptcy code to treat such lease as terminated by rejection or remain in possession of its leased premises for the rent otherwise payable under the lease for the remaining term of the ground lease (including renewals) and to offset against such rent any damages incurred due to the landlord’s failure to perform its obligations under the lease. If a debtor lessee/borrower rejects any or all of the lease, the leasehold lender could succeed to the lessee/borrower’s position under the lease only if the lease specifically grants the lender such right. If both the lessor and the lessee/borrower are involved in bankruptcy proceedings, the issuing entity may be unable to enforce the lessee/borrower’s pre-petition agreement to refuse to treat a ground lease rejected by a bankrupt lessor as terminated. In such circumstances, a ground lease could be terminated notwithstanding lender protection provisions contained in the ground lease or in the mortgage.
Some of the ground leases securing the mortgage loans may provide that the ground rent payable under the related ground lease increases during the term of the mortgage loan. These increases may adversely affect the cash flow and net income of the related borrower.
A leasehold lender could lose its security unless (i) the leasehold lender holds a fee mortgage, (ii) the ground lease requires the lessor to enter into a new lease with the leasehold lender upon termination or rejection of the ground lease, or (iii) the bankruptcy court, as a court of equity, allows the leasehold lender to assume the ground lessee’s obligations under the ground lease and succeed to the ground lessee’s position. Although not directly covered by the 1994 amendments to the federal bankruptcy code, such a result would be consistent with the purpose of the 1994 amendments to the federal bankruptcy code granting the holders of leasehold mortgages permitted under the terms of the lease the right to succeed to the position of a leasehold mortgagor. Although consistent with the federal bankruptcy code, such position may not be adopted by the applicable bankruptcy court.
Further, in a decision by the United States Court of Appeals for the Seventh Circuit (Precision Indus. v. Qualitech Steel SBQ, LLC, 327 F.3d 537 (7th Cir. 2003)) the court ruled with respect to an unrecorded lease of real property that where a statutory sale of the fee interest in leased property occurs under the federal bankruptcy code upon the bankruptcy of a landlord, such sale terminates a lessee’s possessory interest in the property, and the purchaser assumes title free and clear of any interest, including any leasehold estates. Pursuant to the federal bankruptcy code, a lessee may request the bankruptcy court to prohibit or condition the statutory sale of the property so as to provide adequate protection of the leasehold interest; however, the court ruled that this provision does not ensure continued possession of the property, but rather entitles the lessee to compensation for the value of its leasehold interest, typically from the sale proceeds. While there are certain circumstances under which a “free and clear” sale under the federal bankruptcy code would not be authorized (including that the lessee could not be compelled in a legal or equitable proceeding to accept a monetary satisfaction of his possessory
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interest, and that none of the other conditions of the federal bankruptcy code otherwise permits the sale), we cannot assure you that those circumstances would be present in any proposed sale of a leased premises. As a result, we cannot assure you that, in the event of a statutory sale of leased property pursuant to the federal bankruptcy code, the lessee will be able to maintain possession of the property under the ground lease. In addition, we cannot assure you that the lessee and/or the lender will be able to recoup the full value of the leasehold interest in bankruptcy court. Most of the ground leases contain standard protections typically obtained by securitization lenders. Certain of the ground leases with respect to a mortgage loan included in the issuing entity may not. See representation and warranty number 34 in Annex D-1, representation and warranty number 36 in Annex E-1, representation and warranty number 34 in Annex F-1, and the identified exceptions to those representations and warranties in Annex D-2, Annex D-3, Annex E-2 or Annex F-2, as applicable.
Except as noted in this prospectus, each of the ground leases has a term that extends at least 20 years beyond the maturity date of the mortgage loan (taking into account all freely exercisable extension options) and contains customary mortgagee protection provisions, including notice and cure rights and the right to enter into a new lease with the applicable ground lessor in the event a ground lease is rejected or terminated.
With respect to certain of the mortgage loans, the related borrower may have given to certain lessors under the related ground lease a right of first refusal or first offer in the event a sale is contemplated or an option to purchase all or a portion of the mortgaged property and these provisions, if not waived, may impede the mortgagee’s ability to sell the related mortgaged property at foreclosure or adversely affect the foreclosure process.
See “Certain Legal Aspects of Mortgage Loans—Bankruptcy Laws”.
Energy Efficiency and Greenhouse Gas Emission Standards Set By New York City’s Local Law 97 May Adversely Affect Future Net Operating Income at Mortgaged Real Properties Located in New York City
With respect to any of the underlying mortgage loans secured by mortgaged real properties located in New York City, the related borrowers may face fines or retrofitting costs related to compliance with New York City Local Law 97 of 2019 (“Local Law 97”). Local Law 97 generally requires, with some exceptions, that (i) buildings that exceed 25,000 gross square feet, (ii) two or more buildings on the same tax lot that together exceed 50,000 square feet and (iii) two or more buildings owned by a condominium association that are governed by the same board of managers and that together exceed 50,000 square feet meet new energy efficiency and greenhouse gas emissions limits by 2024, with stricter limits coming into effect in 2030. Noncompliant building owners may face fines starting in 2025, unless they are able to bring their building into timely compliance by retrofitting their buildings. We cannot assure you that fines or retrofitting costs as a result of Local Law 97 will not adversely affect the future net operating income at any of the mortgaged real properties located in New York City.
Increases in Real Estate Taxes May Reduce Available Funds
Certain of the mortgaged properties securing the mortgage loans have or may in the future have the benefit of reduced real estate taxes in connection with a local government “payment in lieu of taxes” program or other tax abatement arrangements. Upon expiration of such program or if such programs were otherwise terminated, the related borrower would be required to pay higher, and in some cases substantially higher, real estate taxes. Prior to expiration of such program, the tax benefit to the mortgaged property may decrease throughout the term of the expiration date until the expiration of such program. An increase in real estate taxes may impact the ability of the borrower to pay debt service on the mortgage loan.
See “Description of the Mortgage Pool—Real Estate and Other Tax Considerations” for descriptions of real estate tax matters relating to certain mortgaged properties.
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Collective Bargaining Activity May Disrupt Operations, Increase Labor Costs or Interfere with Business Strategies
A number of employees at certain of the mortgaged properties are covered by a collective bargaining agreement. If relationships with such employees or the unions that represent them become adverse, such mortgaged properties could experience labor disruptions such as strikes, lockouts, boycotts and public demonstrations. In addition, during the COVID-19 pandemic, unions may encourage employees to leave work if the workplace does not meet certain safety requirements. Labor disputes, which may be more likely when collective bargaining agreements are being negotiated, could harm relationships with employees, result in increased regulatory inquiries and enforcement by governmental authorities. Further, adverse publicity related to a labor dispute could harm such mortgaged properties’ reputation and reduce customer demand for related services. Labor regulation and the negotiation of new or existing collective bargaining agreements could lead to higher wage and benefit costs, changes in work rules that raise operating expenses, legal costs, and limitations on the related borrower’s ability to take cost saving measures during economic downturns. We cannot assure you that the related borrower will be able to control the negotiations of collective bargaining agreements covering unionized labor employed at such mortgaged properties.
State and Local Mortgage Recording Taxes May Apply Upon a Foreclosure or Deed in Lieu of Foreclosure and Reduce Net Proceeds
Many jurisdictions impose recording taxes on mortgages which, if not paid at the time of the recording of the mortgage, may impair the ability of the lender to foreclose the mortgage. Such taxes, interest, and penalties could be significant in amount and would, if imposed, reduce the net proceeds realized by the issuing entity in liquidating the real property securing the related mortgage loan.
Risks Related to Conflicts of Interest
Interests and Incentives of the Originators, the Sponsors and Their Affiliates May Not Be Aligned With Your Interests
The originators, the sponsors and their affiliates (including certain of the underwriters) expect to derive ancillary benefits from this offering and their respective incentives may not be aligned with those of purchasers of the offered certificates. The sponsors originated or purchased the mortgage loans in order to securitize the mortgage loans by means of a transaction such as the offering of the offered certificates. The sponsors will sell the mortgage loans to the depositor (an affiliate of German American Capital Corporation, one of the sponsors, Deutsche Bank AG, acting through its New York Branch, an originator, a holder of the VRR Interest and an initial risk retention consultation party, DBR Investments Co. Limited, an originator, and Deutsche Bank Securities Inc., one of the underwriters) on the closing date in exchange for cash, derived from the sale of the offered certificates to investors and/or in exchange for offered certificates. A completed offering would reduce the originators’ exposure to the mortgage loans. The originators made the mortgage loans with a view toward securitizing them and distributing the exposure by means of a transaction such as this offering of offered certificates. In addition, certain mortgaged properties may have tenants that are affiliated with the related originator. See “Description of the Mortgage Pool—Tenant Issues—Affiliated Leases”. This offering of offered certificates will effectively transfer the originators’ exposure to the mortgage loans to purchasers of the offered certificates.
The originators, the sponsors and their affiliates expect to receive various benefits, including compensation, commissions, payments, rebates, remuneration and business opportunities, in connection with or as a result of this offering of offered certificates and their interests in the mortgage loans. The sponsors and their affiliates will effectively receive compensation, and may record a profit, in an amount based on, among other things, the amount of proceeds (net of transaction expenses) received from the sale of the offered certificates to investors relative to their investment in the mortgage loans. The benefits to the originators, the sponsors and their affiliates arising from the decision to securitize the mortgage loans may be greater than they would have been had other assets been selected.
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Furthermore, the sponsors and/or their affiliates may benefit from a completed offering of the offered certificates because the offering would establish a market precedent and a valuation data point for securities similar to the offered certificates, thus enhancing the ability of the sponsors and their affiliates to conduct similar offerings in the future and permitting them to adjust the fair value of the mortgage loans or other similar assets or securities held on their balance sheet, including increasing the carrying value or avoiding decreasing the carrying value of some or all of such similar positions.
In some cases, the originators, the sponsors or their affiliates are the holders of the mezzanine loans and/or companion loans related to their mortgage loans. The originators, the sponsors and/or their respective affiliates may retain existing mezzanine loans and/or companion loans or originate future permitted mezzanine indebtedness with respect to the mortgage loans. These transactions may cause the originators, the sponsors and their affiliates or their clients or counterparties who purchase the mezzanine loans and/or companion loans, as applicable, to have economic interests and incentives that do not align with, and that may be directly contrary to, those of an investor in the offered certificates. In addition, these transactions or actions taken to maintain, adjust or unwind any positions in the future, may, individually or in the aggregate, have a material effect on the market for the offered certificates (if any), including adversely affecting the value of the offered certificates, particularly in illiquid markets. The originators, the sponsors and their affiliates will have no obligation to take, refrain from taking or cease taking any action with respect to such companion loans or any existing or future mezzanine loans, based on the potential effect on an investor in the offered certificates, and may receive substantial returns from these transactions. In addition, the originators, the sponsors or any of their respective affiliates may benefit from certain relationships, including financial dealings, with any borrower, any non-recourse carveout guarantor or any of their respective affiliates, aside from the origination of mortgage loans or contribution of mortgage loans into this securitization. Conflicts may also arise because the sponsors and their respective affiliates intend to continue to actively acquire, develop, operate, finance and dispose of real estate-related assets in the ordinary course of their businesses. During the course of their business activities, the sponsors and their respective affiliates may acquire, sell or lease properties, or finance loans secured by properties, which may include the properties securing the mortgage loans or properties that are in the same markets as the mortgaged properties. Such other properties, similar to other third-party owned real estate, may compete with the mortgaged properties for existing and potential tenants. The sponsors may also, from time to time, be among the tenants at the mortgaged properties, and they should be expected to make occupancy-related decisions based on their self-interest and not that of the issuing entity. We cannot assure you that the activities of these parties with respect to such other properties will not adversely impact the performance of the mortgaged properties.
In addition, certain of the mortgage loans included in the issuing entity may have been refinancings of debt previously held by a sponsor, an originator or one of their respective affiliates, or a sponsor, an originator or one of their respective affiliates may have or have had equity investments in the borrowers or mortgaged properties under certain of the mortgage loans included in the issuing entity. Each of the sponsors, the originators and their respective affiliates have made and/or may make loans to, or equity investments in, affiliates of the borrowers under the related mortgage loans. In the circumstances described above, the interests of the sponsors, the originators and their respective affiliates may differ from, and compete with, the interests of the issuing entity.
In addition, Deutsche Bank AG, acting through its New York Branch and Citi Real Estate Funding Inc. are each expected to hold a portion of the VRR Interest as described in “Credit Risk Retention”, and are (or are affiliated with the entities) expected to be appointed as the initial risk retention consultation parties. Each risk retention consultation party may, on a strictly non-binding basis, consult with the special servicer and recommend that the special servicer take actions that conflict with the interests of holders of certain classes of the certificates. However, the special servicer is not required to follow any such recommendations or take directions from any risk retention consultation party and is not permitted to take actions that are prohibited by law or that violate the servicing standard or the terms of the mortgage loan documents. The risk retention consultation parties and the holders of the VRR Interest by whom they are appointed may have interests that are in conflict with those of certain other certificateholders, in particular if any risk retention consultation party or holder of the VRR Interest holds companion loan securities, or has financial interests in, or other financial dealings (as a lender or otherwise) with, a borrower or an
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affiliate of a borrower under any of the mortgage loans. In order to minimize the effect of certain of these conflicts of interest, for so long as any borrower party is a risk retention consultation party or holder of the VRR Interest entitled to appoint such risk retention consultation party (any such mortgage loan referred to in this context as an “excluded loan” as to such risk retention consultation party), then such risk retention consultation party will not have consultation rights solely with respect to any such excluded loan. See “Credit Risk Retention”.
In addition, for so long as any of Deutsche Bank AG, acting through its New York Branch or Citi Real Estate Funding Inc. (in each case, as a holder of the VRR Interest or a risk retention consultation party), is a borrower party with respect to any mortgage loan or whole loan, such party will be required to certify that it will forego access to any “conflicted information” solely relating to such excluded loan and/or the related mortgaged properties pursuant to the terms of the pooling and servicing agreement. Notwithstanding such restriction, we cannot assure you that neither Deutsche Bank AG, acting through its New York Branch nor Citi Real Estate Funding Inc. (in each case, as a holder of the VRR Interest or a risk retention consultation party), will not obtain sensitive information related to the strategy of any contemplated workout or liquidation related to any such mortgage loan or whole loan or otherwise seek to exert its influence over the special servicer in the event such mortgage loan or whole loan becomes subject to a workout or liquidation. See “Description of the Certificates—Reports to Certificateholders; Certain Available Information”.
Further, various originators, sponsors and their respective affiliates are acting in multiple capacities in or with respect to this transaction, which may include, without limitation, acting as one or more transaction parties or a subcontractor or vendor of such party, participating in or contracting for interim servicing and/or custodial services with certain transaction parties, providing warehouse financing to, or receiving warehouse financing from, certain other originators or sponsors prior to transfer of the related mortgage loans to the issuing entity, and/or conducting due diligence on behalf of an investor with respect to the mortgage loans prior to their transfer to the issuing entity.
For a description of certain of the foregoing relationships and arrangements that exist among the parties to this securitization, see “Certain Affiliations, Relationships And Related Transactions Involving Transaction Parties” and “Transaction Parties”.
In addition, an affiliate of Citi Real Estate Funding Inc., a mortgage loan seller and a sponsor, is a tenant with respect to the mortgaged property securing the 601 Lexington Avenue mortgage loan. We cannot assure you that any related borrower did not receive more favorable loan terms than it would have received if a lender affiliate was not a tenant, nor can we assure you that any such lender affiliate did not receive more favorable lease terms than an unaffiliated tenant would receive.
In addition, an affiliate of JPMorgan Chase Bank, National Association, a mortgage loan seller and a sponsor, is a tenant with respect to the Bedrock Portfolio mortgage loan. We cannot assure you that any related borrower did not receive more favorable loan terms than it would have received if a lender affiliate was not a tenant, nor can we assure you that any such lender affiliate did not receive more favorable lease terms than an unaffiliated tenant would receive.
These roles and other potential relationships may give rise to conflicts of interest as described in “—Interests and Incentives of the Underwriter Entities May Not Be Aligned With Your Interests”, “—Potential Conflicts of Interest in the Selection of the Underlying Mortgage Loans” and “—Other Potential Conflicts of Interest May Affect Your Investment” below. Each of the foregoing relationships and related interests should be considered carefully by you before you invest in any offered certificates.
The Servicing of the Servicing Shift Whole Loans Will Shift to Other Servicers
The servicing of each of the Shearer’s Industrial Portfolio whole loan, a servicing shift whole loan, is expected to be governed by the pooling and servicing agreement for this securitization only temporarily, until the related servicing shift securitization date. At that time, the servicing and administration of the related servicing shift whole loan will shift to the related master servicer and related special servicer under the related servicing shift pooling and servicing agreement and will be governed exclusively by the related
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servicing shift pooling and servicing agreement and the related intercreditor agreement. Neither the closing date of any such securitization nor the identities of any such servicing shift master servicer or servicing shift special servicer have been determined. In addition, the provisions of the related servicing shift pooling and servicing agreement have not yet been determined. Prospective investors should be aware that they will not have any control over the identity of the related servicing shift master servicer or related servicing shift special servicer, nor will they have any assurance as to the particular terms of the related servicing shift pooling and servicing agreement except to the extent of compliance with the requirements of the related intercreditor agreement. Moreover, the trust directing holder for this securitization will not have any consent or consultation rights with respect to the servicing of the servicing shift whole loan other than those limited consent and consultation rights as are provided in the related intercreditor agreement, and the holder of the related controlling pari passu companion loan or the controlling party in the related securitization of such controlling pari passu companion loan or such other party specified in the related intercreditor agreement may have rights similar to, or more expansive than, those granted to the trust directing holder in this transaction. See “Description of the Mortgage Pool—The Whole Loans—The Serviced Pari Passu Whole Loans” and “—The Non-Serviced Pari Passu Whole Loans”.
Interests and Incentives of the Underwriter Entities May Not Be Aligned With Your Interests
The activities and interests of the underwriters and their respective affiliates (collectively, the “Underwriter Entities”) will not align with, and may in fact be directly contrary to, those of the certificateholders. The Underwriter Entities are each part of separate global investment banking, securities and investment management firms that provide a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals. As such, they actively make markets in and trade financial instruments for their own account and for the accounts of customers. These financial instruments include debt and equity securities, currencies, commodities, bank loans, indices, baskets and other products. The Underwriter Entities’ activities include, among other things, executing large block trades and taking long and short positions directly and indirectly, through derivative instruments or otherwise. The securities and instruments in which the Underwriter Entities take positions, or expect to take positions, include loans similar to the mortgage loans, securities and instruments similar to the offered certificates and other securities and instruments. Market making is an activity where the Underwriter Entities buy and sell on behalf of customers, or for their own account, to satisfy the expected demand of customers. By its nature, market making involves facilitating transactions among market participants that have differing views of securities and instruments. Any short positions taken by the Underwriter Entities and/or their clients through marketing or otherwise will increase in value if the related securities or other instruments decrease in value, while positions taken by the Underwriter Entities and/or their clients in credit derivative or other derivative transactions with other parties, pursuant to which the Underwriter Entities and/or their clients sell or buy credit protection with respect to one or more classes of the offered certificates, may increase in value if the offered certificates default, are expected to default, or decrease in value.
The Underwriter Entities and their clients acting through them may execute such transactions, modify or terminate such derivative positions and otherwise act with respect to such transactions, and may exercise or enforce, or refrain from exercising or enforcing, any or all of their rights and powers in connection therewith, without regard to whether any such action might have an adverse effect on the offered certificates or the certificateholders. Additionally, none of the Underwriter Entities will have any obligation to disclose any of these securities or derivatives transactions to you in your capacity as a certificateholder. As a result, you should expect that the Underwriter Entities will take positions that are inconsistent with, or adverse to, the investment objectives of investors in the offered certificates.
As a result of the Underwriter Entities’ various financial market activities, including acting as a research provider, investment advisor, market maker or principal investor, you should expect that personnel in various businesses throughout the Underwriter Entities will have and express research or investment views and make recommendations that are inconsistent with, or adverse to, the objectives of investors in the offered certificates.
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If an Underwriter Entity becomes a holder of any of the certificates, through market-making activity or otherwise, any actions that it takes in its capacity as a certificateholder, including voting, providing consents or otherwise will not necessarily be aligned with the interests of other holders of the same class or other classes of the certificates. Similarly, the expected holders of the VRR Interest and the parties expected to be designated to consult with the special servicer on their behalf as the risk retention consultation parties are an Underwriter Entity. We cannot assure you that any actions that such party takes in either such capacity will necessarily be aligned with the interests of the holders of other classes of certificates. To the extent an Underwriter Entity makes a market in the certificates (which it is under no obligation to do), it would expect to receive income from the spreads between its bid and offer prices for the certificates. The price at which an Underwriter Entity may be willing to purchase certificates, if it makes a market, will depend on market conditions and other relevant factors and may be significantly lower than the issue price for the certificates and significantly lower than the price at which it may be willing to sell certificates.
In addition, none of the Underwriter Entities will have any obligation to monitor the performance of the certificates or the actions of the parties to the pooling and servicing agreement and will have no authority to advise any party to the pooling and servicing agreement or to direct their actions.
Furthermore, each Underwriter Entity expects that a completed offering will enhance its ability to assist clients and counterparties in the transaction or in related transactions (including assisting clients in additional purchases and sales of the certificates and hedging transactions). The Underwriter Entities expect to derive fees and other revenues from these transactions. In addition, participating in a successful offering and providing related services to clients may enhance the Underwriter Entities’ relationships with various parties, facilitate additional business development, and enable them to obtain additional business and generate additional revenue.
The Underwriter Entities are playing several roles in this transaction. Deutsche Bank Securities Inc., one of the underwriters, is an affiliate of (i) the depositor, (ii) German American Capital Corporation, a sponsor, (iii) Deutsche Bank AG, acting through its New York Branch, an originator, a holder of the VRR Interest and an initial risk retention consultation party, and (iv) DBR Investments Co. Limited, an originator and the holder of the companion loans for which the noteholder is identified as “DBRI” in the table titled “Whole Loan Control Notes and Non-Control Notes” under “Description of the Mortgage Pool—The Whole Loans—General”. Citigroup Global Markets Inc., one of the underwriters, is an affiliate of Citi Real Estate Funding Inc., a sponsor, an originator, a holder of the VRR Interest, an initial risk retention consultation party and the holder of the companion loans for which the noteholder is identified as “CREFI” in the table titled “Whole Loan Control Notes and Non-Control Notes” under “Description of the Mortgage Pool—The Whole Loans—General”. Goldman Sachs & Co. LLC, one of the underwriters, is an affiliate of (i) Goldman Sachs Bank USA, an originator and the holder of the companion loans for which the noteholder is identified as “GS Bank” in the table titled “Whole Loan Control Notes and Non-Control Notes” under “Description of the Mortgage Pool—The Whole Loans—General”, and (ii) Goldman Sachs Mortgage Company, a sponsor. J.P. Morgan Securities LLC, one of the underwriters, is an affiliate of JPMorgan Chase Bank, National Association, a sponsor, an originator and the holder of the companion loans for which the noteholder is identified as “JPMCB” in the table titled “Whole Loan Control Notes and Non-Control Notes” under “Description of the Mortgage Pool—The Whole Loans—General”. In addition, affiliates of the underwriters are holders of companion loans as described in the table titled “Whole Loan Control Notes and Non-Control Notes” under “Description of the Mortgage Pool—The Whole Loans—General”.
See “Transaction Parties—The Sponsors and Mortgage Loan Sellers”. Each of the foregoing relationships should be considered carefully by you before you invest in any certificates.
Potential Conflicts of Interest of the Master Servicer and the Special Servicer
The pooling and servicing agreement provides that the mortgage loans serviced thereunder are required to be administered in accordance with the servicing standard without regard to ownership of any certificate by the master servicer, the special servicer or any of their respective affiliates. See “Pooling
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and Servicing Agreement—Servicing Standard”. The trust and servicing agreement or pooling and servicing agreement, as applicable, governing the servicing of a non-serviced whole loan provides that such non-serviced whole loan is required to be administered in accordance with a servicing standard that is generally similar to the servicing standard set forth in the pooling and servicing agreement. See “Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans”.
Notwithstanding the foregoing, the master servicer, a sub-servicer, the special servicer or any of their respective affiliates and, as it relates to servicing and administration of a non-serviced mortgage loan, each applicable master servicer, sub-servicer, special servicer or any of their respective affiliates under the pooling and servicing agreement governing the servicing of a non-serviced whole loan, may have interests when dealing with the mortgage loans that are in conflict with those of holders of the certificates, especially if the master servicer, a sub-servicer, the special servicer or any of their respective affiliates holds certificates or securities relating to any of the applicable companion loans, or has financial interests in or financial dealings with a borrower or a borrower sponsor.
In order to minimize the effect of certain of these conflicts of interest as they relate to the special servicer, if the special servicer obtains knowledge that it has become a borrower party with respect to a serviced mortgage loan and any related serviced companion loan, the special servicer will be required to resign as special servicer with respect to that mortgage loan or serviced whole loan (referred to in this prospectus as an “excluded special servicer loan”) and a separate special servicer that is not a borrower party (referred to in this prospectus as an “excluded special servicer”) will be appointed as special servicer for such excluded special servicer loan as described under “Pooling and Servicing Agreement—Replacement of the Special Servicer Without Cause”. Any excluded special servicer will be required to perform all of the obligations of the special servicer with respect to such excluded special servicer loan and will be entitled to all special servicing compensation with respect to such excluded special servicer loan earned during such time as the related mortgage loan is an excluded special servicer loan (provided that the special servicer will remain entitled to all other special servicing compensation with respect all mortgage loans and serviced whole loans that are not excluded special servicer loans). While the special servicer will have the same access to information related to the excluded special servicer loan as it does with respect to the other mortgage loans, the special servicer will covenant in the pooling and servicing agreement that it will not directly or indirectly provide any information related to the excluded special servicer loan to the related borrower party or any employees or personnel of such borrower party involved in the management of any investment in the related borrower party or the related mortgaged property and will maintain sufficient internal controls and appropriate policies and procedures in place in order to comply with those obligations. Notwithstanding those restrictions, we cannot assure you that the related borrower party will not obtain sensitive information related to the strategy of any contemplated workout or liquidation related to an excluded special servicer loan.
Each of these relationships may create a conflict of interest. For instance, if the special servicer or its affiliate holds a subordinate class of certificates, the special servicer might seek to reduce the potential for losses allocable to those certificates from the mortgage loans by deferring acceleration in hope of maximizing future proceeds. However, that action could result in less proceeds to the issuing entity than would be realized if earlier action had been taken. In addition, no servicer is required to act in a manner more favorable to the offered certificates or any particular class of certificates than to the non-offered certificates, any serviced companion loan holder or the holder of any serviced companion loan securities.
Each of the master servicer and the special servicer services and is expected to continue to service, in the ordinary course of its business, existing and new mortgage loans for third parties, including portfolios of mortgage loans similar to the mortgage loans. The real properties securing these other mortgage loans may be in the same markets as, and compete with, certain of the mortgaged properties securing the mortgage loans. Consequently, personnel of the master servicer or the special servicer, as applicable, may perform services, on behalf of the issuing entity, with respect to the mortgage loans at the same time as they are performing services, on behalf of other persons, with respect to other mortgage loans secured by properties that compete with the mortgaged properties securing the mortgage loans. In addition, the mortgage loan sellers will determine who will service mortgage loans that the mortgage loan sellers originate in the future, and that determination may be influenced by the mortgage loan seller’s
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opinion of servicing decisions made by the master servicer or special servicer under the pooling and servicing agreement including, among other things, the manner in which the master servicer or special servicer enforces breaches of representations and warranties against the related mortgage loan seller. This may pose inherent conflicts for the master servicer or the special servicer.
The special servicer may enter into one or more arrangements with the directing holder, a controlling class certificateholder, a serviced companion loan holder or other certificateholders (or an affiliate or a third party representative of one or more of the preceding parties) to provide for a discount and/or revenue sharing with respect to certain of the special servicer compensation in consideration of, among other things, the special servicer’s appointment (or continuance) as special servicer under the pooling and servicing agreement and/or the related intercreditor agreement and limitations on the right of such person to replace the special servicer. See “—Other Potential Conflicts of Interest May Affect Your Investment” below.
Eightfold Real Estate Capital Fund V, L.P. or its affiliate is expected to (i) appoint itself or its affiliate as the initial trust directing holder and, therefore, the initial directing holder with respect to each serviced mortgage loan (other than any applicable excluded loan and any servicing shift mortgage loan) and any related serviced companion loans and (ii) purchase the Class F, Class G, Class H, Class X-F, Class X-G, and Class X-H certificates and receive the Class S certificates, and may purchase certain additional classes of certificates. LNR Partners, LLC is expected to act as the special servicer with respect to each serviced mortgage loan (other than any excluded special servicer loans) and any related serviced companion loans and it or an affiliate assisted Eightfold Real Estate Capital Fund V, L.P. or its affiliate with its due diligence on the mortgage loans prior to the closing date.
Although the master servicer and the special servicer will be required to service and administer the mortgage loan pool in accordance with the servicing standard and, accordingly, without regard to their rights to receive compensation under the pooling and servicing agreement and without regard to any potential obligation to repurchase or substitute a mortgage loan if the master servicer or special servicer is a mortgage loan seller, the possibility of receiving additional servicing compensation in the nature of assumption and modification fees, the continuation of receiving fees to service or specially service a mortgage loan, or the desire to avoid a repurchase demand resulting from a breach of a representation and warranty or material document default may under certain circumstances provide the master servicer or the special servicer, as the case may be, with an economic disincentive to comply with this standard.
Each of the foregoing relationships should be considered carefully by you before you invest in any certificates.
Potential Conflicts of Interest of the Operating Advisor
Park Bridge Lender Services LLC has been appointed as the initial operating advisor with respect to all of the serviced mortgage loans. See “Transaction Parties—The Operating Advisor and Asset Representations Reviewer”. In the normal course of conducting its business, Park Bridge Lender Services LLC and its affiliates may have rendered services to, performed surveillance of, provided valuation services to, and negotiated with, numerous parties engaged in activities related to structured finance and commercial mortgage securitization. These parties may have included institutional investors, the depositor, the sponsors, the mortgage loan sellers, the originators, the certificate administrator, the trustee, the master servicer, the special servicer or the directing holder, the risk retention consultation parties, collateral property owners and their vendors or affiliates of any of those parties. In the normal course of its business, Park Bridge Lender Services LLC and its affiliates are also hired by trustees and other transaction parties to perform valuation services with respect to properties that may have mortgages attached. Each of these relationships, to the extent they exist, may continue in the future and may involve a conflict of interest with respect to the duties of Park Bridge Lender Services LLC as operating advisor. We cannot assure you that the existence of these relationships and other relationships in the future will not impact the manner in which the initial operating advisor performs its duties under the pooling and servicing agreement.
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In addition, the operating advisor and its affiliates may have interests that are in conflict with those of certificateholders, especially if the operating advisor or any of its affiliates holds certificates or has financial interests in or other financial dealings with any of the parties to this transaction, a borrower or a parent or sponsor of a borrower or any of their affiliates.
The operating advisor or its affiliates may have duties with respect to existing and new commercial and multifamily mortgage loans for itself, its affiliates or third parties, including portfolios of mortgage loans similar to the mortgage loans included in the issuing entity. These other mortgage loans and the related mortgaged properties may be in the same markets as, or have owners, obligors or property managers in common with, one or more of the mortgage loans in the issuing entity and the related mortgaged properties. As a result of the investments and activities described above, the interests of the operating advisor and its affiliates and their clients may differ from, and conflict with, the interests of the issuing entity. Consequently, personnel of the operating advisor may perform services, on behalf of the issuing entity, with respect to the mortgage loans at the same time as they are performing services, on behalf of other persons, with respect to other mortgage loans secured by properties that compete with the mortgaged properties securing the mortgage loans included in the issuing entity. Although the operating advisor is required to consider the servicing standard in connection with its activities under the pooling and servicing agreement, the operating advisor will not itself be bound by the servicing standard.
Potential Conflicts of Interest of the Asset Representations Reviewer
Park Bridge Lender Services LLC has been appointed as the initial asset representations reviewer with respect to all of the mortgage loans other than the non-serviced mortgage loans. See “Transaction Parties—The Operating Advisor and Asset Representations Reviewer”. In the normal course of conducting its business, the initial asset representations reviewer and its affiliates may have rendered services to, performed surveillance of, provided valuation services to, and negotiated with, numerous parties engaged in activities related to structured finance and commercial mortgage securitization. These parties may have included institutional investors, the depositor, the sponsors, the mortgage loan sellers, the originators, the certificate administrator, the trustee, the master servicer, the special servicer or the directing holder, the risk retention consultation parties, collateral property owners and their vendors or affiliates of any of those parties. Each of these relationships, to the extent they exist, may continue in the future and may involve a conflict of interest with respect to the initial asset representations reviewer’s duties as asset representations reviewer. We cannot assure you that the existence of these relationships and other relationships in the future will not impact the manner in which the initial asset representations reviewer performs its duties under the pooling and servicing agreement.
In addition, the asset representations reviewer and its affiliates may have interests that are in conflict with those of certificateholders, especially if the asset representations reviewer or any of its affiliates holds certificates or has financial interests in or other financial dealings with any of the parties to this transaction, a borrower or a parent or sponsor of a borrower or any of their affiliates.
The asset representations reviewer or its affiliates may have duties with respect to existing and new commercial and multifamily mortgage loans for itself, its affiliates or third parties, including portfolios of mortgage loans similar to the mortgage loans included in the issuing entity. These other mortgage loans and the related mortgaged properties may be in the same markets as, or have owners, obligors or property managers in common with, one or more of the mortgage loans in the issuing entity and the related mortgaged properties. As a result of the investments and activities described above, the interests of the asset representations reviewer and its affiliates and their clients may differ from, and conflict with, the interests of the issuing entity. Consequently, personnel of the asset representations reviewer may perform services, on behalf of the issuing entity, with respect to the mortgage loans at the same time as they are performing services, on behalf of other persons, with respect to other mortgage loans secured by properties that compete with the mortgaged properties securing the mortgage loans included in the issuing entity.
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Potential Conflicts of Interest of the Directing Holder and the Companion Loan Holders
It is expected that Eightfold Real Estate Capital Fund V, L.P. or its affiliate will be appointed as the initial trust directing holder and, therefore, the initial directing holder with respect to each serviced mortgage loan (other than any applicable excluded loan and any servicing shift mortgage loan). The special servicer may, at the direction of the directing holder (for so long as a control termination event does not exist and other than with respect to any applicable excluded special servicer loan), take actions with respect to the specially serviced mortgage loans administered under the pooling and servicing agreement that could adversely affect the holders of some or all of the classes of certificates. The directing holder (other than with respect to any non-serviced mortgage loan, any servicing shift mortgage loan or any applicable excluded loan) will be controlled by the controlling class certificateholders.
The controlling class certificateholders and the holders of the companion loans or securities backed by such companion loans may have interests in conflict with those of the other certificateholders. As a result, it is possible that the directing holder on behalf of the controlling class certificateholders (for so long as a control termination event does not exist and other than with respect to any applicable excluded loan or any servicing shift mortgage loan) or on behalf of the subordinate companion loan holders or the directing holder (which term as used herein will include any equivalent entity or any representative thereof) under the pooling and servicing agreement or trust and servicing agreement, as applicable, governing the servicing of a non-serviced whole loan may direct the special servicer or the special servicer under such pooling and servicing agreement or trust and servicing agreement, as applicable, relating to the other securitization transaction, as the case may be, to take actions that conflict with the interests of holders of certain classes of the certificates. Set forth in the following table is the identity of the initial directing holder (or equivalent party) for each whole loan, the expected securitization trust holding the controlling note in such whole loan and the pooling and servicing agreement or trust and servicing agreement under which it is expected to be serviced.
Whole Loan |
Pooling/Trust and Servicing Agreement(1) |
Controlling Noteholder |
Initial Directing Party(2) |
| 601 Lexington Avenue | BXP 2021-601L | BXP 2021-601L | (3) |
| One Wilshire | Benchmark 2022-B32 | Benchmark 2022-B32 | ECMBS LLC |
| Bedrock Portfolio | Benchmark 2022-B32 | Benchmark 2022-B32 | ECMBS LLC |
| Shearer’s Industrial Portfolio | Benchmark 2022-B34(4) | (4) | Goldman Sachs Bank USA(4) |
| Gem Tower | Benchmark 2022-B34 | Benchmark 2022-B34 | Eightfold Real Estate Capital Fund V, L.P. |
| Novo Nordisk HQ | Benchmark 2021-B31 | Benchmark 2021-B31 | RREF IV Debt AIV, LP |
| JW Marriott Desert Springs | Benchmark 2022-B32 | Benchmark 2022-B32 | ECMBS LLC |
| Glen Forest Office Portfolio | Benchmark 2022-B32 | Benchmark 2022-B32 | ECMBS LLC |
| (1) | The identification of a “Pooling/Trust and Servicing Agreement” above indicates that we have identified a securitization trust that has closed or priced or as to which a preliminary prospectus (or preliminary offering circular) or final prospectus (or final offering circular) has printed that has included, or is expected to include, the related controlling note for such whole loan. |
| (2) | The entity listed as the “Initial Directing Party” reflects the party entitled to exercise control and consultation rights with respect to the related mortgage loan until such party’s rights are terminated pursuant to the related pooling and servicing agreement, trust and servicing agreement or intercreditor agreement, as applicable. |
| (3) | With respect to the 601 Lexington Avenue mortgage loan, the BXP 2021-601L trust and servicing agreement provides for a directing holder; however, the certificateholders entitled to make such an appointment have not done so as of the date hereof, but may do so in the future. |
| (4) | The servicing of a servicing shift whole loan will be transferred on the related servicing shift securitization date. The initial controlling noteholder and the initial directing party of the Shearer’s Industrial Portfolio whole loan will be Goldman Sachs Bank USA, as the holder of the related controlling pari passu companion loan. On and after the related servicing shift securitization date, the controlling noteholder of the related servicing shift whole loan is expected to be the related directing holder (or equivalent entity) under such securitization. |
The special servicer, in connection with obtaining the consent of, or upon non-binding consultation with (or, in the case of any servicing shift whole loan, prior to the related servicing shift securitization date, at the direction or with the approval of), the directing holder or a serviced companion loan holder or its representative, may take actions with respect to the related serviced whole loan that could adversely affect the holders of some or all of the classes of certificates, to the extent described under “Description of the Mortgage Pool—The Whole Loans—The Serviced Pari Passu Whole Loans”. In connection with the pari passu whole loans serviced under the pooling and servicing agreement for this securitization, the
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serviced companion loan holders do not have any duties to the holders of any class of certificates, and they may have interests in conflict with those of the certificateholders. As a result, it is possible that a serviced companion loan holder (solely with respect to the related serviced whole loan) may advise the special servicer to take actions that conflict with the interests of holders of certain classes of the certificates. However, the special servicer is not permitted to take actions that are prohibited by law or violate the servicing standard or the terms of the mortgage loan documents. In addition, except as limited by certain conditions described under “Pooling and Servicing Agreement—Termination of the Master Servicer and the Special Servicer for Cause—Servicer Termination Events”, the special servicer may be replaced by the directing holder for cause at any time and without cause (for so long as a control termination event does not exist and other than with respect to any applicable excluded loan) (or, in the case of any servicing shift mortgage loan, prior to the related servicing shift securitization date, by the holder of the related controlling pari passu companion loan at any time, for cause or without cause). See “Pooling and Servicing Agreement—The Directing Holder” and “—Termination of the Master Servicer and the Special Servicer for Cause—Servicer Termination Events”.
Similarly, the applicable controlling class related to the securitization trust indicated in the chart above as the controlling noteholder (or, on and after the related servicing shift securitization date, the securitization trust for the related controlling pari passu companion loan) has certain consent and/or consultation rights with respect to the non-serviced mortgage loans under the related pooling and servicing agreement governing the servicing of that related non-serviced whole loan and have similar conflicts of interest with the holders of other certificates backed by the companion loans. See “Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans”.
The directing holder and its affiliates (and the directing holder (or equivalent entity) under the pooling and servicing agreement or trust and servicing agreement, as applicable, governing the servicing of a non-serviced whole loan and their respective affiliates) may have interests that are in conflict with those of certain certificateholders, especially if the applicable directing holder or any of its affiliates holds certificates or companion loan securities, or has financial interests in or other financial dealings (as lender or otherwise) with a borrower or an affiliate of a borrower. In order to minimize the effect of certain of these conflicts of interest, for so long as any borrower party is the directing holder or the holder of the majority of the controlling class (by certificate balance) (any such mortgage loan referred to in this prospectus as an “excluded loan” as to such party), the directing holder will not have consent or consultation rights solely with respect to the related excluded loan (however, the directing holder will be provided certain notices and certain information relating to such excluded loan as described in the pooling and servicing agreement). In addition, for so long as any borrower party is the directing holder or a controlling class certificateholder, as applicable, the directing holder or such controlling class certificateholder, as applicable, will not be given access to any excluded information solely relating to the related excluded loan and/or the related mortgaged properties pursuant to the terms of the pooling and servicing agreement. Notwithstanding those restrictions, we cannot assure you that the directing holder or any controlling class certificateholder will not obtain sensitive information related to the strategy of any contemplated workout or liquidation related to an excluded loan or otherwise seek to exert its influence over the special servicer in the event an excluded loan becomes subject to a workout or liquidation. See “Description of the Certificates—Reports to Certificateholders; Certain Available Information”. Each of these relationships may create a conflict of interest.
Eightfold Real Estate Capital Fund V, L.P. or its affiliate is expected to (i) appoint itself or its affiliate as the initial trust directing holder and, therefore, the initial directing holder with respect to each serviced mortgage loan (other than any applicable excluded loan or any servicing shift mortgage loan) and any related serviced companion loans and (ii) purchase the Class F, Class G, Class H, Class X-F, Class X-G and Class X-H certificates and receive the Class S certificates, and may purchase certain additional classes of certificates. LNR Partners, LLC is expected to act as the special servicer with respect to each serviced mortgage loan (other than any excluded special servicer loan) and any related serviced companion loans and it or an affiliate assisted Eightfold Real Estate Capital Fund V, L.P. or its affiliate with its due diligence on the mortgage loans prior to the closing date.
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Potential Conflicts of Interest in the Selection of the Underlying Mortgage Loans
The anticipated initial investor in the Class F, Class G, Class H, Class X-F, Class X-G and Class X-H certificates, which is referred to in this prospectus as the “B-piece buyer” (see “Pooling and Servicing Agreement—The Directing Holder—General”), was given the opportunity by the sponsors to perform certain due diligence on the mortgage loans originally identified by the sponsors for inclusion in the issuing entity. In addition, the B-piece buyer was given the opportunity by the sponsors to request the removal, re-sizing, decrease in the principal balance of the mortgage loan, reduction of the time during which the loan pays interest-only, increase in the amount of required reserves or change in the expected repayment dates or other features of some or all of the mortgage loans. The mortgage pool as originally proposed by the sponsors was adjusted based on certain of these requests. In addition, the B-piece buyer received or may receive price adjustments or cost mitigation arrangements in connection with accepting certain mortgage loans in the mortgage pool.
We cannot assure you that you or another investor would have made the same requests to modify the original pool as the B-piece buyer or that the final pool as influenced by the B-piece buyer’s feedback will not adversely affect the performance of your certificates and benefit the performance of the B-piece buyer’s certificates. Because of the differing subordination levels, the B-piece buyer has interests that may, in some circumstances, differ from those of purchasers of other classes of certificates, and may desire a portfolio composition that benefits the B-piece buyer but that does not benefit other investors. In addition, the B-piece buyer may enter into hedging or other transactions or otherwise have business objectives that also could cause its interests with respect to the mortgage pool to diverge from those of other purchasers of the certificates. The B-piece buyer performed due diligence solely for its own benefit and has no liability to any person or entity for conducting its due diligence. The B-piece buyer is not required to take into account the interests of any other investor in the certificates in exercising remedies or voting or other rights in its capacity as owner of its certificates or in making requests or recommendations to the sponsors as to the selection of the mortgage loans and the establishment of other transaction terms. Investors are not entitled to rely on in any way the B-piece buyer’s acceptance of a mortgage loan. The B-piece buyer’s acceptance of a mortgage loan does not constitute, and may not be construed as, an endorsement of such mortgage loan, the underwriting for such mortgage loan or the originator of such mortgage loan.
The B-piece buyer will have no liability to any certificateholder for any actions taken by them as described in the preceding two paragraphs.
It is anticipated that Eightfold Real Estate Capital Fund V, L.P. or its affiliate will be the B-piece buyer and will appoint itself or its affiliate as the initial trust directing holder and, therefore, the initial directing holder with respect to each serviced mortgage loan (other than any applicable excluded loan or any servicing shift mortgage loan) and any related serviced companion loans. The directing holder will have certain rights to direct and consult with the special servicer. In addition, the directing holder will generally have certain consultation rights with regard to a non-serviced mortgage loan under the pooling and servicing agreement or trust and servicing agreement, as applicable, governing the servicing of such non-serviced whole loan and the related intercreditor agreement. See “—Potential Conflicts of Interest of the Directing Certificateholder and the Companion Loan Holders”, “Pooling and Servicing Agreement—The Directing Holder” and “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced Pari Passu Whole Loans—Control Rights” and “—The Non-Serviced AB Whole Loans”.
LNR Partners, LLC is expected to act as the special servicer with respect to each serviced mortgage loan (other than any excluded special servicer loan) and any related serviced companion loans and it or an affiliate assisted Eightfold Real Estate Capital Fund V, L.P. or its affiliate with its due diligence on the mortgage loans prior to the Closing Date.
Because the incentives and actions of the B-piece buyer may, in some circumstances, differ from or be adverse to those of purchasers of the offered certificates, you are advised and encouraged to make your own investment decision based on a careful review of the information set forth in this prospectus and your own view of the mortgage pool and should not rely upon the B-piece buyer’s due diligence or investment decision (or due diligence or the investment decision of its affiliates).
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Conflicts of Interest May Occur as a Result of the Rights of the Applicable Directing Holder To Terminate the Special Servicer of the Applicable Whole Loan
With respect to each whole loan, the directing holder exercising control rights over that whole loan will be entitled, under certain circumstances, to remove the special servicer under the applicable pooling and servicing agreement or trust and servicing agreement, as applicable, governing the servicing of such whole loan and, in such circumstances, appoint a successor special servicer for such whole loan (or have certain consent rights with respect to such removal or replacement). The party with this appointment power may have special relationships or interests that conflict with those of the holders of one or more classes of certificates. In addition, that party does not have any duties to the holders of any class of certificates, may act solely in its own interests, and will have no liability to any certificateholders for having done so. No certificateholder may take any action against the directing holder under the pooling and servicing agreement for this securitization or under any pooling and servicing agreement or trust and servicing agreement, as applicable, governing the servicing of a non-serviced whole loan, or against any other parties for having acted solely in their respective interests. See “Description of the Mortgage Pool—The Whole Loans” for a description of these rights to terminate the special servicer.
The special servicer (or a successor special servicer) may enter into one or more arrangements with the directing holder, a controlling class certificateholder, a companion loan holder, the holders of the VRR Interest, a holder of a companion loan security or other certificateholders (or an affiliate or a third party representative of one or more of the preceding) to provide for a discount and/or revenue sharing with respect to certain of the special servicer compensation in consideration of, among other things, the appointment (or continuance) of the special servicer under the pooling and servicing agreement and the co-lender agreements and limitations on the right of such person to replace the special servicer.
Other Potential Conflicts of Interest May Affect Your Investment
The managers of the mortgaged properties and the borrowers may experience conflicts in the management and/or ownership of the mortgaged properties because:
| ● | a substantial number of the mortgaged properties are managed by property managers affiliated with the respective borrowers; |
| ● | these property managers also may manage and/or franchise additional properties, including properties that may compete with the mortgaged properties; and |
| ● | affiliates of the managers and/or the borrowers, or the managers and/or the borrowers themselves, also may own other properties, including competing properties. |
None of the borrowers, property managers or any of their affiliates or any employees of the foregoing has any duty to favor the leasing of space or renting of hotel rooms, as applicable, in the mortgaged properties over the leasing or renting of space in other properties, one or more of which may be adjacent to or near the mortgaged properties.
If a mortgage loan is in default or undergoing special servicing, such relationships could disrupt the management of the related mortgaged property, which may adversely affect cash flow.
Each of the foregoing relationships should be considered carefully by you before you invest in any certificates.
Other Risks Relating to the Certificates
The Certificates Are Limited Obligations
The certificates, when issued, will only represent ownership interests in the issuing entity. The certificates will not represent an interest in or obligation of, and will not be guaranteed by, the sponsors, the depositor, or any other person. The primary assets of the issuing entity will be the mortgage loans,
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and distributions on any class of certificates will depend solely on the amount and timing of payments and other collections in respect of the mortgage loans. We cannot assure you that the cash flow from the mortgaged properties and the proceeds of any sale or refinancing of the mortgaged properties will be sufficient to pay the principal of, and interest on, the mortgage loans or to distribute in full the amounts of interest and principal to which the certificateholders will be entitled. See “Description of the Certificates—General”.
The Certificates May Have Limited Liquidity and the Market Value of the Certificates May Decline
Your certificates will not be listed on any national securities exchange or traded on any automated quotation systems of any registered securities association, and there is currently no secondary market for your certificates. The underwriters have no obligation to make a market in the offered certificates. We cannot assure you that an active secondary market for the certificates will develop. In addition, the ability of the underwriters to make a market in the offered certificates may be impacted by changes in any regulatory requirements applicable to the marketing, holding and selling of, and issuing quotations with respect to, the offered certificates and other CMBS generally (including, without limitation, the application of Rule 15c2-11 under the Securities Exchange Act of 1934, as amended, to the publication or submission of quotations, directly or indirectly, in any quotation medium by a broker or dealer for securities such as the offered certificates). Additionally, one or more investors may purchase substantial portions of one or more classes of certificates. Accordingly, you may not have an active or liquid secondary market for your certificates.
The market value of the certificates will also be influenced by the supply of and demand for CMBS generally. A number of factors will affect investors’ demand for CMBS, including:
| ● | the availability of alternative investments that offer higher yields or are perceived as being a better credit risk than CMBS, or as having a less volatile market value or being more liquid than CMBS; |
| ● | legal and other restrictions that prohibit a particular entity from investing in CMBS or limit the amount or types of CMBS that it may acquire or require it to maintain increased capital or reserves as a result of its investment in CMBS; |
| ● | increased regulatory compliance burdens imposed on CMBS or securitizations generally, or on classes of securitizers, that may make securitization a less attractive financing option for commercial mortgage loans; and |
| ● | investors’ perceptions of commercial real estate lending or CMBS, which may be adversely affected by, among other things, a decline in real estate values or an increase in defaults and foreclosures on commercial mortgage loans. |
We cannot assure you that your certificates will not decline in value.
Nationally Recognized Statistical Rating Organizations May Assign Different Ratings to the Certificates; Ratings of the Certificates Reflect Only the Views of the Applicable Rating Agencies as of the Dates Such Ratings Were Issued; Ratings May Affect ERISA Eligibility; Ratings May Be Downgraded
Ratings assigned to the offered certificates by the nationally recognized statistical rating organizations engaged by the depositor:
| ● | are based on, among other things, the economic characteristics of the mortgaged properties and other relevant structural features of the transaction; |
| ● | do not represent any assessment of the yield to maturity in distributions to certificateholders that a certificateholder may experience; |
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| ● | reflect only the views of the respective rating agencies as of the date such ratings were issued; |
| ● | may be reviewed, revised, suspended, downgraded, qualified or withdrawn entirely by the applicable rating agency as a result of changes in or unavailability of information; |
| ● | may have been determined based on criteria that included an analysis of historical mortgage loan data that may not reflect future experience; |
| ● | may reflect assumptions by such rating agencies regarding performance of the mortgage loans that are not accurate, as evidenced by the significant amount of downgrades, qualifications and withdrawals of ratings assigned to previously issued CMBS by the hired rating agencies and other nationally recognized statistical rating organizations during the recent credit crisis; and |
| ● | do not consider to what extent the offered certificates will be subject to prepayment or that the outstanding principal amount of any class of offered certificates will be prepaid. |
In addition, the rating of any class of offered certificates below an investment grade rating by any nationally recognized statistical rating organization, whether upon initial issuance of such class of certificates or as a result of a ratings downgrade, could adversely affect the ability of an employee benefit plan or other investor to purchase or retain those offered certificates. See “Certain ERISA Considerations” and “Legal Investment”.
Nationally recognized statistical rating organizations that were not engaged by the depositor to rate the offered certificates may nevertheless issue unsolicited credit ratings on one or more classes of offered certificates, relying on information they receive pursuant to Rule 17g-5 under the Securities Exchange Act of 1934, as amended, or otherwise. If any such unsolicited ratings are issued, we cannot assure you that they will not be different from any ratings assigned by a rating agency engaged by the depositor. The issuance of unsolicited ratings by any nationally recognized statistical rating organization on a class of the offered certificates that are lower than ratings assigned by a rating agency engaged by the depositor may adversely impact the liquidity, market value and regulatory characteristics of that class.
As part of the process of obtaining ratings for the offered certificates, the depositor had initial discussions with and submitted certain materials to 5 nationally recognized statistical rating organizations. Based on preliminary feedback from those nationally recognized statistical rating organizations at that time, the depositor selected 3 of those nationally recognized statistical rating organizations to rate certain classes of the certificates and not the other nationally recognized statistical rating organizations, due in part to their initial subordination levels for the various classes of the certificates. If the depositor had selected the other nationally recognized statistical rating organizations to rate the certificates, we cannot assure you that the ratings such other nationally recognized statistical rating organizations would have assigned to the certificates would not have been lower than the ratings assigned by the nationally recognized statistical rating organizations engaged by the depositor. Further, in the case of one nationally recognized statistical rating organization engaged by the depositor, the depositor only requested ratings for certain classes of rated certificates, due in part to the initial subordination levels provided by such nationally recognized statistical rating organization for the classes of certificates. If the depositor had selected such nationally recognized statistical rating organization to rate those other classes of rated certificates not rated by it, its ratings of those other certificates may have been different, and potentially lower, than those ratings ultimately assigned to those certificates by the other nationally recognized statistical rating organizations engaged to rate such certificates. In addition, the decision not to engage one or more other rating agencies in the rating of certain classes of certificates to be issued in connection with this transaction may negatively impact the liquidity, market value and regulatory characteristics of those classes of certificates. Although unsolicited ratings may be issued by any nationally recognized statistical rating organization, a nationally recognized statistical rating organization might be more likely to issue an unsolicited rating if it was not selected after having provided preliminary feedback to the depositor. Neither the depositor nor any other person or entity will have any duty to notify you if any other nationally recognized statistical rating organization issues, or delivers notice of its intention to issue, consolidated ratings on one or more classes of certificates after the date of this prospectus.
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Furthermore, the Securities and Exchange Commission may determine that any or all of the rating agencies engaged by the depositor to rate the certificates no longer qualifies as a nationally recognized statistical rating organization, or is no longer qualified to rate the certificates or may no longer rate similar securities for a limited period as a result of an enforcement action, and that determination may also have an adverse effect on the liquidity, market value and regulatory characteristics of the offered certificates. To the extent that the provisions of any mortgage loan or the pooling and servicing agreement condition any action, event or circumstance on the delivery of a rating agency confirmation, the pooling and servicing agreement will require delivery or deemed delivery of a rating agency confirmation only from the rating agencies engaged by the depositor to rate the certificates or, in the case of a serviced whole loan, any related companion loan securities.
On September 29, 2020, a settlement was reached between Kroll Bond Rating Agency, LLC and the Securities and Exchange Commission in connection with an investigation into the policies and procedures deployed by Kroll Bond Rating Agency, LLC to establish, maintain, enforce and document an effective internal control structure governing the implementation of and adherence to policies, procedures, and methodologies for determining credit ratings for conduit/fusion commercial mortgage-backed securities in accordance with Section 15E(c)(3)(A) of the Exchange Act. The Securities and Exchange Commission found that Kroll Bond Rating Agency, LLC’s internal controls relating to its rating of conduit/fusion commercial mortgage-backed securities had deficiencies that resulted in material weaknesses in its internal control structure. Under the settlement, Kroll Bond Rating Agency, LLC, without admitting or denying the findings of the Securities and Exchange Commission, agreed (a) to pay a civil penalty of $1.25 million, (b) to undertake, among other things, a review of the application of its internal processes, policies and procedures regarding the implementation of and adherence to procedures and methodologies for determining credit ratings, and (c) to take the necessary actions to ensure that such internal processes, policies and procedures accurately reflect the strictures of Section 15E(c)(3)(A) of the Exchange Act. Any change in Kroll Bond Rating Agency, LLC’s rating criteria or methodology could result in a downgrade, withdrawal or qualification of any rating assigned to any class of certificates, despite the fact that such class might still be performing fully to the specifications described in this prospectus and set forth in the pooling and servicing agreement.
We are not obligated to maintain any particular rating with respect to the certificates, and the ratings initially assigned to the certificates by any or all of the rating agencies engaged by the depositor to rate the certificates could change adversely as a result of changes affecting, among other things, the mortgage loans, the mortgaged properties, the parties to the pooling and servicing agreement, or as a result of changes to ratings criteria employed by any or all of the rating agencies engaged by the depositor to rate the certificates. Although these changes would not necessarily be or result from an event of default on any mortgage loan, any adverse change to the ratings of the offered certificates would likely have an adverse effect on the market value, liquidity and/or regulatory characteristics of those certificates.
Further, certain actions provided for in loan agreements may require a rating agency confirmation be obtained from the rating agencies engaged by the depositor to rate the certificates and, in the case of a serviced whole loan, any companion loan securities as a precondition to taking such action. In certain circumstances, this condition may be deemed to have been met or waived without such a rating agency confirmation being obtained. In the event such an action is taken without a rating agency confirmation being obtained, we cannot assure you that the applicable rating agency will not downgrade, qualify or withdraw its ratings as a result of the taking of such action. See “Description of the Mortgage Pool—Certain Terms of the Mortgage Loans—“Due-On-Sale” and “Due-On-Encumbrance” Provisions”, “Pooling and Servicing Agreement—Rating Agency Confirmations” and “Ratings” for additional considerations regarding the ratings, including a description of the process of obtaining confirmations of ratings for the offered certificates.
Subordination of the Subordinate Certificates Will Affect the Timing of Distributions and the Application of Losses on the Subordinate Certificates
As described in this prospectus, the rights of the holders of each class of subordinate certificates to receive payments of principal and interest otherwise payable on such class of subordinate certificates will
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be subordinated to the rights of the holders of more senior certificates having an earlier alphabetical or alphanumeric class designation.
If you acquire Class A-M, Class B or Class C certificates, then your rights to receive distributions of amounts collected or advanced on or in respect of the mortgage loans will be subordinated to those of the holders of the senior certificates. The Class A-M certificates will likewise be protected by the subordination of the Class B, Class C, Class D, Class E, Class F, Class G and Class H certificates. The Class B certificates will likewise be protected by the subordination of the Class C, Class D, Class E, Class F, Class G and Class H certificates. The Class C certificates will likewise be protected by the subordination of the Class D, Class E, Class F, Class G and Class H certificates. As a result, investors in those classes of certificates that are subordinated in whole or part to other classes of certificates will generally bear the effects of losses on the mortgage loans and unreimbursed expenses of the issuing entity before the holders of those other classes of certificates. See “Description of the Certificates—Distributions” and “—Subordination; Allocation of Realized Losses”.
Your Yield May Be Affected by Defaults, Prepayments and Other Factors
General. The yield to maturity on each class of offered certificates will depend in part on the following:
| ● | the purchase price for the certificates; |
| ● | the rate and timing of principal payments on the mortgage loans (both voluntary and involuntary), and the allocation of principal prepayments to the respective classes of offered certificates with certificate balances; and |
| ● | the allocation of shortfalls and losses on the mortgage loans to the respective classes of offered certificates. |
For this purpose, principal payments include voluntary and involuntary prepayments, such as prepayments resulting from the application of loan reserves, property releases, casualty or condemnation, defaults and liquidations as well as principal payments resulting from repurchases due to material breaches of representations and warranties or material document defects or purchases by a companion loan holder or mezzanine lender (if any) pursuant to a purchase option or sales of defaulted mortgage loans.
Any changes in the weighted average lives of your certificates may adversely affect your yield. In general, if you buy a certificate at a premium or buy any of the Class X certificates, and principal distributions occur faster than expected, your actual yield to maturity will be lower than expected. If prepayment principal distributions are very high, holders of certificates purchased at a premium or holders of any of the Class X certificates might not fully recover their initial investment. Conversely, if you buy a certificate at a discount (other than any of the Class X certificates) and principal distributions occur more slowly than expected, your actual yield to maturity will be lower than expected.
Prepayments resulting in a shortening of weighted average lives of your certificates may be made at a time of low interest rates when you may be unable to reinvest the resulting payment of principal on your certificates at a rate comparable to the effective yield anticipated by you in making your investment in the certificates, while delays and extensions resulting in a lengthening of those weighted average lives may occur at a time of high interest rates when you may have been able to reinvest principal payments that would otherwise have been received by you at higher rates.
In addition, the extent to which prepayments on the mortgage loans in the issuing entity ultimately affect the weighted average life of the certificates will depend on the terms of the certificates, more particularly:
| ● | a class of certificates that entitles the holders of those certificates to a disproportionately larger share of the prepayments on the mortgage loans increases the “call risk” or the likelihood of early retirement of that class if the rate of prepayment is relatively fast; and |
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| ● | a class of certificates that entitles the holders of the certificates to a disproportionately smaller share of the prepayments on the mortgage loans increases the likelihood of “extension risk” or an extended average life of that class if the rate of prepayment is relatively slow. |
The Timing of Prepayments and Repurchases May Change Your Anticipated Yield. The rate at which voluntary prepayments occur on the mortgage loans will be affected by a variety of factors, including:
| ● | the terms of the mortgage loans, including, the length of any prepayment lockout period and the applicable yield maintenance charges and prepayment premiums and the extent to which the related mortgage loan terms may be practically enforced; |
| ● | the level of prevailing interest rates; |
| ● | the availability of credit for commercial real estate; |
| ● | the master servicer’s or special servicer’s ability to enforce yield maintenance charges and prepayment premiums; |
| ● | the failure to meet certain requirements for the release of escrows; |
| ● | the occurrence of casualties or natural disasters; and |
| ● | economic, demographic, tax, legal or other factors. |
Although a yield maintenance charge or other prepayment premium provision of a mortgage loan is intended to create an economic disincentive for a borrower to prepay voluntarily a mortgage loan, we cannot assure you that mortgage loans that have such provisions will not prepay.
The extent to which the special servicer forecloses upon, takes title to and disposes of any mortgaged property related to a mortgage loan or sells defaulted mortgage loans will affect the weighted average lives of your certificates. If the special servicer forecloses upon a significant number of the related mortgage loans, and depending upon the amount and timing of recoveries from the related mortgaged properties or sells defaulted mortgage loans, your certificates may have a shorter weighted average life.
Delays in liquidations of defaulted mortgage loans and modifications extending the maturity of mortgage loans will tend to delay the payment of principal on the mortgage loans. The ability of the related borrower to make any required balloon payment typically will depend upon its ability either to refinance the mortgage loan or to sell the related mortgaged property. A significant number of the mortgage loans require balloon payments at maturity or provide incentives for the borrower to repay by the related anticipated repayment date and there is a risk that a number of those mortgage loans may default at maturity, or that the special servicer may extend the maturity of a number of those mortgage loans in connection with workouts. We cannot assure you as to the borrowers’ abilities to make mortgage loan payments on a full and timely basis, including any balloon payments at maturity or anticipated repayment date. Bankruptcy of the borrower or adverse conditions in the market where the mortgaged property is located may, among other things, delay the recovery of proceeds in the case of defaults. Losses on the mortgage loans due to uninsured risks or insufficient hazard insurance proceeds may create shortfalls in distributions to certificateholders. Any required indemnification of a party to the pooling and servicing agreement in connection with legal actions relating to the issuing entity, the related agreements or the certificates may also result in shortfalls.
See “—Risks Relating to the Mortgage Loans—Risks Relating to Enforceability of Yield Maintenance Charges, Prepayment Premiums or Defeasance Provisions” above and “Description of the Mortgage Pool—Certain Terms of the Mortgage Loans—Prepayment Protections and Certain Involuntary Prepayments”.
In addition, if a sponsor repurchases a mortgage loan from the issuing entity due to a material breach of one or more of its representations or warranties or a material document defect, the repurchase price
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paid will be passed through to the holders of the certificates with the same effect as if the mortgage loan had been prepaid in part or in full, and no yield maintenance charge or other prepayment premium would be payable. Additionally, the holder of a subordinate companion loan or any mezzanine lender (if any) may have the option to purchase the related mortgage loan after certain defaults, and the purchase price may not include any yield maintenance charges or prepayment premiums. As a result of such a repurchase or purchase, investors in the Class X-A, Class X-B, Class X-D, Class X-F, Class X-G and Class X-H certificates and any other certificates purchased at a premium might not fully recoup their initial investment. A repurchase, a prepayment or the exercise of a purchase option may adversely affect the yield to maturity on your certificates. In this respect, see “Description of the Mortgage Loan Purchase Agreements” and “Pooling and Servicing Agreement—Realization Upon Mortgage Loans”.
The certificates with notional amounts will not be entitled to distributions of principal but instead will accrue interest on their respective notional amounts. Because the notional amount of the certificates indicated in the following table is based upon all or a portion of the outstanding certificate balances of the related class of certificates, the yield to maturity on the indicated certificates will be extremely sensitive to the rate and timing of prepayments of principal, liquidations and principal losses on the mortgage loans to the extent allocated to the related certificates.
Interest-Only Class of Certificates |
Underlying Class(es) |
| Class X-A | Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4, Class A-5, Class A-M |
| Class X-B | Class B |
| Class X-D | Class D, Class E |
| Class X-F | Class F |
| Class X-G | Class G |
| Class X-H | Class H |
A rapid rate of principal prepayments, liquidations and/or principal losses on the mortgage loans could result in the failure to recoup the initial investment in the Class X certificates. Investors in the Class X certificates should fully consider the associated risks, including the risk that an extremely rapid rate of amortization, prepayment or other liquidation of the mortgage loans could result in the failure of such investors to recoup fully their initial investments. The yield to maturity of the certificates with notional amounts may be adversely affected by the prepayment of mortgage loans with higher net mortgage loan rates. See “Yield and Maturity Considerations—Yield on the Certificates with Notional Amounts”.
Your Yield May Be Adversely Affected By Prepayments Resulting From Earnout Reserves. With respect to certain mortgage loans, earnout escrows may have been established at origination, which funds may be released to the related borrower upon satisfaction of certain conditions. If such conditions with respect to any such mortgage loan are not satisfied, the amounts reserved in such escrows may be applied to the payment of the mortgage loan, which would have the same effect on the offered certificates as a prepayment of the mortgage loan, except that such application of funds would not be accompanied by any prepayment premium or yield maintenance charge. See Annex A-1. The pooling and servicing agreement will provide that unless required by the mortgage loan documents, the master servicer will not apply such amounts as a prepayment if no event of default has occurred.
Losses and Shortfalls May Change Your Anticipated Yield. If losses on the mortgage loans allocated to the principal balance certificates exceed the aggregate certificate balance of principal balance certificates subordinated to a particular class, that class will suffer a loss equal to the full amount of the excess (up to the outstanding certificate balance of that class). Even if losses on the mortgage loans are not borne by your certificates, those losses may affect the weighted average life and yield to maturity of your certificates.
For example, certain shortfalls in interest as a result of involuntary prepayments may reduce the funds available to make payments on your certificates. In addition, if the master servicer, the special servicer or the trustee reimburses itself (or a master servicer, special servicer, trustee or other party to a pooling and servicing agreement governing the servicing of the non-serviced whole loan) out of general collections on the mortgage loans included in the issuing entity for any advance that it (or any such other
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party) has determined is not recoverable out of collections on the related mortgage loan, then to the extent that this reimbursement is made from collections of principal on the mortgage loans in the issuing entity, that reimbursement will reduce the amount of principal available to be distributed on the certificates and will result in a reduction of the certificate balance (or notional amount) of a class of principal balance certificates and the VRR Interest, pro rata based on their respective percentage allocation entitlement as described in this prospectus. See “Description of the Certificates—Distributions”. Likewise, if the master servicer or the trustee reimburses itself out of principal collections on the mortgage loans for any workout-delayed reimbursement amounts, that reimbursement will reduce the amount of principal available to be distributed on the principal balance certificates and the VRR Interest, pro rata based on their respective percentage allocation entitlement as described in this prospectus, on that distribution date. This reimbursement would have the effect of reducing current payments of principal on the offered certificates (other than the certificates with notional amounts) and extending the weighted average lives of the offered certificates with certificate balances. See “Description of the Certificates—Distributions”.
In addition, to the extent losses are realized on the mortgage loans and allocated to the principal balance certificates, first the Class H certificates, then the Class G certificates, then the Class F certificates, then the Class E certificates, then the Class D certificates, then the Class C certificates, then the Class B certificates, then the Class A-M certificates and, then pro rata, the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4 and Class A-5 certificates, based on their respective certificate balances, will bear such losses up to an amount equal to the respective outstanding certificate balance of that class. A reduction in the certificate balance of any of the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4, Class A-5 or Class A-M certificates will result in a corresponding reduction in the notional amount of the Class X-A certificates. A reduction in the certificate balance of the Class B certificates will result in a corresponding reduction in the notional amount of the Class X-B certificates. A reduction in the certificate balance of any of the Class D or Class E certificates will result in a corresponding reduction in the notional amount of the Class X-D certificates. A reduction in the certificate balance of the Class F certificates will result in a corresponding reduction in the notional amount of the Class X-F certificates. A reduction in the certificate balance of the Class G certificates will result in a corresponding reduction in the notional amount of the Class X-G certificates. A reduction in the certificate balance of the Class H certificates will result in a corresponding reduction in the notional amount of the Class X-H certificates. We make no representation as to the anticipated rate or timing of prepayments (voluntary or involuntary) or rate, timing or amount of liquidations or losses on the mortgage loans or as to the anticipated yield to maturity of any such offered certificate. See “Yield and Maturity Considerations”.
Risk of Early Termination. The issuing entity is subject to optional termination under certain circumstances. See “Pooling and Servicing Agreement—Termination; Retirement of Certificates”. In the event of this termination, you might receive some principal payments earlier than otherwise expected, which could adversely affect your anticipated yield to maturity.
Your Lack of Control Over the Issuing Entity and the Mortgage Loans Can Impact Your Investment
You Have Limited Voting Rights. Except as described in this prospectus, you and other certificateholders generally do not have a right to vote and do not have the right to make decisions with respect to the administration of the issuing entity and the mortgage loans. With respect to mortgage loans (other than any mortgage loan that will be serviced under a separate pooling and servicing agreement), those decisions are generally made, subject to the express terms of the pooling and servicing agreement for this transaction, by the master servicer, the special servicer, the trustee or the certificate administrator, as applicable, subject to any rights of the directing holder or the risk retention consultation parties under the pooling and servicing agreement for this transaction and the rights of the holders of the related companion loans and mezzanine debt under the related intercreditor agreement. With respect to the non-serviced mortgage loans, you will generally not have any right to vote or make decisions with respect the non-serviced mortgage loans, and those decisions will generally be made by the master servicer or the special servicer under the pooling and servicing agreement governing the servicing of the related non-serviced mortgage loan and the related companion loan, subject to the rights of the directing holder appointed under such pooling and servicing agreement. See “Pooling and Servicing Agreement” and
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“Description of the Mortgage Pool—The Whole Loans”. In particular, with respect to the risks relating to a modification of a mortgage loan, see “—Risks Relating to Modifications of the Mortgage Loans” below.
In certain limited circumstances where certificateholders have the right to vote on matters affecting the issuing entity, in some cases, these votes are by certificateholders taken as a whole and in others the vote is by class. In all cases voting is based on the outstanding certificate balance, which is reduced by realized losses. In certain cases with respect to the termination of the special servicer and the operating advisor, certain voting rights will also be reduced by appraisal reductions, as described below. These limitations on voting could adversely affect your ability to protect your interests with respect to matters voted on by certificateholders. See “Description of the Certificates—Voting Rights”. You will have no rights to vote on any servicing matters related to the mortgage loans that will be serviced under a pooling and servicing agreement governing the servicing of a non-serviced whole loan.
In general, a certificate beneficially owned by the master servicer, the special servicer (including, for the avoidance of doubt, any excluded special servicer), the trustee, the certificate administrator, the depositor, any mortgage loan seller, a borrower party or affiliate of any of such persons will be deemed not to be outstanding and a holder of such certificate will not have the right to vote, subject to certain exceptions, as further described in the definition of “Certificateholder” under “Description of the Certificates—Reports to Certificateholders; Certain Available Information—Certificate Administrator Reports”.
The Rights of the Directing Holder, the Risk Retention Consultation Parties and the Operating Advisor Could Adversely Affect Your Investment. The directing holder will have certain consent and consultation rights with respect to certain matters relating to the mortgage loans (other than a non-serviced mortgage loan or any applicable excluded loan) and the right to replace the special servicer with or without cause, except that if a control termination event (i.e., an event in which the certificate balance of the most senior class of certificates that is eligible to be a controlling class, as reduced by the application of appraisal reductions and realized losses, is less than 25% of its initial certificate balance), is continuing, the directing holder will lose the consent rights and the right to replace the special servicer, and if a consultation termination event (i.e., an event in which the certificate balance of the most senior class of certificates that is eligible to be a controlling class (as reduced by the application of realized losses) is less than 25% of its initial certificate balance) is continuing, then the directing holder will lose the consultation rights. See “Pooling and Servicing Agreement—The Directing Holder”.
In addition, each risk retention consultation party will have certain consultation rights with respect to certain matters relating to the mortgage loans (other than any non-serviced mortgage loan, any servicing shift mortgage loan and any applicable excluded loan). See “Pooling and Servicing Agreement—The Directing Holder—Major Decisions”.
These actions and decisions with respect to which the directing holder has consent or consultation rights and any risk retention consultation party has consultation rights include, among others, certain modifications to the mortgage loans or serviced whole loans, including modifications of monetary terms, foreclosure or comparable conversion of the related mortgaged properties, and certain sales of mortgage loans or REO properties for less than the outstanding principal amount plus accrued interest, fees and expenses. As a result of the exercise of these rights by the directing holder and any risk retention consultation party, the special servicer may take actions with respect to a mortgage loan that could adversely affect the interests of investors in one or more classes of offered certificates.
Similarly, with respect to a non-serviced mortgage loan, the special servicer under the pooling and servicing agreement or trust and servicing agreement, as applicable, governing the servicing of such non-serviced mortgage loan may, at the direction or upon the advice of the directing holder of the related securitization trust holding the controlling note for the related non-serviced whole loan, take actions with respect to such non-serviced mortgage loan and related companion loan that could adversely affect such non-serviced mortgage loan, and therefore, the holders of some or all of the classes of certificates. Similarly, with respect to any servicing shift whole loan, prior to the related servicing shift securitization date, the special servicer may, at the direction or upon the advice of the holder of the related controlling pari passu companion loan, take actions with respect to such whole loan that could adversely affect such
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whole loan, and therefore, the holders of some or all of the classes of certificates. The issuing entity (as the holder of the non-controlling notes) will have limited consultation rights with respect to major decisions relating to each non-serviced whole loan (and any servicing shift whole loan) and in connection with a sale of a defaulted loan, and such rights will be exercised by the directing holder for this transaction for so long as no control termination event is continuing and by the special servicer if a control termination event is continuing. See “Description of the Mortgage Pool—The Whole Loans” and “Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans”.
Although the special servicer under the pooling and servicing agreement and the special servicer for a non-serviced mortgage loan are not permitted to take actions which are prohibited by law or violate the servicing standard under the applicable pooling and servicing agreement or trust and servicing agreement, as applicable, or the terms of the related loan documents, it is possible that the directing holder (or equivalent entity) under such pooling and servicing agreement or trust and servicing agreement, as applicable, may direct or advise, as applicable, the related special servicer to take actions with respect to such mortgage loan that conflict with the interests of the holders of certain classes of the certificates.
You will be acknowledging and agreeing, by your purchase of offered certificates, that the directing holder, the risk retention consultation parties and the directing holder (or equivalent entity) under the pooling and servicing agreement or the trust and servicing agreement governing the servicing of each non-serviced mortgage loan:
(i) may have special relationships and interests that conflict with those of holders of one or more classes of certificates;
(ii) may act solely in its own interests or the interests of the holders of the controlling class or the VRR Interest, as applicable (or in the case of a non-serviced mortgage loan, the controlling class of the securitization trust formed under the pooling and servicing agreement governing the servicing of such non-serviced mortgage loan);
(iii) does not have any duties to the holders of any class of certificates other than the controlling class or the VRR Interest, as applicable (or, in the case of a non-serviced mortgage loan, the controlling class of the securitization trust formed under the pooling and servicing agreement governing the servicing of such non-serviced mortgage loan);
(iv) may take actions that favor its own interests or the interests of the holders of the controlling class or the holders of the VRR Interest, as applicable (or, in the case of a non-serviced mortgage loan, the controlling class of the securitization trust formed under the pooling and servicing agreement governing the servicing of such non-serviced mortgage loan), over the interests of the holders of one or more other classes of certificates; and
(v) will have no liability whatsoever (other than to a controlling class certificateholder) for having so acted as set forth in clauses (i) – (iv) above, and that no certificateholder may take any action whatsoever against the directing holder, any risk retention consultation party, a controlling companion loan holder or the directing holder (or the equivalent) under the pooling and servicing agreement or the trust and servicing agreement, as applicable, governing the servicing of such non-serviced mortgage loan or any of their respective affiliates, directors, officers, employees, shareholders, members, partners, agents or principals for having so acted.
In addition, if a control termination event is continuing, the operating advisor will have certain consultation rights with respect to certain matters relating to the mortgage loans (other than a non-serviced mortgage loan or a servicing shift mortgage loan). Further, if a consultation termination event is continuing, the operating advisor will have the right to recommend a replacement of the special servicer, as described under “Pooling and Servicing Agreement—The Operating Advisor” and “—Replacement of the Special Servicer After Operating Advisor Recommendation and Certificateholder Vote”. The operating advisor is generally required to act on behalf of the issuing entity and in the best interest of, and for the benefit of, the certificateholders and, with respect to any serviced whole loan, for the benefit of the
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holders of the related companion loan (as a collective whole as if the certificateholders and companion loan holders constituted a single lender, taking into account the subordinate nature of any subordinate companion loan). We cannot assure you that any actions taken by the special servicer as a result of a recommendation or consultation by the operating advisor will not adversely affect the interests of investors in any one or more classes of certificates. With respect to any non-serviced mortgage loan, the operating advisor (if any) appointed under the pooling and servicing agreement governing the servicing of such non-serviced mortgage loan may have rights and duties under such pooling and servicing agreement that vary in certain respects from those under the pooling and servicing agreement for this transaction. Further, the operating advisor will generally have no obligations or consultation rights under the pooling and servicing agreement for this transaction with respect to any non-serviced mortgage loan or any related REO property. See “Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans”.
You Have Limited Rights to Replace the Master Servicer, the Special Servicer, the Trustee, the Certificate Administrator, the Operating Advisor or the Asset Representations Reviewer. In general, the directing holder will have the right to terminate and replace the special servicer (other than with respect to any servicing shift whole loan) with or without cause for so long as no control termination event is continuing as described in this prospectus. For so long as a control termination event under the pooling and servicing agreement is continuing, the special servicer may also be removed (other than with respect to any servicing shift whole loan) in certain circumstances (x) if a request is made by certificateholders evidencing not less than 25% of the voting rights (taking into account the application of any appraisal reduction amounts to notionally reduce the certificate balances of the principal balance certificates) and (y) upon receipt of approval by (i) certificateholders holding at least 66 2/3% of a quorum of the certificateholders (which is the holders of certificates evidencing at least 50% of the voting rights (taking into account the application of realized losses and the application of appraisal reductions to notionally reduce the respective certificate balances)) or (ii) certificateholders holding more than 50% of each class of “non-reduced certificates” (each class of certificates (other than the Class X-A, Class X-B, Class X-D, Class X-F, Class X-G, Class X-H, Class S and Class R certificates) outstanding that has not been reduced to less than 25% of its initial certificate balance through the application of appraisal reduction amounts and realized losses). See “Pooling and Servicing Agreement—Replacement of the Special Servicer Without Cause”.
In addition, if, during the continuance of a control termination event, the operating advisor determines, in its sole discretion exercised in good faith, that (1) the special servicer is not performing its duties as required under the pooling and servicing agreement or is otherwise not acting in accordance with the servicing standard, and (2) the replacement of the special servicer would be in the best interest of the certificateholders as a collective whole, then the operating advisor will have the right to recommend the replacement of the special servicer and deliver a report supporting such recommendation in the manner described in “Pooling and Servicing Agreement—Replacement of the Special Servicer After Operating Advisor Recommendation and Certificateholder Vote”. The operating advisor’s recommendation to replace the special servicer must be confirmed by an affirmative vote of holders of voting rights of principal balance certificates and the VRR Interest evidencing at least a majority of a quorum (which, for this purpose, is holders that evidence at least 20% of the voting rights (taking into account the application of appraisal reductions to notionally reduce the respective certificate balances) of all principal balance certificates and the VRR Interest on an aggregate basis). Additionally, with respect to each servicing shift whole loan, prior to the related servicing shift securitization date, the holder of the related controlling pari passu companion loan will have the right to terminate and replace the special servicer (solely with respect to the related servicing shift whole loan) with or without cause at any time. See “Description of the Mortgage Pool—The Whole Loans—The Serviced Pari Passu Whole Loans—Control Rights with respect to Servicing Shift Whole Loans” and “—The Non-Serviced Pari Passu Whole Loans—Control Rights”.
The certificateholders will generally have no right to replace and terminate the master servicer, the trustee and the certificate administrator without cause. The vote of the requisite percentage of certificateholders may terminate the operating advisor or the asset representations reviewer without cause. The vote of the requisite percentage of the certificateholders will be required to replace the master servicer, the special servicer, the operating advisor and the asset representations reviewer even for
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cause, and certain termination events may be waived by the vote of the requisite percentage of the certificateholders. The certificateholders will have no right to replace the master servicer or the special servicer of the pooling and servicing agreement relating to a non-serviced mortgage loan. We cannot assure you that your lack of control over the replacement of these parties will not have an adverse impact on your investment.
The Rights of Companion Loan Holders and Mezzanine Debt Could Adversely Affect Your Investment. The holders of a pari passu companion loan relating to the serviced mortgage loans will have certain consultation rights (on a non-binding basis) with respect to major decisions relating to the related whole loan under the related intercreditor agreement. Such companion loan holder and its representative may have interests in conflict with those of the holders of some or all of the classes of certificates, and may advise the special servicer to take actions that conflict with the interests of the holders of certain classes of the certificates. Although any such consultation is non-binding and the special servicer is not obligated to consult with the companion loan holder if required under the servicing standard, we cannot assure you that the exercise of the rights of such companion loan holder will not delay any action to be taken by the special servicer and will not adversely affect your investment.
With respect to any mortgage loan that is subject to one or more subordinate companion loans, the holders of such companion loan(s) will generally have the right under limited circumstances to (i) cure certain defaults with respect to the related mortgage loan and to purchase (without payment of any yield maintenance charge or prepayment premium) the related mortgage loan and (ii) other than during the continuance of a “control period” or a “control termination event” applicable to such subordinate companion loan, approve certain modifications and consent to certain actions to be taken with respect to the related whole loan. The rights of the holder of a subordinate companion loan could adversely affect your ability to protect your interests with respect to matters relating to the related mortgage loan. See “Description of the Mortgage Pool—The Whole Loans”.
With respect to mortgage loans that have or may in the future have mezzanine debt, the related mezzanine lender will have the right under certain limited circumstances to (i) cure certain defaults with respect to, and under certain default scenarios, purchase (without payment of any yield maintenance charge or prepayment premium) the related mortgage loan and (ii) so long as no event of default with respect to the related mortgage loan continues after the mezzanine lender’s cure right has expired, approve certain modifications and consent to certain actions to be taken with respect to the related mortgage loan. See “Description of the Mortgage Pool—Mortgage Pool Characteristics” and “—Additional Indebtedness”.
The purchase option that the holder of a subordinate companion loan or mezzanine debt holds pursuant to the related intercreditor agreement generally permits such holder to purchase its related defaulted mortgage loan for a purchase price generally equal to the outstanding principal balance of the related defaulted mortgage loan, together with accrued and unpaid interest (exclusive of default interest) on, and unpaid servicing expenses, protective advances and interest on advances related to, such defaulted mortgage loan. However, in the event such holder is not obligated to pay some or all of those fees and additional expenses, including any liquidation fee payable to the special servicer under the terms of the pooling and servicing agreement, then the exercise of such holder’s rights under the co-lender agreement or intercreditor agreement to purchase the related mortgage loan from the issuing entity may result in a loss to the issuing entity in the amount of those fees and additional expenses. In addition, such holder’s right to cure defaults under the related defaulted mortgage loan could delay the issuing entity’s ability to realize on or otherwise take action with respect to such defaulted mortgage loan.
In addition, with respect to a non-serviced mortgage loan, you will not have any right to vote with respect to any matters relating to the servicing and administration of the non-serviced mortgage loan. See “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced Pari Passu Whole Loans”, “—The Non-Serviced AB Whole Loans” and “Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans”.
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You will be acknowledging and agreeing, by your purchase of offered certificates, that the companion loan holders:
| ● | may have special relationships and interests that conflict with those of holders of one or more classes of certificates; |
| ● | may act solely in its own interests, without regard to your interests; |
| ● | do not have any duties to any other person, including the holders of any class of certificates; |
| ● | may take actions that favor its interests over the interests of the holders of one or more classes of certificates; and |
| ● | will have no liability whatsoever for having so acted and that no certificateholder may take any action whatsoever against the companion loan holder or its representative or any director, officer, employee, agent or principal of the companion loan holder or its representative for having so acted. |
Risks Relating to Modifications of the Mortgage Loans
As delinquencies or defaults occur, the special servicer will be required to utilize an increasing amount of resources to work with borrowers to maximize collections on the mortgage loans serviced by it. This may include modifying the terms of such mortgage loans that are in default or whose default is reasonably foreseeable. At each step in the process of trying to bring a defaulted mortgage loan current or in maximizing proceeds to the issuing entity, the special servicer and any sub-servicer will be required to invest time and resources not otherwise required when collecting payments on performing mortgage loans. Modifications of mortgage loans implemented by the special servicer or any sub-servicer in order to maximize ultimate proceeds of such mortgage loans to issuing entity may have the effect of, among other things, reducing or otherwise changing the mortgage rate, forgiving or forbearing payments of principal, interest or other amounts owed under the mortgage loan, extending the final maturity date of the mortgage loan, capitalizing or deferring delinquent interest and other amounts owed under the mortgage loan, forbearing payment of a portion of the principal balance of the mortgage loan or any combination of these or other modifications.
Any modified mortgage loan may remain in the issuing entity, and the modification may result in a reduction in (or may eliminate) the funds received with respect of such mortgage loan. In particular, any modification to reduce or forgive the amount of interest payable on the mortgage loan will reduce the amount cash flow available to make distributions of interest on the certificates, which will likely impact the most subordinated classes of certificates that suffer the shortfall. To the extent the modification defers principal payments on the mortgage loan (including as a result of an extension of its stated maturity date), certificates entitled to principal distributions will likely be repaid more slowly than anticipated, and if principal payments on the mortgage loan are forgiven, the reduction will cause a write-down of the certificate balances of the certificates in reverse order of seniority. See “Description of the Certificates—Subordination; Allocation of Realized Losses”.
The ability to modify mortgage loans by the special servicer may be limited by several factors. First, if the special servicer has to consider a large number of modifications, operational constraints may affect the ability of the special servicer to adequately address all of the needs of the borrowers. Furthermore, the terms of the related servicing agreement may prohibit the special servicer from taking certain actions in connection with a loan modification, such as an extension of the loan term beyond a specified date such as a specified number of years prior to the rated final distribution date. You should consider the importance of the role of the special servicer in maximizing collections for the transaction and the impediments the special servicer may encounter when servicing delinquent or defaulted mortgage loans. In some cases, failure by a special servicer to timely modify the terms of a defaulted mortgage loan may reduce amounts available for distribution on the certificates in respect of such mortgage loan, and consequently may reduce amounts available for distribution to the related certificates. In addition, even if
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a loan modification is successfully completed, we cannot assure you that the related borrower will continue to perform under the terms of the modified mortgage loan.
Modifications that are designed to maximize collections in the aggregate may adversely affect a particular class of certificates. The pooling and servicing agreement obligates the special servicer not to consider the interests of individual classes of certificates. You should note that in connection with considering a modification or other type of loss mitigation, the special servicer may incur or bear related out-of-pocket expenses, such as appraisal fees, which would be reimbursed to the special servicer from the transaction as servicing advances and paid from amounts received on the modified loan or from other mortgage loans in the mortgage pool but in each case, prior to distributions being made on the certificates.
Sponsors May Not Make Required Repurchases or Substitutions of Defective Mortgage Loans or Pay Any Loss of Value Payment Sufficient to Cover All Losses on a Defective Mortgage Loan
Each sponsor is the sole warranting party in respect of the mortgage loans sold by such sponsor to us. Neither we nor any of our affiliates (except German American Capital Corporation, in its capacity as a sponsor) is obligated to repurchase or substitute any mortgage loan or make any payment to compensate the issuing entity in connection with a breach of any representation or warranty of a sponsor or any document defect, if the sponsor defaults on its obligation to do so. We cannot assure you that the sponsors will effect such repurchases or substitutions or make such payment to compensate the issuing entity. Although a loss of value payment may only be made to the extent that the special servicer deems such amount to be sufficient to compensate the issuing entity for such material defect or material breach, we cannot assure you that such loss of value payment will fully compensate the issuing entity for such material defect or material breach in all respects. In addition, the sponsors may have various legal defenses available to them in connection with a repurchase or substitution obligation or an obligation to pay the loss of value payment. In particular, in the case of a non-serviced loan that is serviced under the pooling and servicing agreement entered into in connection with the securitization of the related pari passu companion loan, the asset representations reviewer (if applicable) under that pooling and servicing agreement may review the diligence file relating to such pari passu companion loan concurrently with the review of the asset representations reviewer of the related mortgage loan for this transaction, and their findings may be inconsistent, and such inconsistency may allow the related mortgage loan seller to challenge the findings of the asset representations reviewer of the affected mortgage loan. Any mortgage loan that is not repurchased or substituted and that is not a “qualified mortgage” for a REMIC may cause designated portions of the issuing entity to fail to qualify as one or more REMICs or cause the issuing entity to incur a tax. See “Description of the Mortgage Loan Purchase Agreements”.
In addition, with respect to the 601 Lexington Avenue mortgage loan (9.3%), each of German American Capital Corporation and Citi Real Estate Funding Inc. will be obligated to take the remediation actions described above as a result of a material document defect or material breach only with respect to the related promissory note(s) sold by the applicable mortgage loan seller to the depositor as if the note(s) contributed by each such mortgage loan seller and evidencing such mortgage loan were a separate mortgage loan. In addition to the foregoing, it is also possible that under certain circumstances, only one of German American Capital Corporation or Citi Real Estate Funding Inc. will repurchase, or otherwise comply with any remediation obligations with respect to, its interest in such mortgage loan if there is a material breach or material document defect.
Payments Allocated to the VRR Interest Will Not Be Available to Make Payments on the Non-VRR Certificates, and Payments Allocated to the Non-VRR Certificates Will Not Be Available to Make Payments on the VRR Interest
As described in this prospectus, payments of principal and interest in respect of the mortgage loans will be distributed to the holders of the non-VRR certificates and the VRR Interest, pro rata, based upon their respective percentage allocation entitlement. Amounts received and allocated to the non-VRR certificates will not be available to satisfy any amounts due and payable to the VRR Interest. Likewise, amounts received and allocated to the VRR Interest will not be available to satisfy any amounts due and
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payable to the non-VRR certificates. Accordingly, any losses incurred by the issuing entity will also be effectively allocated between the non-VRR certificates (collectively) and the VRR Interest, pro rata, based upon their respective percentage allocation entitlement. See “Description of the Certificates—Distributions” and “Credit Risk Retention”.
Risks Relating to Interest on Advances and Special Servicing Compensation
To the extent described in this prospectus, the master servicer, the special servicer and the trustee will each be entitled to receive interest on unreimbursed advances made by it at the “prime rate” (and solely with respect to the master servicer, subject to a floor rate of 2.0%) as published in The Wall Street Journal, compounded annually. This interest will generally accrue from the date on which the related advance is made or the related expense is incurred to the date of reimbursement. In addition, under certain circumstances, including delinquencies in the payment of principal and/or interest, a mortgage loan will be specially serviced and the special servicer will be entitled to compensation for special servicing activities. The right to receive interest on advances or special servicing compensation is senior to the rights of certificateholders to receive distributions on the offered certificates. The payment of interest on advances and the payment of compensation to the special servicer may lead to shortfalls in amounts otherwise distributable on your certificates.
Bankruptcy of a Servicer May Adversely Affect Collections on the Mortgage Loans and the Ability to Replace the Servicer
The master servicer or the special servicer may be eligible to become a debtor under the federal bankruptcy code or enter into receivership under the Federal Deposit Insurance Act (“FDIA”). If a master servicer or special servicer, as applicable, were to become a debtor under the federal bankruptcy code or enter into receivership under the FDIA, although the pooling and servicing agreement provides that such an event would entitle the issuing entity to terminate the master servicer or special servicer, as applicable, the provision would most likely not be enforceable. However, a rejection of the pooling and servicing agreement by a master servicer or special servicer, as applicable, in a bankruptcy proceeding or repudiation of the pooling and servicing agreement in a receivership under the FDIA would be treated as a breach of the pooling and servicing agreement and give the issuing entity a claim for damages and the ability to appoint a successor master servicer or special servicer, as applicable. An assumption under the federal bankruptcy code would require the master servicer or special servicer, as applicable, to cure its pre-bankruptcy defaults, if any, and demonstrate that it is able to perform following assumption. The bankruptcy court may permit the master servicer or special servicer, as applicable, to assume the servicing agreement and assign it to a third party. An insolvency by an entity governed by state insolvency law would vary depending on the laws of the particular state. We cannot assure you that a bankruptcy or receivership of the master servicer or special servicer, as applicable, would not adversely impact the servicing of the mortgage loans or that the issuing entity would be entitled to terminate the master servicer or special servicer, as applicable, in a timely manner or at all.
If any master servicer or special servicer, as applicable, becomes the subject of bankruptcy or similar proceedings, the issuing entity claim to collections in that master servicer’s or special servicer’s, as applicable, possession at the time of the bankruptcy filing or other similar filing may not be perfected. In this event, funds available to pay principal and interest on your certificates may be delayed or reduced.
The Originators, the Sponsors, the Depositor and the Issuing Entity Are Subject to Bankruptcy or Insolvency Laws That May Affect the Issuing Entity’s Ownership of the Mortgage Loans
In the event of the bankruptcy or insolvency of an originator, a sponsor or the depositor, or a receivership or conservatorship of Goldman Sachs Bank USA (“GS Bank”), an originator and the parent of Goldman Sachs Mortgage Company, or JPMorgan Chase Bank, National Association, an originator, it is possible that the issuing entity’s right to payment from or ownership of certain of the mortgage loans could be challenged, and if such challenge were successful, delays, reductions in payments and/or losses on the certificates could occur. Even if a challenge were not successful, it is possible that payments on the certificates would be delayed while a court resolves the claim.
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Goldman Sachs Mortgage Company, a sponsor, is an indirect, wholly-owned subsidiary of GS Bank, a New York State chartered bank. JPMorgan Chase Bank, National Association, a sponsor and an originator, is a national banking association. The deposits of GS Bank and JPMorgan Chase Bank, National Association are insured by the Federal Deposit Insurance Corporation (the “FDIC”). If GS Bank or JPMorgan Chase Bank, National Association were to become subject to receivership, the proceeding would be administered by the FDIC under the FDIA; likewise, if GS Bank or JPMorgan Chase Bank, National Association were to become subject to conservatorship, the agency appointed as conservator would likely be the FDIC as well. The FDIA gives the FDIC the power to disaffirm or repudiate contracts to which a bank is party at the time of receivership or conservatorship and the performance of which the FDIC determines to be burdensome, in which case the counterparty to the contract has a claim for payment by the receivership or conservatorship estate of “actual direct compensatory damages” as of the date of receivership or conservatorship. The FDIC has adopted a rule, substantially revised and effective January 1, 2011, establishing a safe harbor (the “FDIC Safe Harbor”) from its repudiation powers for securitizations meeting the requirements of the rule (12 C.F.R. § 360.6).
The transfer of the mortgage loans by the sponsors to the depositor in connection with this offering is not expected to qualify for the FDIC Safe Harbor. However, the transfers by Goldman Sachs Mortgage Company, Citi Real Estate Funding, Inc. or German American Capital Corporation are not transfers by a bank, and in any event, even if the FDIC Safe Harbor were applicable to this transfer, the FDIC Safe Harbor is non-exclusive.
In the case of each sponsor, an opinion of counsel will be rendered on the closing date, based on certain facts and assumptions and subject to certain qualifications, to the effect that the transfer of the applicable mortgage loans by such sponsor to the depositor would generally be respected in the event of a bankruptcy or insolvency of such sponsor. A legal opinion is not a guaranty as to what any particular court would actually decide, but rather an opinion as to the decision a court would reach if the issues are competently presented and the court followed existing precedent as to legal and equitable principles applicable in bankruptcy cases. In any event, we cannot assure you that the Federal Deposit Insurance Corporation, a bankruptcy trustee or another interested party, as applicable, would not attempt to assert that such transfer was not a sale. Even if a challenge were not successful, it is possible that payments on the certificates would be delayed while a court resolves the claim.
In addition, since the issuing entity is a common law trust, it may not be eligible for relief under the federal bankruptcy laws, unless it can be characterized as a “business trust” for purposes of the federal bankruptcy laws. Bankruptcy courts look at various considerations in making this determination, so it is not possible to predict with any certainty whether or not the issuing entity would be characterized as a “business trust”. Regardless of whether a bankruptcy court ultimately determines that the issuing entity is a “business trust”, it is possible that payments on the offered certificates would be delayed while the court resolved the issue.
Title II of the Dodd-Frank Act provides for an orderly liquidation authority (“OLA”) under which the FDIC can be appointed as receiver of certain systemically important non-bank financial companies and their direct or indirect subsidiaries in certain cases. We make no representation as to whether this would apply to any of the sponsors. In January 2011, the then-acting general counsel of the FDIC issued a letter (the “Acting General Counsel’s Letter”) in which he expressed his view that, under then-existing regulations, the FDIC, as receiver under the OLA, would not, in the exercise of its OLA repudiation powers, recover as property of a financial company assets transferred by the financial company, provided that the transfer satisfies the conditions for the exclusion of assets from the financial company’s estate under the federal bankruptcy code. The letter further noted that, while the FDIC staff may be considering recommending further regulations under OLA, the then-acting general counsel would recommend that such regulations incorporate a 90-day transition period for any provisions affecting the FDIC’s statutory power to disaffirm or repudiate contracts. If, however, the FDIC were to adopt a different approach than that described in the Acting General Counsel’s Letter, delays or reductions in payments on the offered certificates would occur.
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The Requirement of the Special Servicer to Obtain FIRREA-Compliant Appraisals May Result in an Increased Cost to the Issuing Entity
Each appraisal obtained pursuant to the pooling and servicing agreement is required to contain a statement, or is accompanied by a letter from the appraiser, to the effect that the appraisal was performed in accordance with the requirements of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”), as in effect on the date such appraisal was obtained. Any such appraisal is likely to be more expensive than an appraisal that is not FIRREA compliant. Such increased cost could result in losses to the issuing entity. Additionally, FIRREA compliant appraisals are required to assume a value determined by a typically motivated buyer and seller, and could result in a higher appraised value than one prepared assuming a forced liquidation or other distress situation. In addition, because a FIRREA compliant appraisal may result in a higher valuation than a non-FIRREA compliant appraisal, there may be a delay in calculating and applying appraisal reductions, which could result in the holders of a given class of certificates continuing to hold the full non-notionally reduced amount of such certificates for a longer period of time than would be the case if a non-FIRREA compliant appraisal were obtained.
Tax Matters and Changes in Tax Law May Adversely Impact the Mortgage Loans or Your Investment
Tax Considerations Relating to Foreclosure. If the issuing entity acquires a mortgaged property (or, in the case of a non-serviced mortgage loan, a beneficial interest in a mortgaged property) subsequent to a default on the related mortgage loan pursuant to a foreclosure or deed in lieu of foreclosure, the special servicer (or, in the case of a non-serviced mortgage loan, the related non-serviced special servicer) would be required to retain an independent contractor to operate and manage such mortgaged property. Among other limitations, the independent contractor generally will not be allowed to perform construction work other than repair, maintenance or certain types of tenant build-outs, unless the construction was more than 10% completed when the mortgage loan defaulted or when the default of the mortgage loan becomes imminent. Any (i) net income from such operation (other than qualifying “rents from real property”), (ii) rental income based on the net profits of a tenant or sub-tenant or allocable to a service that is non-customary in the area and for the type of property involved and (iii) rental income attributable to personal property leased in connection with a lease of real property, if the rent attributable to the personal property exceeds 15% of the total rent for the taxable year, will subject the Lower-Tier REMIC or the STK Chicago Loan REMIC to federal tax (and possibly state or local tax) on such income at the corporate tax rate. No determination has been made whether any portion of the income from the mortgaged properties constitutes “rent from real property”. Any such imposition of tax will reduce the net proceeds available for distribution to certificateholders. The special servicer (or, in the case of a non-serviced mortgage loan, the related non-serviced special servicer) may permit the Lower-Tier REMIC or the STK Chicago Loan REMIC to earn “net income from foreclosure property” that is subject to tax if it determines that the net after-tax benefit to holders of certificates is greater than under another method of operating or leasing the mortgaged property. See “Pooling and Servicing Agreement—Realization Upon Mortgage Loans”. In addition, if the issuing entity were to acquire one or more mortgaged properties (or, in the case of a non-serviced mortgage loan, a beneficial interest in a mortgaged property) pursuant to a foreclosure or deed in lieu of foreclosure, upon acquisition of those mortgaged properties (or, in the case of a non-serviced mortgage loan, a beneficial interest in a mortgaged property), the issuing entity may in certain jurisdictions, particularly in New York, be required to pay state or local transfer or excise taxes upon liquidation of such properties. Such state or local taxes may reduce net proceeds available for distribution to the certificateholders. In most circumstances, the special servicer will be required to sell the mortgaged property prior to the close of the third calendar year beginning after the year of acquisition.
When foreclosing on a real estate mortgage, a REMIC is generally limited to taking only the collateral that will qualify as “foreclosure property” within the meaning of the REMIC provisions. Foreclosure property includes only the real property (ordinarily the land and the structures) securing the real estate mortgage and personal property incident to such real property.
REMIC Status. If an entity intended to qualify as a REMIC fails to satisfy one or more of the REMIC provisions of the Internal Revenue Code of 1986, as amended (the “Code”) during any taxable year, the Code provides that such entity will not be treated as a REMIC for such year and any year thereafter. In
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such event, the issuing entity, including the Upper-Tier REMIC, the Lower-Tier REMIC and the STK Chicago Loan REMIC, as applicable, may be treated as one or more separate associations taxable as corporations under Treasury regulations, and the offered certificates may be treated as stock interests in those associations and not as debt instruments.
Material Federal Tax Considerations Regarding Original Issue Discount. One or more classes of the offered certificates may be issued with “original issue discount” for federal income tax purposes, which generally would result in the holder recognizing taxable income in advance of the receipt of cash attributable to that income. Investors must have sufficient sources of cash to pay any federal, state or local income taxes with respect to the original issue discount. In addition, such original issue discount will be required to be accrued and included in income based on the assumption that no defaults will occur and no losses will be incurred with respect to the mortgage loans. This could lead to the inclusion of amounts in ordinary income early in the term of the certificate that later prove uncollectible, giving rise to a bad debt deduction. In the alternative, the investor may be required to treat such uncollectible amount as a capital loss under Code Section 166.
State and Local Taxes Could Adversely Impact Your Investment. In addition to the federal income tax consequences described under the heading “Material Federal Income Tax Considerations”, potential purchasers should consider the state and local income tax consequences of the acquisition, ownership and disposition of the certificates. State income tax laws may differ substantially from the corresponding federal income tax laws, and this prospectus does not purport to describe any aspects of the income tax laws of the states or localities in which the mortgaged properties are located or of any other applicable state or locality or other jurisdiction.
It is possible that one or more jurisdictions may (i) attempt to tax nonresident holders of certificates solely by reason of the location in that jurisdiction of the depositor, the trustee, the certificate administrator, a borrower or a mortgaged property or on some other basis, (ii) require nonresident holders of certificates to file returns in such jurisdiction or (iii) attempt to impose penalties for failure to file such returns; and it is possible that any such jurisdiction will ultimately succeed in collecting such taxes or penalties from nonresident holders of certificates.
We cannot assure you that holders of certificates will not be subject to tax in any particular state or local taxing jurisdiction.
If any tax or penalty is successfully asserted by any state or local taxing jurisdiction, neither we nor any other person will be obligated to indemnify or otherwise to reimburse the holders of certificates for such tax or penalty.
You should consult your own tax advisors with respect to the various state and local tax consequences of an investment in the certificates.
Changes to REMIC Restrictions on Loan Modifications May Impact an Investment in the Certificates. The IRS has issued guidance easing the tax requirements for a servicer to modify a commercial or multifamily mortgage loan held in a REMIC by interpreting the circumstances when default is “reasonably foreseeable” to include those where the servicer reasonably believes that there is a “significant risk of default” with respect to the underlying mortgage loan upon maturity of the loan or at an earlier date, and that by making such modification the risk of default is substantially reduced. Accordingly, if the master servicer or the special servicer determined that a Mortgage Loan was at significant risk of default and permitted one or more modifications otherwise consistent with the terms of the Pooling and Servicing Agreement, any such modification may impact the timing of payments and ultimate recovery on the underlying mortgage loan, and likewise on one or more classes of certificates.
In addition, the IRS has issued final regulations under the REMIC provisions of the Code that modify the tax restrictions imposed on a servicer’s ability to modify the terms of the underlying mortgage loans held by a REMIC relating to changes in the collateral, credit enhancement and recourse features. The IRS has also issued Revenue Procedure 2010-30, describing circumstances in which it will not challenge the treatment of mortgage loans as “qualified mortgages” on the grounds that the underlying mortgage
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loan is not “principally secured by real property,” that is, has a real property loan-to-value ratio greater than 125% following a release of liens on some or all of the real property securing such underlying mortgage loan. The general rule is that a mortgage loan must continue to be “principally secured by real property” following any such lien release, unless the lien release is pursuant to a defeasance permitted under the original loan documents and occurs more than two years after the startup day of the REMIC, all in accordance with the REMIC provisions of the Code. Revenue Procedure 2010-30 also allows lien releases in certain “grandfathered transactions” and transactions in which the release is part of a “qualified pay-down transaction” even if the underlying mortgage loan after the transaction might not otherwise be treated as principally secured by a lien on real property. If the value of the real property securing a mortgage loan were to decline, the need to comply with the rules of Revenue Procedure 2010-30 could restrict the servicers’ actions in negotiating the terms of a workout or in allowing minor lien releases in circumstances in which, after giving effect to the release, the underlying mortgage loan would not have a real property loan-to-value ratio of 125% or less (calculated as described above). This could impact the timing of payments and ultimate recovery on a Mortgage Loan, and likewise on one or more classes of certificates.
You should consider the possible impact on your investment of any existing REMIC restrictions as well as any potential changes to the REMIC rules.
Loan Modifications Related to COVID-19. The IRS has also issued Revenue Procedure 2020-26 (extended by Revenue Procedure 2021-12) easing the tax requirements for a servicer to modify certain mortgage loans held in a REMIC by permitting certain forbearances (and related modifications) for up to six months that are agreed to be a borrower between March 27, 2020 and September 30, 2021, and that are made under certain forbearance programs for borrowers experiencing a financial hardship due, directly or indirectly, to the COVID-19 emergency. Under the revenue procedure, these forbearances (a) are not treated as resulting in a newly issued mortgage loan for purposes of Treasury Regulations section 1.860G-2(b)(1), (b), are not prohibited transactions under Code Section 860F(a)(2), and (c) do not result in a deemed reissuance of related REMIC regular interests. Accordingly, the Servicer or Special Servicer may grant certain forbearances (and engage in related modifications), whether or not covered under Revenue Procedure 2020-26 and Revenue Procedure 2021-12, with respect to a Mortgage Loan in connection with the COVID-19 emergency, which may impact the timing of payments and ultimate recovery on the Mortgage Loans, and likewise on one or more Classes of Certificates. The time period covered by Revenue Procedure 2020-26 (as extended by Revenue Procedure 2021-12) has lapsed and it is unclear whether the IRS will issue new guidance or otherwise extend the application of Revenue Procedure 2020-26 or Revenue Procedure 2021-12, with possible retroactive effect, for forbearances granted after September 30, 2021.
General Risk Factors
Combination or “Layering” of Multiple Risks May Significantly Increase Risk of Loss
Although the various risks discussed in this prospectus are generally described separately, you should consider the potential effects of the interplay of multiple risk factors. Where more than one significant risk factor is present, the risk of loss to an investor in the certificates may be significantly increased.
The Certificates May Not Be a Suitable Investment for You
The certificates will not be suitable investments for all investors. In particular, you should not purchase any class of certificates unless you understand and are able to bear the risk that the yield to maturity and the aggregate amount and timing of distributions on the certificates will be subject to material variability from period to period and give rise to the potential for significant loss over the life of the certificates. The interaction of the foregoing factors and their effects are impossible to predict and are likely to change from time to time. As a result, an investment in the certificates involves substantial risks and uncertainties and should be considered only by sophisticated institutional investors with substantial
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investment experience with similar types of securities and who have conducted appropriate due diligence on the mortgage loans, the mortgaged properties and the certificates.
The Volatile Economy, Credit Crisis and Downturn in the Real Estate Market Have Adversely Affected and May Continue To Adversely Affect the Value of CMBS
The real estate and securitization markets, including the market for commercial mortgage-backed securities (“CMBS”), have from time to time experienced significant dislocations, illiquidity and volatility. We cannot assure you that another dislocation in CMBS will not occur.
Any economic downturn may adversely affect the financial resources of borrowers under commercial mortgage loans and may result in their inability to make payments on, or refinance, their outstanding mortgage debt when due or to sell their mortgaged properties for an aggregate amount sufficient to pay off the outstanding debt when due. As a result, distributions of principal and interest on your certificates, and the value of your certificates, could be adversely affected.
Other Events May Affect the Value and Liquidity of Your Investment
Moreover, other types of events, domestic or international, may affect general economic conditions and financial markets:
| ● | Wars, revolts, terrorist attacks, armed conflicts, energy supply or price disruptions, political crises, natural disasters and man-made disasters may have an adverse effect on the mortgaged properties and/or your certificates; and |
| ● | Trading activity associated with indices of CMBS may drive spreads on those indices wider than spreads on CMBS, thereby resulting in a decrease in value of such CMBS, including your certificates, and spreads on those indices may be affected by a variety of factors, and may or may not be affected for reasons involving the commercial and multifamily real estate markets and may be affected for reasons that are unknown and cannot be discerned. |
In addition, on February 24, 2022, Russia launched a military invasion of Ukraine. The European Union, United States, United Kingdom, Canada, Japan and a number of other countries responded by announcing successively more restrictive sanctions against Russia, various Russian individuals, corporations and private banks, and the Russian central bank, which aim to limit such sanctioned persons’ and entities’ access to the global economy, Russian foreign reserves and personal assets held domestically and internationally. As economies and financial markets throughout the world become increasingly interdependent, events or conditions in one country or region are more likely to adversely impact markets or issuers in other countries or regions. The current Russia-Ukraine conflict is expected to have a particularly significant negative effect on the costs of energy and mineral resources and is expected to exacerbate inflationary pressures throughout the global economy. Furthermore, there may be a heightened risk of cyber-warfare, biological warfare or nuclear warfare launched by Russia against other countries in response to political opposition and imposed sanctions or perceptions of increased NATO involvement in the conflict. The evolution of the conflict and actions taken by governments in response to such conflict, and the consequences, economic or otherwise, are unpredictable and may be far reaching and long lasting. As a result, we cannot predict the immediate or longer-term effects of the conflict on the global economy or on the performance of the mortgage loans or underlying mortgaged properties.
You should consider that the foregoing factors may adversely affect the performance of the mortgage loans and accordingly the performance of the offered certificates.
Legal and Regulatory Provisions Affecting Investors Could Adversely Affect the Liquidity of the Certificates
We make no representation as to the proper characterization of the certificates for legal investment, financial institution regulatory, financial reporting or other purposes, as to the ability of particular investors
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to purchase the certificates under applicable legal investment or other restrictions or as to the consequences of an investment in the certificates for such purposes or under such restrictions. Changes in federal banking and securities laws and other laws and regulations may have an adverse effect on issuers, investors or other participants in the asset-backed securities markets including the CMBS market. While the general effects of such changes are uncertain, regulatory or legislative provisions applicable to certain investors may have the effect of limiting or restricting their ability to hold or acquire CMBS, which in turn may adversely affect the ability of investors in the certificates who are not subject to those provisions to resell their certificates in the secondary market. For example:
| ● | Investors should be aware, and in some cases are required to be aware, of the investor diligence requirements that apply in the EU (the “EU Due Diligence Requirements”) under Regulation (EU) 2017/2402 (as amended, the “EU Securitization Regulation”), and in the UK (the “UK Due Diligence Requirements”) under Regulation (EU) 2017/2402, as it forms part of UK domestic law by virtue of the EUWA, and as amended by the Securitization (Amendment) (EU Exit) Regulations 2019 (the “UK Securitization Regulation”), in addition to any other regulatory requirements that are (or may become) applicable to them and/or with respect to their investment in the certificates. |
| ● | The EU Due Diligence Requirements apply to “institutional investors” (as defined in the EU Securitization Regulation), being (subject to certain conditions and exceptions) (a) institutions for occupational retirement provision; (b) credit institutions (as defined in Regulation (EU) No 575/2013, as amended (the “CRR”)); (c) alternative investment fund managers who manage and/or market alternative investment funds in the EU; (d) investment firms (as defined in the CRR); (e) insurance and reinsurance undertakings; and (f) management companies of UCITS funds (or internally managed UCITS); and the EU Due Diligence Requirements apply also to certain consolidated affiliates of such credit institutions and investment firms. Each such institutional investor and each relevant affiliate is referred to herein as an “EU Institutional Investor”. |
| ● | The UK Due Diligence Requirements apply to “institutional investors” (as defined in the UK Securitization Regulation) being (subject to certain conditions and exceptions): (a) insurance undertakings and reinsurance undertakings as defined in the FSMA; (b) occupational pension schemes as defined in the Pension Schemes Act 1993 that have their main administration in the UK, and certain fund managers of such schemes; (c) alternative investment fund managers as defined in the Alternative Investment Fund Managers Regulations 2013 which market or manage alternative investment funds in the UK; (d) UCITS as defined in the FSMA, which are authorized open ended investment companies as defined in the FSMA, and management companies as defined in the FSMA; and (e) CRR firms as defined in Regulation (EU) No 575/2013 as it forms part of UK domestic law by virtue of the EUWA; and the UK Due Diligence Requirements apply also to certain consolidated affiliates of such CRR firms. Each such institutional investor and each relevant affiliate is referred to herein as a “UK Institutional Investor”. |
| ● | EU Institutional Investors and UK Institutional Investors are referred to together as “Institutional Investors.” EU Securitization Regulation and UK Securitization Regulation are each a “Securitization Regulation” and EU Due Diligence Requirements and UK Due Diligence Requirements are each “Due Diligence Requirements”, and a reference to the “applicable Securitization Regulation” or “applicable Due Diligence Requirements” means, in relation to an Institutional Investor, as the case may be, the Securitization Regulation or the Due Diligence Requirements to which such Institutional Investor is subject. In addition, for the purpose of the following paragraph, a reference to a “third country” means (i) in respect of an EU Institutional Investor and the EU Securitization Regulation, a country other than an EU member state, or (ii) in respect of a UK Institutional Investor and the UK Securitization Regulation, a country other than the UK. |
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| ● | The applicable Due Diligence Requirements restrict an Institutional Investor from investing in a securitization unless: |
| (a) | in each case, it has verified that the originator, sponsor or original lender will retain, on an ongoing basis, a material net economic interest of not less than five percent. in the securitization, determined in accordance with Article 6 of the applicable Securitization Regulation, and the risk retention is disclosed to the Institutional Investor (the “Risk Retention Requirements”); |
| (b) | in the case of an EU Institutional Investor, it has verified that the originator, sponsor or SSPE has, where applicable, made available the information required by Article 7 of the EU Securitization Regulation (the “EU Transparency Requirements”) in accordance with the frequency and modalities provided for thereunder; |
| (c) | in the case of a UK Institutional Investor, it has verified that the originator, sponsor or securitization special purpose entity: |
| (i) | if established in the UK has, where applicable, made available the information required by Article 7 of the UK Securitization Regulation (the “UK Transparency Requirements”) in accordance with the frequency and modalities provided for thereunder; and |
| (ii) | if established in a third country has, where applicable, made available information which is substantially the same as that which it would have made available under the UK Transparency Requirements if it had been established in the UK, and has done so with such frequency and modalities as are substantially the same as those with which it would have made information available if it had been established in the UK; and |
| (d) | in each case, it has verified that, where the originator or original lender either (i) is not a credit institution or an investment firm (each as defined in the applicable Securitization Regulation) or (ii) is established in a third country, the originator or original lender grants all the credits giving rise to the underlying exposures on the basis of sound and well-defined criteria and clearly established processes for approving, amending, renewing and financing those credits and has effective systems in place to apply those criteria and processes in order to ensure that credit-granting is based on a thorough assessment of the obligor’s creditworthiness. |
| ● | The applicable Due Diligence Requirements further require that an Institutional Investor carry out a due diligence assessment which enables it to assess the risks involved prior to investing, including but not limited to the risk characteristics of the individual investment position and the underlying assets and all the structural features of the securitization that can materially impact the performance of the investment. In addition, pursuant to the applicable Securitization Regulation, while holding an exposure to a securitization, an Institutional Investor is subject to various monitoring obligations in relation to such exposure, including but not limited to: (i) establishing appropriate written procedures to monitor compliance with the due diligence requirements and the performance of the investment and of the underlying assets; (ii) performing stress tests on the cash flows and collateral values supporting the underlying assets; (iii) ensuring internal reporting to its management body; and (iv) being able to demonstrate to its competent authorities, upon request, that it has a comprehensive and thorough understanding of the investment and underlying assets and that it has implemented written policies and procedures for the risk management and as otherwise required by the applicable Securitization Regulation. |
| ● | Failure on the part of an Institutional Investor to comply with the applicable Due Diligence Requirements may result in various penalties including, in the case of those investors subject to regulatory capital requirements, the imposition of a punitive capital charge in respect of the investment in the securitization acquired by the relevant investor. Aspects of the requirements and what is or will be required to demonstrate compliance to national regulators remain unclear. |
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| ● | Prospective investors should make themselves aware of the applicable Due Diligence Requirements described above (and any corresponding implementing rules of their regulator), where applicable to them, in addition to any other applicable regulatory requirements with respect to their investment in the certificates. |
| ● | None of the originators, the sponsors, the depositor or the issuing entity intends to retain a material net economic interest in the securitization constituted by the issuance of the certificates in a manner that would satisfy the Risk Retention Requirements or to take any other action that may be required by Institutional Investors for the purposes of their compliance with either of the applicable Due Diligence Requirements, and no such person assumes (i) any obligation to so retain or take any such other action or (ii) any liability whatsoever in connection with any certificateholder’s non-compliance with the applicable Due Diligence Requirements. Consequently, the certificates are not a suitable investment for Institutional Investors. As a result, the price and liquidity of the certificates in the secondary market may be adversely affected. This could adversely affect your ability to transfer your certificates or the price you may receive upon your sale of your certificates. Each investor should evaluate the impact any such non-compliance may have on it. |
| ● | Changes in federal banking and securities laws, including those resulting from the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) enacted in the United States, may have an adverse effect on issuers, investors or other participants in the asset-backed securities markets. In particular, capital regulations issued by the U.S. banking regulators in July 2013 implement the increased capital requirements established under the Basel Accord and are being phased in over time. These capital regulations eliminate reliance on credit ratings and otherwise alter, and in most cases increase, the capital requirements imposed on depository institutions and their holding companies, including with respect to ownership of asset-backed securities such as CMBS. Further changes in capital requirements have been announced by the Basel Committee on Banking Supervision and it is uncertain when such changes will be implemented in the United States. When fully implemented in the United States, these changes may have an adverse effect with respect to investments in asset-backed securities, including CMBS. As a result of these regulations, investments in CMBS such as the certificates by financial institutions subject to bank capital regulations may result in greater capital charges to these financial institutions and these new regulations may otherwise adversely affect the treatment of CMBS for their regulatory capital purposes. |
| ● | Section 619 of the Dodd-Frank Act (such statutory provision together with the implementing regulations, the “Volcker Rule”) generally prohibits “banking entities” (which is broadly defined to include U.S. banks and bank holding companies and many non-U.S. banking entities, together with their respective subsidiaries and other affiliates) from (i) engaging in proprietary trading, (ii) acquiring or retaining an ownership interest in or sponsoring a “covered fund” and (iii) entering into certain relationships with such funds. Under the Volcker Rule, unless otherwise jointly determined otherwise by specified federal regulators, a “covered fund” does not include an issuer that may rely on an exclusion or exemption from the definition of “investment company” under the Investment Company Act other than the exclusions contained in Section 3(c)(1) and Section 3(c)(7) of the Investment Company Act. |
The issuing entity will be relying on an exclusion or exemption under the Investment Company Act contained in Section 3(c)(5) of the Investment Company Act or Rule 3a-7 under the Investment Company Act, although there may be additional exclusions or exemptions available to the issuing entity. Accordingly, the issuing entity is being structured so as not to constitute a “covered fund” for purposes of the Volcker Rule. The general effects of the Volcker Rule remain uncertain. Any prospective investor in the certificates, including a U.S. or foreign bank or a subsidiary or other bank affiliate, should consult its own legal advisors regarding such matters and other effects of the Volcker Rule.
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| ● | The Financial Accounting Standards Board has adopted changes to the accounting standards for structured products. These changes, or any future changes, may affect the accounting for entities such as the issuing entity, could under certain circumstances require an investor or its owner generally to consolidate the assets of the issuing entity in its financial statements and record third parties’ investments in the issuing entity as liabilities of that investor or owner or could otherwise adversely affect the manner in which the investor or its owner must report an investment in CMBS for financial reporting purposes. |
| ● | For purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended, no class of certificates will constitute “mortgage related securities”. |
Further changes in federal banking and securities laws and other laws and regulations may have an adverse effect on issuers, investors, or other participants in the asset-backed securities markets (including the CMBS market) and may have adverse effect on the liquidity, market value and regulatory characteristics of the certificates.
Accordingly, all investors whose investment activities are subject to legal investment laws and regulations, regulatory capital requirements, or review by regulatory authorities should consult with their own legal, accounting and other advisors in determining whether, and to what extent, the certificates will constitute legal investments for them or are subject to investment or other restrictions, unfavorable accounting treatment, capital charges or reserve requirements. See “Legal Investment”.
In addition, this transaction is structured to comply with the Credit Risk Retention Rules as and to the extent set forth under “Credit Risk Retention”. We cannot assure you that the retaining sponsor will at times satisfy such credit risk retention requirements. At this time, it is unclear what effect a failure of the retaining sponsor to be in compliance with the Credit Risk Retention Rules at any time will have on the certificateholders or the market value or liquidity of the certificates.
The Master Servicer, any Sub-Servicer, the Special Servicer, the Trustee, the Certificate Administrator or the Custodian May Have Difficulty Performing Under the Pooling and Servicing Agreement or a Related Sub Servicing Agreement
The issuing entity relies on the ability of the master servicer, any sub-servicer, any special servicer, the trustee, the certificate administrator and the custodian to perform their respective duties under the pooling and servicing agreement. Any economic downturn or recession, whether resulting from COVID-19 or otherwise, may adversely affect the master servicer’s, any sub-servicer’s or the special servicer’s ability to perform its duties under the Pooling and Servicing Agreement or the related sub servicing agreement, including, if applicable, performance as it relates to the making of debt service or property protection advances or the ability to effectively service the underlying mortgage loans. Accordingly, this may adversely affect the performance of the underlying mortgage loans or the performance of the certificates.
DESCRIPTION OF THE MORTGAGE POOL
General
The assets of the issuing entity will consist of a pool of 37 fixed rate mortgage loans (the “Mortgage Loans” or, collectively, the “Mortgage Pool”) with an aggregate principal balance as of the Cut-off Date of $914,831,933 (the “Initial Pool Balance”). The “Cut-off Date” with respect to each Mortgage Loan is the later of the related due date in April 2022 (or, in the case of any Mortgage Loan that has its first due date after April 2022, the date that would have been its due date in April 2022 under the terms of that Mortgage Loan if a monthly payment were scheduled to be due in that month) and the date of origination of such Mortgage Loan.
Eight (8) of the Mortgage Loans (39.8%) are each part of a larger whole loan (a “Whole Loan”), each of which is comprised of (i) the related Mortgage Loan, (ii) one or more loans that are pari passu in right
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of payment to the related Mortgage Loan (each referred to in this prospectus as a “Pari Passu Companion Loan”) and (iii) in the case of one of the Mortgage Loans (9.3%) one or more loans that are subordinate in right of payment to the related Mortgage Loan and the related Pari Passu Companion Loans (each referred to in this prospectus as a “Subordinate Companion Loan”). Each of the Pari Passu Companion Loans and the Subordinate Companion Loans are referred to in this prospectus as a “Companion Loan”. Each Companion Loan is secured by the same mortgage(s) and the same assignment(s) of leases and rents securing the related Mortgage Loan. See “—The Whole Loans” below for more information regarding the rights of the holders of the Companion Loans and the servicing and administration of the Whole Loans that will not be serviced under the pooling and servicing agreement for this transaction.
The Mortgage Loans were originated, co-originated or acquired (or, on or prior to the Closing Date, will be acquired) by the mortgage loan sellers set forth in the following chart. The mortgage loan sellers will sell their respective Mortgage Loans to the depositor, which will in turn sell the Mortgage Loans to the issuing entity:
Sellers of the Mortgage Loans
Mortgage Loan Seller(1) | Number of Mortgage Loans | Aggregate Cut-off Date Balance of Mortgage Loans | Approx. % of Initial Pool Balance(2) | |||||||
| German American Capital Corporation (“GACC”) | 9 | $ | 233,069,443 | 25.5 | % | |||||
| Citi Real Estate Funding Inc. (“CREFI”) | 18 | 292,776,731 | 32.0 | |||||||
| Goldman Sachs Mortgage Company (“GSMC”) | 6 | 189,985,759 | 20.8 | |||||||
| JPMorgan Chase Bank, National Association (“JPMCB”) | 3 | 114,000,000 | 12.5 | |||||||
| GACC / CREFI(3) | 1 | 85,000,000 | 9.3 | |||||||
| Total | 37 | $ | 914,831,933 | 100.0 | % | |||||
| (1) | Each Mortgage Loan was originated by its respective Mortgage Loan Seller or its affiliate, except those certain Mortgage Loans that were originated by an unaffiliated third-party or are part of larger whole loan structures that were co-originated by the applicable Mortgage Loan Seller or its affiliate with one or more other lenders. See “—Co-Originated or Unaffiliated Third-Party Originated Mortgage Loans” below. |
| (2) | The sum of the numerical data in this column does not equal the indicated total due to rounding. |
| (3) | The 601 Lexington Avenue mortgage loan (9.3%) is part of a whole loan as to which separate notes are being sold by GACC and CREFI. The 601 Lexington Avenue whole loan was co-originated by DBR Investments Co. Limited, Citi Real Estate Funding Inc., Morgan Stanley Bank, N.A. and Wells Fargo Bank, National Association. The 601 Lexington Avenue mortgage loan is evidenced by two (2) promissory notes: (i) note A-2-C2-1, with an outstanding principal balance of $43,479,070 as of the Cut-off Date, as to which GACC is acting as Mortgage Loan Seller; and (ii) note A-4-C2-1, with an outstanding principal balance of $41,520,930 as of the Cut-off Date, as to which CREFI is acting as Mortgage Loan Seller. |
Each of the Mortgage Loans or Whole Loans is evidenced by one or more promissory notes or similar evidence of indebtedness (each a “Mortgage Note”) and, in each case, secured by (or, in the case of an indemnity deed of trust, backed by a guaranty that is secured by) one or more mortgages, deeds of trust or other similar security instruments (each, a “Mortgage”) creating a first lien on a fee simple and/or leasehold interest in one or more commercial or multifamily real properties (each, a “Mortgaged Property”).
The Mortgage Loans are generally non-recourse loans. In the event of a borrower default on a non-recourse Mortgage Loan, recourse may be had only against the specific Mortgaged Property or Properties, as applicable, and the other limited assets securing such Mortgage Loan, and not against the related borrower’s other assets. The Mortgage Loans are not insured or guaranteed by the Sponsors, the Mortgage Loan Sellers or any other person or entity unrelated to the respective borrower. You should consider all of the Mortgage Loans to be non-recourse loans as to which recourse in the case of default will be limited to the specific property and other assets, if any, pledged to secure the related Mortgage Loan.
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The Mortgage Loans included in this transaction were selected for this transaction from mortgage loans specifically originated or acquired for securitizations of this type by the Mortgage Loan Sellers taking into account rating agency criteria and feedback, subordinate investor feedback, property type and geographic location.
Co-Originated or Unaffiliated Third-Party Originated Mortgage Loans
The following Mortgage Loans are component promissory notes of whole loans co-originated by the related Mortgage Loan Seller (or an affiliate) and another entity or were originated by an unaffiliated third-party and subsequently acquired (or, on or prior to the Closing Date, will be acquired) by the related Mortgage Loan Seller:
| ● | The 601 Lexington Avenue Mortgage Loan (9.3%) is part of a Whole Loan that was co-originated by DBR Investments Co. Limited, Citi Real Estate Funding Inc., Wells Fargo Bank, National Association and Morgan Stanley Bank, N.A. and is evidenced by two promissory notes: (i) note A-2-C2-1, with an outstanding principal balance of $43,479,070 as of the Cut-off Date, as to which GACC is the Mortgage Loan Seller and (ii) note A-4-C2-1, with an outstanding principal balance of $41,520,930 as of the Cut-off Date, as to which CREFI is the Mortgage Loan Seller. |
| ● | The Prospector Plaza Mortgage Loan (2.6%), for which GACC is the Mortgage Loan Seller, was originated by Ladder Capital Finance LLC, an unaffiliated third party. |
| ● | The Bedrock Portfolio Mortgage Loan (9.3%), for which JPMCB is the Mortgage Loan Seller, is part of a Whole Loan that was co-originated by JPMCB and Starwood Mortgage Capital LLC. |
| ● | The Shearer’s Industrial Portfolio Mortgage Loan (3.3%), for which GSMC is the Mortgage Loan Seller, is part of a Whole Loan that was co-originated by Goldman Sachs Bank USA and Wells Fargo Bank, National Association. |
Certain Calculations and Definitions
This prospectus sets forth certain information with respect to the Mortgage Loans and the Mortgaged Properties. The sum in any column of the tables presented in Annex A-2 may not equal the indicated total due to rounding. The information in Annex A-1 with respect to the Mortgage Loans and the Mortgaged Properties is based upon the pool of the Mortgage Loans as it is expected to be constituted as of the close of business on April 14, 2022 (the “Closing Date”), assuming that (i) all scheduled principal and interest payments due on or before the Cut-off Date will be made, (ii) there will be no principal prepayments on or before the Closing Date and (iii) with respect to the 601 Lexington Avenue Mortgage Loan, GACC will sell 1 of 2 promissory notes comprising such Mortgage Loan, and CREFI will sell 1 of 2 promissory notes comprising such Mortgage Loan, to the depositor. The statistics in Annex A-1, Annex A-2 and Annex A-3 were primarily derived from information provided to the depositor by each sponsor, which information may have been obtained from the borrowers.
All percentages of the Mortgage Loans and Mortgaged Properties, or of any specified group of Mortgage Loans and Mortgaged Properties, referred to in this prospectus without further description are approximate percentages of the Initial Pool Balance by Cut-off Date Balance (in the case of Mortgage Loan information) or by Allocated Loan Amount as of the Cut-off Date (in the case of Mortgaged Property information).
The information presented in this prospectus with respect to the Loan Per Net Rentable Area, Loan-to-Value Ratio, Loan-to-Value Ratio at Maturity, Underwritten NCF DSCR, Underwritten NCF Debt Yield and Underwritten NOI Debt Yield for each Mortgage Loan with one or more Pari Passu Companion Loans is calculated in a manner that reflects the aggregate indebtedness evidenced by that Mortgage Loan and the related Pari Passu Companion Loan(s), but excluding any related Subordinate Companion Loan(s), unless otherwise indicated.
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Unless otherwise specified, (i) references to a Mortgaged Property (or portfolio of Mortgaged Properties) by name refer to such Mortgaged Property (or portfolio of Mortgaged Properties) so identified on Annex A-1, (ii) references to a Mortgage Loan by name refer to such Mortgage Loan secured by the related Mortgaged Property (or portfolio of Mortgaged Properties) so identified on Annex A-1, (iii) any parenthetical with a percent next to a Mortgaged Property name (or portfolio of Mortgaged Properties name) indicates the approximate percent (or approximate aggregate percent) that the outstanding principal balance of the related Mortgage Loan (or, if applicable, the allocated loan amount with respect to such Mortgaged Property) represents of the Initial Pool Balance, and (iv) any parenthetical with a percent next to a Mortgage Loan name or a group of Mortgage Loans indicates the approximate percent (or approximate aggregate percent) that the outstanding principal balance of such Mortgage Loan or the aggregate outstanding principal balance of such group of Mortgage Loans, as applicable, represents of the Initial Pool Balance.
| Definitions |
For purposes of this prospectus, including the information presented in the Annexes to this prospectus, the indicated terms have the meanings set forth below. In reviewing such definitions, investors should be aware that the appraisals for the Mortgaged Properties may not reflect the complete effects of the COVID-19 pandemic on the related mortgaged properties as the cumulative impact of the pandemic may not be known for some time. Similarly, net operating income and occupancy information used in underwriting the Mortgage Loans may not reflect current conditions, and in particular, the effects of the COVID-19 pandemic. As a result, appraised values, net operating income, occupancy, and related metrics, such as loan-to-value ratios, debt service coverage ratios and debt yields, may not accurately reflect the current conditions at the Mortgaged Properties. See “Risk Factors—Special Risks—Coronavirus Pandemic Has Adversely Affected the Global Economy and Will Likely Adversely Affect the Performance of the Mortgage Loans”, “—Risks Relating to the Mortgage Loans—Appraisals May Not Reflect Current or Future Market Value of Each Property” and “—Risks Relating to the Mortgage Loans—Underwritten Net Cash Flow Could Be Based On Incorrect or Failed Assumptions.”
“ADR” means, for any hospitality property, average daily rate.
“Allocated Loan Amount” generally means, (a) with respect to any single Mortgaged Property that is the only real property collateral for the related Mortgage Loan, the total outstanding principal balance of such Mortgage Loan; and (b) with respect to any Mortgaged Property that is one of multiple Mortgaged Properties securing a Mortgage Loan, the portion of the total outstanding principal balance of such Mortgage Loan allocated to the subject Mortgaged Property in accordance with net cash flow, appraised value or otherwise in accordance with or as set forth in the related Mortgage Loan documents.
“Annual Debt Service” generally means, for any Mortgage Loan or Companion Loan, 12 times the average of the principal and interest payments for the first 12 payment periods of the Mortgage Loan or Companion Loan following the Cut-off Date (but without regard to any leap year adjustments) or: (i) in the case of a Mortgage Loan or Companion Loan that provides for interest only payments through maturity or anticipated repayment date, the aggregate interest payments scheduled to be due on the Due Date following the Cut-off Date and the 11 Due Dates thereafter and (ii) in the case of a Mortgage Loan or Companion Loan that provides for an initial interest only period and provides for scheduled amortization payments thereafter, 12 times the monthly payment of principal and interest payable during such subsequent amortization period. Monthly debt service and debt service coverage ratios are calculated using the average of the principal and interest payments for the first twelve payment periods of the Mortgage Loan or Companion Loan, as applicable following the Cut-off Date (but without regard to any leap year adjustments), subject to the exceptions set forth in the prior sentence. In the case of any Whole Loan, Annual Debt Service is calculated with respect to the Mortgage Loan including any related Pari Passu Companion Loan and without regard to any related Subordinate Companion Loan.
“Appraised Value” means, for any Mortgaged Property, the appraised value of such Mortgaged Property as determined by the most recent third party appraisal of the Mortgaged Property available to the applicable mortgage loan seller. Other than as described under “—Appraised Value”, the Appraised
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Value reflected in this prospectus for each Mortgaged Property reflects the “as-is” value. In certain cases, in addition to an “as-is” value, the appraisal states an appraised value based on hypothetical or other projected values for the related Mortgaged Property that assumes that certain events will occur with respect to re-tenanting, construction, renovation or repairs at such Mortgaged Property. In most such cases, the applicable mortgage loan seller has generally taken reserves sufficient to complete such re-tenanting, construction, renovation or repairs. We make no representation that sufficient amounts have been reserved or that the appraised value would approximate either the value that would be determined in a current appraisal of the related Mortgaged Property or the amount that would be realized upon a sale. In the case of certain Mortgage Loans as described under “—Appraised Value”, the Cut-off Date LTV Ratio or the Maturity Date LTV Ratio or ARD for such Mortgage Loans has been calculated based on an Appraised Value of a related Mortgaged Property other than the “as-is” Appraised Value. We cannot assure you that the value of any particular Mortgaged Property will not have declined from the Appraised Value shown on Annex A-1. We make no representation that any Appraised Value presented in this prospectus would approximate either the value that would be determined in a current appraisal of the Mortgaged Property or the amount that would be realized upon a sale of the Mortgaged Property.
“Balloon Balance” means, with respect to any Mortgage Loan, the principal amount that will be due at maturity (or, in the case of any ARD Loan, outstanding at the related Anticipated Repayment Date or due at maturity, as the case may be) for such Mortgage Loan, assuming no payment defaults or principal prepayments.
“Cut-off Date Balance” of any Mortgage Loan or Companion Loan, will be the unpaid principal balance of that Mortgage Loan or Companion Loan, as of the Cut-off Date, after application of all payments due on or before that date, whether or not received.
“Hard Lockbox” means that the borrower is required to direct the tenants to pay rents directly to a lockbox account controlled by the lender. Hospitality properties are considered to have a hard lockbox if credit card receivables are required to be deposited directly into the lockbox account even though cash, checks or “over the counter” receipts are deposited by the manager of the related Mortgaged Property into the lockbox account controlled by the lender.
“In-Place Cash Management” means, for funds directed into a lockbox, such funds are generally not made immediately available to the related borrower, but instead are forwarded to a cash management account controlled by the lender and the funds are disbursed according to the related Mortgage Loan documents with any excess remitted to the related borrower (unless an event of default under the Mortgage Loan documents or one or more specified trigger events have occurred and are outstanding), generally on a daily basis.
“Largest Tenant” means, with respect to any Mortgaged Property, the tenant occupying the largest amount of net rentable square feet.
“Lease Expiration” means the date at which the applicable tenant’s lease is scheduled to expire.
“Loan Per Net Rentable Area” means the principal balance per unit of measurement as of the Cut-off Date.
“Loan-to-Value Ratio,” “Cut-off Date LTV Ratio,” “LTV Ratio” or “Current LTV” means, with respect to any Mortgage Loan, (a) the Cut-off Date Balance of such Mortgage Loan divided by (b) the Appraised Value of the related Mortgaged Property or aggregate Appraised Values of the Mortgaged Properties; provided that:
| ● | In the case of a Mortgage Loan that is part of a Whole Loan, unless otherwise indicated, the Loan-to-Value Ratio was calculated with respect to such Mortgage Loan including any related Pari Passu Companion Loans and without regard to any related Subordinate Companion Loan. |
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| ● | With respect to each Mortgaged Property identified in “—Appraised Value” below, the respective Cut-off Date LTV Ratio was calculated based on an Appraised Value of such Mortgaged Property other than the “as-is” Appraised Value. |
“Loan-to-Value Ratio at Maturity or ARD”, “LTV Ratio at Maturity or ARD”, “Balloon LTV” or “Maturity Date LTV Ratio” means, with respect to any Mortgage Loan, (a) the Balloon Balance of such Mortgage Loan, divided by (b) the Appraised Value of the related Mortgaged Property or Mortgaged Properties; provided that:
| ● | In the case of a Mortgage Loan that is part of a Whole Loan, unless otherwise indicated, Loan-to-Value Ratio at Maturity or ARD was calculated with respect to such Mortgage Loan including any related Pari Passu Companion Loans and without regard to any related Subordinate Companion Loan. |
| ● | In the case of an ARD Loan, the Loan-to-Value Ratio at Maturity or ARD is calculated with respect to the related Balloon Balance on the related Anticipated Repayment Date. |
| ● | With respect to each Mortgaged Property identified in “—Appraised Value” below, the respective LTV Ratio at Maturity or ARD was calculated based on an Appraised Value of such Mortgaged Property other than the “as-is” Appraised Value. |
“Most Recent NOI” and “Trailing 12 NOI” (which is for the twelve-month period ending as of the date specified in Annex A-1) is the net operating income for a Mortgaged Property as established by information provided by the borrowers, except that in certain cases such net operating income has been adjusted by removing certain non-recurring expenses and revenue or by certain other normalizations. Most Recent NOI and Trailing 12 NOI do not necessarily reflect accrual of certain costs such as taxes and capital expenditures and do not reflect non-cash items such as depreciation or amortization. In some cases, capital expenditures may have been treated by a borrower as an expense or expenses treated as capital expenditures. Most Recent NOI and Trailing 12 NOI were not necessarily determined in accordance with generally accepted accounting principles. Moreover, Most Recent NOI and Trailing 12 NOI are not substitutes for net income determined in accordance with generally accepted accounting principles as a measure of the results of a property’s operations or substitutes for cash flows from operating activities determined in accordance with generally accepted accounting principles as a measure of liquidity, and in certain cases may reflect partial year annualizations.
“MSA” means metropolitan statistical area.
“Net Operating Income” or “NOI,” with respect to any Mortgaged Property, means historical net operating income for the annual or other period specified (or ending on the “NOI Date” specified). In general, it is the revenue derived from the use and operation of such Mortgaged Property less the sum of (a) actual operating expenses (such as utilities, administrative expenses, repairs and maintenance, management and franchise fees and advertising) and (b) actual fixed expenses (such as insurance, real estate taxes and, if applicable, ground, space or air rights lease payments). Net operating income generally does not reflect (i.e., it does not deduct for) capital expenditures, including tenant improvement costs and leasing commissions, interest expenses and non-cash items such as depreciation and amortization.
“NRA” means net rentable area.
“Occupancy” means, unless the context indicates otherwise, (i) in the case of multifamily, self storage and mixed use (to the extent the related Mortgaged Property includes multifamily space) properties, the percentage of rental Units that are rented as of the Occupancy Date; (ii) in the case of office, retail, industrial and mixed use properties (to the extent the related Mortgaged Property includes office, retail or industrial space), the percentage of the net rentable square footage rented as of the Occupancy Date (subject to, in the case of certain Mortgage Loans, one or more of the additional leasing assumptions); and (iii) in the case of hospitality and mixed use (to the extent the related Mortgaged Property includes hospitality space) properties, the percentage of available Rooms occupied for the trailing 12-month period
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ending on the Occupancy Date. In some cases, occupancy was calculated based on assumptions regarding occupancy, such as the assumption that a certain tenant at the Mortgaged Property that has executed a lease, but has not yet taken occupancy and/or has not yet commenced paying rent, will take occupancy on a future date generally expected to occur within twelve months of the Cut-off Date; assumptions regarding the renewal of particular leases and/or the re-leasing of certain space at the related Mortgaged Property; in some cases, assumptions regarding leases under negotiation being executed; in some cases, assumptions regarding tenants taking additional space in the future if currently committed to do so or, in some cases, the exclusion of dark tenants, tenants with material aged receivables, tenants that may have already given notice to vacate their space, bankrupt tenants that have not yet affirmed their lease and certain additional leasing assumptions. See footnotes to Annex A-1 for additional occupancy assumptions. We cannot assure you that the assumptions made with respect to any Mortgaged Property will, in fact, be consistent with that Mortgaged Property’s actual occupancy. See “—Tenant Issues” below.
“Occupancy Date” means the date of determination of the Occupancy of a Mortgaged Property.
“Original Balance” means the principal balance of the Mortgage Loan as of the date of origination.
“Prepayment Provision” means the number of payments from the first due date through and including the maturity date or, in the case of an ARD Loan, the related Anticipated Repayment Date, as applicable, for which a Mortgage Loan is, as applicable, (i) locked out from prepayment, (ii) provides for payment of a prepayment premium or yield maintenance charge in connection with a prepayment, (iii) permits defeasance and/or (iv) permits prepayment without a payment of a prepayment premium or a yield maintenance charge.
“Related Group” identifies each group of Mortgage Loans in the Mortgage Pool with the same borrower sponsor or with sponsors affiliated with other borrower sponsors in the Mortgage Pool. Each Related Group is identified by a separate number on Annex A-1.
“RevPAR” means, with respect to any hospitality property, revenues per available room.
“Soft Lockbox” means that the related borrower is required to deposit or cause the property manager to deposit all rents collected into a lockbox account. Hospitality and multifamily properties are considered to have a soft lockbox if credit card receivables, cash, checks or “over the counter” receipts are deposited into the lockbox account by the borrower or property manager.
“Soft Springing Hard Lockbox” means that the related borrower is required to deposit, or cause the property manager to deposit, all rents collected into a lockbox account or cash management account until the occurrence of an event of default under the Mortgage Loan documents or one or more specified trigger events, at which time the lockbox account converts to a Hard Lockbox.
“Springing Cash Management” means, until the occurrence of an event of default under the Mortgage Loan documents or one or more specified trigger events, revenue from the lockbox (if any) is forwarded to an account controlled by the related borrower or is otherwise made available to the related borrower. Upon the occurrence of an event of default or such a trigger event, the Mortgage Loan documents require the related revenue to be forwarded to a cash management account controlled by the lender and the funds are disbursed according to the related Mortgage Loan documents.
“Springing Lockbox”: means a lockbox that is not currently in place, but the related Mortgage Loan documents require the imposition of a Hard Lockbox or a Soft Lockbox upon the occurrence of an event of default under the Mortgage Loan documents or one or more specified trigger events.
“Square Feet”, “SF” or “Sq. Ft.” means, in the case of a Mortgaged Property operated as a retail center, office, industrial/warehouse facility, self storage, any combination of the foregoing or other special purpose property, the square footage of the net rentable or leasable area.
“T-12” and “TTM” each means trailing 12 months.
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“Term to Maturity” means, with respect to any Mortgage Loan, the remaining term, in months, from the Cut-off Date for such Mortgage Loan to the related maturity date or, in the case of an ARD Loan, the related Anticipated Repayment Date, as applicable. Annex A-1 indicates which Mortgage Loans are ARD Loans.
“Underwritten EGI” or “UW EGI”, with respect to any Mortgaged Property, means the gross potential rent, recoveries and other income, less mark to market, vacancy and collection loss.
“Underwritten Expenses” or “UW Expenses” means, with respect to any Mortgage Loan or Mortgaged Property, an estimate of (a) operating expenses (such as utilities, administrative expenses, repairs and maintenance, management and franchise fees and advertising); and (b) fixed expenses (such as insurance, real estate taxes and, if applicable, ground, space or air rights lease payments), as determined by the related mortgage loan seller and generally derived from historical expenses at the Mortgaged Property, the borrower’s budget or appraiser’s estimate, in some cases adjusted for significant occupancy increases and a market rate management fee and subject to certain assumptions and subjective judgments of each mortgage loan seller as described under the definition of “Underwritten Net Operating Income”. We cannot assure you that the assumptions made with respect to any Mortgaged Property will, in fact, be consistent with that Mortgaged Property’s actual performance.
“Underwritten NCF Debt Yield”, “UW NCF Debt Yield” or “Cut-off Date UW NCF Debt Yield” means, with respect to any Mortgage Loan, the Underwritten Net Cash Flow for the related Mortgaged Property or Mortgaged Properties divided by the Cut-off Date Balance of such Mortgage Loan; provided that:
| ● | In the case of a Mortgage Loan that is part of a Whole Loan, unless otherwise indicated, Underwritten NCF Debt Yield was calculated with respect to such Mortgage Loan including any related Pari Passu Companion Loan(s) and without regard to any related Subordinate Companion Loan(s). |
“Underwritten Net Cash Flow,” “Underwritten NCF” or “UW NCF”, with respect to any Mortgaged Property, means the Underwritten Net Operating Income decreased by an amount that the related mortgage loan seller has determined for the capital expenditures and reserves for capital expenditures, including tenant improvement costs and leasing commissions, as applicable. Underwritten Net Cash Flow generally does not reflect interest expense and non-cash items such as depreciation and amortization. For certain of the investment grade-rated or institutional tenants at the Mortgaged Properties, UW NCF is based on the “straight line” rent of those tenants generally over the lesser of the term of the related lease (which, in certain cases, may be calculated through the date of an early termination option) and the term of the related Mortgage Loan. See Annex A-1 (and the footnotes related thereto) and Annex A-3.
“Underwritten Net Cash Flow DSCR,” “Underwritten NCF DSCR,” or “UW NCF DSCR,” means, with respect to any Mortgage Loan, (a) the Underwritten Net Cash Flow for the related Mortgaged Property or Mortgaged Properties, divided by (b) the Annual Debt Service for such Mortgage Loan; provided that:
| ● | In the case of a Mortgage Loan that is part of a Whole Loan, unless otherwise indicated, Underwritten Net Cash Flow DSCR was calculated with respect to such Mortgage Loan including any related Pari Passu Companion Loan(s) and without regard to any related Subordinate Companion Loan(s). |
In general, debt service coverage ratios are used by income property lenders to measure the ratio of (a) cash currently generated by a property that is available for debt service to (b) required debt service payments. However, debt service coverage ratios only measure the current, or recent, ability of a property to service mortgage debt. If a property does not possess a stable operating expectancy (for instance, if it is subject to material leases that are scheduled to expire during the loan term and that provide for above market rents and/or that may be difficult to replace), a debt service coverage ratio may not be a reliable indicator of a property’s ability to service the mortgage debt over the entire remaining loan term. The Underwritten Net Cash Flow DSCRs are presented in this prospectus for illustrative purposes only and, as discussed above, are limited in their usefulness in assessing the current, or predicting the future, ability of a Mortgaged Property to generate sufficient cash flow to repay the related Mortgage Loan.
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Accordingly, we cannot assure you, and no representation is made, that the Underwritten Net Cash Flow DSCRs accurately reflect that ability.
“Underwritten Net Operating Income,” “Underwritten NOI,” or “UW NOI,” with respect to any Mortgaged Property, means Underwritten Revenues less Underwritten Expenses, which is an estimate of cash flow available for debt service in a typical year of stable, normal operations as determined by the related mortgage loan seller.
The Underwritten Net Operating Income for each Mortgaged Property is calculated on the basis of numerous assumptions and subjective judgments, which, if ultimately proven erroneous, could cause the actual net cash flow for such Mortgaged Property to differ materially from the Underwritten Net Operating Income set forth in this prospectus. Certain of such assumptions and subjective judgments of each mortgage loan seller relate to future events, conditions and circumstances, including future expense levels, future increases in rents over current rental rates (including in circumstances where a tenant may currently be in a free or reduced rent period), future vacancy rates, the levels and stability of cash flows for properties with short term rentals (such as hospitality properties), commencement of occupancy and rent payments with respect to leases for which rentals have not yet commenced and/or a “free rent” period is still in effect, the re-leasing of vacant space and the continued leasing of occupied space, which will be affected by a variety of complex factors over which none of the depositor, the applicable mortgage loan seller, the master servicer or the special servicer have control. In certain cases, Net Operating Income includes rents paid on “dark” space by a tenant that has ceased operations at the subject Mortgaged Property prior to the end of its lease. In some cases, the Underwritten Net Operating Income set forth in this prospectus for any Mortgaged Property is higher, and may be materially higher, than the annual net operating income for such Mortgaged Property based on historical operating statements.
In determining Underwritten Net Operating Income for a Mortgaged Property, the applicable mortgage loan seller generally relied on rent rolls and/or other generally unaudited financial information provided by the respective borrowers; and in some cases, the appraisal, borrower budgets and/or local market information was the primary basis for the determination. From that information, the applicable mortgage loan seller calculated stabilized estimates of cash flow that took into consideration historical financial statements (where available), appraiser estimates, borrower budgets, material changes in the operating position of a Mortgaged Property of which the applicable mortgage loan seller was aware (e.g., current rent roll information including newly signed leases (regardless of whether the tenant has taken occupancy), near term rent steps, expirations of “free rent” periods, market rents, and market vacancy data), and estimated capital expenditures, leasing commissions and tenant improvement costs. In certain cases, the applicable mortgage loan seller’s estimate of Underwritten Net Operating Income reflected differences from the information contained in the operating statements obtained from the respective borrowers (resulting in either an increase or decrease from the recent historical net operating income set forth therein) based upon the applicable mortgage loan seller’s own analysis of such operating statements and the assumptions applied by the respective borrowers in preparing such statements and information. In certain instances, for example, property management fees and other expenses may have been taken into account in the calculation of Underwritten Net Operating Income even though such expenses may not have been reflected in actual historic operating statements. In most of those cases, the information was annualized, with some exceptions, before using it as a basis for the determination of Underwritten Net Operating Income. In certain cases with respect to certain credit rated tenants, or credit worthy tenants, the applicable mortgage loan seller may have calculated Underwritten Net Operating Income based on certain adjustments to the rental income, such as using the average rent due under the related lease from such tenant over such Mortgage Loan or lease term. Historical operating statements may not be available for newly constructed Mortgaged Properties, Mortgaged Properties with triple net leases, Mortgaged Properties that have recently undergone substantial renovations and newly acquired Mortgaged Properties.
Specifically, the rental revenue included in the Net Operating Income is based on leases in place, leases that have been executed but the tenant is not yet paying rent and/or in occupancy, leases that are being negotiated and expected to be signed, additional space that a tenant has committed to take and in certain cases contractual rent steps generally within 12 months past the Cut-off Date, in certain cases
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certain appraiser estimates of rental income, and in some cases adjusted downward to market rates, with vacancy rates equal to the Mortgaged Property’s historical rate, current rate, market rate or an assumed vacancy as determined by the related originator or appraiser; plus any additional recurring revenue fees. In some cases the related originator included revenue otherwise payable by a tenant but for the existence of an initial “free rent” period or a permitted rent abatement while the leased space is built out. Additionally, in determining rental revenue for multifamily rental properties, the related mortgage loan seller either reviewed rental revenue shown on the certified rolling 12-month operating statements or annualized the rental revenue and reimbursement of expenses shown on rent rolls or recent partial year operating statements with respect to the prior one- to 12-month periods or in some cases may have relied on information provided in the appraisal for market rental rates and vacancy. In some cases the related originator included revenue otherwise payable by a tenant but for the existence of an initial “free rent” period or a permitted rent abatement while the leased space is built out. See “—Tenant Issues” below. For certain of the investment grade-rated or institutional tenants at the Mortgaged Properties, Underwritten NOI is based on the “straight line” rent of those tenants generally over the lesser of the term of the related lease (which, in certain cases, may be calculated through the date of an early termination option) and the term of the related Mortgage Loan. See Annex A-1 (and the footnotes related thereto) and Annex A-3.
“Underwritten Net Operating Income DSCR”, “Underwritten NOI DSCR” or “UW NOI DSCR” or means, with respect to any Mortgage Loan, (a) the Underwritten Net Operating Income for the related Mortgaged Property or Mortgaged Properties, divided by (b) the Annual Debt Service for such Mortgage Loan; provided that:
| ● | In the case of a Mortgage Loan that is part of a Whole Loan, unless otherwise indicated, Underwritten Net Operating Income DSCR was calculated with respect to such Mortgage Loan including any related Pari Passu Companion Loan(s) and without regard to any related Subordinate Companion Loan(s). |
The Underwritten Net Operating Income DSCRs are presented in this prospectus for illustrative purposes only and, as discussed above, are limited in their usefulness in assessing the current, or predicting the future, ability of a Mortgaged Property to generate sufficient cash flow to repay the related Mortgage Loan. Accordingly, we cannot assure you, and no representation is made, that the Underwritten Net Operating Income DSCRs accurately reflect that ability. See the definition of “Underwritten Net Cash Flow DSCR” for more information regarding the evaluation of debt service coverage ratios.
“Underwritten NOI Debt Yield” or “UW NOI Debt Yield” means, with respect to any Mortgage Loan, the Underwritten Net Operating Income for the related Mortgaged Property or Mortgaged Properties divided by the Cut-off Date Balance for the related Mortgage Loan; provided that:
| ● | In the case of a Mortgage Loan that is part of a Whole Loan, unless otherwise indicated, the debt yield was calculated with respect to such Mortgage Loan including any related Pari Passu Companion Loan(s) and without regard to any related Subordinate Companion Loan(s). |
“Underwritten EGI”, “UW EGI” with respect to any Mortgaged Property, means the gross potential rent, recoveries and other income, less mark to market, vacancy and collection loss.
“Underwritten Revenues” with respect to any Mortgage Loan, means the gross potential rent (in certain cases, inclusive of rents under master leases with an affiliate of the borrower that relate to space not used or occupied by the master lease tenant, or, in the case of a hospitality property, room rent, food and beverage revenues and other hospitality income), subject to the assumptions and subjective judgments of each mortgage loan seller as described under the definition of “Underwritten Net Operating Income”. We cannot assure you that the assumptions made with respect to any Mortgaged Property will, in fact, be consistent with that Mortgaged Property’s actual performance.
“Units” or “Rooms” means (a) in the case of a Mortgaged Property operated as multifamily housing, the number of apartments, regardless of the size of or number of rooms in such apartment, and (b).
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“Weighted Average Mortgage Rate” means the weighted average of the Mortgage Rates as of the Cut-off Date.
Mortgage Pool Characteristics
Overview
The issuing entity will include nine (9) Mortgage Loans (33.2%) that represent the obligations of multiple borrowers that are liable on a joint and several basis for the repayment of the entire indebtedness evidenced by the related Mortgage Loan or Whole Loan and/or represent separate obligations of each borrower that are cross-collateralized and cross-defaulted with each other.
See also “—Certain Calculations and Definitions” above for important general and specific information regarding the manner of calculation of the underwritten debt service coverage ratios and loan-to-value ratios. See also “—Certain Terms of the Mortgage Loans” below for important information relating to certain payment and other terms of the Mortgage Loans.
Property Types
The following table shows the property type concentrations of the Mortgaged Properties:
Property Type Distribution(1)
| Property Type | Number of Mortgaged Properties | Aggregate Cut-off Date Balance | Approx. % of Initial Pool Balance | ||||||
| Office | 36 | $493,859,823 | 54.0 | % | |||||
| CBD | 10 | $271,903,400 | 29.7 | % | |||||
| Suburban | 18 | 111,819,086 | 12.2 | ||||||
| CBD/Data Center | 1 | 85,000,000 | 9.3 | ||||||
| Medical | 7 | 25,137,337 | 2.7 | ||||||
| Retail | 36 | $198,100,063 | 21.7 | % | |||||
| Anchored | 5 | $112,145,189 | 12.3 | % | |||||
| Single Tenant | 27 | 49,205,552 | 5.4 | ||||||
| Unanchored | 3 | 34,032,427 | 3.7 | ||||||
| Shadow Anchored | 1 | 2,716,894 | 0.3 | ||||||
| Multifamily | 6 | $82,970,000 | 9.1 | % | |||||
| Garden | 4 | $57,134,207 | 6.2 | % | |||||
| Mid Rise | 2 | 25,835,793 | 2.8 | ||||||
| Industrial | 12 | $50,093,202 | 5.5 | % | |||||
| Manufacturing | 5 | $17,770,209 | 1.9 | % | |||||
| Flex | 1 | 10,500,000 | 1.1 | ||||||
| Manufacturing/Warehouse | 2 | 9,552,920 | 1.0 | ||||||
| Warehouse/Distribution | 3 | 8,020,073 | 0.9 | ||||||
| Warehouse | 1 | 4,250,000 | 0.5 | ||||||
| Other | 6 | $33,972,600 | 3.7 | % | |||||
| Hospitality | 2 | $30,337,246 | 3.3 | % | |||||
| Full Service | 1 | $20,000,000 | 2.2 | % | |||||
| Select Service | 1 | 10,337,246 | 1.1 | ||||||
| Mixed Use | 5 | $25,499,000 | 2.8 | % | |||||
| Multifamily/Retail | 4 | $22,787,500 | 2.5 | % | |||||
| Multifamily/Office/Retail | 1 | 2,711,500 | 0.3 | ||||||
| Total | 103 | $914,831,933 | 100.0 | % | |||||
| (1) | Because this table presents information relating to Mortgaged Properties and not Mortgage Loans, the information for Mortgage Loans secured by more than one Mortgaged Property is based on Allocated Loan Amounts, which amounts, if not specified in the related Mortgage Loan documents, are based on the appraised values, as set forth in Annex A-1. |
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With respect to all the property types listed above, the borrowers with respect to Mortgage Loans secured by such property types may face increased incidence of nonpayment of rent due to the COVID-19 pandemic and may have difficulty evicting non-paying tenants due to a variety of factors including (but not limited to): government-mandated moratoriums on evictions, court closures, and local officials refusing to enforce eviction orders. We cannot assure you that borrowers of Mortgage Loans secured by any of the property types will not request forbearance or modifications or otherwise fail to make timely debt service payments due to the ongoing COVID-19 pandemic. See “Risk Factors—Special Risks—Coronavirus Pandemic Has Adversely Affected the Global Economy and Will Likely Adversely Affect the Performance of the Mortgage Loans” and “—COVID-19 Considerations” below.
Retail Properties
With respect to the retail properties and mixed use properties with retail components set forth in the above chart:
| ● | With respect to the Redmond Community Center Mortgage Loan (3.8%), the borrower sponsor owns adjacent portions of the related shopping center that are not included in the collateral and that may compete with the Mortgaged Property. The loan documents contain anti-poaching covenants. |
| ● | With respect to the Prospector Plaza Mortgage Loan (2.6%), the borrower sponsor owns portions of the shopping center in which the Mortgaged Property is located which were previously owned by the borrower, including a 25,536 square foot CVS store which has a 2022 lease expiration, an approximately 5,300 square foot vacant box and a vacant pad site. The loan documents contain anti-poaching covenants. |
| ● | With respect to the STK Chicago Mortgage Loan (0.8%), the borrower sponsor owns other properties within a five mile radius of the Mortgaged Property that may compete with the Mortgaged Property. |
See “Risk Factors—Risks Relating to the Mortgage Loans—Retail Properties Have Special Risks”, “—Specialty Use Concentrations” below and “Risk Factors—Risks Relating to the Mortgage Loans—Some Mortgaged Properties May Not Be Readily Convertible to Alternative Uses”.
Office Properties
With respect to the office properties and mixed use properties with office components set forth in the above chart:
| ● | With respect to the 601 Lexington Avenue Mortgaged Property (9.3%), the related borrower sponsor owns one or more nearby properties that compete with the Mortgaged Property. The related Mortgage Loan documents do not contain so-called “anti-poaching” provisions to prevent the borrower or its affiliates from steering or directing existing or prospective tenants to the competing properties. |
| ● | With respect to the Romaine & Orange Square Mortgaged Property (7.4%), the borrower sponsor owns other office properties within a five-mile radius that directly compete with the Mortgaged Property. The related Mortgage Loan documents do not contain so-called “anti-poaching” provisions to prevent the borrower or its affiliates from steering or directing existing or prospective tenants to the competing properties. |
| ● | In addition, with respect to the Romaine & Orange Square Mortgaged Property (7.4%), the largest tenant, Kaiser Foundation Health Plan, Inc. (“Kaiser”), which leases 58.6% of the net rentable area at the Mortgaged Property, has identified various repair and maintenance obligations at the Mortgaged Property (collectively, the “Kaiser Work”), which it has asserted the borrower is responsible for. On the origination date, the borrower deposited $35,000 into a reserve account, which amount represents the estimated cost to complete certain window and wall work included |
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| in the Kaiser Work, which the borrower has agreed to perform within 60 days of the origination date. In addition, the borrower and Kaiser have engaged a third party vendor (the “Vendor”) to determine which party is responsible to perform certain elevator and parking garage work, constituting the remainder of the Kaiser Work. The Mortgage Loan documents require that if (i) the Vendor determines the borrower is responsible to perform such elevator and garage work or (ii) following the Vendor’s determination, Kaiser claims the borrower is responsible to perform such elevator and garage work (notwithstanding the Vendor’s determination), the borrower must promptly perform such work. Upon an event of default under the Romaine & Orange Square Mortgage Loan, the borrower must deposit the estimated cost to complete the elevator and parking garage work, unless it provides satisfactory evidence that the work was completed in a manner acceptable to Kaiser. The borrower has represented that it anticipates the cost to complete the Kaiser Work will not exceed $105,000 and that it anticipates in its commercially reasonable judgement that the time to complete the Kaiser Work will not exceed 6 months from the commencement of such work (subject to force majeure events, delays caused by Kaiser or other delays beyond the borrower’s reasonable control); however there is no assurance of the actual cost and timing of the Kaiser Work. |
| ● | With respect to the Santa Barbara Tech Center Mortgaged Property (1.5%), approximately 66.8% of the net rentable area is leased to Mission Support and Test Services LLC (“MSTS”), under two leases, one, representing 50.1% of net rentable area, expiring in 2025 and the second, representing 16.7% of net rentable area, expiring in 2027, but subject to an ongoing termination right with 360 days’ notice and no termination fee. MSTS is the current manager and operator of the Nevada National Security Site (“NNSS”), a complex of facilities owned by the National Nuclear Security Administration, an agency of the United States Department of Energy. The Mortgaged Property houses the NNSS Special Technologies Laboratory, which develops special purpose devices, measurement instruments and analysis methods tailored to the needs of the government end user. MTST’s government contract to operate the NNSS has an initial term of five years expiring in November 2022. MTST’s interest in retaining its leased space is dependent on renewal of its government contract. In addition, the borrower sponsor owns other office properties within a five mile radius of the Mortgaged Property that may compete with the Mortgaged Property. |
See “Risk Factors—Risks Relating to the Mortgage Loans—Office Properties Have Special Risks”, “—Specialty Use Concentrations” below and “Risk Factors—Risks Relating to the Mortgage Loans—Some Mortgaged Properties May Not Be Readily Convertible to Alternative Uses”.
Multifamily Properties
With respect to the multifamily properties set forth in the above chart:
| ● | With respect to the Millennia Portfolio Mortgage Loan (4.4%), as to the Gateway at the Greene Mortgaged Property (0.9%), pursuant to a recorded restrictive covenant with the Ohio Housing Finance Agency related to low income housing tax credits, until 2038, 30% of the 103 units at such Mortgaged Property are required to be leased to tenants with income restricted to not more than 80% of area median gross income, and at rents restricted to rents affordable to tenants who earn 80% of area median gross income, as determined in accordance with federal regulations. In addition, with respect to the Summit Ridge Mortgaged Property (2.1%), 69 tenants receive Section 8 vouchers, totaling approximately 8.9% of rental income at such Mortgaged Property and with respect to the Lexington Village Mortgaged Property (1.3%), 39 tenants receive Section 8 vouchers, totaling approximately 10.0% of rental income. |
| ● | With respect to the 35 Crosby Street and 70 Carmine Street Mortgage Loan (2.1%), one unit at the 70 Carmine Street Mortgaged Property (0.7%) is rent controlled and one unit is rent stabilized. |
| ● | With respect to the 1201 Main Mortgage Loan (1.0%), 15 of the 27 multifamily units at the Mortgaged Property are master leased by Basalt Orthopedic Surgery Center with expiration dates |
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| ranging from 2025 through 2027. The master tenant is using such units as temporary housing for its employees who have moved to the area to work for the master tenant, prior to such employees finding a more permanent home. |
| ● | In addition, with respect to the 1201 Main Mortgage Loan (1.0%), five of the 27 units at the related Mortgaged Property are deed-restricted affordable units. Such affordable units must be rented to so-called “Qualified Tenants” (two units restricted to tenants at lease rates affordable to less than 80% area median income (“AMI”), two units restricted to tenants at lease rates affordable to less than 100% AMI, and one unit restricted to a tenant at a lease rate affordable to less than 120% AMI) in accordance with a declaration of deed restriction agreement entered into by the property owner with the Board of Trustees of the Town of Carbondale, Colorado and the Garfield County Housing Authority. |
See “Risk Factors—Risks Relating to the Mortgage Loans—Multifamily Properties Have Special Risks”, “—Specialty Use Concentrations” below and “Risk Factors—Risks Relating to the Mortgage Loans—Some Mortgaged Properties May Not Be Readily Convertible to Alternative Uses”.
Hospitality Properties
With respect to the hospitality properties set forth in the above chart:
| ● | The following table shows the breakdown of each Mortgaged Property associated with a hotel brand through a license, franchise agreement, operating agreement or management agreement. |
Mortgaged Property Name |
Mortgage Loan Cut-off Date Balance by Allocated Loan Amount |
% of Initial Pool Balance by Allocated Loan Amount |
Expiration of License, Franchise Agreement, Operating Agreement or Management Agreement |
Maturity Date |
Upfront PIP Reserve |
Renewal Option |
| Courtyard Appleton | $10,337,246 | 1.1% | 9/12/2037 | 3/6/2032 | N/A | No |
| JW Marriott Desert Springs | $20,000,000 | 2.2% | 12/31/2032 | 1/6/2027 | N/A | Yes |
| ● | Hospitality properties may be particularly affected by seasonality. The JW Marriott Desert Springs Mortgage Loan (2.2%) requires seasonality reserves to be funded at origination and/or on an ongoing basis to the extent of available excess cash flow (and/or from a monthly deposit by the borrower during specified months) in an amount specified in the related loan documents. We cannot assure that these reserves will be sufficient to offset any seasonal fluctuations in revenue. |
| ● | Certain of the hospitality properties securing the Mortgage Loans are currently undergoing or are scheduled to undergo renovations or property improvement plans. See “—Redevelopment, Renovation and Expansion” below. |
| ● | With respect to the JW Marriott Desert Springs Mortgage Loan (2.2%), approximately 40.5% of the underwritten revenue is attributed to food and beverage sales and approximately 16.0% of the underwritten revenue is attributed to other revenue including valet and daily parking, movie rentals, cancellation/attrition and other miscellaneous revenue sources. |
| ● | With respect to the JW Marriott Desert Springs Mortgage Loan (2.2%), the related Mortgaged Property’s 2020 net operating income was $(54,690), the 2021 net operating income was approximately $12.6 million and the underwritten net operating income was approximately $26.1 million. The increase from the 2021 net operating income to the underwritten net operating income is primarily attributable to underwriting to average occupancy levels prior to the 2019 renovation and the COVID-19 pandemic at the post-renovation average daily rate observed between June 2021 and November 2021. The Mortgaged Property’s 2021 performance reflects recovery from the COVID-19 pandemic as stay-at-home orders were lifted and travel began to rebound. We cannot assure you that the Mortgaged Property will revert to pre-COVID-19 performance. At loan origination, the related borrower deposited $6,482,400 into a debt service reserve. Provided no Mortgage Loan event of default is continuing, the debt service reserve will |
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| be reduced each payment date by 1/12th of the initial deposit until the funds on deposit are reduced to zero. We cannot assure you that the amount in the debt service reserve will be sufficient to cover debt service payments due under the Mortgage Loan documents. |
| ● | With respect to the Courtyard Appleton Mortgage Loan (1.1%), the related Mortgaged Property’s 2020 net operating income was approximately $(57,387), the 2021 net operating income was approximately $1,229,297 and the underwritten net operating income is approximately $1,629,248. The increase from the 2021 net operating income to the underwritten net operating income is primarily attributable to underwriting based on the trailing 12-month period of January 1, 2019 through June 30, 2019 and July 1, 2021 through December 31, 2021, which timeframes are intended to capture the period prior to and immediately after COVID-19, and the period in which the hotel began to return to pre-COVID-19 performance. We cannot assure you that the Mortgaged Property will revert to pre-COVID-19 performance. Approximately 6.3% of the underwritten revenue is attributed to food and beverage sales. |
See
“Risk Factors—Risks Relating to the Mortgage Loans—Risks Relating to Affiliation with a Franchise or Hotel
Management Company” and “—Hospitality Properties Have Special Risks” and
“—Specialty Use Concentrations” below, and “Risk Factors—Risks
Relating to the Mortgage Loans—Some Mortgaged Properties May Not Be Readily Convertible to Alternative Uses”.
Mixed Use Properties
With respect to the mixed-use properties set forth in the above chart, see “Risk Factors—Risks Relating to the Mortgage Loans—Retail Properties Have Special Risks” and “—Office Properties Have Special Risks”, as applicable.
| ● | With respect to the Bedrock Portfolio Mortgage Loan (9.3%), Dan Gilbert, who owns and controls the borrower sponsor and affiliated companies, owns a number of other properties within a five-mile radius of the Mortgaged Properties. |
| ● | With respect to the Bedrock Portfolio Mortgage Loan (9.3%), JPMCB is the ninth largest tenant at the portfolio of Mortgaged Properties by the net rentable area (1.2%). |
| ● | With respect to the 1340 Lafayette Mortgage Loan (1.8%), the related borrower sponsor owns a number of other properties within a five-mile radius that may compete with the Mortgaged Property. |
Certain of the mixed use Mortgaged Properties may have specialty uses. See “—Specialty Use Concentrations” below and “Risk Factors—Risks Relating to the Mortgage Loans—Some Mortgaged Properties May Not Be Readily Convertible to Alternative Uses”.
Specialty Use Concentrations.
Certain Mortgaged Properties have one or more tenants that operate their space as a specialty use. Such specialty uses may not allow the space to be readily converted to be suitable for another type of tenant, they may rely on contributions from individuals and government grants or other subsidies to pay rent and other operating expenses or they may have primarily seasonal use that makes income potentially more volatile than for properties with longer term leases. For example, with respect to the 5 largest tenants at the Mortgaged Properties securing the 15 largest Mortgage Loans by Cut-off Date Balance, or Mortgaged Properties with respect to which a single tenant operates the Mortgaged Property, certain tenants operate their space as a specialty use, as set forth in the following table:
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| Specialty Use | Number of Mortgaged Properties | Approx. % of Initial Pool Balance | ||||
| Grocery | 4 | 18.8 | % | |||
| Government Tenant | 2 | 9.8 | % | |||
| Data Center | 1 | 9.3 | % | |||
| Film Studio | 1 | 7.4 | % | |||
| Medical Office, Research or Diagnostic Laboratories | 6 | 5.5 | % | |||
| Gym or Fitness Center | 2 | 2.9 | % | |||
| Restaurant(1) | 3 | 1.4 | % | |||
| Bank Branch | 1 | 0.3 | % | |||
| (1) | Excludes any hospitality or multifamily Mortgaged Properties that may have a restaurant on-site. |
See “Risk Factors—Risks Relating to the Mortgage Loans—Some Mortgaged Properties May Not Be Readily Convertible to Alternative Uses”.
Top Ten Mortgage Loans
The following table shows certain information regarding the ten largest Mortgage Loans by Cut-off Date Balance:
| Loan Name | Mortgage Loan Cut-off Date Balance | Approx. % of Initial Pool Balance | Loan
per | UW NCF DSCR(1) | Cut-off Date LTV Ratio(1) | U/W Cut-off Date NOI Debt Yield(1) | Property Type | |||||||||||||
| 601 Lexington Avenue | $85,000,000 | 9.3 | % | $432 | 4.50 | x | 42.5 | % | 13.2 | % | Office | |||||||||
| One Wilshire | $85,000,000 | 9.3 | % | $588 | 3.37 | x | 42.6 | % | 9.6 | % | Office | |||||||||
| Bedrock Portfolio | $85,000,000 | 9.3 | % | $160 | 3.30 | x | 59.4 | % | 13.6 | % | Various | |||||||||
| Romaine & Orange Square | $68,000,000 | 7.4 | % | $556 | 1.78 | x | 62.4 | % | 8.1 | % | Office | |||||||||
| Shoreline Square | $55,575,000 | 6.1 | % | $134 | 2.93 | x | 63.5 | % | 11.9 | % | Office | |||||||||
| Millennia Portfolio | $40,000,000 | 4.4 | % | $51,480 | 1.24 | x | 73.8 | % | 8.5 | % | Multifamily | |||||||||
| InCommercial Net Lease Portfolio #5 | $35,000,000 | 3.8 | % | $114 | 1.64 | x | 59.5 | % | 9.7 | % | Various | |||||||||
| Redmond Community Center | $34,500,000 | 3.8 | % | $314 | 2.20 | x | 61.3 | % | 9.4 | % | Retail | |||||||||
| Shearer’s Industrial Portfolio | $30,000,000 | 3.3 | % | $62 | 1.95 | x | 62.8 | % | 8.3 | % | Industrial | |||||||||
| Hall Road Crossing | $28,712,745 | 3.1 | % | $159 | 1.50 | x | 68.2 | % | 9.3 | % | Retail | |||||||||
| Top 10 Total/Wtd. Avg. | $546,787,745 | 59.8 | % | 2.78 | x | 56.8 | % | 10.7 | % | |||||||||||
| (1) | With respect to the 601 Lexington Avenue Mortgage Loan, Loan per Sq. Ft./Unit/Room, UW NCF DSCR, Cut-off Date LTV Ratio and U/W Cut-off Date NOI Debt Yield calculations include any related pari passu companion loan(s) and exclude any related subordinate companion loan(s). With respect to the 601 Lexington Avenue Mortgage Loan, the UW NCF DSCR and the Cut-off Date LTV Ratio including the related Subordinate Companion Loan(s) but excluding any related mezzanine loans are 3.25x and 58.8%, respectively. |
See “—Assessment of Property Value and Condition” for additional information.
For more information regarding the fifteen largest Mortgage Loans and/or loan concentrations and related Mortgaged Properties, see the individual Mortgage Loan and portfolio descriptions under “Description of Top Fifteen Mortgage Loans and Additional Mortgage Loan Information” in Annex A-3. Other than with respect to the top ten Mortgage Loans identified in the table above, each of the other Mortgage Loans represents no more than 3.1% of the Initial Pool Balance.
See “Risk Factors—Risks Relating to the Mortgage Loans—Concentrations Based on Property Type, Geography, Related Borrowers and Other Factors May Disproportionately Increase Losses”.
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Multi-Property Mortgage Loans and Related Borrower Mortgage Loans
The Mortgage Pool will include 10 Mortgage Loans (30.3%), set forth in the following table entitled “Multi-Property Mortgage Loans”, which are each secured by two or more properties. In some cases, however, the amount of the mortgage lien encumbering a particular property may be less than the full amount of indebtedness under the Mortgage Loan, generally to minimize recording tax. In such instances, the mortgage amount may equal a specified percentage (generally ranging from 100% to 150%, inclusive) of the appraised value or Allocated Loan Amount for the particular Mortgaged Property. This would limit the extent to which proceeds from that Mortgaged Property would be available to offset declines in value of the other Mortgaged Properties securing the same Mortgage Loan.
The following table shows each individual Mortgage Loan that is secured by two or more Mortgaged Properties.
Multi-Property Mortgage Loans
| Mortgage Loan/Property Portfolio Names | Aggregate Cut-off Date Balance | Approx. % of Initial Pool Balance | ||||
| Bedrock Portfolio | $85,000,000 | 9.3 | % | |||
| Millennia Portfolio | 40,000,000 | 4.4 | ||||
| InCommercial Net Lease Portfolio #5 | 35,000,000 | 3.8 | ||||
| Shearer’s Industrial Portfolio | 30,000,000 | 3.3 | ||||
| 285 & 355 Riverside Ave | 28,000,000 | 3.1 | ||||
| 35 Crosby Street and 70 Carmine Street | 19,250,000 | 2.1 | ||||
| Tharp Portfolio | 13,985,759 | 1.5 | ||||
| Glen Forest Office Portfolio | 9,000,000 | 1.0 | ||||
| Walgreens New Castle & Oneonta | 8,700,000 | 1.0 | ||||
| 138 St. Marks & 155 5th Ave | 8,550,000 | 0.9 | ||||
| Total | $277,485,759 | 30.3 | % | |||
In addition, an individual Mortgaged Property may be comprised of two or more parcels that may not be contiguous or may be owned by separate borrowers.
None of the Mortgage Loans are cross-collateralized or have the same borrower sponsor or borrower sponsors related to each other. See “Risk Factors—Risks Relating to the Mortgage Loans—Concentrations Based on Property Type, Geography, Related Borrowers and Other Factors May Disproportionately Increase Losses” in addition to Annex A-1.
Mortgage Loans with related borrower sponsors are identified under “Related Borrower” on Annex A-1. See “Risk Factors—Risks Relating to the Mortgage Loans—Concentrations Based on Property Type, Geography, Related Borrowers and Other Factors May Disproportionately Increase Losses” in addition to Annex A-1 and the related footnotes.
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Geographic Concentrations
This table shows the states that have concentrations of Mortgaged Properties that secure 5.0% or more of the Initial Pool Balance:
Geographic Distribution(1)
| State | Number of Mortgaged Properties | Aggregate Cut-off Date Balance | % of Initial Pool Balance | ||||||
| California | 8 | $286,150,645 | 31.3 | % | |||||
| New York | 11 | $165,595,000 | 18.1 | % | |||||
| Michigan | 16 | $126,212,745 | 13.8 | % | |||||
| Ohio | 5 | $46,131,387 | 5.0 | % | |||||
| (1) | Because this table presents information relating to Mortgaged Properties and not the Mortgage Loans, the information for any Mortgaged Property that is one of multiple Mortgaged Properties securing a particular Mortgage Loan is based on an Allocated Loan Amount, which amounts, if not specified in the related Mortgage Loan documents, are based on the appraised values, as stated in Annex A-1. |
The remaining Mortgaged Properties are located throughout 20 other states, with no more than 4.6% of the Initial Pool Balance by Allocated Loan Amount secured by Mortgaged Properties located in any such jurisdiction.
Repayments by borrowers and the market value of the related Mortgaged Properties could be affected by economic conditions generally or specific to particular geographic areas or the regions of the United States, and concentrations of Mortgaged Properties in particular geographic areas may increase the risk that conditions in the real estate market where the Mortgaged Property is located, or other adverse economic or other developments or natural disasters (e.g., earthquakes, floods, forest fires, tornadoes or hurricanes, terrorist attacks or changes in governmental rules or fiscal policies) affecting a particular region of the country, could increase the frequency and severity of losses on Mortgage Loans secured by those Mortgaged Properties. For example:
| ● | Thirteen (13) Mortgaged Properties (39.6%) are located in California, Washington and Texas and are more susceptible to wildfires. |
| ● | Nine (9) Mortgaged Properties (35.1%) are located in areas that are considered a high earthquake risk (seismic zones 3 or 4). Seismic reports were prepared with respect to these Mortgaged Properties and, based on those reports, no Mortgaged Property has a seismic expected loss greater than 18%. |
| ● | Eleven (11) Mortgaged Properties (37.9%) are located in California, Washington and New Jersey, and may be more generally susceptible to floods or hurricanes than properties in other parts of the country. |
Mortgaged Properties With Limited Prior Operating History
Fifty (50) Mortgaged Properties (18.8%) have a limited operating history (i.e., less than 18 most recent months of recent historical financials), as follows:
| ● | Each of the Tharp Portfolio (1.5%), 1201 Main (1.0%) and 138 St. Marks & 155 5th Ave (0.9%) Mortgage Loans are secured, in whole or in part, by one or more Mortgaged Properties that were constructed, in a lease-up period or the subject of a major renovation that was completed within 12 calendar months prior to the Cut-off Date and, therefore, such Mortgaged Property has no or limited prior operating history or the related Mortgage Loan Seller did not take the operating history into account in the underwriting of the related Mortgage Loan. |
| ● | Each of the InCommercial Net Lease Portfolio #5 (3.8%), 1340 Lafayette (1.8%), Redmond Community Center (3.8%), Tharp Portfolio (1.5%) and Walgreens New Castle & Oneonta (1.0%) |
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| Mortgage Loans are secured, in whole or in part, by one or more Mortgaged Properties that were acquired by the related borrower or an affiliate of the borrower within 12 calendar months prior to the Cut-off Date and such borrower or affiliate was unable to provide the related Mortgage Loan Seller with historical financial information (or provided limited historical financial information) for such acquired Mortgaged Property. |
| ● | Each of the Shearer’s Industrial Portfolio (3.3%), Tharp Portfolio (1.5%), 905 Medical Park Drive (0.6%), 3097 E Ana St (0.6%) and VA Dialysis Center – Philadelphia (0.5%) Mortgage Loans are secured, in whole or in part, by one or more Mortgaged Properties that are subject to a triple-net or modified gross lease with the related sole tenant and, therefore, have no or limited prior operating history and/or lack historical financial figures and information. |
See “Risk Factors—Risks Relating to the Mortgage Loans—Limited Information Causes Uncertainty”.
Tenancies-in-Common or Diversified Ownership
Each of the Prospector Plaza (2.6%) and the 905 Medical Park Drive (0.6%) Mortgage Loans has one or more borrowers that own all or a portion of the related Mortgaged Property as tenants-in-common, and the respective tenants-in-common have agreed to a waiver of their rights of partition.
See “Risk Factors—Risks Relating to the Mortgage Loans—Tenancies-in-Common May Hinder Recovery”,“—The Borrower’s Form of Entity May Cause Special Risks” and “—Tenancies-in-Common May Hinder Recovery”.
Condominium and Other Shared Interests
Each of the 601 Lexington Avenue (9.3%), Gem Tower (3.1%) and the STK Chicago (0.8%) Mortgage Loans are secured, in whole or in part, by the related borrower’s interest in one or more units in a condominium. Except as described below, the borrower generally controls the appointment and voting of the condominium board or the condominium owners cannot take actions or cause the condominium association to take actions that would affect the borrower’s unit without the borrower’s consent.
With respect to the Gem Tower Mortgage Loan (3.1%), the related Mortgaged Property represents the retail component (constituting one condominium unit) of a mixed-use condominium regime comprised of (i) the Mortgaged Property, (ii) certain office units (collectively, the “Office Component”), (iii) certain commercial units (collectively, the “Commercial Component”) and (iv) a parking unit (the “Parking Component”). The borrower holds a 1/7th voting interest in the related condominium regime and does not control the related condominium board (the “Master Condominium Board”), provided, however, that certain decisions pertaining solely to the Mortgaged Property are governed by a separate board of managers (the “Retail Board of Managers”). The borrower is entitled to appoint all three members of and controls the Retail Board of Managers. The Retail Board of Managers is entitled to appoint one out of seven members of the Master Condominium Board. Pursuant to the related condominium documents, any decision which affects only the Mortgaged Property and does not adversely affect the Office Component, Commercial Component or Parking Component for its permitted purposes may be determined by the Retail Board of Managers. In addition, certain major decisions including, among other things, any amendment of the condominium declaration or by-laws that modifies the permitted use of the Mortgaged Property or has more than a de minimis effect on the Mortgaged Property may not be made without the prior written consent of the borrower.
With respect to the STK Chicago Mortgage Loan (0.8%), the related Mortgaged Property is a commercial condominium building represented by The Kinzie State Commercial Condominium Association, which is comprised of five total units (each, an “STK Condominium Unit”). The Museum of Broadcast Communications owns four STK Condominium Units, representing an approximately 62.74% share. Pursuant to the condominium association documents, decisions are to be made by majority votes present at any meeting, with 44% unit representation and at least two units providing a quorum. The related borrower owns one STK Condominium Unit, representing an approximately 37.26% share and therefore does not control the condominium board.
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See “Risk Factors—Risks Relating to the Mortgage Loans—Condominium Ownership May Limit Use and Improvements”.
Fee & Leasehold Estates; Ground Leases
The following table shows the distribution of underlying interests encumbered by the mortgages related to the Mortgaged Properties:
Property Ownership Interest(1)
| Property Ownership Interest | Number of Mortgaged Properties | Aggregate Cut-off Date Balance | Approx. % of Initial Pool Balance | |||||||
| Fee Simple(2) | 99 | $ | 747,241,033 | 81.7 | % | |||||
| Fee Simple/Leasehold | 2 | 105,000,000 | 11.5 | |||||||
| Leasehold | 2 | 62,590,900 | 6.8 | |||||||
| Total | 103 | $ | 914,831,933 | 100.0 | % | |||||
| (1) | Because this table presents information relating to Mortgaged Properties and not Mortgage Loans, the information for Mortgage Loans secured by more than one Mortgaged Property is based on Allocated Loan Amounts, which amounts, if not specified in the related Mortgage Loan documents, are based on the appraised values, as set forth in Annex A-1. |
| (2) | With respect to certain Mortgaged Properties, the encumbered interest is be characterized as a “Fee Simple” if (i) the borrower has a fee interest in all or substantially all of the Mortgaged Property (provided that if the borrower has a leasehold interest in any portion of the Mortgaged Property, such portion is not material to the use or operation of the Mortgaged Property), or (ii) the Mortgage Loan is secured by the borrower’s leasehold interest in the Mortgaged Property as well as the borrower’s (or other fee owner’s) overlapping fee interest in the related Mortgaged Property. |
In general, unless the related fee interest is also encumbered by the related Mortgage (and therefore treated as a fee simple interest in the chart above), each of the ground leases (i) has a term that extends at least 20 years beyond the maturity date of the Mortgage Loan (taking into account all freely exercisable extension options), and (ii) except as noted in the exceptions to representation and warranty number 34 in Annex D-1, representation and warranty number 36 in Annex E-1 or representation and warranty number 34 in Annex F-1, indicated on Annex D-2, Annex D-3, Annex E-2 or Annex F-2, as applicable, contains customary lender protection provisions, including notice and cure rights and the right to enter into a new lease with the applicable ground lessor in the event a ground lease is rejected or terminated.
With respect to the 601 Lexington Avenue Mortgage Loan (9.3%), the Mortgaged Property is comprised of (i) the borrower’s fee simple interest in three (3) condominium units totaling approximately 1,657,621 square feet within the four (4) unit condominium known as the 601 Lexington Avenue Condominium (the “601 Lexington Avenue Condominium”) and (ii) the borrower’s leasehold interest in a portion of what is commonly known as the “Church Unit” within the 601 Lexington Avenue Condominium (approximately 18,038 square feet). The related ground lease expires April 30, 2036 (the loan matures January 9, 2032) and, upon expiration, the borrower is required pursuant to the ground lease to purchase the fee simple interest from the ground lessor for a fixed price of approximately $23,284,421. In addition, upon the condemnation or taking of any portion of the leasehold, the borrower is required to purchase the fee simple interest at the foregoing purchase price discounted to the date of the condemnation or taking at a discount rate of 6%. If the leasehold mortgagee forecloses upon the leasehold, the leasehold mortgagee’s initial assignment of its interest does not require the ground lessor’s consent; however, any subsequent transfers of the leasehold interest require the ground lessor’s consent. In addition, the ground lease may be amended without the leasehold mortgagee’s prior consent, but any amendment of the ground lease will not be binding on the lender without the lender’s prior written consent. Further, (i) the ground lease does not provide that the lender is entitled to a new lease either generally upon a termination of the ground lease or specifically upon a rejection of the ground lease in bankruptcy and (ii) the ground lease requires the ground lessor to provide the leasehold mortgagee notice of any default by the tenant under the ground lease but does not specifically provide that any notice of default or termination is ineffective against the leasehold mortgagee unless such notice is given to the leasehold mortgagee.
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Mortgage loans secured by ground leases present certain bankruptcy and foreclosure risks not present with Mortgage Loans secured by fee simple estates. See “Risk Factors—Risks Relating to the Mortgage Loans—Risks Related to Ground Leases and Other Leasehold Interests”, “Certain Legal Aspects of Mortgage Loans—Foreclosure” and “—Bankruptcy Laws”.
COVID-19 Considerations
The cumulative effects of the COVID-19 emergency on the global economy may cause tenants to be unable to pay their rent and borrowers to be unable to pay debt service under the Mortgage Loans. As a result, we cannot assure you that tenants or borrowers will not seek rent or debt service relief (including forbearance arrangements) or other lease or loan modifications in the future. Such actions may lead to shortfalls and losses on the certificates. For example:
| ● | With respect to the Gem Tower Mortgage Loan (3.1%), in connection with the COVID-19 pandemic, the related borrower has granted rent deferrals in the amount of approximately $3,266,000 in the aggregate to the tenants at the Mortgaged Property, of which approximately (i) $2,673,000 has been forgiven and (ii) $593,000 remains unpaid. In addition, the Mortgage Loan documents permit the borrower to grant to any tenant on an ongoing basis, without the lender’s prior consent, the deferral of up to four months’ of rent in the aggregate, provided that such deferred rent is required to be repaid prior to the expiration of the term of the related lease and the borrower delivers notice to the lender of any such deferral. At origination, the borrower deposited with the lender approximately (i) $551,668 in a rent deferral reserve in connection with any deferred rent as of the origination date and (ii) $1,000,000 in a rent stabilization reserve to be held as additional collateral for the Mortgage Loan until the debt yield at the Mortgaged Property is no less than 9.6% for four consecutive fiscal quarters. |
| ● | With respect to the Romaine & Orange Square Mortgage Loan (7.4%), the second largest tenant, Common Grounds, a shared workspace provider, representing approximately 14.1% of net rentable square footage, received rent deferrals totaling $329,237 from May through October 2021, which it agreed to repay in equal monthly installments from January 1, 2023 through June 30, 2026. The third largest tenant, MTI Film, representing approximately 11.5% of the net rentable square footage, received rent deferrals of 50% of base rent on two separate suites for six months each during 2020 and 2021, and has agreed to repay the deferred rent in equal installments from June 2021 through June 2026. In addition, two other tenants received rent abatements or deferrals. |
| ● | With respect to the STK Chicago Mortgage Loan (0.8%), during the COVID-19 pandemic, the sole tenant, a restaurant, defaulted on payment of its rent, and three separate lease modifications were entered into deferring payment of the tenant’s rent. Pursuant to the final lease modification, rent deferrals were continued through March 2021, and approximately $472,000 in deferred rent was required to be repaid in 18 equal monthly installments commencing in October 2021. The tenant has been current on payment of its rent, including repayment of deferred rent, since October 2021. In addition, on May 6, 2020 an amendment to the STK Chicago Mortgage Loan was executed, which permitted the lender to apply funds in a rollover reserve of up to $98,428 towards payment of interest on the Mortgage Loan. The amendment further provided that a cash flow sweep would commence and excess cash flow would be deposited into the rollover reserve until all funds withdrawn from such reserve to pay interest were replenished. As of July 2021, all such funds withdrawn from the rollover reserve were replenished. In addition, during the first quarter of 2020, the STK Chicago Mortgage Loan entered into a cash management trigger period due to the debt service coverage ratio falling below 1.20x. With respect to the four most recent quarterly periods under the STK Chicago Mortgage Loan documents, ended March 31, 2021, June 30, 2021, September 30, 2021 and December 31, 2021, the debt service coverage ratio calculated on an amortizing basis in accordance with the STK Chicago Mortgage Loan documents has been 0.74x, 1.21x, 1.31x and 1.48x, respectively. Further, the STK Chicago Mortgage Loan was originated on February 7, 2020, and the related appraisal, property condition report and ESA were prepared prior to that date and do not or may not reflect current conditions |
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| at the Mortgaged Property or current market conditions. In particular, the appraisal does not reflect the COVID-19 pandemic. |
See “Description of Top Fifteen Mortgage Loans and Additional Mortgage Loan Information” in Annex A-3 for discussions of the impact of the COVID-19 pandemic on operations of certain tenants at the Mortgaged Properties.
See “Risk Factors—Special Risks—Coronavirus Pandemic Has Adversely Affected the Global Economy and Will Likely Adversely Affect the Performance of the Mortgage Loans”.
Environmental Considerations
An environmental report was prepared for each Mortgaged Property securing a Mortgage Loan. The environmental report prepared for the STK Chicago Mortgage Loan (0.8%) is approximately 27 months old as of the Cut-off Date, and no other environmental report is more than 7 months old as of the Cut-off Date. See Annex A-1 for the date of the environmental report for each Mortgaged Property. The environmental reports were generally prepared pursuant to the American Society for Testing and Materials standard for a “Phase I” environmental site assessment (“ESA”) to identify any recognized environmental conditions (each, a “REC”) at the related Mortgaged Property. In addition to the Phase I standards, some of the environmental reports will include additional research, such as limited sampling for asbestos-containing material, lead-based paint, radon or water damage with limited areas of potential or identified mold, depending on the property use and/or age. Additionally, as needed pursuant to American Society for Testing and Materials standards, supplemental “Phase II” site investigations have been completed for some Mortgaged Properties to further evaluate the RECs identified during the Phase I investigations. A Phase II investigation generally consists of sampling and/or testing of the soil and groundwater at the property.
| ● | With respect to the Millennia Portfolio Mortgage Loan (4.4%), as to the Summit Ridge Property (2.1%), the related ESA stated that the Mortgaged Property is located in radon Zone 1, where average predicted radon levels exceed the United States Environmental Protection Agency (“EPA”) action level of 4.0 pCi/L. The ESA stated that property ownership conducted limited radon sampling at the Mortgaged Property, and radon was detected above the EPA action level of 4.0 pCi/L in one of the samples obtained. The ESA recommended that additional investigation was warranted. At origination, $4,400 was deposited into an environmental reserve held by the lender. The loan documents require that not later than 90 days after the origination date, the borrowers deliver an assessment report prepared by an expert describing the radon concentrations detected in the applicable unit, and if such report indicates that elevated radon levels continue to be detected, the borrowers are required, not later than 30 days following the date of such report, to deliver evidence reasonably satisfactory to the lender that an acceptable mitigation system has been installed to reduce radon concentrations to an acceptable level. The funds in the reserve are required to be released to the borrowers upon delivery to the lender of an assessment report prepared by an expert, acceptable to the lender, indicating that the radon concentrations in the applicable unit are at an acceptable level. |
| ● | With respect to the Courtyard Appleton Mortgage Loan (1.1%), the related ESA identifies as a controlled REC for the Mortgaged Property impacts to soils and groundwater associated with historical industrial operations conducted on a larger 16-acre parcel of which the Mortgaged Property is part. Impacts at the larger parcel ultimately were separated into two release areas – the M-I LLC site and the Banta Court property. Investigation and remediation activities were conducted across the entire 16-acre site, including the Mortgaged Property, from 1998 through 2008. In 2009, both the M-I LLC site and the Banta Court property release areas received closure with continued monitoring obligations from the governing agency. The Banta Court property release matter was then reopened in September 2013 in association with redevelopment activities proposed for areas that did not include the Mortgaged Property, but that are on-going. The party responsible for the on-going remedial and redevelopment activities is identified by the Wisconsin Department of Natural Resources as RiverHealth LLC/Tanesay Development, an |
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| affiliate of the borrower under the Courtyard Appleton Mortgage Loan. However, given that the on-going remedial and redevelopment activities are under the oversight of the governing authority, that the Mortgaged Property is serviced by public water and sewer systems, and that the Mortgaged Property is mostly covered with relatively impermeable surfaces, the ESA consultant determined that no further action or investigation was necessary in relation to this matter. |
| ● | With respect to the Bedrock Portfolio Mortgage Loan (9.3%), with respect to The Assembly individual Mortgaged Property (0.3%), according to the related ESA, Baseline Environmental Assessments (“BEAs”) conducted at the Mortgaged Property in 2000, 2003, 2008, and 2015, identified impacts associated with heavy metals and volatile organic compounds in soil. The ESA concluded that the impacts identified and summarized in the November 2015 BEA, including a potential vapor encroachment condition at the Mortgaged Property’s mixed-use building, represent a continued REC to the Mortgaged Property. The ESA recommended a sub-slab vapor investigation to determine the presence of a receptor pathway into the mixed-use building. In connection with the foregoing, the borrower was required at loan origination to reserve $250,000. |
| ● | With respect to the 1340 Lafayette Mortgage Loan (1.8%), according to the related ESA, the Mortgaged Property was previously used as a filling station and auto repair site from the 1950s through the early 2000s, then included a bus repair building from 2007 to 2011, before being redeveloped into a parking lot. Prior to the redevelopment of the Mortgaged Property into an open-air parking lot in 2020, the New York City Department of Environmental Remediation (“NYCOER”) imposed an “E-Designation,” which requires the Mortgaged Property to be investigated with respect to air, noise or hazardous materials and to have any impacts addressed before an owner can obtain a building permit for the property’s redevelopment, to the Mortgaged Property, and the related subsurface investigations and remedial actions were performed. The remedial actions were completed during the redevelopment, and the Mortgaged Property obtained a Notice of Satisfaction by the NYCOER in November 2021, with the ongoing institutional controls including prohibition of the following: (a) vegetable gardening and farming; (b) use of groundwater without treatment rendering it safe for the intended use; (c) disturbance of residual contaminated material unless it is conducted in accordance with a soil/material management plan; and (d) higher level of land usage without NYCOER’s approval. In addition, the E-Designation remains with the Mortgaged Property. Based on the regulatory closure and current improvements, the ESA concluded that the foregoing conditions and requirements represent a controlled REC. |
| ● | With respect to the Shearer’s Industrial Portfolio Mortgage Loan (3.3%), the related ESAs identified certain recognized environmental conditions at the related Mortgaged Properties including (i) a REC at the 3636 Medallion Avenue Mortgaged Property (0.3%) in connection with soil and groundwater impacts including, among other things, polynuclear aromatic hydrocarbons (PAHs) and metals, from prior manufacturing operations at such Mortgaged Property, (ii) four RECs at the 3000 East Mount Pleasant Street Mortgaged Property (0.5%) in connection with (a) potential releases from a former bulk oil underground storage tank associated with a gas station previously operated at such Mortgaged Property based on the lack of sampling data, (b) soil and groundwater impacts including, among other things, arsenic, from a septic system associated with a radiator repair shop previously operated at such Mortgaged Property, (c) potential soil and ground water impacts from certain former underground storage tanks associated with prior manufacturing operations at such Mortgaged Property based on the lack of sampling data, and (d) potential soil and groundwater impacts from prior operations at adjacent properties including, among other things, a foundry and an auto repair shop and gas station, and (iii) a REC at the 3200 Northern Cross Boulevard Mortgaged Property (0.3%) in connection with potential soil and groundwater impacts from possible oil releases in the vicinity of transformers located at such Mortgaged Property based on the lack of sampling data. In addition, the related ESAs identified certain controlled RECs at certain of the Mortgaged Properties for which regulatory closure has been granted subject to compliance with certain use restrictions or engineering controls. At origination, the borrower obtained an environmental insurance policy issued by the Great |
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| American E & S Insurance Company that names the lender as an additional insured and has a policy limit of $5,000,000 per incident and $10,000,000 in the aggregate, a deductible of $100,000 and a term expiring in February 2032 with respect to the borrower and February 2035 with respect to the lender. |
For several of the properties, the related ESAs noted that onsite underground storage tanks (“USTs”) or leaking USTs previously had been removed or closed in place or other types of potential or actual spills or releases may have occurred, and based on criteria such as past investigations, cleanups or other response actions, quantities or types of hazardous materials involved, absence of significant risk, tank test results or other records, and/or other circumstances including regulatory closure, the ESAs did not recommend any further investigation or other action at the current time. In some such cases even where regulatory closure was documented for past incidents the ESAs reported that requests to governmental agencies for any related files are pending; however, those ESAs concluded that nevertheless such incidents were not likely to be significant at the present time.
Redevelopment, Renovation and Expansion
Certain of the Mortgaged Properties are properties which are currently undergoing or are expected to undergo redevelopment, renovation or expansion, including with respect to hospitality properties, executing property improvement plans (“PIPs”). In certain cases, such PIPs may be required by the franchisor to maintain franchise affiliation, as described in “—Mortgage Pool Characteristics—Property Types—Hospitality Properties” above. For example, with respect to a Mortgaged Property that is currently undergoing or is expected to undergo material redevelopment, renovation or expansion and is a Mortgaged Property that (i) secures a Mortgage Loan that is one of the top 20 Mortgage Loans or (ii) where the related costs are anticipated to be more than 10% of the Cut-off Date Balance of the related Mortgage Loan:
| ● | With respect to the Shoreline Square Mortgage Loan (6.1%), the largest tenant, GSA US Customs, representing approximately 29.8% of the net rentable area, leases its premises subject to two separate leases. The first lease expires August 9, 2022. The second lease will commence upon acceptance of the demised premises by GSA US Customs following completion of certain tenant improvements required by such tenant’s lease in the amount of $4,292,145.53, which tenant improvements are required to be completed by September 28, 2022. At origination, approximately $7,144,299.00 was reserved for the cost of performing such tenant improvements. The expiration date of the GSA US Customs tenant on Annex A-1 hereto is based on the second lease. There can be no assurance that the tenant will accept its improvements or that the second lease will be effective. |
| ● | With respect to the Millennia Portfolio Mortgage Loan (4.4%), at origination $531,675 was deposited into a reserve for immediate repairs, including roof replacement at the Summit Ridge Property (2.1%) and renovation of 14 down units at the Lexington Village Property (1.3%), as well as sidewalk, flooring and seal coat repairs at various properties, installation of smoke detectors at the Lexington Village Property and addition or reconfiguration of ADA accessible parking spaces at various properties. |
| ● | With respect to the Shearer’s Industrial Portfolio Mortgage Loan (3.3%), the sole tenant at each of the related Mortgaged Properties, Shearer’s Foods LLC, is expected to perform an approximately 76,391 square foot expansion of the improvements at the 821 Route 97 Mortgaged Property (the “Shearer’s Expansion”). Under the related lease, the borrower is required to provide a tenant improvement allowance in the amount of $12,243,079 to Shearer’s Foods LLC to reimburse Shearer’s Foods LLC for the costs and expenses it incurs in performing the Shearer’s Expansion. It is anticipated that Shearer’s Foods LLC will complete the expansion in August 2022. At origination, the borrower deposited $12,243,079 with the lender in connection with such tenant improvement allowance obligations. |
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| ● | With respect to the Novo Nordisk HQ Mortgaged Property (2.4%), the sole tenant at the Mortgaged Property, Novo Nordisk, currently leases approximately 77.0% of the net rentable square footage at the Mortgaged Property; however, it has an option to lease the remaining net rentable square footage in whole or part exercisable during the term of the related lease, which expires April 30, 2031. At origination, approximately $14,146,846 was reserved for tenant improvement and leasing commission expenses that may be incurred in connection with the exercise of such expansion option. In addition, when the related borrower purchased the Mortgaged Property in 2016, the property seller funded an escrow for the benefit of the borrower for certain tenant improvement and leasing commission obligations due to the sole tenant. At origination, the lender took an assignment of such escrow in lieu of requiring a reserve for such obligations under the Mortgage Loan documents. Such arrangement may provide less security and fewer rights to the lender than a direct reserve fund under the Mortgage Loan documents. |
| ● | With respect to the Townsgate Office Mortgage Loan (1.7%), in connection with loan origination the borrower reserved the costs allocated to planned elevator modernization ($370,000) and roof replacement ($195,000), for a total of $565,000, which are required to be completed no later than the date that is 12 months prior to the maturity date of the related Mortgage Loan. |
Certain risks related to redevelopment, renovation and expansion at a Mortgaged Property are described in “Risk Factors—Risks Relating to the Mortgage Loans—Risks Related to Redevelopment, Expansion and Renovation at Mortgaged Properties”. In addition, we cannot assure you that the redevelopments, renovations and/or expansions described above will be completed as expected or at all.
Assessment of Property Value and Condition
In connection with the origination or acquisition of each Mortgage Loan or otherwise in connection with this offering, an appraisal was conducted in respect of the related Mortgaged Property by an independent appraiser that was state certified and/or a member of the Appraisal Institute or an update of an existing appraisal was obtained. In each case, the appraisal complied, or the appraiser certified that it complied, with the real estate appraisal regulations issued jointly by the federal bank regulatory agencies under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended. In general, those appraisals represent the analysis and opinion of the person performing the appraisal and are not guarantees of, and may not be indicative of, present or future value. We cannot assure you that another person would not have arrived at a different valuation, even if such person used the same general approach to and same method of valuing the property or that different valuations would not have been reached separately by the mortgage loan sellers based on their internal review of such appraisals. The appraisals obtained as described above sought to establish the amount a typically motivated buyer would pay a typically motivated seller. Such amount could be significantly higher than the amount obtained from the sale of a Mortgaged Property under a distress or liquidation sale.
In addition, in general, a licensed engineer, architect or consultant inspected the related Mortgaged Property, in connection with the origination or acquisition of each of the Mortgage Loans or otherwise in connection with this offering, to assess the condition of the structure, exterior walls, roofing, interior structure and mechanical and electrical systems. Engineering reports by licensed engineers, architects or consultants generally were prepared for the Mortgaged Properties in connection with the origination of the related Mortgage Loan or in connection with this offering. The engineering report prepared for the STK Chicago Mortgage Loan (0.8%) is approximately 27 months old as of the Cut-off Date, and no other engineering report is more than 7 months old as of the Cut-off Date. In certain cases where material deficiencies were noted in such reports, the related borrower was required to establish reserves for replacement or repair or remediate the deficiency.
In addition, in connection with the origination of each Mortgage Loan included in the issuing entity, the related mortgage loan seller or other originator generally examined whether the use and occupancy of the related real property collateral was in material compliance with zoning, land-use, building rules, regulations and orders then applicable to that property. In addition, certain Mortgaged Properties may be legal non-conforming uses that may be restricted after certain events, such as casualties, at the
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Mortgaged Properties. See “Transaction Parties—The Sponsors and Mortgage Loan Sellers—German American Capital Corporation—DB Originators’ Underwriting Guidelines and Processes”, “—Citi Real Estate Funding Inc.—CREFI’s Underwriting Guidelines and Processes”, “—Goldman Sachs Mortgage Company—Goldman Originator’s Underwriting Guidelines and Processes” and “—JPMorgan Chase Bank, National Association—JPMCB’s Underwriting Guidelines and Processes”.
See “Risk Factors—Risks Relating to the Mortgage Loans—Risks Related to Zoning Non-Compliance and Use Restrictions” and see representation and warranty number 24 on Annex D-1, representation and warranty number 26 on Annex E-1, representation and warranty number 24 on Annex F-1, and the identified exceptions to those representations and warranties in Annex D-2, Annex D-3, Annex E-2 or Annex F-2, as applicable, for additional information.
Litigation and Other Considerations
There may be material pending or threatened legal proceedings against, or other past or present material criminal or material adverse regulatory circumstances experienced by, the borrowers, their sponsors and managers of the Mortgaged Properties and their respective affiliates. In addition, the Mortgaged Property may be subject to ongoing litigation or condemnation proceedings. For example:
| ● | With respect to the Millennia Portfolio Mortgage Loan (4.4%), with respect to the related property manager, which is an affiliate of the borrower sponsor, or its affiliates, there were approximately 124 prior and active litigation matters disclosed in search reports obtained by the lender, or separately disclosed by the property manager, as well as adverse media articles, involving claims of personal injury, negligence, nonpayment of vendor invoices, discrimination, constructive eviction, improper maintenance/unsafe and unhealthy living conditions (including mold, sewage and rat infestation), and violations of Department of Housing and Urban Development (“HUD”) regulations. Such property manager is a manager of numerous affordable housing properties that receive HUD or other government funding. |
| ● | In addition, with respect to the Millennia Portfolio Mortgage Loan (4.4%), the borrower that owns the Lexington Village Mortgaged Property (1.3%), is a defendant in a lawsuit by a tenant alleging improper repairs to furnishings. |
| ● | With respect to the STK Chicago Mortgage Loan (0.8%), the borrower sponsor, Fred S. Latsko, is currently the plaintiff in an ongoing litigation with the Museum of Broadcast (“MBC”) and Fern Hill regarding the conveyance of air rights during the sale of condominium units from MBC to such borrower sponsor and Fern Hill. Deutsche Bank, an affiliate of the related lender, has been named as a defendant in such lawsuit solely as a result of the court requiring plaintiff to join various parties, including Deutsche Bank, as necessary parties to the action. No relief is being sought against Deutsche Bank and the related borrower is required to reimburse the related lender for any out of pocket expenses relating to such litigation. On August 17, 2021, an order was approved by the court which relieved Deutsche Bank of the need to participate in the litigation due to Deutsche Bank, on behalf of itself and its successors and assigns, agreeing to be bound by any rulings the court makes in this action. |
See “Risk Factors—Risks Relating to the Mortgage Loans—Litigation Regarding the Mortgaged Properties or Borrowers May Impair Your Distributions”.
Loan Purpose; Default History, Bankruptcy Issues and Other Proceedings
Loan Purpose
Twenty-three (23) of the Mortgage Loans (69.6%) were, in whole or in part, originated in connection with the borrower’s refinancing of a previous mortgage loan or credit facility secured by the related Mortgaged Property.
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Eleven (11) of the Mortgage Loans (25.6%) were, in whole or in part, originated in connection with the borrower’s acquisition of the related Mortgaged Property.
Three (3) of the Mortgage Loans (4.8%) were, in whole or in part, originated in connection with the borrower’s recapitalization of the related Mortgaged Property.
For additional information regarding the status of the Mortgage Loans since the date of origination, see “—COVID-19 Considerations”.
Default History, Bankruptcy Issues and Other Proceedings
None of the Mortgage Loans (i) were refinancings in whole or in part of a prior loan secured by, or a mezzanine loan secured by interests in the owner of, the related Mortgaged Property, which prior loan was in default at the time of refinancing and/or otherwise involved a discounted pay-off, maturity extension, short sale or other restructuring or (ii) provided acquisition financing for the related borrower’s purchase of the related Mortgaged Property at a foreclosure sale or after becoming REO Property, as described below. However, the STK Chicago Mortgage Loan (0.8%) was modified to permit the borrower to use funds in a rollover reserve to pay debt service after the sole tenant, a restaurant, defaulted on rent payments during the COVID-19 pandemic. See “—COVID-19 Considerations.”
In addition, with respect to certain of the Mortgage Loans, (a) related borrowers, borrower sponsors and/or key principals (or affiliates thereof) have previously sponsored, been a key principal with respect to, or been a payment or non-recourse carveout guarantor on mortgage loans secured by, real estate projects (including in some such cases, the particular Mortgaged Property or Properties securing its related Mortgage Loan) that became the subject of foreclosure proceedings or a deed-in-lieu of foreclosure or bankruptcy proceedings or directly or indirectly secured a real estate loan or a real estate related mezzanine loan that was the subject of a discounted payoff or (b) a Mortgaged Property was acquired by the related borrower or an affiliate thereof through foreclosure or a deed-in-lieu of foreclosure, as part of an REO transaction, at a foreclosure sale or out of receivership.
For example, within approximately the last 10 years, with respect to the 20 largest Mortgage Loans:
| ● | With respect to the Shoreline Square Mortgage Loan (6.1%), one of the borrower sponsors and nonrecourse carveout guarantors, Ezak Assa, is subject to an ongoing adversary proceeding originally filed in 2011 related to a bankruptcy filing of an entity in which Mr. Assa is a limited partner. Mr. Assa is a limited partner of Waterscape Resort LLC, which entity served as the sponsor of a mortgage loan known as Cassa NY Condominium. The related collateral for the mortgage loan was the subject of a foreclosure proceeding filed in 2011. The mortgage loan was refinanced and paid in full and the foreclosure proceeding was settled. Waterscape Resort LLC declared bankruptcy in 2011 with a paid in full plan. |
| ● | With respect to the Millennia Portfolio Mortgage Loan (4.4%), the borrower sponsor is also the sponsor of a securitized commercial mortgage loan secured by a mixed use (hotel and office) property which is in special servicing. Such mortgage loan entered special servicing to enable the property owner to obtain consent to various modifications relating to the COVID-19 pandemic, including obtaining Paycheck Protection Program loans, deferring reserve deposits for hotel furniture, fixtures and equipment, using reserve funds for hotel operations and changing the hotel manager. |
| ● | In addition, with respect to the Millennia Portfolio Mortgage Loan (4.4%), in connection with its acquisition of the Lexington Village Mortgaged Property (1.3%), the borrower sponsor negotiated the partial forgiveness of subordinate debt that had been placed on the Mortgaged Property by the prior owner of the Mortgaged Property. |
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| ● | With respect to the 285 & 355 Riverside Ave Mortgage Loan (3.1%), the Mortgaged Property previously served as collateral for a mortgage loan that was previously securitized in LBUBS 2005-C3. The prior mortgage loan was transferred to the special servicer in early 2014 due to tenants vacating and the prior borrower defaulted on the prior mortgage loan in mid-2014. The seller of the Mortgaged Properties acquired the defaulted note in 2014. |
| ● | With respect to the 1340 Lafayette Mortgage Loan (1.8%), in 2016, one of the Mortgage Loan’s non-recourse carveout guarantors, David M. Johnson, inherited an ownership interest in a property unrelated to the Mortgaged Property (the “Unrelated Property”) which had gone into default under a mortgage loan after the passing of the previous owner. In 2018, an earlier granted judgment for foreclosure with respect to the Unrelated Property was vacated, and the related litigation was ultimately dismissed after the mortgage loan for the Unrelated Property was paid off in full. |
With respect to certain of the Mortgage Loans, related borrowers, sponsors and/or key principals (or affiliates thereof) may previously have been the subject of personal bankruptcy proceedings, or a related Mortgaged Property has previously been involved in a borrower, principal or tenant bankruptcy.
We cannot assure you that there are no other bankruptcy proceedings, foreclosure proceedings, deed-in-lieu of foreclosure transactions and/or mortgage loan workout matters that involved one or more Mortgage Loans or Mortgaged Properties, and/or a tenant, guarantor, borrower, borrower sponsor or other party to a Mortgage Loan.
Certain risks relating to bankruptcy proceedings are described in “Risk Factors—Risks Relating to the Mortgage Loans—A Bankruptcy Proceeding May Result in Losses and Delays in Realizing on the Mortgage Loans”, “—Litigation Regarding the Mortgaged Properties or Borrowers May Impair Your Distributions” and “Certain Legal Aspects of Mortgage Loans—Bankruptcy Laws”.
Tenant Issues
Tenant Concentrations
The Mortgaged Properties have tenant concentrations as set forth below:
| ● | Forty-seven (47) of the Mortgaged Properties (16.5%) are leased to a single tenant. |
| ● | Eleven (11) of the Mortgaged Properties (17.3%) are each leased to a tenant that makes up 50% or more (but less than 100%) of the rentable square footage. |
See “—Lease Expirations and Terminations” below, “Risk Factors—Risks Relating to the Mortgage Loans—Risks of Commercial, Multifamily and Manufactured Housing Lending Generally”, “—Performance of the Mortgage Loans Will Be Highly Dependent on the Performance of Tenants and Tenant Leases—A Tenant Concentration May Result in Increased Losses” and “—Concentrations Based on Property Type, Geography, Related Borrowers and Other Factors May Disproportionately Increase Losses”.
Lease Expirations and Terminations
Expirations. Certain of the Mortgaged Properties are subject to tenant leases that expire before the maturity date of the related Mortgage Loan. For tenant lease expiration information in the form of a lease rollover chart relating to each of the top 15 Mortgage Loans, see the related summaries attached as Annex A-3. In addition, see Annex A-1 for tenant lease expiration dates for the five largest tenants (based on net rentable area leased) at each retail, office, mixed use and industrial Mortgaged Property. Even if none of the top five tenants at a particular Mortgaged Property as identified on Annex A-1 have leases that expire before, or shortly after, the maturity of the related Mortgage Loan, there may still be a significant percentage of leases at a particular Mortgaged Property that expire in a single calendar year, a rolling 12-month period or prior to, or shortly after, the maturity of a Mortgage Loan. Furthermore, some of the Mortgaged Properties have significant leases or a significant concentration of leases that expire
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before, or shortly after, the maturity of the related Mortgage Loan. Identified below are certain material lease expirations or concentrations of lease expirations with respect to the Mortgaged Properties:
| ● | In certain cases, the lease of a single tenant, major tenant or anchor tenant at a multi-tenanted Mortgaged Property expires prior to the maturity date (or, in the case of any ARD Loan, the Anticipated Repayment Date) of the related Mortgage Loan. |
| ● | With respect to the Mortgage Loans secured, in whole or in part, by the Mortgaged Properties identified in the following table, such Mortgaged Properties are occupied by a single tenant under a lease which expires prior to, or within 12 months after, the maturity date (or, in the case of any ARD Loan, the Anticipated Repayment Date) of the related Mortgage Loan. |
Mortgaged Property Name |
% of the Initial Pool Balance by Allocated Loan Amount |
Lease Expiration Date |
Maturity Date/ARD |
| InCommercial Net Lease Portfolio #5 – Walgreens, Meridian, ID | 0.3% | 12/31/2030 | 4/6/2032 |
| InCommercial Net Lease Portfolio #5 – Tractor Supply Co, Oconto, WI | 0.1% | 9/30/2032 | 4/6/2032 |
| InCommercial Net Lease Portfolio #5 – Dollar General, Ghent, WV | 0.1% | 4/30/2032 | 4/6/2032 |
| InCommercial Net Lease Portfolio #5 – Tractor Supply Co, Kewaunee, WI | 0.1% | 11/30/2032 | 4/6/2032 |
| InCommercial Net Lease Portfolio #5 – Family Dollar, Linden, AL | 0.1% | 8/31/2031 | 4/6/2032 |
| InCommercial Net Lease Portfolio #5 – Dollar General, Lenore, WV | 0.1% | 9/30/2031 | 4/6/2032 |
| InCommercial Net Lease Portfolio #5 – Fresenius, Rayville, LA | 0.1% | 5/31/2032 | 4/6/2032 |
| InCommercial Net Lease Portfolio #5 – Family Dollar, Franklinton, LA | 0.1% | 12/31/2031 | 4/6/2032 |
| InCommercial Net Lease Portfolio #5 – Dollar General, Burlington, WV | 0.1% | 9/30/2031 | 4/6/2032 |
| InCommercial Net Lease Portfolio #5 – Dollar General, Hinton, WV | 0.1% | 10/31/2031 | 4/6/2032 |
| InCommercial Net Lease Portfolio #5 – Dollar General, Lerona, WV | 0.1% | 2/29/2032 | 4/6/2032 |
| InCommercial Net Lease Portfolio #5 – Dollar General, Rushford, NY | 0.1% | 11/30/2032 | 4/6/2032 |
| InCommercial Net Lease Portfolio #5 – Dollar General, Dixie, WV | 0.1% | 5/31/2032 | 4/6/2032 |
| InCommercial Net Lease Portfolio #5 – Dollar General, Walker, WV | 0.1% | 2/29/2032 | 4/6/2032 |
| InCommercial Net Lease Portfolio #5 – Dollar General, Bay Minette, AL | 0.1% | 7/31/2032 | 4/6/2032 |
| InCommercial Net Lease Portfolio #5 – Dollar General, Fruithurst, AL | 0.1% | 10/31/2032 | 4/6/2032 |
| InCommercial Net Lease Portfolio #5 – Dollar General, Billingsley, AL | 0.1% | 12/31/2032 | 4/6/2032 |
| InCommercial Net Lease Portfolio #5 – Dollar General, South Dayton, NY | 0.1% | 11/30/2032 | 4/6/2032 |
| InCommercial Net Lease Portfolio #5 – Dollar General, Gaylesville, AL | 0.1% | 11/30/2032 | 4/6/2032 |
| InCommercial Net Lease Portfolio #5 – Dollar General, Knox City, TX | 0.1% | 4/30/2032 | 4/6/2032 |
| 1340 Lafayette | 1.8% | 6/30/2032 | 3/1/2032 |
| Tharp Portfolio – FedEx | 0.2% | 5/31/2025 | 3/6/2032 |
| Tharp Portfolio – Greenwood Med Spa | 0.1% | 9/30/2026 | 3/6/2032 |
| Glen Forest Office Portfolio – Willard | 0.0% | 11/30/2025 | 12/6/2026 |
| STK Chicago | 0.8% | 9/30/2025 | 3/6/2030 |
| 905 Medical Park Drive | 0.6% | 8/31/2028 | 3/6/2032 |
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Mortgaged Property Name |
% of the Initial Pool Balance by Allocated Loan Amount |
Lease Expiration Date |
Maturity Date/ARD |
| VA Dialysis Center - Philadelphia | 0.5% | 8/31/2031 | 3/6/2032 |
| ● | With respect to the Mortgaged Properties shown in the following table, one or more leases representing 50% or greater of the net rentable square footage of the related Mortgaged Property (excluding Mortgaged Properties leased to a single tenant and set forth in the bullet above) expire in a single calendar year prior to, or within twelve months after, the maturity (or, in the case of any ARD Loan, the anticipated repayment date) of the related Mortgage Loan. There may be other Mortgaged Properties as to which leases representing at least 50% or greater of the net rentable square footage of the related Mortgaged Property expire over several calendar years prior to maturity (or, in the case of any ARD Loan, the Anticipated Repayment Date) of the related Mortgage Loan. |
Mortgaged Property Name |
% of the Initial Pool Balance by Allocated Loan Amount |
% of NRSF Expiring |
Lease Expiration Year |
Maturity Date/ARD |
| Romaine & Orange Square | 7.4% | 58.6% | 2028 | 4/6/2032 |
| Gem Tower | 3.1% | 76.1% | 2024 | 12/6/2031 |
| Townsgate Office | 1.7% | 51.3% | 2024 | 4/6/2032 |
| Santa Barbara Tech Center | 1.5% | 50.1% | 2025 | 3/6/2032 |
| Bedrock Portfolio – The Qube | 1.4% | 77.9% | 2028 | 1/1/2029 |
| 65 Triangle Industrial | 0.5% | 63.0% | 2027 | 3/6/2032 |
| Tharp Portfolio – Jiffy and Dollar | 0.4% | 61.4% | 2031 | 3/6/2032 |
| Glen Forest Office Portfolio – Capstone | 0.1% | 54.1% | 2025 | 12/6/2026 |
| ● | In addition, with respect to certain other Mortgaged Properties, there are leases that represent in the aggregate a material portion (but less than 50%) of the net rentable square footage of the related Mortgaged Property that expire in a single calendar year prior to, or shortly after, the maturity date (or, in the case of any ARD Loan, the Anticipated Repayment Date) of the related Mortgage Loan. |
See Annex A-1 for tenant lease expiration dates for the five largest tenants (based on net rentable area leased) at each retail, office, mixed use and industrial Mortgaged Property.
Furthermore, tenants under certain leases included in the Underwritten Net Cash Flow, Underwritten Net Operating Income and/or Occupancy may be in financial distress, may have filed for bankruptcy or may be part of a chain that is in financial distress as a whole, or the tenant’s parent company may have implemented or expressed an intent to implement a plan to consolidate or reorganize its operations, close a number of stores in the chain, reduce exposure, relocate stores or otherwise reorganize its business to cut costs. In addition, certain shadow anchor tenants may be in financial distress or may be experiencing adverse business conditions, which could have a negative effect on the operations of certain tenants at the Mortgaged Properties. Furthermore, commercial tenants having multiple leases may experience adverse business conditions that result in their deciding to close under-performing stores. For example:
We cannot assure you that any other tenant or anchor tenant at a Mortgaged Property will not close stores, including stores at or near the Mortgaged Property.
Terminations. In addition to termination options tied to certain triggers as described in “Risk Factors—Risks Relating to the Mortgage Loans—Performance of the Mortgage Loans Will Be Highly Dependent on the Performance of Tenants and Tenant Leases—Early Lease Termination Options May Reduce Cash Flow” that are common with respect to retail properties, certain tenant leases permit the related tenant to unilaterally terminate its lease (with respect to all or a portion of its leased property). For example, among the 5 largest tenants by net rentable square footage at the Mortgaged Properties securing the largest 15 Mortgage Loans by aggregate Cut-off Date Balance, or those Mortgaged Properties with a tenant that
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leases at least 20% of the net rentable square footage at the related Mortgaged Property (in each case excluding government tenants, which are described further below):
| ● | With respect to the 601 Lexington Avenue Mortgage Loan (9.3%), Kirkland & Ellis, the largest tenant at the related Mortgaged Property, representing approximately 36.8% of the net rentable square footage, has the right to terminate its lease only with respect to (i) the 32nd floor effective June 30, 2027, by (a) providing notice by March 31, 2026 and (b) paying unamortized leasing costs and (ii) either the highest or lowest odd-numbered floor other than the 51st floor as of February 28, 2034. |
| ● | With respect to the Bedrock Portfolio Mortgage Loan (9.3%), the fifth largest tenant at the related Mortgaged Property by net rentable area, Coyote Logistics, representing approximately 2.2% of the net rentable area, has a one-time right to terminate its lease, effective as of August 31, 2025, with at least nine (9) months’ prior written notice and the payment of a termination fee in an amount equal to the sum of (i) the then unamortized brokerage commissions, tenant improvement allowance, the abatement of base rental and attorneys’ fees incurred by landlord in negotiating the lease, amortized on a straight-line basis over the initial term of the lease with interest on the unamortized balance at a rate of 6% per annum, plus (ii) an amount equal to three (3) full calendar months’ rent at the then existing rates. |
| ● | With respect to the One Wilshire Mortgage Loan (9.3%), CenturyLink Communications, LLC, the fourth largest tenant, leasing approximately 8.5% of the net rentable square footage at the Mortgaged Property, has a one-time right to reduce its space by 7,445 square feet effective on June 30, 2023 with notice on or prior to September 30, 2022. |
| ● | With respect to InCommercial Net Lease Portfolio #5 Mortgage Loan (3.8%), the sole tenant at the Walgreens, Meridian, ID Mortgaged Property (0.3%), Walgreen Co., has the right to terminate its lease effective on December 31, 2030 upon 6 months’ prior written notice to the related landlord. |
| ● | With respect to the 285 & 355 Riverside Ave Mortgage Loan (3.1%), the third largest tenant at the 355 Riverside Ave Mortgaged Property (1.2%), Bluff Point Associates, representing approximately 13.7% of the net rentable area of the Mortgaged Property, has the one-time option to terminate its lease effective October 1, 2024 upon between 270 and 180 days’ notice to the related landlord and payment of a termination fee. The fourth largest tenant at the 355 Riverside Ave Mortgaged Property, IXM Trading, LLC, representing approximately 12.9% of the net rentable area of the Mortgaged Property, has the one-time option to terminate its lease effective May 31, 2024 upon 365 days’ notice to the related landlord and payment of a termination fee. The fifth largest tenant at the 355 Riverside Ave Mortgaged Property, BHMS Investments LP, representing approximately 7.0% of the net rentable area of the Mortgaged Property, has the one-time option to terminate its lease effective May 1, 2024 upon between 365 and 270 days’ notice to the related landlord and payment of a termination fee. The fifth largest tenant at the 285 Riverside Ave Mortgaged Property, RBC Capital Markets, LLC, representing approximately 13.0% of the net rentable area of the Mortgaged Property, has the one-time option to terminate its lease effective May 12, 2029 upon 365 days’ notice to the related landlord and payment of a termination fee. |
| ● | With respect to the Tharp Portfolio Mortgage Loan (1.5%), (i) the largest tenant at the Greensburg Retail Center Mortgaged Property (0.3%), Athletico Physical Therapy, leasing approximately 26.1% of the net rentable square footage at such Mortgaged Property, has the right to terminate its lease effective on September 30, 2026 with 12 months’ prior written notice provided to the borrower between June 2025 and September 2025, and (ii) the second largest tenant at the Greensburg Retail Center Mortgaged Property, Starbucks Coffee, leasing approximately 25.3% of the net rentable square footage at such Mortgaged Property, has the right to terminate its lease effective on or after September 30, 2025 with 120 days’ prior written notice. |
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| ● | With respect to the Glen Forest Office Portfolio Mortgage Loan (1.0%), the largest tenant at the Meridian Mortgaged Property (0.1%), The London Company, representing approximately 35.5% of the net rentable area at such Mortgaged Property, may terminate its lease on November 30, 2029 upon nine (9) months’ prior notice to the related landlord. The largest tenant at the Bayberry Mortgaged Property (0.1%), Virginia Estate & Trust Law, representing approximately 23.5% of the net rentable area at such Mortgaged Property, has the one-time right to terminate its lease effective April 30, 2026 upon notice delivered by July 31, 2025 and payment of a termination fee. |
| ● | With respect to the Lee’s Hill II Mortgage Loan (1.0%), the largest tenant, Providence Service, representing approximately 22.9% of the net rentable area, has the right to terminate its lease effective December 31, 2024 upon 365 days’ prior notice to the related landlord and payment of a termination fee. |
Certain of the tenant leases for the Mortgaged Properties may permit affected tenants to terminate their leases and/or abate or reduce rent if another tenant at the Mortgaged Property or a tenant at an adjacent or nearby property terminates its lease or goes dark, or if a specified percentage of the Mortgaged Property is unoccupied. For example, among the 5 largest tenants by net rentable square footage at the Mortgaged Properties securing the largest 15 Mortgage Loans by aggregate Cut-off Date Balance, or those Mortgaged Properties with a tenant that leases at least 20% of the net rentable square footage at the related Mortgaged Property (in each case excluding government tenants, which are described further below):
| ● | With respect to the Redmond Community Center Mortgage Loan (3.8%), the fourth largest tenant at the related Mortgaged Property, PetCo Animal Supplies, Inc. (“PetCo”), representing approximately 9.5% of the net rentable area of the Mortgaged Property, has the right to pay reduced rent (equal to the lesser of 3% of the tenant’s gross sales and 50% of fixed rent, plus in either case all other charges) upon a Reduced Occupancy Period that continues for a period of three months, and if the Reduced Occupancy Period continues for a total of 12 months, has the option for the next 60 days following the end of the 12 months to terminate the lease upon 30 days’ written notice to the landlord. A “Reduced Occupancy Period” means a period commencing upon the occurrence of any of the following events and continuing until such time as the non-operating major tenant reopens, or a store or stores of similar size and quality open, for business, or until the applicable percentage of the applicable gross leasable area is leased, open and operating: (i) Bed, Bath & Beyond ceases to operate its store at the shopping center (defined to include the portion of the Redmond Town Center which is included in the collateral for the Mortgage Loan), (ii) less than 50% of the gross leasable area of the shopping center excluding the tenant’s premises and Bed, Bath & Beyond are leased, open and operating or (iii) less than 50% of the gross leasable retail area of the project (the larger Redmond Town Center of which the shopping center is a portion), as developed from time to time, are leased, open and operating. A Reduced Occupancy Period has been in effect since May 16, 2021 due to Bed, Bath & Beyond having vacated the shopping center, with the 60-day period during which PetCo can terminate its lease commencing May 16, 2022. However, PetCo has signed an amendment to its lease pursuant to which it has agreed that the tenant H-Mart, which has leased the Bed, Bath & Beyond space, is a store of similar size and quality to Bed, Bath & Beyond, so that the Reduced Occupancy Period will end when H-Mart opens for business, and has further agreed to waive its right to terminate the lease as a result of the Reduced Occupancy Period, and has acknowledged that no other Reduced Occupancy Period is currently in effect. PetCo has also agreed to resume paying rent after May 15, 2022, in exchange for a $1.00 per square foot reduction in its annual rent through the end of its current lease term on January 31, 2024. |
| ● | With respect to the Hall Road Crossing Mortgage Loan (3.1%), the largest tenant at the related Mortgaged Property, Amazon Fresh, representing approximately 20.1% of the net rentable area of the Mortgaged Property, may, if 50% or more of the Mortgaged Property is not constructed, leased and open for business to the public by retail tenants operating to the general public: (i) abate the rent payable under its lease if such condition exists for a period of at least 180 days; or (ii) terminate its lease if such condition exists for a period of at least 12 months. The second |
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| largest tenant at the related Mortgaged Property, Bob’s Discount Furniture, representing approximately 18.2% of the net rentable area of the Mortgaged Property, may, if 40% or more of the Mortgaged Property is not occupied by bona fide retail tenants operating their stores: (i) abate the rent payable under its lease if such condition exists for a period of at least 6 months; or (ii) terminate its lease if such condition exists for a period of at least 12 months thereafter upon 60 days’ prior notice to the related landlord. The fourth largest tenant at the related Mortgaged Property, Old Navy, representing approximately 9.6% of the net rentable area of the Mortgaged Property, may, if 70% or more of the Mortgaged Property is not occupied by certain key tenants that are open for business: (i) abate the rent payable under its lease if such condition exists for a period of at least 3 months; or (ii) terminate its lease if such condition exists for a period of at least 11 months thereafter upon 30 days’ prior notice to the related landlord. There is currently a failure of the co-tenancy requirements under the Old Navy lease for which Old Navy has a rent credit in the amount of approximately $198,025.77 covering the period from November 30, 2019 through November 30, 2020, which amount will be offset against rent until recovered. |
| ● | With respect to the Prospector Plaza Mortgage Loan (2.6%), the third largest tenant, Ross Dress for Less, Inc. (“Ross”), has a co-tenancy tied to at least two (2) of three (3) stores, including a CVS store which is no longer part of the collateral and has a 2022 lease expiration, or replacement stores which satisfy certain criteria, remaining open in a specified amount of space. Because the borrower does not own the CVS pad, it will not be able to control any renewal or replacement of the CVS store. In addition, Ross has a co-tenancy tied to 65% of space at the related shopping center (excluding Ross and one of the stores that triggers the first co-tenancy) not being open and operating. If either co-tenancy is triggered, Ross has the right to pay reduced rent while such event is continuing; provided that if the co-tenancy trigger continues for a period of 12 full consecutive calendar months, Ross must elect within 30 days after the end of such 12 month period either to resume paying full rent or to terminate its lease. |
| ● | With respect to the Crossroads Village Mortgage Loan (1.4%), the second largest tenant at the mortgaged property, Old Navy, LLC, representing approximately 19.8% of the net rentable area, may pay reduced rent, go dark or terminate its respective lease if certain tenants go dark and a specified percentage of the Mortgaged Property is unoccupied or goes dark. |
In addition, certain of the tenant leases may permit a tenant to go dark at any time or, may otherwise not require certain of the tenants to continuously operate its space during the term of its lease. For example, taking into account the 5 largest tenants based on net rentable square footage at those Mortgaged Properties securing the largest 15 Mortgage Loans by aggregate Cut-off Date Balance or in cases where any Mortgaged Property is leased to a single tenant who has the option to go dark:
| ● | With respect to InCommercial Net Lease Portfolio #5 Mortgage Loan (3.8%), the sole tenant at each of the following Mortgaged Properties is not required to continuously operate its space during the term of its lease: Tractor Supply Co, Kewaunee, WI; Tractor Supply Co, Oconto, WI; Family Dollar, Linden, AL; Family Dollar, Franklinton, LA; Tractor Supply Co, Lake Charles, LA; Walgreens, Meridian, ID; Tractor Supply Co, Ogdensburg, NY; Walgreens, Mount Pleasant, SC; Dollar General, Billingsley, AL; Dollar General, Rushford, NY; Dollar General, South Dayton, NY; Dollar General, Bay Minette, AL; Dollar General, Fruithurst, AL; Dollar General, Gaylesville, AL; Dollar General, Burlington, WV; Dollar General, Dixie, WV; Dollar General, Ghent, WV; Dollar General, Hinton, WV; Dollar General, Lerona, WV; Dollar General, Lenore, WV; Dollar General, Walker, WV; and Dollar General, Knox City, TX. |
| ● | With respect to the Shearer’s Industrial Portfolio Mortgage Loan (3.3%), the sole tenant at each of the related Mortgaged Properties, Shearer’s Foods LLC, is not required to continuously operate all or any portion of its space during the term of its lease. |
| ● | With respect to Hall Road Crossing Mortgage Loan (3.1%), the largest tenant, Amazon Fresh, representing approximately 20.1% of the net rentable area of the Mortgaged Property, has the right to go dark at any time. If the tenant remains dark for more than 18 consecutive months, the |
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| landlord will have the right to terminate the lease by giving notice to tenant, such termination to have effect at least 3 months following such notice. The second largest tenant at the related Mortgaged Property, Bob’s Discount Furniture, representing approximately 18.2% of the net rentable area of the Mortgaged Property, has the right to go dark at any time; provided, however, that that if the tenant ceases to operate for a continuous period of 270 days, then the landlord has a right to terminate by providing 60 days’ notice to tenant. The third largest tenant at the related Mortgaged Property, Michaels, representing approximately 11.2% of the net rentable area of the Mortgaged Property, has the right to go dark at any time; provided, however, that that if the tenant ceases to operate for a continuous period of 120 days (the “Shutdown Period”), then the landlord has a right to terminate by providing notice to tenant on the first day following the Shutdown Period, provided that the landlord’s right to terminate the lease will expire upon the earlier of (i) 180 days following the end of the Shutdown Period, (ii) 180 days after Michaels provides the landlord with notice of Michaels’ intention to cease operation of its business in the demised premises (but in no event before the first day after the end of the Shutdown Period, (iii) the date on which Michaels enters into an assignment of its lease or a sublease covering the demised premises, or (iv) the date on which Michaels recommences business at the Mortgaged Property. The fourth largest tenant at the related Mortgaged Property, Old Navy, representing approximately 9.6% of the net rentable area of the Mortgaged Property has the right to go dark at any time; provided, however, that that if the tenant ceases to operate for a continuous period of 120 days, then the landlord has a right to terminate by providing 30 days’ notice to tenant. The fifth largest tenant at the related Mortgaged Property, Foot Locker, representing approximately 6.7% of the net rentable area of the Mortgaged Property, has the right to go dark at any time; provided, however, that if the tenant ceases to operate for a continuous period of 90 days, then the landlord has a right to terminate by providing 30 days’ notice to tenant. |
| ● | With respect to the Walgreens New Castle & Oneonta Mortgage Loan (1.0%), the sole tenant at each of the Walgreens Oneonta Mortgaged Property (0.5%) and Walgreens New Castle Mortgaged Property (0.5%), Walgreens, has the right to go dark at any time; provided, however, that if the tenant ceases to operate for a continuous period of 6 months, then the applicable landlord has a right to terminate the lease and recapture the applicable Mortgaged Property by providing 30 days’ notice to such tenant. |
| ● | With respect to the Tharp Portfolio Mortgage Loan (1.5%), certain of the related tenants including, among others (i) CSL Plasma, the sole tenant at the CSL Plasma Mortgaged Property (0.3%) and (ii) FedEx, the sole tenant at the FedEx Mortgaged Property (0.2%), do not have an obligation to continuously operate under their related leases. |
Certain Mortgaged Properties may have tenants or sub-tenants that are charitable institutions that generally rely on contributions from individuals and government grants or other subsidies to pay rent on office space and other operating expenses. For example, set forth below are certain charitable institution tenants that individually represent more than 5% of the base rent at the related Mortgaged Property and have these types of risks. In addition, one or more leases at certain Mortgaged Properties representing less than 5% of the base rent could also have these types of risks.
Mortgaged Property Name |
% of Initial Pool Balance by Allocated Loan Amount |
Tenant(s) |
% of Net Rentable Area |
% of U/W Base Rent |
| Lee’s Hill II | 1.0% | Providence Service | 22.9% | 41.4% |
Certain of the Mortgaged Properties may be leased in whole or in part by government sponsored tenants. Government sponsored tenants frequently have the right to cancel their leases at any time or after a specific time (in some cases after the delivery of notice) or for lack of appropriations or upon the loss of access to certain government programs or upon other events related to government status. For example, among the 5 largest tenants by net rentable square footage at the Mortgaged Properties securing the largest 15 Mortgage Loans by aggregate Cut-off Date Balance, or those Mortgaged
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Properties with a tenant that leases at least 20% of the net rentable square footage at the related Mortgaged Property:
| Mortgage Loan Name | % of the Initial Pool Balance by Allocated Loan Amount | Tenant Name | % of Net Rentable Area | |||||||
| Shoreline Square | 6.1 | % | GSA US Customs | 29.8 | % | |||||
| Shoreline Square | 6.1 | % | State of CA State Lands Commission(1) | 7.1 | % | |||||
| Shoreline Square | 6.1 | % | Department of Defense | 4.9 | % | |||||
| Greenbrier Towers I & II | 1.5 | % | GSA - Fleet Management Center(2) | 0.7 | % | |||||
| Santa Barbara Tech Center | 1.5 | % | Mission Support and Test Services LLC(3) | 66.8 | % | |||||
| VA Dialysis Center - Philadelphia | 0.5 | % | United States Government (dba VA Dialysis Center) | 100 | % | |||||
| (1) | State of CA State Lands Commission may terminate its lease at any time effective on or after February 28, 2023, by giving written notice to the related landlord at least 30 days prior to such termination. |
| (2) | GSA - Fleet Management Center has the right to terminate the lease at any time effective after July 17, 2029 by providing at least 120 days prior written notice to the related landlord. |
| (3) | Although not a government entity, Mission Support and Test Services (“MSTS”) is the current manager and operator of the Nevada National Security Site and its related facilities. The Nevada National Security Site (“NNSS”) is part of the Nevada-centered complex of facilities owned by the NNSA under the U.S. Department of Energy. MSTS has an ongoing termination right with not less than 360 days’ notice and no termination fee with respect to a portion of its space, representing approximately 16.7% of total net rentable area. |
With respect to the Shoreline Square Mortgage Loan (6.1%), the General Services Administration of the United States (“GSA”) leases 32.5% of the Mortgaged Property, which is occupied by the U.S. Customs and Border Protection, the United States Department of Agriculture and the Bureau of Alcohol, Tobacco, Firearms and Explosives. If the Mortgaged Property is transferred, each of the GSA leases require the United States and the transferee to enter into novation agreements; however, if the United States determines that recognizing the transferee as landlord is not in its interest, it may continue to hold the transferor liable for performance of obligations under the lease. The United States’ obligation to pay rent to the transferee would be suspended until government transfer procedures are completed, and the United States has determined that recognizing the transferee is in its interest. The foregoing provisions may delay or impede the ability of the lender to realize on the related Mortgaged Properties following a default. The borrowers are subject to certain requirements regarding management of the Mortgaged Property and the borrowers that were required by certain United States agencies.
See Annex A-1 and the footnotes related thereto for additional information on the top five tenants at the related Mortgaged Properties. See Annex A-3 for more information on material termination options relating to the largest 15 Mortgage Loans.
Other. Tenants under certain leases included in the Underwritten Net Cash Flow, Underwritten NOI and/or Occupancy may not be in physical occupancy, may not have begun paying rent or may be in negotiation or may be underwritten based on straight-line rents. For example, with respect to (i) tenants that are one of the 5 largest tenants by net rentable area at a Mortgaged Property securing one of the largest 15 Mortgage Loans by aggregate Cut-off Date Balance or (ii) tenants individually or in the aggregate representing more than 25% of the net rentable area at any Mortgaged Property:
| ● | With respect to the 601 Lexington Avenue Mortgage Loan (9.3%), the largest tenant, Kirkland & Ellis, representing approximately 36.8% of the net rentable square footage at the related Mortgaged Property, has $4,062,504 of outstanding free rent. Boston Properties Limited Partnership, a Delaware limited partnership (“BPLP”), an affiliate of the borrower sponsor, provided a payment guaranty for the outstanding free rent at closing. The third largest tenant, NYU, representing approximately 11.7% of the net rentable square footage, has commenced paying rent, but has not yet taken occupancy of its full space, which is expected by April or May 2022. We cannot assure you that NYU will take occupancy as expected or at all. In addition, Citadel, the fourth largest tenant, representing approximately 8.6% of the net rentable square |
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| footage at the related Mortgaged Property, has provided notice it intends to vacate its space at its lease expiration in August 2022. We cannot assure you that this vacated space will be relet at similar terms or at all. In addition, the Mortgage Loan was underwritten including approximately $6.75 million of straight line rents for the tenants Kirkland & Ellis, NYU and Freshfields. |
| ● | With respect to the Hall Road Crossing Mortgage Loan (3.1%), the largest tenant, Amazon Fresh, representing approximately 20.1% of the net rentable area of the Mortgaged Property, has not yet taken occupancy or commenced paying rent under such tenant’s lease. The rent commencement date will be the earlier of (i) the date on which Amazon Fresh opens for business with the public, and (ii) January 31, 2023. We cannot assure you that such tenant will take occupancy of its space and/or begin paying rent pursuant to its lease. |
| ● | With respect to the Romaine & Orange Square Mortgage Loan (7.4%), the third largest tenant, MTI Film, representing approximately 11.5% of the net rentable square footage, has partial free rent for Suites 1009 and 1012-1016 (11,935 sq. ft.) each June from 2022 through June 2026 and for Suite 1011 (2,160 sq. ft.) each June from 2022 through June 2027 except June 2023, which was reserved with the lender at origination. |
| ● | With respect to the Redmond Community Center Mortgage Loan (3.8%), the largest tenant, H-Mart, representing approximately 34.5% of the net rentable square footage at the related Mortgaged Property, is not yet in occupancy or paying rent. H-Mart is expected to open in July 2022 and has an additional five months of free rent. H-Mart is permitted to extend its opening date up to an additional 120 days if it is not permitted to open in any capacity due to regulations affecting its premises related to the COVID-19 pandemic or similar event. The second largest tenant, Overlake Medical Clinics, representing approximately 15.8% of the net rentable square footage at the related Mortgaged Property, is not yet in occupancy or paying rent with respect to an 11,069 square foot expansion suite (constituting approximately 10.1% of the net rentable square footage at the related Mortgaged Property), which is expected to open in April 2022, and has an additional two months of free rent. In addition, while the Mortgaged Property was 97.3% leased as of February 15, 2022, it is currently 51.3% occupied, due to the foregoing tenants and one other tenant not yet being in occupancy. In addition, the tenant PetCo is paying reduced rent through May 15, 2022 as a result of a co-tenancy triggered by a former anchor tenant at the Mortgaged Property vacating its space. At origination a free rent reserve in the amount of $634,763 was deposited with the lender in respect of the free rent periods of the foregoing tenants, and a reserve of $38,817 was deposited with the lender in respect of PetCo’s reduced rent. We cannot assure you that any of the tenants that are not in occupancy will take occupancy and start paying rent as expected or at all. |
See “Risk Factors—Risks Relating to the Mortgage Loans—Underwritten Net Cash Flow Could Be Based On Incorrect or Failed Assumptions”.
Other tenants at the Mortgaged Properties may sublet a portion of their space or have provided notice of their intent to sublet out a portion of their space in the future. For example, among the 5 largest tenants (based on net rentable area) at the 15 largest Mortgage Loans or in cases where 10% or more of the aggregate net rentable area at a Mortgaged Property is sublet:
| ● | With respect to the 601 Lexington Avenue Mortgage Loan (9.3%), (i) Citibank, the second largest tenant at the related Mortgaged Property, representing approximately 12.9% of the net rentable square footage, currently subleases approximately 3.6% of the net rentable square footage at the Mortgaged Property to a subtenant, and (ii) Freshfields, the fifth largest tenant at the related Mortgaged Property, representing approximately 8.3% of the net rentable square footage, currently subleases approximately 1.0% of the net rentable square footage at the Mortgaged Property to a subtenant and, as of origination, was publicly marketing the rest of its space for sublease. |
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| ● | With respect to the 1500 Volta Drive Mortgage Loan (1.1%), the sole tenant at the Mortgaged Property, Stewart and Stevenson LLC, subleases 100% of its space to Stewart and Stevenson Manufacturing Technologies LLC for a term coterminous to the prime lease, which expires on December 31, 2034. |
See Annex A-3 for more information on other tenant matters relating to the largest 15 Mortgage Loans.
Purchase Options and Rights of First Refusal
Certain of the Mortgaged Properties are subject to purchase options and rights of first refusal to purchase all or a portion of the Mortgaged Property. With respect to each of the Romaine & Orange Square (7.4%), Prospector Plaza (2.6%), InCommercial Net Lease Portfolio #5 (3.8%), Hall Road Crossing (3.1%), Walgreens New Castle & Oneonta (1.0%), 1201 Main (1.0%), 905 Medical Park Drive (0.6%) and Tharp Portfolio (1.5%) Mortgage Loans, certain tenants, franchisors, property managers, ground lessors, developers or owners’ associations at one or more of the related Mortgaged Properties or other parties have a purchase option or a right of first refusal or right of first offer or similar right, upon satisfaction of certain conditions, to purchase all or a portion of one or more of the related Mortgaged Properties.
See “Risk Factors—Risks Relating to the Mortgage Loans—Performance of the Mortgage Loans Will Be Highly Dependent on the Performance of Tenants and Tenant Leases—Leases That Are Not Subordinated to the Lien of the Mortgage or Do Not Contain Attornment Provisions May Have an Adverse Impact at Foreclosure”. In addition, please see representation and warranty number 6 in Annex D-1, representation and warranty number 8 in Annex E-1, representation and warranty number 6 in Annex F-1, and the identified exceptions to those representations and warranties in Annex D-2, Annex D-3, Annex E-2 or Annex F-2, as applicable.
Affiliated Leases
Certain of the Mortgaged Properties are leased in whole or in part by borrowers or borrower affiliates including, in certain circumstances, under an operating lease between a borrower and an affiliate of the related borrower. Set forth below are examples of Mortgaged Properties or portfolios of Mortgaged Properties at which at least 5.0% of (i) the gross income at the Mortgaged Property or portfolio of Mortgaged Properties relates to leases between the borrower and an affiliate of the borrower or (ii) the net rentable area at the Mortgaged Property or portfolio of Mortgaged Properties is leased to an affiliate of the borrower, excluding Mortgaged Properties that are leased to an affiliate of the borrower that functions as an operating lease:
| ● | With respect to the Bedrock Portfolio Mortgage Loan (9.3%), the three (3) individual Mortgaged Properties identified as The Qube, Chrysler House, and 1001 Woodward, are subject to master leases that were originally entered into for the purpose of securing historic tax credit investors. None of the historic tax credit investors remain in the ownership of the master tenants, which are now wholly owned indirectly by Detroit Real Estate Holdings Company I LLC, which directly owns each of the borrowers. Each master tenant is required to comply with single purpose entity covenants in the Mortgage Loan documents, including having independent directors. Each master tenant granted the lender a Mortgage and an Assignment of Leases and Rents on its individual property. |
| ● | With respect to the Bedrock Portfolio Mortgage Loan (9.3%), the borrower sponsor was founded and is controlled by Dan Gilbert, who also controls three (3) of the top 10 tenants at the Mortgaged Property, accounting for approximately 51% of the net rentable area and approximately 58% of the underwritten base rent at the Mortgaged Property. |
| ● | With respect to the Gem Tower Mortgage Loan (3.1%), the largest tenant at the Mortgaged Property, City’s Property Development Corp., is an affiliate of the related borrowers. |
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| ● | With respect to the 3097 E Ana St Mortgage Loan (0.6%), the sole tenant at the Mortgaged Property, International Textile Group, Inc., is an affiliate of the borrower sponsor. |
| ● | With respect to the 65 Triangle Industrial Mortgage Loan (0.5%), the second largest tenant at the Mortgaged Property, Casual Express Apparel Corp, representing approximately 37.0% of the net rentable area, is an affiliate of the borrower sponsor and nonrecourse carveout guarantor. |
Other Mortgaged Properties may have tenants that are affiliated with the related borrower but those tenants do not represent more than 5.0% of the gross income or net rentable area of the related Mortgaged Property.
We cannot assure you that any borrower affiliated tenants did not receive more favorable leasing terms than a tenant who is not a borrower affiliate.
Certain of the Mortgaged Properties may be leased in whole or in part by relevant transaction parties or their affiliates.
With respect to the 601 Lexington Avenue Mortgage Loan (9.3%), the second largest tenant, an affiliate of Citi Real Estate Funding Inc., one of the originators of such Mortgage Loan, is currently leasing approximately 216,256 square feet of the net rentable area at the related Mortgaged Property, which represents approximately 12.9% of the net rentable area.
Insurance Considerations
The Mortgage Loans generally require that each Mortgaged Property be insured by a hazard insurance policy in an amount (subject to an approved deductible) at least equal to the lesser of the outstanding principal balance of the related Mortgage Loan and 100% of the replacement cost of the improvements located on the related Mortgaged Property, and if applicable, that the related hazard insurance policy contain appropriate endorsements or have been issued in an amount sufficient to avoid the application of co-insurance and not permit reduction in insurance proceeds for depreciation; provided that in the case of certain of the Mortgage Loans, the hazard insurance may be in such other amounts as was required by the related originators.
In general, the standard form of hazard insurance policy covers physical damage to, or destruction of, the improvements on the Mortgaged Property by fire, lightning, explosion, smoke, windstorm and hail, riot or strike and civil commotion, subject to the conditions and exclusions set forth in each policy. Each Mortgage Loan generally also requires the related borrower to maintain comprehensive general liability insurance against claims for personal and bodily injury, death or property damage occurring on, in or about the related Mortgaged Property in an amount generally equal to at least $1,000,000. Each Mortgage Loan generally further requires the related borrower to maintain business interruption insurance in an amount not less than approximately 100% of the gross rental income from the related Mortgaged Property for not less than 12 months. In general, the Mortgage Loans (including those secured by Mortgaged Properties located in California) do not require earthquake insurance. Nine (9) of the Mortgaged Properties (35.1%) are located in areas that are considered a high earthquake risk. These areas include all or parts of the states of California and Washington.
With respect to 69 of the Mortgaged Properties, which secure in whole or in part 22 Mortgage Loans (72.3%), the related borrowers maintain insurance under blanket policies.
With respect to certain of the Mortgaged Properties, certain insurance requirements of the related Mortgage Loan documents may be satisfied by insurance, including self-insurance, provided by a sole or significant tenant or the property manager, as described below:
| ● | With respect to the 601 Lexington Avenue Mortgage Loan (9.3%), the loan documents provide that required terrorism insurance may be written by a non-rated captive insurer subject to certain conditions, including, among others: (A) TRIPRA is in full force and effect; (B) the terrorism policy issued by such captive insurer, together with any other qualified terrorism policies in-place, |
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| provides a per occurrence limit of not less than the replacement cost and rent loss coverage as otherwise required; (C) covered losses that are not reinsured by the federal government under TRIPRA and paid to the captive insurer must be reinsured with a cut-through endorsement by an insurance company rated at least S&P “A”/ Moody’s “A2” or better or such higher rating as the rating agency may require, not to exceed S&P “A+”/ Moody’s “A1”; (D) all reinsurance agreements between the captive insurer and other reinsurance providers are reasonably acceptable to the lender; and (E) such captive insurer is licensed in the State of Vermont or other jurisdiction to the extent reasonably approved by the lender and qualified to issue the terrorism policy in accordance with applicable legal requirements. |
| ● | With respect to the Novo Nordisk HQ Mortgage Loan (2.4%), the related borrower may rely on the insurance provided by the sole tenant at the Mortgaged Property, Novo Nordisk, so long as such insurance satisfies the insurance requirements of the Mortgage Loan documents. In addition, the borrower may rely on self-insurance by such sole tenant to the extent that the tenant or any lease guarantor of the tenant maintains a rating of “A-” or better by S&P. |
| ● | With respect to the Prospector Plaza Mortgage Loan (2.6%), as to the premises of the second largest tenant, Save Mart Supermarkets, which leases approximately 23.9% of net rentable area, the borrower is entitled to rely on the tenant’s insurance provided that either (i) such insurance complies with the requirements of the loan documents or (ii) such insurance is otherwise acceptable to the lender. The lender acknowledged in the loan documents that the insurance maintained by the tenant at origination (other than business interruption insurance, which is required to be maintained by the borrower) was acceptable to the lender. The deductible for the tenant’s property insurance is $500,000. |
Further, with respect to Mortgaged Properties that are part of condominium regimes, the insurance may be maintained by the condominium association rather than the related borrower. Many Mortgage Loans contain limitations on the obligation to obtain terrorism insurance. See “Risk Factors—Risks Relating to the Mortgage Loans—Terrorism Insurance May Not Be Available for All Mortgaged Properties”.
See “Risk Factors—Risks Relating to the Mortgage Loans—Risks Associated with Blanket Insurance Policies or Self-Insurance” and see representation and warranty number 16 on Annex D-1, representation and warranty number 18 on Annex E-1 and representation and warranty number 16 on Annex F-1 and the identified exceptions to those representations and warranties, if any, on Annex D-2, Annex E-2 and Annex F-2, respectively, for additional information.
Use Restrictions
Certain of the Mortgaged Properties are subject to restrictions that restrict the use of such Mortgaged Properties to its current use, place other use restrictions on such Mortgaged Property or limit the related borrower’s ability to make changes to such Mortgaged Property.
| ● | With respect to the 601 Lexington Avenue Mortgage Loan (9.3%), in 2016, the Mortgaged Property was designated a landmark by the New York City Landmarks Preservation Commission (“NYC LPC”). The landmark designation requires that NYC LPC approval be obtained in advance for any alteration, reconstruction, demolition or new construction affecting the designated building. |
| ● | With respect to the Prospector Plaza Mortgage Loan (2.6%), with respect to the fifth largest tenant, First Light Fitness Corporation (doing business as Anytime Fitness), which leases approximately 2.1% of the net rentable square footage, the use of the Mortgaged Property as a gym/fitness center violates use restrictions under a declaration of restrictions relating to the Mortgaged Property and under certain other leases at the Mortgaged Property. The First Light Fitness Corporation lease provides that if the landlord receives a notice of default from any tenant at the Mortgaged Property, or from an adjacent property owner, on the grounds that the use by |
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| First Light Fitness Corporation violates the foregoing use restrictions, the landlord will have the right to terminate the lease upon 20 days’ notice and payment of a termination fee of $100,000 to the tenant. |
| ● | With respect to the 35 Crosby Street and 70 Carmine Street Mortgage Loan (2.1%), the 35 Crosby Street Mortgaged Property (1.4%) was designated a landmark by the NYC LPC. The landmark designation requires that NYC LPC approval be obtained in advance for any alteration, reconstruction, demolition or new construction affecting the designated building. |
| ● | With respect to the 1340 Lafayette Mortgage Loan (1.8%), the New York City Department of Environmental Remediation (“NYCOER”) has imposed an “E-Designation” on the Mortgaged Property, which creates certain restrictions on the Mortgaged Property. See “—Environmental Considerations” for additional information. |
| ● | With respect to the Crossroads Village Mortgage Loan (1.4%), an unimproved portion of the Mortgaged Property is subject to an agreement for conservation easement which requires Mortgagor to maintain the easement area in its natural and undeveloped condition, and prohibits, among other things, altering the surface of the easement area, spraying pesticides in the easement area, removing vegetation from the easement area, disposing of waste in the easement area, or using the easement area for unrelated stormwater drainage. |
In addition, certain Mortgaged Properties are subject to use restrictions relating to environmental considerations. See “—Environmental Considerations”.
Further, the Mortgaged Properties securing the Mortgage Loans may have zoning, building code, or other local law issues in addition to the issues described above. In addition, certain of the Mortgaged Properties are subject to a temporary certificate of occupancy (the “TCO”). In such cases, the related Mortgage Loan documents require the related borrower to use commercially reasonable efforts to maintain the TCO, or cause the sponsor of the property to maintain the TCO, and to cause the TCO to be continuously renewed at all times until a permanent certificate of occupancy (“PCO”) is obtained for the related Mortgaged Property or contain covenants to similar effect.
In addition, (i) certain of the Mortgaged Properties may be subject to zoning violations relating to maintenance and inspection requirements with respect to the Mortgaged Properties, for which the related Mortgage Loan documents generally require the related borrowers to reserve funds to remedy the violations, and (ii) certain of the Mortgaged Properties are legal non-conforming uses that may be restricted after certain events, such as casualties, or may restrict renovations at the Mortgaged Properties.
See “Risk Factors—Risks Relating to the Mortgage Loans—Risks Related to Zoning Non-Compliance and Use Restrictions” and see representation and warranty numbers 24 and 25 on Annex D-1, representation and warranty numbers 26 and 27 on Annex E-1 and representation and warranty numbers 24 and 25 on Annex F-1 and the identified exceptions to those representations and warranties, if any, on Annex D-2, Annex D-3, Annex E-2 and Annex F-2, respectively, for additional information.
Appraised Value
The appraised values presented in this prospectus and used in the calculation of financial metrics presented in this prospectus are based on appraisals obtained on the dates specified on Annex A-1, and do not reflect any changes in economic circumstances after the respective dates of the appraisals. See “Risk Factors—Special Risks—Coronavirus Pandemic Has Adversely Affected the Global Economy and Will Likely Adversely Affect the Performance of the Mortgage Loans”.
In certain cases, in addition to an “as-is” value, the appraisal states a value other than the “as-is” value for a Mortgaged Property that assumes that certain events will occur with respect to re-tenanting, construction, renovation or repairs at such Mortgaged Property or states an “as portfolio” value that assigns a premium to the value of the Mortgaged Properties as a whole, which value exceeds the sum of
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their individual appraised values. However, other than as set forth below, the Appraised Value reflected in this prospectus with respect to each Mortgaged Property reflects the “as-is” value.
With respect to the Mortgaged Properties that secure the Mortgage Loan listed in the following table, the related Cut-off Date LTV Ratio and the related Maturity Date LTV Ratio was calculated using an Appraised Value other than the “as-is” Appraised Value:
Mortgage Loan |
% of Initial Pool Balance |
Mortgage Loan Cut-off Date LTV Ratio (Other Than “As-Is”) |
Mortgage Loan Maturity Date LTV Ratio (Other Than “As-Is”) |
Appraised Value (Other Than “As-Is”) |
Mortgage Loan Cut-off Date LTV Ratio (“As-Is”) |
Mortgage Loan Maturity Date LTV Ratio (“As-Is”) |
Appraised Value (“As-Is”) |
| Shearer’s Industrial Portfolio (1) | 3.3% | 62.8% | 62.8% | $219,100,000 | 66.7% | 66.7% | $206,300,000 |
| (1) | The aggregate Appraised Value (Other Than “As-Is”) for the Mortgage Loan includes the “Hypothetical Market Value As If Complete” value of $24,200,000 as of January 19, 2022 for the 821 Route 97 Mortgaged Property, which is based on the assumption that a proposed building expansion at such Mortgaged Property is completed as described in the related building plans. The expansion is expected to increase the square footage of the 821 Route 97 Mortgaged Property from 145,485 square feet to 221,876 square feet, and is estimated to be completed in August 2022. |
In addition, the “as-is” Appraised Value may be based on certain assumptions or “extraordinary assumptions”, including that certain tenants are in-place and paying rent when such tenants have not yet taken occupancy, the payment of tenant improvement or leasing commissions allowances, free or abated rent periods, increased tenant occupancies, or that certain renovations or property improvement plans have been completed.
For additional information regarding the appraisals obtained by the sponsors or, in the case of any mortgage loan acquired and re-underwritten by the related sponsor, appraisal(s) obtained by the related originator and relied upon by such sponsor, see “Transaction Parties—The Sponsors and Mortgage Loan Sellers—German American Capital Corporation”, “—Citi Real Estate Funding Inc.”, “—Goldman Sachs Mortgage Company” and “—JPMorgan Chase Bank, National Association”. See also “Risk Factors—Risks Relating to the Mortgage Loans—Appraisals May Not Reflect Current or Future Market Value of Each Property”.
Non-Recourse Carveout Limitations
While the Mortgage Loans are generally non-recourse, the Mortgage Loans generally provide for recourse to the borrower and the related guarantor for liabilities that result from, for example fraud by the borrower, certain voluntary insolvency proceedings or other matters. However, certain of the Mortgage Loans may not contain such non-recourse carveouts or contain limitations to such carveouts. In general, the liquidity and net worth of a non-recourse guarantor under a Mortgage Loan will be less, and may be materially less, than the outstanding principal amount of that Mortgage Loan. As such, we cannot assure you that the related guarantor will be willing or able to satisfy its obligations under the Mortgage Loan documents. In addition, certain Mortgage Loans have additional limitations to the non-recourse carveouts. See Annex D-2, Annex D-3, Annex E-2 and Annex F-2 for additional information.
| ● | With respect to the 601 Lexington Avenue Mortgage Loan (9.3%) and the Novo Nordisk HQ Mortgage Loan (2.4%), there are no separate non-recourse carveout guarantors, and the related borrower is the only indemnitor under the related environmental indemnity agreement. |
| ● | The non-recourse carveout provisions contained in certain of the Mortgage Loan documents may also limit the liability of the non-recourse carveout guarantor for certain monetary obligations or covenants related to the use and operation of the Mortgaged Property to the extent that there is sufficient cash flow generated by the Mortgaged Property and made available to the related borrower and/or non-recourse carveout guarantor to take or prevent such required action. |
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| ● | Certain of the Mortgage Loans provide, with respect to liability for breaches of the environmental covenants in the Mortgage Loan documents, that the recourse obligations for environmental indemnification may terminate immediately (or in some cases, following a specified period, such as two years) after payment or defeasance in full of such Mortgage Loans (or in some cases, after a permitted transfer of the Mortgaged Property). |
| ● | With respect to certain of the Mortgage Loans, the related environmental indemnity may require the making of a claim against an applicable environmental insurance policy prior to any claim being made under such environmental indemnity. |
In addition, there may be impediments and/or difficulties in enforcing some or all of the non-recourse carveout liability obligations of individual guarantors depending on the domicile or citizenship of the guarantors.
See “Risk Factors—Risks Relating to the Mortgage Loans—Mortgage Loans Are Non-Recourse and Are Not Insured or Guaranteed”.
Real Estate and Other Tax Considerations
Below are descriptions of real estate tax matters relating to certain Mortgaged Properties.
| ● | With respect to the Courtyard Appleton Mortgage Loan (1.1%), in 2009, RiverHeath LLC, an affiliate of the borrower controlled by the borrower sponsor, entered into a Development Agreement (the “TIF Agreement”) with the City of Appleton, pursuant to which RiverHeath LLC would receive a tax incentive from the City of Appleton to develop certain projects in the city including the Mortgaged Property. Additionally, the TIF Agreement served as collateral for an unrelated loan from Horicon Bank. The TIF Agreement provides that a certain percentage of real estate taxes on such projects are to be reimbursed to RiverHeath LLC up to a total of $9,750,000. Real estate taxes were underwritten to the unabated tax amount. |
| ● | With respect to the VA Dialysis Center – Philadelphia Mortgage Loan (0.5%), in 2013 the Mortgaged Property qualified for a 10-year tax exemption from the City of Philadelphia property taxes which abatement expires in 2024. During the abatement period, taxes on the value of the improvements constructed in connection with the 2013 renovation are abated 90%. Real estate taxes were underwritten to the future 10-year average. |
Certain risks relating to real estate taxes regarding the Mortgaged Properties or the borrowers are described in “Risk Factors—Risks Relating to the Mortgage Loans—Increases in Real Estate Taxes May Reduce Available Funds” and see representation and warranty number 17 on Annex D-1, representation and warranty number 19 on Annex E-1 and representation and warranty number 17 on Annex F-1 and the identified exceptions to those representations and warranties, if any, on Annex D-2, Annex E-2 and Annex F-2, respectively, for additional information.
Delinquency Information
As of the Cut-off Date, none of the Mortgage Loans will be 30 days or more delinquent and none of the Mortgage Loans have been 30 days or more delinquent since origination. A Mortgage Loan will be treated as 30 days delinquent if the scheduled payment for a due date is not received from the related borrower by the immediately following due date.
For additional information regarding the status of the Mortgage Loans, see “—COVID-19 Considerations”.
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Certain Terms of the Mortgage Loans
Amortization of Principal
The Mortgage Loans provide for one or more of the following:
Twenty-four (24) Mortgage Loans (76.4%) are interest-only until the related maturity date or Anticipated Repayment Date.
Seven (7) Mortgage Loans (13.7%) provide for payments of interest-only for the first 10 to 59 months following the Cut-off Date or first 12 to 60 months following the origination date of the related Mortgage Loan and thereafter provide for regularly scheduled payments of interest and principal based on an amortization period longer than the remaining term of the related Mortgage Loan until the related maturity date and therefore have an expected Balloon Balance at the related maturity date.
Six (6) Mortgage Loans (9.9%) (excluding interest-only and partial interest-only Mortgage Loans) provide for payments of interest and principal until the related maturity date and then have an expected Balloon Balance at the related maturity date.
Due Dates; Mortgage Rates; Calculations of Interest
Subject in some cases to a next business day convention, all of the Mortgage Loans have due dates upon which scheduled payments of principal, interest or both are required to be made by the related borrower under the related Mortgage Note (each such date, a “Due Date”) and grace periods that occur as described in the following table:
Overview of Due Dates
| Due Date | Default Grace Period Days | Number of Mortgage Loans | Aggregate Cut-off Date Balance of Mortgage Loans | Approx. % of Initial Pool Balance | |||||||||
| 6 | 0 | 32 | $687,831,933 | 75.2% | |||||||||
| 1 | 0 | 2 | 101,500,000 | 11.1 | |||||||||
| 1 | 5 | 2 | 40,500,000 | 4.4 | |||||||||
| 9(1) | 0 | 1 | 85,000,000 | 9.3 | |||||||||
| Total | 37 | $914,831,933 | 100.0% | ||||||||||
| (1) | With respect to the 601 Lexington Avenue Mortgage Loan (9.3%), monthly debt service payments are due on the 9th of each month, with a monetary default grace period of 2 business days, each of which grace period extensions is exercisable once in any twelve-month period. |
As used in this prospectus, “grace period” is the number of days before a payment default is an event of default under the terms of each Mortgage Loan. A grace period does not apply to a maturity date or anticipated repayment date payment. See Annex A-1 for information on the number of days before late payment charges are due under the Mortgage Loans. The information on Annex A-1 regarding the number of days before a late payment charge is due is based on the express terms of the Mortgage Loans. Some jurisdictions may impose a statutorily longer period.
All of the Mortgage Loans are secured by first liens on fee simple and/or leasehold interests in the related Mortgaged Properties, subject to the permitted exceptions reflected in the related title insurance policy. All of the Mortgage Loans bear fixed interest rates.
All of the Mortgage Loans accrue interest on the basis of the actual number of days in a month, assuming a 360-day year (“Actual/360 Basis”).
ARD Loans
Each of the One Wilshire Mortgage Loan (9.3%) and the Novo Nordisk HQ Mortgage Loan (2.4%) (collectively, the “ARD Loans” and each, an “ARD Loan”) provides that, after a certain date (the
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“Anticipated Repayment Date”), if the related borrower has not prepaid the related ARD Loan in full, any principal outstanding on that date will accrue interest at an increased interest rate (the “Revised Rate”) rather than the stated Mortgage Rate (the “Initial Rate”).
In addition, each ARD Loan is interest-only until its respective Anticipated Repayment Date. “Excess Interest” with respect to each ARD Loan is the interest collected from the related borrower at the Revised Rate in respect of such ARD Loan in excess of the interest accrued at the Initial Rate, plus any related interest accrued on such amounts, to the extent permitted by applicable law and the related Mortgage Loan documents.
After its Anticipated Repayment Date, an ARD Loan further requires that all cash flow available from the related Mortgaged Property after payment of the monthly debt service payments required under the terms of the related Mortgage Loan documents, all escrows and property expenses required under the related Mortgage Loan documents be used to accelerate amortization of principal (without payment of any yield maintenance premium or prepayment charge) on such ARD Loan. While interest at the Initial Rate continues to accrue and be payable on a current basis on an ARD Loan after its related Anticipated Repayment Date, the payment of Excess Interest will be deferred and will be required to be paid only after the outstanding principal balance of such ARD Loan has been paid in full, at which time the Excess Interest, to the extent actually collected, will be paid to the holders of the Class S certificates and the VRR Interest. See “Risk Factors—Risks Relating to the Mortgage Loans—Risks of Anticipated Repayment Date Loans”.
Prepayment Protections and Certain Involuntary Prepayments
All of the Mortgage Loans have a degree of voluntary prepayment protection in the form of defeasance or prepayment lockout provisions and/or yield maintenance provisions. Voluntary prepayments, if permitted, generally (except in some cases as relates to a prepayment in connection with a casualty or condemnation) require the payment of a yield maintenance charge or a prepayment premium unless the Mortgage Loan (or Whole Loan, if applicable) is prepaid within a specified period (ranging from approximately 3 to 7 payments) up to and including the stated maturity date. See Annex A-1 and Annex A-2 for more information on the prepayment protections attributable to the Mortgage Loans on a loan-by-loan basis and a pool basis. Additionally, certain Mortgage Loans may provide that, with respect to a Mortgaged Property that did not comply with the then-current applicable zoning rules and regulations as of the date of the origination of such Mortgage Loan, in the event the related borrower is unable to obtain a variance that permits the continuation of the nonconformance(s) and/or the restoration thereof, as applicable, due to casualty, governmental action and/or any other reason, the related borrower will be required to partially prepay the Mortgage Loan in order to meet certain loan-to-value ratio and/or debt service coverage ratio requirements, if applicable, which partial prepayment may occur during a lockout period and without payment of any yield maintenance charge or prepayment premium. See “—Assessment of Property Value and Condition”.
With respect to certain of the Mortgage Loans that permit the borrower to voluntarily prepay such Mortgage Loan with payment of a prepayment premium or yield maintenance charge, the yield maintenance charge will generally, subject to variations, be equal to the greater of (i) a specified percentage of the amount being prepaid or (ii) the present value as of the prepayment date, of the remaining scheduled payments of principal and interest from the prepayment date through the maturity date or the commencement of the related open period, as applicable, determined by discounting such payments at the Discount Rate or Reinvestment Yield (or as otherwise stated in the related Mortgage Loan documents), less the amount of principal being prepaid; provided that in no event may the aggregate rate being used to discount any such payment ever exceed the applicable interest rate under the Mortgage Loan.
With respect to certain other Mortgage Loans that permit the borrower to voluntarily prepay the Mortgage Loan with the payment of a prepayment premium or a yield maintenance charge, the yield maintenance charge will generally, subject to certain variations, be an amount (in some cases not less than 1% of the amount prepaid) equal to the present value of a series of payments, each equal to the
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Interest Payment Differential as of the date of prepayment and payable on each scheduled due date over the remaining original term of the prepaid Mortgage Loan through and including the stated maturity date, the Anticipated Repayment Date or the commencement of the open period, as applicable, discounted at a rate that, when compounded monthly, is equivalent to the Reinvestment Yield when compounded semi-annually.
“Discount Rate” generally means the yield on a U.S. Treasury security that has the most closely corresponding maturity date to the maturity date or the commencement of the related open period, as applicable, or, the remaining weighted average life of the Mortgage Loan, plus an additional fixed percentage, as applicable, of the Mortgage Loan.
“Reinvestment Yield” will generally equal, depending on the Mortgage Loan, either: (a) the yield calculated by the lender by the linear interpolation of the yields, “as reported in the Federal Reserve Statistical Release H.15-Selected Interest Rates under the heading U.S. Government Securities/Treasury Constant Maturities” for the week ending prior to the date on which prepayment is made, of U.S. Treasury Constant Maturities with maturity dates (one longer or one shorter) most nearly approximating the loan maturity date or the Anticipated Repayment Date or the day that is the first day of the open period, as applicable; or (b) the lesser of (i) the yield on the U.S. Obligations with the same maturity date as the stated maturity date, the Anticipated Repayment Date or date preceding the commencement of the open period, as applicable, of the prepaid Mortgage Loan or, if no such U.S. Obligations issue is available, then the interpolated yield on the two U.S. Obligations issues (primary issues) with maturity dates (one prior to and one following) that are closest to the stated maturity date, the Anticipated Repayment Date or the date preceding the commencement of the open period, as applicable, of the prepaid Mortgage Loan or (ii) the yield on the U.S. Obligations with a term equal to the remaining average life of the prepaid Mortgage Loan or, if no such U.S. Obligations are available, then the interpolated yield on the two U.S. Obligations issues (primary issues) with terms (one prior to and one following) that are closest to the remaining average life of the prepaid Mortgage Loan with each such yield being based on the bid price for such issue as published in The Wall Street Journal on the date that is 14 days prior to the date of prepayment set forth in borrower’s notice of repayment (or, if such bid price is not published on that date, the next preceding date on which such bid price is so published) and converted to a monthly compounded nominal yield.
“U.S. Obligations” generally means securities evidencing an obligation to timely pay principal and/or interest in a full and timely manner that are (1) direct obligations of the United States of America for the payment of which its full faith and credit is pledged, not subject to prepayment, call or early redemption, (2) other non-callable “government securities” as defined in Treasury regulations Section 1.860G-2(a)(8)(ii), or (3) such other instruments as set forth in the related Mortgage Loan documents.
The term “Interest Payment Differential” will generally equal (i) the positive difference, if any, of the related mortgage interest rate minus the Reinvestment Yield as of the date of prepayment, divided by (ii) 12, and multiplied by (iii) the outstanding principal balance (or the portion thereof being prepaid) of the prepaid Mortgage Loan on the date of prepayment, provided that the Interest Payment Differential will never be less than zero.
Notwithstanding the foregoing, yield maintenance charges payable (if at all) in connection with an involuntary prepayment (such as a prepayment resulting from a liquidation following a default) may be calculated in a manner that varies from those described above.
Additionally, certain Mortgage Loans may provide that in the event of the exercise of a purchase option by a tenant or the sale of real property or the release of a portion of the Mortgaged Property, that the related Mortgage Loans may be prepaid in part prior to the expiration of a prepayment/defeasance lockout provision. See “—Partial Releases” below.
Generally, no yield maintenance charge will be required for prepayments in connection with a casualty or condemnation, unless, in the case of most of the Mortgage Loans, an event of default is continuing. See “Risk Factors—Risks Relating to the Mortgage Loans—Risks Relating to Enforceability of Yield Maintenance Charges, Prepayment Premiums or Defeasance Provisions”. In addition, certain of the
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Mortgage Loans permit the related borrower, after a total or partial casualty or partial condemnation, to prepay the remaining principal balance of the Mortgage Loan (after application of the related insurance proceeds or condemnation award to pay the principal balance of the Mortgage Loan), which may not be accompanied by any prepayment consideration.
Certain of the Mortgage Loans are secured in part by letters of credit and/or cash reserves that in each such case:
| ● | will be released to the related borrower upon satisfaction by the related borrower of certain performance related conditions, which may include, in some cases, meeting debt service coverage ratio levels and/or satisfying leasing conditions; and |
| ● | if not so released, may, at the discretion of the lender, prior to loan maturity (or earlier loan default or loan acceleration), be drawn on and/or applied to prepay the subject Mortgage Loan if such performance related conditions are not satisfied within specified time periods. |
See Annex A-1 and A-3 for more information on reserves relating to the five largest tenants with respect to each Mortgage Loan.
Voluntary Prepayments
Seven (7) Mortgage Loans (22.5%) permit the related borrower, after a lockout period of 11 to 26 payments following the origination date, to prepay the Mortgage Loan with the payment of the greater of a yield maintenance charge and a prepayment premium of 1%, as applicable, of the prepaid amount if such prepayment occurs prior to the related open prepayment period.
One (1) Mortgage Loan (3.1%) permits the related borrower after a lockout period of 28 payments following the origination date, to prepay the Mortgage Loan with the payment of a yield maintenance charge if such prepayment occurs prior to the related open prepayment period.
The Mortgage Loans described above that permit voluntary prepayment with yield maintenance have the following lock-out period as calculated from the Cut-off Date and as indicated in the following table:
| Mortgage Loan | Cut-off Date Principal Balance | % of Initial Outstanding Pool Balance | Lock-Out Period (payments from Cut-off Date) | ||||||
| Bedrock Portfolio | $85,000,000 | 9.3% | 22 | ||||||
| InCommercial Net Lease Portfolio #5 | $35,000,000 | 3.8% | 24 | ||||||
| Shearer’s Industrial Portfolio | $30,000,000 | 3.3% | 10 | ||||||
| Gem Tower | $28,000,000 | 3.1% | 24 | ||||||
| 1340 Lafayette | $16,500,000 | 1.8% | 24 | ||||||
| Greenbrier Towers I & II | $13,500,000 | 1.5% | 24 | ||||||
| Apple Glen Crossing | $13,000,000 | 1.4% | 24 | ||||||
| Crossroads Village | $12,500,000 | 1.4% | 25 | ||||||
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The Mortgage Loans generally permit voluntary prepayment without payment of a yield maintenance charge or any prepayment premium during a limited “open period” immediately prior to and including the stated maturity date, as follows:
Prepayment Open Periods
| Open Periods (Payments) | Number of Mortgage Loans | % of Initial Pool Balance | ||||||
| 3 | 3 | 2.4% | ||||||
| 4 | 18 | 44.9% | ||||||
| 5 | 9 | 19.8% | ||||||
| 6 | 3 | 6.3% | ||||||
| 7 | 4 | 26.5% | ||||||
| Total | 37 | 100.0% | ||||||
See “Risk Factors—Risks Relating to the Mortgage Loans—Risks Relating to Enforceability of Yield Maintenance Charges, Prepayment Premiums or Defeasance Provisions”.
“Due-On-Sale” and “Due-On-Encumbrance” Provisions
The Mortgage Loans generally contain “due-on-sale” and “due-on-encumbrance” clauses, which in each case permits the holder of the Mortgage Loan to accelerate the maturity of the related Mortgage Loan if the related borrower sells or otherwise transfers or encumbers (subject to certain exceptions set forth in the Mortgage Loan documents) the related Mortgaged Property or a controlling interest in the borrower without the consent of the mortgagee (which, in some cases, may not be unreasonably withheld). Many of the Mortgage Loans place certain restrictions (subject to certain exceptions set forth in the Mortgage Loan documents) on the transfer and/or pledging of general partnership and managing member equity interests in a borrower such as specific percentage or control limitations. The terms of the mortgages generally permit, subject to certain limitations, affiliate, estate planning and family transfers, transfers at death, transfers of interest in a public company, the transfer or pledge of less than, or other than, a controlling portion of the partnership, members’ or other equity interests in a borrower, the transfer or pledge of passive equity interests in a borrower (such as limited partnership interests and non-managing member interests in a limited liability company) and transfers to other existing equity holders or to specified persons or persons satisfying qualification criteria set forth in the related Mortgage Loan documents. Certain of the Mortgage Loans do not restrict the pledging of direct or indirect ownership interests in the related borrower, but do restrict the transfer of ownership interests in the related borrower by imposing a specific percentage, a control limitation or requiring the consent of the mortgagee to any such transfer. Generally, the Mortgage Loans do not prohibit transfers so long as no change of control results or, with respect to Mortgage Loans to tenant-in-common borrowers or borrowers that are Delaware statutory trusts, transfers to new tenant-in-common borrowers or new beneficiaries of the Delaware statutory trust, as applicable. Certain of the Mortgage Loans do not prohibit the pledge by direct or indirect owners of the related borrower of equity distributions that may be made from time to time by the borrower to its equity owners.
Additionally, certain of the Mortgage Loans provide that transfers of the Mortgaged Property are permitted if certain conditions are satisfied, which may include one or more of the following:
| ● | no event of default has occurred; |
| ● | the proposed transferee is creditworthy and has sufficient experience in the ownership and management of properties similar to the Mortgaged Property and/or a Rating Agency Confirmation has been obtained from each of the Rating Agencies; |
| ● | the transferee has executed and delivered an assumption agreement evidencing its agreement to abide by the terms of the Mortgage Loan together with legal opinions and title insurance endorsements; and |
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| ● | the assumption fee has been received (which assumption fee will be paid as described under “Pooling and Servicing Agreement—Servicing and Other Compensation and Payment of Expenses”, but will in no event be paid to the Certificateholders); however, certain of the Mortgage Loans allow the borrower to sell or otherwise transfer the related Mortgaged Property a limited number of times without paying an assumption fee. |
| ● | Transfers resulting from the foreclosure of a pledge of the collateral for a mezzanine loan (if any) will also result in a permitted transfer. See “—Additional Indebtedness” below. |
Defeasance; Collateral Substitution
The terms of 29 Mortgage Loans (74.5%) (the “Defeasance Loans”) permit the applicable borrower at any time (provided that no event of default exists) after a specified period (the “Defeasance Lock-Out Period”) to obtain a release of a Mortgaged Property from the lien of the related Mortgage (a “Defeasance Option”) in connection with a defeasance. With respect to all of the Defeasance Loans (except for the STK Chicago Mortgage Loan), the Defeasance Lock-Out Period ends at least two years after the Closing Date. With respect to the STK Chicago Mortgage Loan, pursuant to a REMIC declaration dated August 26, 2021, the STK Chicago Mortgage Loan may be defeased commencing on any day following August 27, 2023, which is less than two years after the Closing Date.
Exercise of a Defeasance Option is also generally conditioned on, among other things, (a) the borrower providing the mortgagee with at least 30 days prior written notice of the date on which such defeasance will occur (such date, the “Release Date”), and (b) the borrower (A) paying on any Release Date (i) all accrued and unpaid interest on the principal balance of the Mortgage Loan (or, the related Whole Loan) up to and including the Release Date, (ii) all other sums (excluding scheduled interest or principal payments due following the Release Date), due under the Mortgage Loan (or Whole Loan, if applicable) and under all other loan documents executed in connection with the Defeasance Option, (iii) an amount (the “Defeasance Deposit”) that will be sufficient to (x) purchase non-callable obligations of, or backed by the full faith and credit of, the United States of America or, in certain cases, other “government securities” (within the meaning of Section 2(a)(16) of the Investment Company Act of 1940) or other instruments that otherwise satisfy REMIC requirements for defeasance collateral, that provide payments (1) on or prior to, but as close as possible to, all successive scheduled due dates occurring during the period from the Release Date to the related maturity date or anticipated repayment date (or to the first day of the open period for such Mortgage Loan) (or Whole Loan, if applicable) and (2) in amounts equal to the scheduled payments due on such due dates under the Mortgage Loan (or Whole Loan, if applicable), or under the defeased portion of the Mortgage Loan (or Whole Loan, if applicable) in the case of a partial defeasance, including or together with, as applicable, a balloon payment due at maturity or the principal balance outstanding at any related anticipated repayment date or at the open prepayment date, as applicable, and (y) pay any costs and expenses incurred in connection with the purchase of such government securities, and (B) delivering a security agreement granting the issuing entity a first priority lien on the Defeasance Deposit and, in certain cases, the government securities purchased with the Defeasance Deposit and an opinion of counsel to such effect.
For additional information on Mortgage Loans that permit partial defeasance, see “—Partial Releases” below.
In general, if consistent with the related loan documents, a successor borrower established, designated or approved by the master servicer will assume the obligations of the related borrower exercising a Defeasance Option and the borrower will be relieved of its obligations under the Mortgage Loan. If a Mortgage Loan (or Whole Loan, if applicable) is partially defeased, if consistent with the related loan documents, generally the related promissory note will be split and only the defeased portion of the borrower’s obligations will be transferred to the successor borrower.
See “Risk Factors—Risks Relating to the Mortgage Loans—Risks Relating to Enforceability of Yield Maintenance Charges, Prepayment Premiums or Defeasance Provisions”.
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Partial Releases
The Mortgage Loans described below permit the release of one or more of the Mortgaged Properties or a portion of a single Mortgaged Property in connection with a partial defeasance, a partial prepayment, a partial substitution, or for no consideration in the case of parcels that are vacant, non-income producing or were not taken into account in the underwriting of the Mortgage Loan, subject to the satisfaction of certain specified conditions, including the REMIC requirements. Additionally, certain Mortgage Loans permit the addition of real property to the Mortgage Loan collateral.
| ● | With respect to the Bedrock Portfolio Mortgage Loan (9.3%), the Mortgage Loan documents permit the release of an individual Mortgaged Property from the lien of the mortgage, provided no event of default has occurred and is continuing and upon satisfaction of certain conditions set forth in the Mortgage Loan documents, including, without limitation, the following: (a) the amount of the outstanding principal balance of the Whole Loan to be prepaid must equal or exceed 115% of the allocated loan amount for such applicable Mortgaged Property, (b) the resulting debt service coverage ratio for the remaining Mortgaged Property is equal to or greater than 3.10x, (c) the Mortgaged Property to be released is conveyed in an arm’s length transfer to a person other than the applicable individual borrower or any of its affiliates, and (d) upon release of such Mortgaged Property, the customary REMIC rules are satisfied. |
| ● | With respect to the Millennia Portfolio Mortgage Loan (4.4%), following the defeasance lockout period, the borrower has the right to obtain the release of any individual Mortgaged Property in connection with a bona fide third-party sale of such Mortgaged Property, by defeasing an amount of such Mortgage Loan equal to 120% of the allocated loan amount of such Mortgaged Property, and satisfying certain conditions, including but not limited to (i) the debt service coverage ratio after such release is not less than the greater of the debt service coverage ratio immediately preceding the release and 1.25x, (ii) the loan to value ratio after such release is not greater than the lesser of the loan to value ratio immediately preceding the release and 73.8% and (iii) satisfaction of REMIC related requirements. |
| ● | With respect to the InCommercial Net Lease Portfolio #5 Mortgage Loan (3.8%), provided that no event of default is continuing under the related Mortgage Loan documents, at any time on or after the earlier to occur of (i) March 9, 2025 and (ii) two (2) years from the Closing Date, the borrower may partially prepay the Mortgage Loan and obtain the release of one or more individual Mortgaged Properties, in each case, provided that, among other conditions, (i) the partial prepayment is in an amount equal to (a) with respect to an individual Mortgaged Property for which the applicable specified tenant is “dark” and/or not open to the public for business during customary hours, an amount equal to 110% of the allocated loan amount for the individual Mortgaged Property, and (b) with respect to any other individual Mortgaged Property, an amount equal to 120% of the allocated loan amount for the individual Mortgaged Property, (ii) the borrower delivers a REMIC opinion, (iii) the borrower delivers (if requested by the lender) a rating agency confirmation, (iv) as of the date of notice of the partial release and the consummation of the partial release, after giving effect to the release, the debt service coverage ratio with respect to the remaining Mortgaged Properties is greater than the greater of (a) 1.60x, and (b) the debt service coverage ratio for all of the Mortgaged Properties immediately prior to the date of notice of the partial release or the consummation of the partial release, as applicable, (v) as of the date of notice of the partial release and the consummation of the partial release, after giving effect to the release, the loan-to-value ratio with respect to the remaining Mortgaged Properties is no greater than the lesser of (a) 60.0% and (b) the loan-to-value ratio for all of the Mortgaged Properties immediately prior to the date of notice of the partial release or the consummation of the partial release, as applicable, and (vi) as of the date of notice of the partial release and the consummation of the partial release, after giving effect to the release, the debt yield with respect to the remaining Mortgaged Properties is greater than the greater of (a) 9.5%, and (b) the debt yield for all of the Mortgaged Properties immediately prior to the date of notice of the partial release or the consummation of the partial release, as applicable. |
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| ● | With respect to the Redmond Community Center Mortgage Loan (3.8%), in connection with an arm’s length sale to an unrelated third party, the borrower has the right to obtain the release of the parcel ground leased to Red Robin (the “Redmond Community Center Release Parcel”) after the expiration of the defeasance lockout period, by defeasing the greater of (x) 100% of the net sales proceeds of the Redmond Community Center Release Parcel (which in no event shall be less than 94% of the gross sales proceeds of the Redmond Community Center Release Parcel), or (y) 125% of the allocated loan amount of the Redmond Community Center Release Parcel (which allocated loan amount is $2,592,096), subject to the following conditions, among others: (i) the debt service coverage ratio after giving effect to such release is at least the greater of (x) 1.54x and (y) the debt service coverage ratio immediately prior to such release; (ii) the loan-to-value ratio after giving effect to such release is no more than the lesser of (x) 61.28% and (y) the aggregate loan-to-value ratio immediately prior to such release; (iii) the Redmond Community Center Release Parcel is a legally subdivided parcel on a separate tax lot; (iv) the conveyance of the Redmond Community Center Release Parcel does not (1) adversely affect the use or operation of, or access to or from, the remaining Redmond Community Center Property (with respect to the Redmond Community Center Mortgage Loan, the “Redmond Community Center Remaining Property”), (2) cause any portion of the Redmond Community Center Remaining Property to be in violation of any legal requirements, (3) create any liens on the Redmond Community Center Remaining Property or (4) violate the terms of any document or instrument relating to the Redmond Community Center Remaining Property, including any lease or any permitted encumbrance and (v) satisfaction of REMIC related conditions. |
| ● | With respect to the 35 Crosby Street and 70 Carmine Street Mortgage Loan (2.1%), provided that no event of default is continuing under the related Mortgage Loan documents, after the earlier to occur of (i) January 19, 2026 and (ii) two (2) years from the Closing Date, the borrower may deliver defeasance collateral and obtain release of one or more individual Mortgaged Properties, provided that, among other conditions, (i) the defeasance collateral is in an amount equal to 120% of the allocated loan amount for the individual Mortgaged Property, (ii) the borrower delivers a REMIC opinion, (iii) the borrower delivers a rating agency confirmation, (iv) as of the date of notice of the partial release and the consummation of the partial release, after giving effect to the release, the debt service coverage ratio with respect to the remaining Mortgaged Properties is greater than the greater of (a) 1.70x, and (b) the debt service coverage ratio for all of the Mortgaged Properties immediately prior to the date of notice of the partial release or the consummation of the partial release, as applicable, (v) as of the date of notice of the partial release and the consummation of the partial release, after giving effect to the release, the debt yield with respect to the remaining Mortgaged Properties is greater than the greater of (a) 7.0%, and (b) the debt yield for all of the Mortgaged Properties immediately prior to the date of notice of the partial release or the consummation of the partial release, as applicable. |
| ● | With respect to the Glen Forest Office Portfolio Mortgage Loan (1.0%), provided that no event of default is continuing under the related Mortgage Loan documents, after the earlier to occur of (i) December 1, 2025 and (ii) two (2) years from the Closing Date, the borrower may deliver defeasance collateral and obtain release of one or more of the Highland II, Utica and Willard Mortgaged Properties, in each case, provided that, among other conditions, (i) the defeasance collateral or partial prepayment, as applicable, is in an amount equal to 120% of the allocated loan amount for the individual Mortgaged Property, (ii) the borrower delivers a REMIC opinion, (iii) the borrower delivers a rating agency confirmation, (iv) as of the date of notice of the partial release and the consummation of the partial release, after giving effect to the release, (x) the debt service coverage ratio with respect to the remaining Mortgaged Properties is greater than the greater of (a) 2.84x, and (b) the debt service coverage ratio for all of the Mortgaged Properties immediately prior to the date of notice of the partial release or the consummation of the partial release, as applicable, and (y) the aggregate debt service coverage ratio, based upon the aggregate debt service which would be due on the Glen Forest Office Portfolio Mortgage Loan and any future mezzanine loan, with respect to the remaining Mortgaged Properties is greater than the greater of (a) 2.00x, and (b) the aggregate debt service coverage ratio for all of the Mortgaged Properties immediately prior to the date of notice of the partial release or the |
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| consummation of the partial release, as applicable, (v) as of the date of notice of the partial release and the consummation of the partial release, after giving effect to the release, (x) the debt yield with respect to the remaining Mortgaged Properties is greater than the greater of (a) 10.07%, and (b) the debt yield for all of the Mortgaged Properties immediately prior to the date of notice of the partial release or the consummation of the partial release, as applicable, and (y) the aggregate debt yield of the Glen Forest Office Portfolio Mortgage Loan and any future mezzanine loan, with respect to the remaining Mortgaged Properties is greater than the greater of (a) 10.0%, and (b) the debt yield for all of the Mortgaged Properties immediately prior to the date of notice of the partial release or the consummation of the partial release, as applicable. |
Furthermore, certain loans may permit the release or substitution of specified parcels of real estate, improvements and/or development rights that secure the Mortgage Loans but were not assigned any material value or considered a source of any material cash flow for purposes of determining the related Appraised Value or Underwritten Net Cash Flow or considered material to the use or operation of the property. Such real estate may be permitted to be released, subject to certain REMIC rules, without payment of a release price and consequent reduction of the principal balance of the subject Mortgage Loan or substitution of additional collateral if zoning and other conditions are satisfied.
See “Risk Factors—Risks Relating to the Mortgage Loans—Risks Relating to Enforceability of Yield Maintenance Charges, Prepayment Premiums or Defeasance Provisions”.
| Substitutions |
See “Risk Factors—Risks Relating to the Mortgage Loans—Risks Relating to Enforceability of Yield Maintenance Charges, Prepayment Premiums or Defeasance Provisions”.
| Escrows |
Thirty (30) Mortgage Loans (71.3%) provide for monthly or upfront escrows to cover property taxes on the Mortgaged Properties.
Twenty (20) Mortgage Loans (59.6%), secured by properties with commercial tenants, provide for upfront or monthly escrows (or credit) for the full term or a portion of the term of the related Mortgage Loan to cover anticipated re-leasing costs, including tenant improvements and leasing commissions or other lease termination or occupancy issues. Such escrows are typically considered for office, retail, industrial and mixed use properties only.
Twenty-eight (28) Mortgage Loans (70.3%) provide for monthly or upfront escrows for ongoing replacements or capital repairs.
Eighteen (18) Mortgage Loans (35.4%) provide for monthly or upfront escrows to cover insurance premiums on the Mortgaged Properties.
Ten (10) Mortgage Loans (29.1%) provide for upfront reserves for immediate repairs.
Certain of the Mortgage Loans described above permit the related borrower to post a letter of credit or deliver a guaranty in lieu of maintaining cash reserves, and any such guaranty may be subject to a cap. In addition, in certain cases, the related borrower may not be required to maintain the escrows described above until the occurrence of a specified trigger.
With respect to the 601 Lexington Avenue Mortgage Loan (9.3%), the borrower is permitted to provide a guaranty from BPLP, an affiliate of the borrower, in lieu of all reserves, subject to certain conditions, including BPLP maintaining a senior unsecured credit rating of at least “BBB” by S&P and “Baa3” by Moody’s. At origination, BPLP provided a guaranty in lieu of (i) depositing $52,315,328 into a reserve for approved leasing expenses outstanding at the time of origination and (ii) depositing $8,974,469 into a reserve for outstanding free and gap rent for six (6) tenants. The aggregate amount guaranteed under any BPLP guaranty (when aggregated with the full amount of any letter of credit and/or
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cash on deposit) will be reduced as the borrowers expend funds for the purposes for which such funds would have otherwise been deposited in the applicable reserve account.
Many of the Mortgage Loans provide for other escrows and reserves, including, in certain cases, reserves for debt service, operating expenses, vacancies at the related Mortgaged Property and other shortfalls or reserves to be released under circumstances described in the related Mortgage Loan documents.
Mortgaged Property Accounts
Lockbox Accounts. The Mortgage Loans documents prescribe the manner in which the related borrowers are permitted to collect rents from tenants at each Mortgaged Property. The following table sets forth the manner in which tenant rent is transferred to a lockbox account, in some cases, only upon the occurrence of a trigger event:
Lockbox Account Types
| Lockbox Type | Number of Mortgage Loans | Approx. % of Initial Pool Balance | ||
| Hard | 23 | 63.1% | ||
| Springing | 10 | 18.0 | ||
| Soft | 3 | 9.6 | ||
| Springing (Residential); Hard (Commercial) | 1 | 9.3 | ||
| Total | 37 | 100.0% |
The lockbox accounts will not be assets of the issuing entity. See “Description of the Mortgage Pool—Certain Calculations and Definitions—Definitions” or Annex A-1 for a description of lockbox and cash management accounts.
Shari’ah Compliant Lending Structure
The Glen Forest Office Portfolio Mortgage Loan (1.0%) was structured as a Shari’ah compliant loan. See “Risk Factors—Risks Relating to the Mortgage Loans—Risks Relating to Shari’ah Compliant Loans”.
The purpose of Shari’ah compliant lending structures is to provide financing to those that follow the Islamic faith and want to comply with the Shari’ah laws propagated thereunder. Although there are many requirements under the Shari’ah laws that affect lending, the rule most affecting the standard loan structure is that Shari’ah rules prohibit transactions involving interest. This is based on the Shari’ah principle that it is unacceptable, in and of itself, for money to increase in value merely by being lent to another person. To accommodate the prohibition on interest, the structure is generally set up so that, although the Shari’ah compliant party is paying the amount that the lender would expect to receive as principal and interest payments, the payments themselves are characterized as rent. This is accomplished through the use of a non-compliant party that receives a traditional loan, and leases the property to the Shari’ah compliant party using a master lease (with the Shari’ah compliant party having an option to purchase).
Title to the related Mortgaged Property is held by the borrower, who master leases the related Mortgaged Property to a master lessee, which is indirectly owned by certain investors understood to be of the Islamic faith. The rent payable pursuant to the master lease is intended to cover the debt service payments required under the related Mortgage Loan, as well as reserve payments and any other sums due under the related mortgage loan. At origination, the lender received a fee mortgage from the borrower on its interest in the related Mortgaged Property. The lender also secured a full subordination of the master lease which permits the lender (or the related borrower, at lender’s election), after an event of default, to terminate the master lease. In addition, the related master tenant entered into an assignment of leases and rents in favor of the borrower as security for the obligations under the master lease and the borrower collaterally assigned the rights under this assignment to the lender pursuant to an assignment of assignment of leases and rents. However, under applicable state law, an assignment of leases and rents without a mortgage may not be enforceable. Accordingly, the lender would not have a perfected security
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interest in the leases and rents of the underlying tenants. The rents under the master lease are less than the rents payable by the underlying tenants. The Mortgage Loan was underwritten based on the rents payable by the underlying tenants. The foregoing structure may delay or impede enforcement of the Mortgage Loan, particularly in the event of the bankruptcy of the borrower or master tenant.
Delaware Statutory Trusts
With respect to each of the InCommercial Net Lease Portfolio #5 Mortgage Loan (3.8%) and the Bala Woods Mortgage Loan (3.0%), the related borrower is a Delaware statutory trust. A Delaware statutory trust is restricted in its ability to actively operate a property, including with respect to loan workouts, leasing and re-leasing, making material improvements and other material actions affecting the related Mortgaged Properties. In the case of a Mortgaged Property that is owned by a Delaware statutory trust, there is a risk that obtaining the consent of the holders of the beneficial interests in the Delaware statutory trust will be time consuming and cause delays with respect to the taking of certain actions by or on behalf of the borrower, including with respect to the related Mortgaged Property. Accordingly, the related borrower has master leased the property to a newly formed, single-purpose entity that is affiliated with the signatory trustee or manager for the related borrower. The master lease has been subordinated to the related Mortgage Loan documents.
The Mortgage Loan documents provide for an assignment of leases and rents from the related master tenant to the borrower, as landlord under the master lease, and a collateral assignment of such assignment of leases and rents from the borrower to the lender, but do not provide for a mortgage on the master lease. However, under applicable state law, an assignment of leases and rents without a mortgage may not be enforceable. Accordingly, the lender would not have a perfected security interest in the leases and rents of the underlying tenants. The rents under the master lease are less than the rents payable by the underlying tenants. The Mortgage Loan was underwritten based on the rents payable by the underlying tenants. The foregoing structure may delay or impede enforcement of the Mortgage Loan, particularly in the event of the bankruptcy of the borrower or master tenant.
With respect to the InCommercial Net Lease Portfolio #5 Mortgage Loan (3.8%), the UW NOI Debt Yield and UW NCF DSCR, based only on the master lease rent, is 7.7% and 1.33x, respectively. The UW NOI Debt Yield and UW NCF DSCR based on the rents from the underlying tenants (and not the master lease rent), is 9.7% and 1.64x, respectively. The trust agreement for the related borrower limits the number of ultimate owners of such borrower to 499 persons. Transfers of a beneficial interest in the borrower are permitted subject to the terms of the InCommercial Net Lease Portfolio #5 Mortgage Loan documents, including, without limitation, that no change of control in the borrower results from any such transfer.
With respect to the Bala Woods Mortgage Loan (3.0%), the UW NOI Debt Yield and UW NCF DSCR, based only on the master lease rent, is 9.8% and 2.50x, respectively. The UW NOI Debt Yield and UW NCF DSCR based on the rents from the underlying tenants (and not the master lease rent), is 8.9% and 2.21x, respectively. There is no limit on the number of ultimate owners of the related borrower. Transfers of a beneficial interest in the borrower are permitted subject to the terms of the Bala Woods Mortgage Loan documents, including, without limitation, that no change of control in the borrower results from any such transfer.
Exceptions to Underwriting Guidelines
The Mortgage Loans to be contributed by GACC were originated in accordance with DBRI’s and DBNY’s underwriting standards as described under “Transaction Parties—The Sponsors and Mortgage Loan Sellers—German American Capital Corporation—DB Originators’ Underwriting Guidelines and Processes”.
The Mortgage Loans to be contributed by CREFI were originated in accordance with CREFI’s underwriting standards as described under “Transaction Parties—The Sponsors and Mortgage Loan Sellers—Citi Real Estate Funding Inc.—CREFI’s Underwriting Guidelines and Processes”.
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The Mortgage Loans to be contributed by GSMC were originated in accordance with GSMC’s underwriting standards as described under “Transaction Parties—The Sponsors and Mortgage Loan Sellers—Goldman Sachs Mortgage Company—Goldman Originator’s Underwriting Guidelines and Processes”.
The Mortgage Loans to be contributed by JPMCB were originated in accordance with JPMCB’s underwriting standards as described under “Transaction Parties—The Sponsors and Mortgage Loan Sellers—JPMorgan Chase Bank, National Association—JPMCB’s Underwriting Guidelines and Processes”.
Additional Indebtedness
| General |
The Mortgage Loans generally prohibit borrowers from incurring any additional debt secured by their Mortgaged Property without the consent of the lender. However:
| ● | substantially all of the Mortgage Loans permit the related borrower to incur limited indebtedness in the ordinary course of business that is not secured by the related Mortgaged Property; |
| ● | the borrowers under certain of the Mortgage Loans have incurred and/or may incur in the future unsecured debt other than in the ordinary course of business; |
| ● | any borrower that is not required pursuant to the terms of the applicable Mortgage Loan documents to meet single purpose entity criteria may not be restricted from incurring unsecured debt or mezzanine debt; |
| ● | the terms of certain Mortgage Loans permit the borrowers to post letters of credit and/or surety bonds for the benefit of the mortgagee under the Mortgage Loans, which may constitute a contingent reimbursement obligation of the related borrower or an affiliate. The issuing bank or surety will not typically agree to subordination and standstill protection benefiting the mortgagee; |
| ● | although the Mortgage Loans generally place certain restrictions on incurring mezzanine debt by the pledging of general partnership and managing member equity interests in a borrower, such as specific percentage or control limitations, the terms of the Mortgage Loan documents generally permit, subject to certain limitations, the pledge of passive equity interests (such as limited partnership or non-managing membership equity interests) in a borrower or less than a controlling interest of any other equity interests in a borrower; and |
| ● | certain of the Mortgage Loans do not restrict the pledging of ownership interests in the borrower, but do restrict the transfer of ownership interests in a borrower by imposing limitations on transfer of control or a specific percentage of ownership interests. |
Whole Loans
Certain Mortgage Loans are subject to the rights of a related Companion Loan holder, as further described in “—The Whole Loans” below.
Mezzanine Indebtedness
Although the Mortgage Loans generally place certain restrictions on incurring mezzanine debt by the pledging of general partnership and managing member equity interests in a borrower, such as specific percentage or control limitations, the terms of the Mortgages generally permit, subject to certain limitations, the pledge of less than a controlling portion of the equity interests in a borrower or a pledge of passive equity interests (such as limited partnership or non-managing membership equity interests) in a borrower. Certain Mortgage Loans described below permit the incurrence of mezzanine debt subject to satisfaction of certain conditions including a certain maximum combined loan-to-value ratio and/or a
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minimum combined debt service coverage ratio, and in some cases mezzanine debt is already in place. Also, certain of the Mortgage Loans do not restrict the pledging of ownership interests in the related borrower, but do restrict the transfer of ownership interests in a borrower by imposing limitations on transfer of control or a specific percentage of ownership interests. In addition, in general, a borrower (or its direct or indirect owners) that does not meet single-purpose entity criteria may not be restricted in any way from incurring mezzanine debt.
As of the Cut-off Date, each sponsor has informed us that it is not aware of existing mezzanine indebtedness with respect to the Mortgage Loans it is selling to the depositor.
The Mortgage Loans generally place certain restrictions on the transfer and/or pledging of general partnership and managing member equity interests in a borrower such as specific percentage or control limitations as described under “—Certain Terms of the Mortgage Loans—“Due-On-Sale” and “Due-On-Encumbrance” Provisions” above. Certain of the Mortgage Loans do not prohibit the pledge by direct or indirect owners of the related borrower of equity distributions that may be made from time to time by the borrower to its equity owners.
With respect to the Mortgage Loans listed in the following table, the direct and indirect equity owners of the borrower are permitted to incur future mezzanine debt, subject to the satisfaction of conditions contained in the related Mortgage Loan documents, including, among other things, a combined maximum loan-to-value ratio, a combined minimum debt service coverage ratio and/or a combined minimum debt yield, as listed in the following table and determined in accordance with the related Mortgage Loan documents:
| Mortgage Loan Name | Mortgage Loan Cut-off Date Balance | Combined Maximum LTV Ratio | Combined Minimum DSCR | Combined Minimum Debt Yield | Intercreditor Agreement Required | |||||
| Romaine & Orange Square | $68,000,000 | 62.4% | 1.78x | N/A | Yes | |||||
| Gem Tower | $28,000,000 | 55.0% | 2.97x | 10.15% | Yes | |||||
| Glen Forest Office Portfolio | $9,000,000 | 75.0% | 2.00x | 10.0% | Yes |
The specific rights of the related mezzanine lender with respect to any such future mezzanine loan will be specified in the related intercreditor agreement and may include cure and repurchase rights. The intercreditor agreement required to be entered into in connection with any future mezzanine loan or the incurrence of the future mezzanine loan will be subject to receipt of a Rating Agency Confirmation. The direct and/or indirect owners of a borrower under a Mortgage Loan are also generally permitted to pledge their interest in such borrower as security for a mezzanine loan in circumstances where the ultimate transfer of such interest to the mezzanine lender would be a permitted transfer under the related Mortgage Loan documents.
Generally, upon a default under a mezzanine loan, subject to the terms of any applicable intercreditor or subordination agreement, the holder of the mezzanine loan would be entitled to foreclose upon the equity in the related borrower, which has been pledged to secure payment of such debt. Although this transfer of equity may not trigger the due on sale clause under the related Mortgage Loan, it could cause a change in control of the borrower and/or cause the obligor under the mezzanine loan to file for bankruptcy, which could negatively affect the operation of the related Mortgaged Property and the related borrower’s ability to make payments on the related Mortgage Loan in a timely manner.
Some of the Mortgage Loans do not prohibit affiliates of the related borrower from pledging their indirect ownership interests in the borrower in connection with pledges to an institutional lender providing a corporate line of credit or corporate credit facility as collateral for such corporate line of credit or corporate credit facility. In connection with those pledges, the Mortgage Loan documents may: (i) contain limitations on the amounts that such collateral may secure and prohibit foreclosure of such pledges unless such foreclosure would represent a transfer otherwise permitted under the Mortgage Loan documents but do not prohibit a change in control in the event of a permitted foreclosure; or (ii) require that such financing be secured by at least a certain number of assets other than such ownership interests in the related borrower.
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See “Risk Factors—Risks Relating to the Mortgage Loans—Other Financings or Ability to Incur Other Indebtedness Entails Risk”.
Preferred Equity
Preferred equity structures would permit one or more special limited partners or members to receive a preferred return in exchange for an infusion of capital or other type of equity pledge that may require payments of a specified return or of excess cash flow. Because preferred equity often provides for a higher rate of return to be paid to the holders of such preferred equity, preferred equity in some respects functions like mezzanine indebtedness, and reduces a principal’s economic stake in the related Mortgaged Property, reduces cash flow on the borrower’s Mortgaged Property after the payment of debt service and payments on the preferred equity and may increase the likelihood that the owner of a borrower will permit the value or income-producing potential of a Mortgaged Property to fall and may create a greater risk that a borrower will default on the Mortgage Loan secured by a Mortgaged Property whose value or income is relatively weak and/or result in potential changes in the management of the related Mortgaged Property in the event the preferred return is not satisfied.
Other Unsecured Indebtedness
With respect to the Novo Nordisk HQ Mortgage Loan (2.4%), in connection with the sale of the Mortgaged Property to the related borrower, such borrower’s sole member (the “Novo Sole Member”) entered into an earnout agreement (the “Novo Earnout Agreement”) with the prior owner of the Mortgaged Property (the “Novo Seller”) whereby the Novo Sole Member agreed to pay all or a pro rata portion of a specified amount (having an outstanding amount as of the origination date of approximately $13,000,000) to the Novo Seller if the tenant at the Mortgaged Property ever exercised all or a portion of its expansion option for 167,815 additional square feet at the Mortgaged Property pursuant to its lease (the “Novo Earnout Obligation”). The Novo Earnout Obligation is secured by a pledge of the Novo Sole Member’s 100% ownership interest in the borrower pursuant to a pledge agreement (the “Novo Earnout Pledge Agreement”). At origination, (i) the related lender funded a reserve (the “Seller Credit Reserve”) equal to the Novo Earnout Obligation, which amount is required to be released to the Novo Seller, provided no event of default is continuing under the loan documents, as and when such amounts are due and payable under the Novo Earnout Agreement and (ii) the related lender entered into a recognition agreement with the Novo Seller whereby such lender agreed (w) to send all notices under the loan documents to the Novo Seller, (x) to allow the Novo Seller to foreclose on the pledge and take over the borrower so long as a preapproved control party will own/control such borrower after foreclosure and so long as the permitted transfer provisions of the loan agreement and recognition agreement are satisfied, (y) to allow the Novo Seller to purchase the senior loan upon notice to the Novo Seller that an event of default under the loan is continuing (for payment of the full outstanding amount of the debt, including all default interest, fees and expenses) and (z) to accept payment of the monthly interest payment or any other payment obligation by the Novo Seller (as and when such payment is due and payable by the borrower) but no more than two (2) times during the term of the Mortgage Loan.
With respect to the Bedrock Portfolio Mortgage Loan (9.3%), the direct or indirect owners of borrowers (other than any special purpose entity managing member of any of the borrowers) are permitted to obtain one or more unsecured loans, not to exceed 10% of the aggregate unpaid principal amount of the Whole Loan, from affiliates of the borrowers upon satisfaction of certain conditions set forth in the Mortgage Loan documents, including, without limitation, such unsecured debts are (a) payable only out of excess cash flow from the Mortgaged Properties (after payment of the debt service, any other amounts then due under the Whole Loan and other amounts relating to the ownership and operation of the Mortgaged Properties such as operating expenses, extraordinary expenses and capital expenditures), (b) subordinate in all respect to the Mortgage Loan pursuant to a subordination and standstill agreement satisfactory to the lender in its sole discretion and (c) without a maturity date.
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Certain Mortgage Loans may also permit the borrower’s parent to pledge direct or indirect ownership interests in the borrower in connection with corporate financing arrangements, provided that such financing is also secured by a significant number of assets other than such ownership interests in the borrower.
Certain risks relating to additional debt are described in “Risk Factors—Risks Relating to the Mortgage Loans—Other Financings or Ability to Incur Other Indebtedness Entails Risk”.
The Whole Loans
| General |
Each of the Mortgage Loans secured by the Mortgaged Properties identified on Annex A-1 as “Bedrock Portfolio”, “One Wilshire”, “Shearer’s Industrial Portfolio”, “Gem Tower”, “JW Marriott Desert Springs”, “Glen Forest Office Portfolio”, “601 Lexington Avenue” and “Novo Nordisk HQ”, collectively securing 39.8% of the Initial Pool Balance, is part of the related Whole Loan consisting of the Mortgage Loan and the related Pari Passu Companion Loan(s) and, in certain cases, the related Subordinate Companion Loan(s). In connection with each Whole Loan, the rights between the trustee on behalf of the issuing entity and the holder(s) of the related Companion Loan(s) (each, a “Companion Loan Holder”) are generally governed by an intercreditor agreement or co-lender agreement (each, an “Intercreditor Agreement”). With respect to each of the Whole Loans, the related Mortgage Loan and related Companion Loans are cross-collateralized and cross-defaulted.
Set forth in the following chart with respect to each Whole Loan is certain information regarding Mortgage Loans, any Pari Passu Companion Loan(s) and any Subordinate Companion Loan(s), including the identity of the current or anticipated holder of the controlling and non-controlling Mortgage Notes and the Cut-off Date Balance of each such Mortgage Loan and any related Companion Loan(s), which may be shown in the aggregate where the same holder holds more than one Mortgage Note.
Whole Loan Control Notes and Non-Control Notes
| Mortgage Loan | Servicing Status | Note(s) | Original Balance ($) | Cut-off Date Balance ($) | Current or Anticipated Holder of Note(s)(1) | Control Note (Yes/No) |
| 601 Lexington Avenue | Non-Serviced | A-1-S1 | $52,500,000 | $52,500,000 | BXP 2021-601L | Yes |
| A-1-C1 | 17,500,000 | 17,500,000 | Wells Fargo Bank, National Association | No | ||
| A-1-C2 | 67,543,860 | 67,543,860 | BANK 2022-BNK39 | No | ||
| A-1-C3 | 67,543,860 | 67,543,860 | BANK 2022-BNK40 | No | ||
| A-1-C4 | 48,067,280 | 48,067,280 | Wells Fargo Bank, National Association | No | ||
| A-2-S1 | 33,000,000 | 33,000,000 | BXP 2021-601L | No | ||
| A-2-C1 | 11,000,000 | 11,000,000 | Benchmark 2022-B33 | No | ||
| A-2-C2-1 | 43,479,070 | 43,479,070 | Benchmark 2022-B34 | No | ||
| A-2-C2-2 | 12,800,000 | 12,800,000 | Benchmark 2022-B32 | No | ||
| A-2-C3-1 | 40,000,000 | 40,000,000 | BMO 2022-C1 | No | ||
| A-2-C3-2 | 16,279,070 | 16,279,070 | Benchmark 2022-B33 | No | ||
| A-2-C4 | 2,567,860 | 2,567,860 | Benchmark 2022-B33 | No | ||
| A-3-S1 | 33,000,000 | 33,000,000 | BXP 2021-601L | No | ||
| A-3-C1 | 11,000,000 | 11,000,000 | MSC 2022-L8(2) | No | ||
| A-3-C2 | 42,456,140 | 42,456,140 | BANK 2022-BNK39 | No | ||
| A-3-C3 | 42,456,140 | 42,456,140 | BANK 2022-BNK40 | No | ||
| A-3-C4 | 30,213,720 | 30,213,720 | MSC 2022-L8(2) | No | ||
| A-4-S1 | 31,500,000 | 31,500,000 | BXP 2021-601L | No | ||
| A-4-C1 | 10,500,000 | 10,500,000 | CREFI | No | ||
| A-4-C2-1 | 41,520,930 | 41,520,930 | Benchmark 2022-B34 | No | ||
| A-4-C2-2 | 12,200,000 | 12,200,000 | Benchmark 2022-B32 | No | ||
| A-4-C3 | 50,153,070 | 50,153,070 | Benchmark 2022-B33 | No | ||
| A-4-C4 | 6,019,000 | 6,019,000 | CREFI | No | ||
| Total Senior Notes | $723,300,000 | $723,300,000 | ||||
| B-1 | $96,845,000 | $96,845,000 | BXP 2021-601L | Yes | ||
| B-2 | 60,874,000 | 60,874,000 | BXP 2021-601L | Yes | ||
| B-3 | 60,874,000 | 60,874,000 | BXP 2021-601L | Yes |
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| Mortgage Loan | Servicing Status | Note(s) | Original Balance ($) | Cut-off Date Balance ($) | Current or Anticipated Holder of Note(s)(1) | Control Note (Yes/No) |
| B-4 | 58,107,000 | 58,107,000 | BXP 2021-601L | Yes | ||
Total |
$1,000,000,000 |
$1,000,000,000 |
||||
| One Wilshire | Non-Serviced | A-1 | $90,000,000 | $90,000,000 | Benchmark 2022-B32 | Yes |
| A-2 | 80,000,000 | 80,000,000 | Benchmark 2022-B33 | No | ||
| A-3 | 85,000,000 | 85,000,000 | Benchmark 2022-B34 | No | ||
| A-4 | 94,250,000 | 94,250,000 | GS Bank | No | ||
| A-5 | 40,000,000 | 40,000,000 | GS Bank | No | ||
Total |
$389,250,000 |
$389,250,000 |
||||
| Bedrock Portfolio | Non-Serviced | A-1-1 | $125,000,000 | $125,000,000 | Benchmark 2022-B32 | Yes |
| A-1-2 | 50,000,000 | 50,000,000 | Benchmark 2022-B34 | No | ||
| A-1-3-A | 35,000,000 | 35,000,000 | Benchmark 2022-B34 | No | ||
| A-1-3-B | 15,000,000 | 15,000,000 | JPMCB | No | ||
| A-1-4 | 50,000,000 | 50,000,000 | Benchmark 2022-B33 | No | ||
| A-1-5 | 30,000,000 | 30,000,000 | Benchmark 2022-B33 | No | ||
| A-1-6 | 39,000,000 | 39,000,000 | JPMCB | No | ||
| A-2-1 | 40,000,000 | 40,000,000 | BMO 2022-C1 | No | ||
| A-2-2 | 26,000,000 | 26,000,000 | Starwood Mortgage Capital LLC | No | ||
| A-2-3 | 10,000,000 | 10,000,000 | Starwood Mortgage Capital LLC | No | ||
| A-2-4 | 10,000,000 | 10,000,000 | Starwood Mortgage Capital LLC | No | ||
Total |
$430,000,000 |
$430,000,000 |
||||
| Shearer’s Industrial Portfolio | Servicing Shift | A-1-1 | $36,318,600 | $36,318,600 | GS Bank | Yes(3) |
| A-1-2 | 30,000,000 | 30,000,000 | Benchmark 2022-B34 | No | ||
| A-1-3 | 30,000,000 | 30,000,000 | GS Bank | No | ||
| A-2 | 41,279,400 | 41,279,400 | Wells Fargo Bank, National Association | No | ||
Total |
$137,598,000 |
$137,598,000 |
||||
| Gem Tower | Serviced | A-1 | $28,000,000 | $28,000,000 | Benchmark 2022-B34 | Yes |
| A-2 | 12,000,000 | 12,000,000 | GS Bank | No | ||
Total |
$40,000,000 |
$40,000,000 |
||||
| Novo Nordisk HQ | Non-Serviced | A-1 | $75,000,000 | $75,000,000 | Benchmark 2021-B31 | Yes |
| A-2 | 47,500,000 | 47,500,000 | Benchmark 2022-B32 | No | ||
| A-3-1 | 12,500,000 | 12,500,000 | Benchmark 2022-B32 | No | ||
| A-3-2 | 12,500,000 | 12,500,000 | DBRI | No | ||
| A-4-1 | 41,000,000 | 41,000,000 | Benchmark 2022-B33 | No | ||
| A-4-2 | 22,167,000 | 22,167,000 | Benchmark 2022-B34 | No | ||
Total |
$210,667,000 |
$210,667,000 |
||||
| JW Marriott Desert Springs | Non-Serviced | A-1 | $75,000,000 | $75,000,000 | Benchmark 2022-B32 | Yes |
| A-2-1 | 33,000,000 | 33,000,000 | Benchmark 2022-B33 | No | ||
| A-2-2 | 20,000,000 | 20,000,000 | Benchmark 2022-B34 | No | ||
Total |
$128,000,000 |
$128,000,000 |
||||
| Glen Forest Office Portfolio | Non-Serviced | A-1 | $30,000,000 | $30,000,000 | Benchmark 2022-B32 | Yes |
| A-2-1 | 20,000,000 | 20,000,000 | Benchmark 2022-B33 | No | ||
| A-2-2 | 9,000,000 | 9,000,000 | Benchmark 2022-B34 | No | ||
Total |
$59,000,000 |
$59,000,000 |
| (1) | The identification of a securitization trust means we have identified another securitization trust that has closed or as to which a preliminary prospectus (or preliminary offering circular) or final prospectus (or final offering circular) has printed that has or is expected to include the identified Mortgage Note(s). |
| (2) | The MSC 2022-L8 securitization transaction is expected to close on April 7, 2022. |
| (3) | From and after the Servicing Shift Securitization Date, the Shearer’s Industrial Portfolio Mortgage Loan will be serviced pursuant to the Servicing Shift PSA entered into in connection with the securitization of the A-1 Controlling Companion Loan. |
“AB Whole Loan” means any Whole Loan comprised of a Mortgage Loan, a Subordinate Companion Loan and, in certain cases, one or more Pari Passu Companion Loans. The 601 Lexington Avenue Whole Loan is the only AB Whole Loan related to the issuing entity.
“Benchmark 2021-B31 PSA” means the pooling and servicing agreement governing the servicing of the Novo Nordisk HQ Whole Loan.
“Benchmark 2022-B32 PSA” means the pooling and servicing agreement governing the servicing of the One Wilshire Whole Loan, the Bedrock Portfolio Whole Loan, the JW Marriott Desert Springs Whole Loan and the Glen Forest Office Portfolio.
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“BXP 2021-601L TSA” means the trust and servicing agreement governing the servicing of the 601 Lexington Avenue Whole Loan.
“Control Note” means, with respect to any Whole Loan, the “Controlling Note” or other similar term specified in the related Intercreditor Agreement. As of the Closing Date, the Control Note with respect to each Whole Loan will be the promissory note(s) with a “Yes” answer in the column “Control Note (Yes/No)” in the table above entitled “Whole Loan Control Notes and Non-Control Notes”.
“Controlling Companion Loan” means, with respect to each Servicing Shift Whole Loan, the Companion Loan that is the Control Note for such Whole Loan.
“Controlling Holder” means, with respect to any Whole Loan, the holder of the related Control Note. As of the Closing Date, the Controlling Holder with respect to each Whole Loan will be the holder listed next to the related Control Note in the column “Current or Anticipated Holder of Note(s)” in the table above entitled “Whole Loan Control Notes and Non-Control Notes.”
“Non-Control Note” means, with respect to any Whole Loan, any “Non-Controlling Note” or other similar term specified in the related Intercreditor Agreement. As of the Closing Date, the Non-Control Note(s) with respect to each Whole Loan will be the promissory note(s) with “No” answers in the column “Control Note (Yes/No)” in the table above entitled “Whole Loan Control Notes and Non-Control Notes.”
“Non-Controlling Holder” means, with respect to any Whole Loan, the holder(s) of a Non-Control Note. As of the Closing Date, the Non-Controlling Holders with respect to each Whole Loan will be the holders listed next to the related Non-Control Notes in the column “Current or Anticipated Holder of Note(s)” in the table above entitled “Whole Loan Control Notes and Non-Control Notes.”
“Non-Serviced Certificate Administrator” means with respect to (i) any Non-Serviced Whole Loan, the certificate administrator relating to the related Non-Serviced PSA and (ii) any Servicing Shift Whole Loan, on and after the Servicing Shift Securitization Date, the certificate administrator under the Servicing Shift PSA.
“Non-Serviced Companion Loan” means each of (i) the Companion Loans identified as “Non-Serviced” under the column entitled “Servicing Status” in the table entitled “Whole Loan Control Notes and Non-Control Notes” above and (ii) on and after the Servicing Shift Securitization Date, the Companion Loans identified as “Servicing Shift” under the column entitled “Servicing Status” in the table entitled “Whole Loan Control Notes And Non-Control Notes” above.
“Non-Serviced Custodian” means with respect to (i) any Non-Serviced Whole Loan, the custodian relating to the related Non-Serviced PSA and (ii) any Servicing Shift Whole Loan, on and after the Servicing Shift Securitization Date, the custodian under the Servicing Shift PSA.
“Non-Serviced Directing Holder” means with respect to (i) any Non-Serviced Whole Loan, the directing holder (or equivalent) under the related Non-Serviced PSA and (ii) any Servicing Shift Whole Loan, on and after the Servicing Shift Securitization Date, the directing holder (or equivalent) under the Servicing Shift PSA.
“Non-Serviced Master Servicer” means with respect to (i) any Non-Serviced Whole Loan, the master servicer relating to the related Non-Serviced PSA and (ii) any Servicing Shift Whole Loan, on and after the Servicing Shift Securitization Date, the master servicer under the Servicing Shift PSA.
“Non-Serviced Mortgage Loan” means each of (i) the Mortgage Loans identified as “Non-Serviced” under the column entitled “Servicing Status” in the table entitled “Whole Loan Control Notes and Non-Control Notes” above and (ii) on and after a Servicing Shift Securitization Date, the Mortgage Loans identified as “Servicing Shift” under the column entitled “Servicing Status” in the table entitled “Whole Loan Control Notes and Non-Control Notes” above.
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“Non-Serviced Pari Passu Companion Loan” means each of (i) the Companion Loans identified as “Non-Serviced” under the column entitled “Servicing Status” that is pari passu in right of payment with the related Mortgage Loan in the table entitled “Whole Loan Control Notes and Non-Control Notes” above and (ii) on and after the related Servicing Shift Securitization Date, the Companion Loans identified as “Servicing Shift” under the column entitled “Servicing Status” that is pari passu in right of payment with the related Mortgage Loan in the table entitled “Whole Loan Control Notes and Non-Control Notes” above.
“Non-Serviced Pari Passu Whole Loan” means each of (i) the Whole Loans identified as “Non-Serviced” under the column entitled “Servicing Status” with one or more Non-Serviced Pari Passu Companion Loans in the table entitled “Whole Loan Control Notes and Non-Control Notes” above and (ii) on and after the Servicing Shift Securitization Date, the Whole Loans identified as “Servicing Shift” under the column entitled “Servicing Status” with one or more Pari Passu Companion Loans in the table entitled “Whole Loan Control Notes and Non-Control Notes” above.
“Non-Serviced PSA” means with respect to (i) any Non-Serviced Whole Loan, the pooling and servicing agreement or trust and servicing agreement relating to the transaction identified under the column entitled “Note Holder” in the table entitled “Non-Serviced Whole Loans” under “Summary of Terms—Whole Loans” above and (ii) the Servicing Shift Whole Loans on and after the Servicing Shift Securitization Date, the Servicing Shift PSA.
“Non-Serviced Securitization Trust” means a securitization trust that is created and governed by a Non-Serviced PSA.
“Non-Serviced Special Servicer” means with respect to (i) any Non-Serviced Whole Loan, the special servicer relating to the related Non-Serviced PSA and (ii) any Servicing Shift Whole Loan, on and after the Servicing Shift Securitization Date, the special servicer under the Servicing Shift PSA.
“Non-Serviced Trustee” means with respect to (i) any Non-Serviced Whole Loan, the trustee relating to the related Non-Serviced PSA and (ii) any Servicing Shift Whole Loan, on and after the Servicing Shift Securitization Date, the trustee under the Servicing Shift PSA.
“Non-Serviced Whole Loan” means each of the Non-Serviced Pari Passu Whole Loans, the Non-Serviced AB Whole Loans and, after the related Servicing Shift Securitization Date, the Servicing Shift Whole Loans.
“Serviced Companion Loan” means each of the Mortgage Loans identified as “Serviced” under the column titled “Servicing Status” in the table titled “Whole Loan Control Notes and Non-Control Notes” above and, prior to the related Servicing Shift Securitization Date, the related Servicing Shift Mortgage Loans.
“Serviced Mortgage Loan” means each of (i) the Mortgage Loans identified as “Serviced” under the column entitled “Servicing Status” in the table entitled “Whole Loan Control Notes and Non-Control Notes” above and (ii) prior to the Servicing Shift Securitization Date, the Mortgage Loans identified as “Servicing Shift” under the column entitled “Servicing Shift” in the table entitled “Whole Loan Control Notes and Non-Control Notes” above.
“Serviced Pari Passu Companion Loan” means each of (i) the Companion Loans identified as “Serviced” under the column entitled “Servicing Status” that is pari passu in right of payment with the related Mortgage Loan in the table entitled “Whole Loan Control Notes and Non-Control Notes” above and (ii) prior to the Servicing Shift Securitization Date, the Companion Loans identified as “Servicing Shift” under the column entitled “Servicing Status” that is pari passu in right of payment with the related Mortgage Loan in the table entitled “Whole Loan Control Notes and Non-Control Notes” above.
“Serviced Pari Passu Mortgage Loan” means each Mortgage Loan related to a Serviced Pari Passu Whole Loan.
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“Serviced Pari Passu Whole Loan” means each of (i) the Whole Loans identified as “Serviced” under the column entitled “Servicing Status” with one or more Serviced Pari Passu Companion Loans in the table entitled “Whole Loan Control Notes and Non-Control Notes” above and (ii) prior to the Servicing Shift Securitization Date, the Whole Loans identified as “Servicing Shift” under the column entitled “Servicing Status” with one or more Serviced Pari Passu Companion Loans in the table entitled “Whole Loan Control Notes and Non-Control Notes” above.
“Serviced Subordinate Companion Loan” means, with respect to any Serviced AB Whole Loan, any subordinate promissory note that is part of such Whole Loan that is subordinate to the related Serviced Mortgage Loan.
“Serviced Whole Loan” means each of (i) the Whole Loans identified as “Serviced” under the column entitled under the column entitled “Servicing Status” in the table entitled “Whole Loan Control Notes and Non-Control Notes” above, and (ii) prior to the Servicing Shift Securitization Date, the Whole Loans identified as “Servicing Shift” under the column entitled “Servicing Status” in the table entitled “Whole Loan Control Notes and Non-Control Notes” above.
“Servicing Shift Mortgage Loan” means each of the Mortgage Loans identified as “Servicing Shift” under the column titled “Servicing Status” in the table titled “Whole Loan Control Notes and Non-Control Notes” above.
“Servicing Shift PSA” means, with respect to each Servicing Shift Whole Loan, the pooling and servicing agreement or trust and servicing agreement governing the servicing of each Servicing Shift Whole Loan following the related Servicing Shift Securitization Date.
“Servicing Shift Securitization Date” means, with respect to each Servicing Shift Whole Loan, the date on which the related Controlling Companion Loan is included in a securitization trust.
“Servicing Shift Whole Loan” means each of the Whole Loans identified as “Servicing Shift” under the column titled “Servicing Status” in the table titled “Whole Loan Control Notes and Non-Control Notes” above.
“Subordinate Companion Loan” means with respect to any Whole Loan, any related subordinated note not included in the issuing entity, which is generally subordinated in right of payment to the related Mortgage Loan to the extent set forth in the related Intercreditor Agreement.
“Whole Loan” means, collectively, each of the Non-Serviced Whole Loans, the Serviced Whole Loans and the Servicing Shift Whole Loans, as the context may require and as applicable.
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The following table provides certain information with respect to each Mortgage Loan that has a corresponding Companion Loan:
Whole Loan Summary
| Mortgage Loan Name | Mortgage Loan Cut-off Date Balance | % of Initial Pool Balance | Pari Passu Companion Loan Cut-off Date Balance | Subordinate Companion Loan Cut-off Date Balance | Mortgage Loan LTV Ratio(1) | Mortgage Loan Underwritten NCF DSCR(1) | Mortgage Loan Underwritten NOI Debt Yield(1) | Whole Loan LTV Ratio(2) | Whole Loan Underwritten NCF DSCR(2) | Whole Loan Underwritten NOI Debt Yield(2) | |||||||||||
| 601 Lexington Avenue | $85,000,000 | 9.3% | $638,300,000 | $276,700,000 | 42.5% | 4.50x | 13.2% | 58.8% | 3.25x | 9.5% | |||||||||||
| One Wilshire | $85,000,000 | 9.3% | $304,250,000 | NAP | 42.6% | 3.37x | 9.6% | 42.6% | 3.37x | 9.6% | |||||||||||
| Bedrock Portfolio | $85,000,000 | 9.3% | $345,000,000 | NAP | 59.4% | 3.30x | 13.6% | 59.4% | 3.30x | 13.6% | |||||||||||
| Shearer’s Industrial Portfolio | $30,000,000 | 3.3% | $107,598,000 | NAP | 62.8% | 1.95x | 8.3% | 62.8% | 1.95x | 8.3% | |||||||||||
| Gem Tower | $28,000,000 | 3.1% | $12,000,000 | NAP | 54.5% | 2.78x | 9.6% | 54.5% | 2.78x | 9.6% | |||||||||||
| Novo Nordisk HQ | $22,167,000 | 2.4% | $188,500,000 | NAP | 63.8% | 3.16x | 9.2% | 63.8% | 3.16x | 9.2% | |||||||||||
| JW Marriott Desert Springs | $20,000,000 | 2.2% | $108,000,000 | NAP | 41.8% | 3.14x | 20.4% | 41.8% | 3.14x | 20.4% | |||||||||||
| Glen Forest Office Portfolio | $9,000,000 | 1.0% | $50,000,000 | NAP | 61.7% | 2.85x | 11.3% | 61.7% | 2.85x | 11.3% |
(1) | Calculated based on the balance of or debt service on, as applicable, the related Whole Loan, but excluding any related Subordinate Companion Loans and any related mezzanine debt. |
| (2) | Calculated based on the balance of or debt service on, as applicable, the related Whole Loan (including any related Subordinate Companion Loans), but excluding any related mezzanine debt. |
The Serviced Pari Passu Whole Loans
The Serviced Pari Passu Whole Loans will be serviced pursuant to the PSA in accordance with the terms of the PSA and the related Intercreditor Agreement. None of the master servicer, the special servicer or the trustee will be required to make a monthly payment advance on any Serviced Pari Passu Companion Loan, but the master servicer or the trustee, as applicable, will be required to make Servicing Advances on the Serviced Pari Passu Whole Loans unless such advancing party (or, even if it is not the advancing party, the special servicer) determines that such a Servicing Advance would be a Nonrecoverable Advance.
Each Servicing Shift Whole Loan will be serviced pursuant to the PSA (and, accordingly, will be a Serviced Pari Passu Whole Loan) prior to the Servicing Shift Securitization Date, after which such Whole Loan will be serviced pursuant to the related Non-Serviced PSA (and, accordingly, will be a Non-Serviced Whole Loan). With respect to each Servicing Shift Whole Loan, the discussion under this section only applies to the period prior to the related Servicing Shift Securitization Date.
Intercreditor Agreement
The Intercreditor Agreement related to each Serviced Pari Passu Whole Loan provides that:
| ● | The promissory notes comprising such Serviced Pari Passu Whole Loan (and consequently, the related Serviced Mortgage Loan and each Serviced Pari Passu Companion Loan) are of equal priority with each other and none of such promissory notes (or mortgage loans) will have priority or preference over any other such promissory note (or mortgage loan). |
| ● | All payments, proceeds and other recoveries on the Serviced Pari Passu Whole Loan will be applied to the promissory notes comprising such Serviced Pari Passu Whole Loan on a pro rata and pari passu basis (subject, in each case, to (a) the allocation of certain amounts to escrows and reserves, certain repairs or restorations or payments to the applicable borrower required by the Mortgage Loan documents and (b) certain payment and reimbursement rights of the parties to the PSA, in accordance with the terms of the PSA). |
| ● | The transfer of up to 49% of the beneficial interest of a promissory note comprising the Serviced Pari Passu Whole Loan is generally permitted. The transfer of more than 49% of the beneficial interest of any such promissory note is generally prohibited unless (i) the transferee is a large institutional lender or investment fund (other than, without the consent of the non-transferring |
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| noteholder, a related borrower or an affiliate thereof) that satisfies minimum net worth and/or experience requirements or certain securitization vehicles that satisfy certain ratings and other requirements or (ii) (a) each non-transferring holder has consented to such transfer (which consent may not be unreasonably withheld), or (b) if any such non-transferring holder’s interest in the related Serviced Whole Loan is held in a securitization, a rating agency communication is provided to each applicable rating agency (or, in certain cases, a rating agency confirmation is obtained from each applicable rating agency). The foregoing restrictions do not apply to a sale of the related Serviced Mortgage Loan together with the related Serviced Pari Passu Companion Loans in accordance with the terms of the PSA. |
With respect to each Serviced Pari Passu Whole Loan, certain costs and expenses (such as a pro rata share of a Servicing Advance) allocable to a related Serviced Pari Passu Companion Loan may be paid or reimbursed out of payments and other collections on the Mortgage Pool, subject to the issuing entity’s right to reimbursement from future payments and other collections on such Serviced Pari Passu Companion Loan or from general collections with respect to any securitization of such Serviced Pari Passu Companion Loan.
Control Rights with respect to Serviced Pari Passu Whole Loans Other than the Servicing Shift Whole Loans
With respect to any Serviced Pari Passu Whole Loan (other than any Servicing Shift Whole Loan), the related Control Note will be included in the issuing entity, and the Directing Holder will have certain consent rights (other than during the continuance of a Control Termination Event) and consultation rights (during the continuance of a Control Termination Event, but so long as no Consultation Termination Event is continuing) with respect to such Mortgage Loan as described under “Pooling and Servicing Agreement—The Directing Holder”.
Control Rights with respect to the Servicing Shift Whole Loans
With respect to each Servicing Shift Whole Loan prior to the related Servicing Shift Securitization Date, the related Control Note will be held as of the Closing Date by the related Controlling Holder. The related Controlling Holder will be entitled (i) to direct the servicing of such Whole Loan, (ii) to consent to certain servicing decisions in respect of such Whole Loan and actions set forth in a related asset status report and (iii) to replace the special servicer with respect to such Whole Loan with or without cause; provided that with respect to the related Servicing Shift Whole Loan, if such holder or its representative is (or is an affiliate of) the related borrower or if all or a specified portion of the related Control Note is held by the borrower or an affiliate thereof, no party will be entitled to exercise the rights of such “Controlling Holder”, and there will be deemed to be no such “Controlling Holder” under the related Intercreditor Agreement.
Certain Rights of each Non-Controlling Holder
With respect to each Serviced Pari Passu Whole Loan, the holder of any related Non-Control Note (a “Non-Controlling Holder”) (or if such Non-Control Note has been securitized, the directing holder (or equivalent holder) with respect to such securitization or other designated party under the related pooling and servicing agreement) will be entitled to certain consent and non-binding consultation rights described below; provided that if such party or its representative is (or is an affiliate of) the related borrower or if all or a specified portion of the subject Non-Control Note is held by the borrower or an affiliate thereof, such party will not be entitled to exercise the right of a Non-Controlling Holder, and/or there will be deemed to be no such Non-Controlling Holder under the related Intercreditor Agreement with respect to such Non-Control Note. With respect to each Servicing Shift Whole Loan, one or more related Non-Control Notes will be included in the issuing entity, and the Directing Holder, other than during the continuance of a Control Termination Event, or the special servicer (consistent with the Servicing Standard), during the continuance of a Control Termination Event, will be entitled to exercise the consent or consultation rights described below.
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The special servicer will be required (i) to provide to each Non-Controlling Holder copies of any notice, information and report that it is required to provide to the Directing Holder with respect to the implementation of any recommended actions outlined in an Asset Status Report relating to such Serviced Pari Passu Whole Loan or any proposed action to be taken in respect of a Major Decision with respect to such Serviced Pari Passu Whole Loan (for this purpose, without regard to whether such items are actually required to be provided to the Directing Holder due to the occurrence of a Control Termination Event or Consultation Termination Event) and (ii) to use commercially reasonable efforts to consult each such Non-Controlling Holder on a strictly non-binding basis (to the extent such party requests consultation after having received the aforementioned notices, information and reports) with respect to any such recommended actions by the special servicer or any proposed action to be taken by such special servicer in respect of such Serviced Pari Passu Whole Loan that constitutes a Major Decision.
Such non-binding consultation right will expire ten (10) business days (or, with respect to an “acceptable insurance default” in the case of certain Serviced Pari Passu Whole Loans, 30 days) after the delivery to such Non-Controlling Holder of written notice of a proposed action (together with copies of the notices, information and reports required to be delivered thereto) (unless the special servicer proposes a new course of action that is materially different from the action previously proposed, in which case such ten (10) business day period will be deemed to begin anew). In no event will the special servicer be obligated to follow or take any alternative actions recommended by any Non-Controlling Holder (or its representative).
In addition to the aforementioned consultation right, each Non-Controlling Holder will have the right to attend annual meetings (which may be held telephonically) with the master servicer or special servicer, as applicable, upon reasonable notice and at times reasonably acceptable to the master servicer or special servicer, as applicable, in which servicing issues related to the related Serviced Pari Passu Whole Loan are discussed.
If a Servicer Termination Event has occurred with respect to the special servicer that affects a Non-Controlling Holder, such holder will have the right to direct the trustee to terminate the special servicer under the PSA solely with respect to the related Serviced Pari Passu Whole Loan.
Sale of Defaulted Mortgage Loan
If any Serviced Pari Passu Whole Loan becomes a Defaulted Loan, and if the special servicer decides to sell the related Serviced Pari Passu Mortgage Loan, such special servicer will be required to sell such Serviced Pari Passu Mortgage Loan and each related Serviced Pari Passu Companion Loan together as interests evidencing one whole loan. Notwithstanding the foregoing, such special servicer will not be permitted to sell a Serviced Pari Passu Whole Loan without the consent of each Non-Controlling Holder (except, in certain cases, if the Non-Controlling Holder is the borrower or an affiliate of the borrower) unless it has delivered to such holder (a) at least fifteen (15) business days prior written notice of any decision to attempt to sell the related Serviced Pari Passu Whole Loan, (b) at least ten (10) days prior to the proposed sale date, a copy of each bid package (together with any material amendments to such bid packages) received by such special servicer, a copy of the most recent appraisal and certain other supplementary documents (if reasonably requested by such holder), and (c) until the sale is completed, and a reasonable period (but no less time than is afforded to other offerors and the Directing Holder) prior to the proposed sale date, all information and documents being provided to offerors or otherwise approved by the master servicer or special servicer in connection with the proposed sale.
The Non-Serviced Pari Passu Whole Loans
Each Non-Serviced Pari Passu Whole Loan will be serviced pursuant to the related Non-Serviced PSA in accordance with the terms of such Non-Serviced PSA and the related Intercreditor Agreement. No Non-Serviced Master Servicer, Non-Serviced Special Servicer or Non-Serviced Trustee will be required to make monthly payment advances on a Non-Serviced Mortgage Loan, but the related Non-Serviced Master Servicer or Non-Serviced Trustee, as applicable, will be required to (and the Non-Serviced Special Servicer, at its option in certain cases, may) make servicing advances on the related Non-Serviced Whole Loan in accordance with the terms of the related Non-Serviced PSA unless such advancing party (or, in
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certain cases, the related Non-Serviced Special Servicer, even if it is not the advancing party) determines that such a servicing advance would be a nonrecoverable advance. Monthly payment advances on each Non-Serviced Mortgage Loan will be made by the master servicer or the trustee, as applicable, to the extent provided under the PSA. None of the master servicer, the special servicer or the trustee will be obligated to make servicing advances with respect to a Non-Serviced Whole Loan. See “Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans” for a description of the servicing terms of the Non-Serviced PSAs.
With respect to the Servicing Shift Whole Loans, the discussion under this “—The Non-Serviced Pari Passu Whole Loans” section only applies to the period on or after the related Servicing Shift Securitization Date.
Intercreditor Agreement
The Intercreditor Agreement related to each Non-Serviced Pari Passu Whole Loan provides that:
| ● | The promissory notes comprising such Non-Serviced Pari Passu Whole Loan (and consequently, the related Non-Serviced Mortgage Loan and each Non-Serviced Pari Passu Companion Loan) are of equal priority with each other and none of such promissory notes (or mortgage loans) will have priority or preference over any other such promissory note (or mortgage loan). |
| ● | All payments, proceeds and other recoveries on the Non-Serviced Whole Loan will be applied to the promissory notes comprising such Non-Serviced Pari Passu Whole Loan on a pro rata and pari passu basis (subject, in each case, to (a) the allocation of certain amounts to escrows and reserves required by the Mortgage Loan documents and (b) certain payment and reimbursement rights of the parties to the related Non-Serviced PSA, in accordance with the terms of the related Non-Serviced PSA). |
| ● | The transfer of up to 49% of the beneficial interest of a promissory note comprising the Non-Serviced Whole Loan is generally permitted. The transfer of more than 49% of the beneficial interest of any such promissory note is generally prohibited unless (i) the transferee is a large institutional lender or investment fund (other than, without the consent of the non-transferring noteholder, a related borrower or an affiliate thereof) that satisfies minimum net worth and/or experience requirements or certain securitization vehicles that satisfy certain ratings and other requirements or (ii) (a) each non-transferring holder has consented to such transfer (which consent may not be unreasonably withheld), or (b) if any such non-transferring holder’s interest in the related Non-Serviced Whole Loan is held in a securitization, a rating agency communication is provided to each applicable rating agency (or, in certain cases, a rating agency confirmation is obtained from each applicable rating agency). The foregoing restrictions do not apply to a sale of the related Non-Serviced Mortgage Loan together with the related Non-Serviced Pari Passu Companion Loans in accordance with the terms of the related Non-Serviced PSA. |
Any losses, liabilities, claims, costs and expenses incurred in connection with a Non-Serviced Whole Loan that are not otherwise paid out of collections on such Whole Loan may, to the extent allocable to the related Non-Serviced Mortgage Loan, be payable or reimbursable out of general collections on the mortgage pool for this securitization.
Control Rights
With respect to each Non-Serviced Whole Loan (including each Servicing Shift Whole Loan on or after the related Servicing Shift Securitization Date), the related Control Note will be held as of the Closing Date by the related Controlling Holder. The related Controlling Holder (or a designated representative) will be entitled (i) to direct the servicing of such Whole Loan, (ii) to consent to certain servicing decisions in respect of such Whole Loan and actions set forth in a related asset status report and (iii) to replace the special servicer with respect to such Whole Loan with or without cause; provided that with respect to each Non-Serviced Whole Loan, if such holder (or its designated representative) is (or is an affiliate of) the related borrower or if all or a specified portion of the subject Control Note is held by
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the borrower or an affiliate thereof, such party will not be entitled to exercise the rights of the “Controlling Holder”, and/or there will be deemed to be no such “Controlling Holder” under the related Intercreditor Agreement.
Certain Rights of each Non-Controlling Holder
With respect to any Non-Serviced Whole Loan, the holder of any related Non-Control Note (or if such Non-Control Note has been securitized, the directing holder (or equivalent entity) with respect to such securitization (or other designated party under the related pooling and servicing agreement)) will be entitled to certain consent and consultation rights described below; provided that if such party or its representative is (or is an affiliate of) the related borrower or if all or a specified portion of the subject Non-Control Note is held by the borrower or an affiliate thereof, such party will not be entitled to exercise the rights of a Non-Controlling Holder, and/or there will be deemed to be no “Non-Controlling Holder” with respect to such Non-Control Note under the related Intercreditor Agreement. With respect to each Non-Serviced Whole Loan (including each Servicing Shift Whole Loan on or after the related Servicing Shift Securitization Date), one or more related Non-Control Notes will be included in the issuing entity, and the Directing Holder, other than during continuance of a Control Termination Event, or the special servicer (consistent with the Servicing Standard), during the continuance of a Control Termination Event, will be entitled to exercise the consent or consultation rights described above.
With respect to any Non-Serviced Whole Loan, the related Non-Serviced Special Servicer or Non-Serviced Master Servicer, as applicable pursuant to the related Intercreditor Agreement, will be required (i) to provide to each Non-Controlling Holder copies of any notice, information and report that it is required to provide to the related Non-Serviced Directing Holder under the related Non-Serviced PSA with respect to the implementation of any recommended actions outlined in an asset status report relating to the related Non-Serviced Whole Loan or any proposed action to be taken in respect of a major decision under the related Non-Serviced PSA with respect to such Non-Serviced Whole Loan (for this purpose, without regard to whether such items are actually required to be provided to the related Non-Serviced Directing Holder due to the occurrence and continuance of a “control termination event” or a “consultation termination event” (or analogous concepts) under such Non-Serviced PSA) and (ii) to consult (or to use reasonable efforts to consult) each Non-Controlling Holder on a strictly non-binding basis (to the extent such party requests consultation after having received the aforementioned notices, information and reports) with respect to any such recommended actions by such Non-Serviced Special Servicer or any proposed action to be taken by such Non-Serviced Special Servicer in respect of the applicable major decision.
Such consultation right will expire ten (10) business days (or, with respect to an “acceptable insurance default” in the case of certain Non-Serviced Whole Loans, 30 days) after the delivery to such Non-Controlling Holder of written notice of a proposed action (together with copies of the notices, information and reports required to be delivered thereto), whether or not such Non-Controlling Holder has responded within such period (unless the related Non-Serviced Special Servicer proposes a new course of action that is materially different from the action previously proposed, in which case such ten (10) business day period will be deemed to begin anew). In no event will the related Non-Serviced Special Servicer be obligated to follow or take any alternative actions recommended by any Non-Controlling Holder (or its representative).
If the related Non-Serviced Special Servicer determines that immediate action is necessary to protect the interests of the holders of the promissory notes comprising a Non-Serviced Whole Loan, it may take, in accordance with the servicing standard under the Non-Serviced PSA, any action constituting a major decision with respect to such Non-Serviced Whole Loan or any action set forth in any applicable asset status report before the expiration of the aforementioned ten (10) business day period.
In addition to the aforementioned consultation right, each Non-Controlling Holder will have the right to attend annual meetings (which may be held telephonically) with the related Non-Serviced Master Servicer or the related Non-Serviced Special Servicer, as applicable, upon reasonable notice and at times reasonably acceptable to such Non-Serviced Master Servicer or Non-Serviced Special Servicer, as applicable, in which servicing issues related to the related Non-Serviced Whole Loan are discussed.
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If a special servicer termination event under the related Non-Serviced PSA has occurred that affects a Non-Controlling Holder, such holder will have the right to direct the related Non-Serviced Trustee to terminate the related Non-Serviced Special Servicer under such Non-Serviced PSA solely with respect to the related Non-Serviced Whole Loan.
Custody of the Mortgage File
The Non-Serviced Custodian is the custodian of the mortgage file related to the related Non-Serviced Whole Loan (other than any promissory notes not contributed to the related Non-Serviced Securitization Trust).
Sale of Defaulted Mortgage Loan
If any Non-Serviced Whole Loan becomes a defaulted mortgage loan, and if the related Non-Serviced Special Servicer decides to sell the related Control Note contributed to the Non-Serviced Securitization Trust, such Non-Serviced Special Servicer will be required to sell the related Non-Serviced Mortgage Loan and each Non-Serviced Pari Passu Companion Loan together as interests evidencing one whole loan. Notwithstanding the foregoing, the related Non-Serviced Special Servicer will not be permitted to sell a Non-Serviced Whole Loan without the consent of each Non-Controlling Holder (except, in certain cases, if the Non-Controlling Holder is the borrower or an affiliate of the borrower) unless it has delivered to such holder (a) at least fifteen (15) business days prior written notice of any decision to attempt to sell the related Non-Serviced Whole Loan, (b) at least ten (10) days prior to the proposed sale date, a copy of each bid package (together with any material amendments to such bid packages) received by the related Non-Serviced Special Servicer, a copy of the most recent appraisal and certain other supplementary documents (if requested by such holder), and (c) until the sale is completed, and a reasonable period (but no less time than is afforded to other offerors and the applicable Non-Serviced Directing Holder under the related Non-Serviced PSA) prior to the proposed sale date, all information and documents being provided to offerors or otherwise approved by the related Non-Serviced Master Servicer or Non-Serviced Special Servicer in connection with the proposed sale.
The Non-Serviced AB Whole Loans
601 Lexington Avenue Whole Loan
| General |
The 601 Lexington Avenue Mortgage Loan (9.3%) is part of a Whole Loan evidenced by 27 promissory notes, each of which is secured by the same mortgage instrument on the same Mortgaged Property, with an aggregate initial principal amount of $1,000,000,000. Note A-2-C2-1 and Note A-4-C2-1, with an aggregate initial principal balance of $85,000,000, will be deposited into this securitization.
The 601 Lexington Avenue Whole Loan (as defined below) is evidenced by (i) the 601 Lexington Avenue Mortgage Loan, (ii) 21 senior promissory notes (the “601 Lexington Avenue Pari Passu Companion Loans” and, together with the 601 Lexington Avenue Mortgage Loan, the “601 Lexington Avenue Senior Notes”), which have an aggregate initial principal balance of $638,300,000 and (iii) four (4) subordinate promissory notes, Notes B-1, B-2, B-3 and B-4 (the “601 Lexington Avenue Subordinate Companion Loans” and, together with the 601 Lexington Avenue Pari Passu Companion Loans, the “601 Lexington Avenue Companion Loans”), which have an aggregate initial principal balance of $276,700,000. The 601 Lexington Avenue Senior Notes are generally pari passu in right of payment with each other, and the 601 Lexington Avenue Subordinate Companion Loans are generally subordinate in right of payment to the 601 Lexington Avenue Senior Notes.
Only the 601 Lexington Avenue Mortgage Loan is included in the issuing entity. The current holders of the 601 Lexington Avenue Notes are set forth in the table entitled “Whole Loan Control Notes and Non-Control Notes” under “Description of the Mortgage Pool—The Whole Loans—General”.
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The 601 Lexington Avenue Mortgage Loan, the 601 Lexington Avenue Pari Passu Companion Loans and the 601 Lexington Avenue Subordinate Companion Loans are collectively referred to in this prospectus as the “601 Lexington Avenue Whole Loan”. The rights of the holders of the promissory notes evidencing the 601 Lexington Avenue Whole Loan (the “601 Lexington Avenue Noteholders”) are subject to an Intercreditor Agreement (the “601 Lexington Avenue Intercreditor Agreement”). The 601 Lexington Avenue Whole Loan will be serviced and administered pursuant to the trust and servicing agreement governing the BXP 2021-601L securitization (the “BXP 2021-601L TSA”) and the 601 Lexington Avenue Intercreditor Agreement. The following summaries describe certain provisions of the 601 Lexington Avenue Intercreditor Agreement.
| Servicing |
The 601 Lexington Avenue Whole Loan (including the 601 Lexington Avenue Mortgage Loan) and any related REO Property are serviced pursuant to the terms of the BXP 2021-601L TSA by Wells Fargo Bank, National Association, as servicer (the “601 Lexington Avenue Servicer”), and, if necessary, Situs Holdings, LLC, as special servicer (the “601 Lexington Avenue Special Servicer”), which governs the terms of the BXP 2021-601L securitization into which each of the 601 Lexington Avenue Pari Passu Companion Loans evidenced by Notes A-1-S1, A-2-S1, A-3-S1 and A-4-S1 and the 601 Lexington Avenue Subordinate Companion Loans were deposited, in the manner described under “Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans”, but subject to the terms of the 601 Lexington Avenue Intercreditor Agreement. See “Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans”.
| Distributions |
The 601 Lexington Avenue Intercreditor Agreement provides, in general, that (i) each 601 Lexington Avenue Senior Note and the rights of the holder thereof to receive payments of interest, principal and other amounts with respect thereto are made on a pro rata and pari passu basis with each other 601 Lexington Avenue Senior Note and (ii) the 601 Lexington Avenue Subordinate Companion Loans and the right of the holders thereof to receive payments of interest, principal and other amounts with respect thereto is at all times, junior, subject and subordinate to the 601 Lexington Avenue Senior Notes and the right of the holders thereof to receive payments of interest, principal and other amounts with respect thereto, in each case to the extent described below.
Application of Payments Prior to an Event of Default
Prior to the occurrence and continuance of an event of default with respect to the 601 Lexington Avenue Whole Loan, any collections received in respect of the 601 Lexington Avenue Whole Loan or related Mortgaged Property will be applied to the 601 Lexington Avenue Mortgage Loan, the 601 Lexington Avenue Pari Passu Companion Loans and the 601 Lexington Avenue Subordinate Companion Loans in accordance with 601 Lexington Avenue mortgage loan agreement. Accordingly, subject to the right of the 601 Lexington Avenue Servicer, the 601 Lexington Avenue Special Servicer, the trustee and the certificate administrator under the BXP 2021-601L TSA to be reimbursed for any unanticipated trust fund expenses in accordance with the BXP 2021-601L TSA, the monthly debt service payment on the 601 Lexington Avenue Whole Loan will be applied: first, to the payment of interest due and payable on the 601 Lexington Avenue Senior Notes, pro rata and pari passu; second, to the payment of interest due and payable on each of the 601 Lexington Avenue Subordinate Companion Loans, pro rata and pari passu; third, to the reduction of the outstanding principal balance of each of the 601 Lexington Avenue Senior Notes, pro rata and pari passu, until the outstanding principal balance of each such 601 Lexington Avenue Senior Note is reduced to zero; and fourth, to the reduction of the outstanding principal balance of 601 Lexington Avenue Subordinate Companion Loans, pro rata and pari passu, until the outstanding principal balance of each such 601 Lexington Avenue Subordinate Companion Loan is reduced to zero.
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Application of Payments
Following the occurrence and during the continuance of an event of default with respect to the 601 Lexington Avenue Whole Loan, payments and proceeds with respect to the 601 Lexington Avenue Whole Loan will generally be applied in the following order, in each case to the extent of available funds:
| • | first, to provide reimbursement to the 601 Lexington Avenue Servicer and the trustee under the BXP 2021-601L TSA (the “601 Lexington Avenue Trustee”) for any nonrecoverable servicing advances and administrative advances and any interest thereon; |
| • | second, to provide reimbursement to holders of the 601 Lexington Avenue Senior Notes for any nonrecoverable monthly debt service advances and interest thereon on the 601 Lexington Avenue Senior Notes, on a pari passu and pro rata basis, then to provide reimbursement to holders of the 601 Lexington Avenue Subordinate Companion Loans for any nonrecoverable monthly debt service advances and interest thereon on the 601 Lexington Avenue Subordinate Companion Loans, on a pari passu and pro rata basis; |
| • | third, to provide reimbursement to the 601 Lexington Avenue Servicer and 601 Lexington Avenue Trustee, as applicable, for any servicing advances and administrative advances plus any interest thereon and any trust fund expenses; |
| • | fourth, to the holders of the 601 Lexington Avenue Senior Notes on a pro rata and pari passu basis, in an amount equal to the accrued and unpaid interest (other than default interest) on the outstanding principal of their respective notes; |
| • | fifth, to the holders of the 601 Lexington Avenue Senior Notes on a pro rata and pari passu basis, in an amount equal to the accrued and unpaid interest on monthly debt service advances; |
| • | sixth, to the holders of the 601 Lexington Avenue Subordinate Companion Loans, on a pro rata and pari passu basis, in an amount equal to the accrued and unpaid interest (other than default interest) on the outstanding principal of their respective notes; |
| • | seventh, to the holders of the 601 Lexington Avenue Subordinate Companion Loans, on a pro rata and pari passu basis, in an amount equal to the accrued and unpaid interest on monthly debt services advances on the B Notes; |
| • | eighth, to the holders of the 601 Lexington Avenue Senior Notes, payments of principal, on a pro rata and pari passu basis, based on their outstanding principal balances, until their principal balances have been reduced to zero; |
| • | ninth, to the holders of the 601 Lexington Avenue Subordinate Companion Loans, payments of principal on a pro rata and pari passu basis, based on their outstanding principal balances, until their principal balances have been reduced to zero; |
| • | tenth, to pay the 601 Lexington Avenue Servicer or the 601 Lexington Avenue Special Servicer any amounts to be applied to the payment of, or escrowed for the future payment of, real estate taxes, assessments and insurance premiums and similar items; |
| • | eleventh, to fund any other reserves to the extent then required to be held in escrow; |
| • | twelfth, to pay to the holders of the 601 Lexington Avenue Senior Notes any yield maintenance or other prepayment premium then due and payable to the holders of the 601 Lexington Avenue Senior Notes, on a pro rata and pari passu basis, then to the holders of the 601 Lexington Avenue Subordinate Companion Loans any yield maintenance or other prepayment premium then due and payable to the holders of the 601 Lexington Avenue Subordinate Companion Loans, on a pro rata and pari passu basis; |
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| • | thirteenth, to pay the 601 Lexington Avenue Servicer or the 601 Lexington Avenue Special Servicer default interest and late fees then due and payable under the 601 Lexington Avenue Whole Loan documents, all of which will be applied in accordance with the BXP 2021-601L TSA; |
| • | fourteenth, to pay any additional servicing compensation that the 601 Lexington Avenue Servicer or the 601 Lexington Avenue Special Servicer is entitled to receive under the BXP 2021-601L TSA; and |
| • | fifteenth, any remaining amount will be paid pro rata to the holders of the 601 Lexington Avenue Companion Loans and the issuing entity as holder of the 601 Lexington Avenue Mortgage Loan, based on the original principal balance of the 601 Lexington Avenue Mortgage Loan and the 601 Lexington Avenue Companion Loans. |
If a P&I Advance is made with respect to the 601 Lexington Avenue Mortgage Loan pursuant to the terms of the PSA, unless such P&I Advance is determined to be nonrecoverable, that P&I Advance, together with interest on that P&I Advance, may only be reimbursed out of future payments and collections on the 601 Lexington Avenue Mortgage Loan or, as and to the extent described under “Pooling and Servicing Agreement—Advances”, on other mortgage loans in this securitization, but not out of payments or other collections on the 601 Lexington Avenue Companion Loans.
The issuing entity is required to pay its pro rata share of any unanticipated trust fund expenses relating to the servicing of the 601 Lexington Avenue Whole Loan in accordance with the BXP 2021-601L TSA and the 601 Lexington Avenue Intercreditor Agreement to the extent that such amounts remain unpaid or unreimbursed after funds received from the related borrower for payment of such amounts and any principal and interest collections allocable to the 601 Lexington Avenue Subordinate Companion Loans have been applied to pay such amounts.
To the extent collections received after the final liquidation of the 601 Lexington Avenue Whole Loan or the related Mortgaged Property are not sufficient to pay such fees and expenses incurred in connection with the servicing and administration of the 601 Lexington Avenue Whole Loan in full, the issuing entity will be required to pay or reimburse its pro rata share of such unpaid fees and expenses (after allocating such fees and expenses first to the 601 Lexington Avenue Subordinate Companion Loans and then to the 601 Lexington Avenue Senior Notes, in that order) from general collections on the other mortgage loans in the trust. This may result in temporary (or, if not ultimately reimbursed, permanent) shortfalls to holders of the certificates.
Consultation and Control
The controlling noteholder under the 601 Lexington Avenue Intercreditor Agreement will be the securitization trust created pursuant to the terms of the BXP 2021-601L TSA. The terms of the BXP 2021-601L TSA provide for a directing certificateholder (the “601 Lexington Avenue Directing Certificateholder”) that will, if appointed, have consent and/or consultation rights with respect to the 601 Lexington Avenue Whole Loan similar to those held by the Directing Holder under the terms of the PSA. If no 601 Lexington Avenue Directing Certificateholder has been appointed or identified to the 601 Lexington Avenue Servicer or the 601 Lexington Avenue Special Servicer, as applicable, and the 601 Lexington Avenue Servicer or the 601 Lexington Avenue Special Servicer, as applicable, has attempted to obtain such information from the certificate administrator appointed under the BXP 2021-601L TSA and no such entity has been identified to the 601 Lexington Avenue Servicer or the 601 Lexington Avenue Special Servicer, as applicable, then until such time as a 601 Lexington Avenue Directing Certificateholder is identified, the 601 Lexington Avenue Servicer or the 601 Lexington Avenue Special Servicer, as applicable, will have no duty to consult with, provide notice to, or seek the approval or consent of any such 601 Lexington Avenue Directing Certificateholder as the case may be. No directing certificateholder has yet been appointed by the certificateholders entitled to make such appointment under the BXP 2021-601L TSA. Absent the appointment of a 601 Lexington Avenue Directing Certificateholder, the 601 Lexington Avenue Servicer and 601 Lexington Avenue Special Servicer will be required to make any servicing decisions with respect to the 601 Lexington Avenue Mortgage Loan in accordance with the servicing standard set forth in the BXP 2021-601L TSA, but will not be required to obtain the consent of any party prior to taking any
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servicing action. The BXP 2021-601L TSA will, however, provide that the 601 Lexington Avenue Servicer and 601 Lexington Avenue Special Servicer will be required to consult with the risk retention consultation parties named in the BXP 2021-601L TSA (the “601 Lexington Avenue Risk Retention Consultation Parties”) with respect to certain matters that are similar to those granted to the Risk Retention Consultation Party under the PSA. See “Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans”.
In addition, pursuant to the terms of the 601 Lexington Avenue Intercreditor Agreement, the issuing entity, as a non-controlling note holder will (i) have the right to receive copies of all notices, information and reports that the 601 Lexington Avenue Servicer or the 601 Lexington Avenue Special Servicer, as applicable, is required to provide to the 601 Lexington Avenue Directing Certificateholder or the 601 Lexington Avenue Risk Retention Consultation Parties (within the same time frame such notices, information and reports are required to be delivered to the 601 Lexington Avenue Directing Certificateholder or the 601 Lexington Avenue Risk Retention Consultation Parties without regard to whether or not such parties actually have lost any rights to receive such information as a result of a consultation termination event or control termination event under the BXP 2021-601L TSA) with respect to any major decisions to be taken with respect to the 601 Lexington Avenue Whole Loan or the implementation of any recommended action outlined in an asset status report relating to the 601 Lexington Avenue Whole Loan and (ii) have the right to be consulted on a strictly non-binding basis to the extent the issuing entity requests consultation with respect to certain major decisions to be taken with respect to the 601 Lexington Avenue Whole Loan or the implementation of any recommended action outlined in an asset status report relating to the 601 Lexington Avenue Whole Loan. The consultation rights of the issuing entity will expire 10 business days following the delivery of written notice and information relating to the matter subject to consultation whether or not the issuing entity has responded within such period; provided that if the 601 Lexington Avenue Servicer or the 601 Lexington Avenue Special Servicer, as applicable, proposes a new course of action that is materially different from the actions previously proposed, the 10 business day consultation period will be deemed to begin anew from the date of delivery of such new proposal and delivery of all information related to such new proposal. Notwithstanding the consultation rights of the issuing entity as described above, the 601 Lexington Avenue Servicer or the 601 Lexington Avenue Special Servicer, as applicable, is permitted to make any material decision or take any action set forth in the asset status report before the expiration of the aforementioned 10 business day period if it determines that immediate action with respect to such decision is necessary to protect the interests of the holders of the 601 Lexington Avenue Mortgage Loan, the related the 601 Lexington Avenue Pari Passu Companion Loans and the related the 601 Lexington Avenue Subordinate Companion Loans. Neither the 601 Lexington Avenue Servicer nor the 601 Lexington Avenue Special Servicer will be obligated at any time to follow or take any alternative actions recommended by the holder of the 601 Lexington Avenue Mortgage Loan (or its representative).
Sale of Defaulted Whole Loan
Pursuant to the terms of the 601 Lexington Avenue Intercreditor Agreement, if the 601 Lexington Avenue Whole Loan becomes a specially serviced loan pursuant to the terms of the BXP 2021-601L TSA, and if the 601 Lexington Avenue Special Servicer determines to sell the 601 Lexington Avenue Pari Passu Companion Loans in accordance with the BXP 2021-601L TSA, then the 601 Lexington Avenue Special Servicer will be required to sell the 601 Lexington Avenue Mortgage Loan together with the 601 Lexington Avenue Pari Passu Companion Loans and the 601 Lexington Avenue Subordinate Companion Loans as one whole loan. In connection with any such sale, the 601 Lexington Avenue Special Servicer will be required to follow the procedures set forth under the BXP 2021-601L TSA. See “Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans”. Proceeds of the sale of the 601 Lexington Avenue Whole Loan will be distributed in accordance with the priority of payments described in “—Application of Payments After an Event of Default” above.
Notwithstanding the foregoing, the 601 Lexington Avenue Special Servicer will not be permitted to sell the 601 Lexington Avenue Pari Passu Companion Loans together with the 601 Lexington Avenue Mortgage Loan if such loan becomes a defaulted loan without the written consent of the issuing entity as holder of the 601 Lexington Avenue Mortgage Loan (provided that such consent is not required if the
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issuing entity is the borrower or an affiliate of the borrower) unless the 601 Lexington Avenue Special Servicer has delivered to the issuing entity: (a) at least 15 business days’ prior written notice of any decision to attempt to sell the related Whole Loan; (b) at least 10 days prior to the proposed sale date, a copy of each bid package (together with any material amendments to such bid packages) received by the 601 Lexington Avenue Special Servicer in connection with any such proposed sale; (c) at least 10 days prior to the proposed sale date, a copy of the most recent appraisal for the 601 Lexington Avenue Whole Loan, and any documents in the servicing file reasonably requested by the issuing entity that are material to the price of the 601 Lexington Avenue Whole Loan; and (d) until the sale is completed, and a reasonable period of time (but no less time than is afforded to other offerors) prior to the proposed sale date, all information and other documents being provided to other offerors and all leases or other documents that are approved by the 601 Lexington Avenue Servicer or the 601 Lexington Avenue Special Servicer in connection with the proposed sale; provided that the issuing entity may waive any of the delivery or timing requirements described in this sentence. Subject to the terms of the BXP 2021-601L TSA, the holder of the 601 Lexington Avenue Mortgage Loan (or its representative) will be permitted to submit an offer at any sale of the related Whole Loan (unless such person is the borrower or an agent or affiliate of the borrower).
Special Servicer Appointment Rights
Pursuant to the 601 Lexington Avenue Intercreditor Agreement, the 601 Lexington Avenue Directing Certificateholder, if appointed, will have the right, at any time prior to a “control event” under the BXP 2021-601L TSA, with or without cause, to replace the 601 Lexington Avenue Special Servicer then acting with respect to the 601 Lexington Avenue Whole Loan and appoint a replacement special servicer without the consent of the issuing entity (or its representative), as holder of the 601 Lexington Avenue Mortgage Loan or any holder of a 601 Lexington Avenue Senior Note in a manner that is substantially similar to that as described under “Pooling and Servicing Agreement—Special Servicing Transfer Event” and “—Rights Upon Servicer Termination Event” in this prospectus.
Additional Information
Each of the tables presented in Annex A-2 sets forth selected characteristics of the pool of Mortgage Loans as of the Cut-off Date, if applicable. For a detailed presentation of certain additional characteristics of the Mortgage Loans and the Mortgaged Properties on an individual basis, see Annex A-1. For a brief summary of the 15 largest Mortgage Loans in the pool of Mortgage Loans, see Annex A-3.
The description in this prospectus, including Annex A-1, A-2 and A-3, of the Mortgage Pool and the Mortgaged Properties is based upon the Mortgage Pool as expected to be constituted at the close of business on the Cut-off Date, as adjusted for the scheduled principal payments due on the Mortgage Loans on or before the Cut-off Date. Prior to the issuance of the Offered Certificates, a Mortgage Loan may be removed from the Mortgage Pool if the depositor deems such removal necessary or appropriate or if it is prepaid. This may cause the range of Mortgage Rates and maturities as well as the other characteristics of the Mortgage Loans to vary from those described in this prospectus.
A Current Report on Form 8-K containing detailed information regarding the Mortgage Loans will be available to persons (including beneficial owners of the Offered Certificates) who receive this prospectus and will be filed pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), together with the PSA, with the United States Securities and Exchange Commission (the “SEC”) on or prior to the date of the filing of the final prospectus.
Additionally, an Asset Data File containing certain detailed information regarding the Mortgage Loans for the reporting period specified therein will be filed or caused to be filed by the depositor on Form ABS-EE on or prior to the date of filing of this prospectus and available to persons (including beneficial owners of the Offered Certificates) who receive this prospectus.
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TRANSACTION PARTIES
The Sponsors and Mortgage Loan Sellers
German American Capital Corporation, Citi Real Estate Funding Inc., Goldman Sachs Mortgage Company and JPMorgan Chase Bank, National Association, are sponsors of, and mortgage loan sellers in, this securitization transaction (in such capacity, the “Sponsors” or “Mortgage Loan Sellers”, as applicable).
For a description of certain affiliations, relationships and related transactions between the sponsors and the other transaction parties, see “Risk Factors—Risks Related to Conflicts of Interest” and “Certain Affiliations, Relationships and Related Transactions Involving Transaction Parties”.
German American Capital Corporation
General. German American Capital Corporation, a Maryland corporation (“GACC”), is a sponsor and a mortgage loan seller in this securitization transaction. Deutsche Bank AG, New York Branch (“DBNY”) or DBR Investments Co. Limited, an Exempted Company incorporated in the Cayman Islands (“DBRI”), each an affiliate of GACC, originated (either directly or, in some cases, through table funding arrangements) all of the GACC Mortgage Loans, except with respect to the Mortgage Loans set forth under “Description of the Mortgage Pool—Co-Originated or Unaffiliated Third-Party Originated Mortgage Loans” for which GACC is identified as a Mortgage Loan Seller.
GACC is a wholly-owned subsidiary of Deutsche Bank Americas Holding Corp., which in turn is a wholly-owned subsidiary of Deutsche Bank AG, a German corporation. GACC is an affiliate of (i) DBRI, an originator, (ii) DBNY, an originator, a Retaining Party and an initial Risk Retention Consultation Party, (iii) Deutsche Bank Securities Inc., an underwriter and (iv) the depositor. The principal offices of GACC are located at 1 Columbus Circle, New York, New York 10019. Prior to the date of this prospectus, DBRI purchased for cash from DBNY a 100% equity participation in the Redmond Community Center Mortgage Loan (the “DBNY Originated Loan”) originated by DBNY. DBNY and DBRI will sell their interests in the DBNY Originated Loan to GACC on the Closing Date. During the period from DBRI’s purchase of such participation interest to the Closing Date, DBRI will have borne the credit risk in respect of the DBNY Originated Loan. It is also expected that DBRI will be the holder of the companion loans (if any) for which the noteholder is identified as “DBRI” in the table titled “Whole Loan Control Notes and Non-Control Notes” under “Description of the Mortgage Pool—The Whole Loans—General” after the Closing Date in the ordinary course of business and such Companion Loans may be securitized in one or more future securitization transactions or otherwise transferred at any time.
Deutsche Bank AG (together with certain affiliates, “Deutsche Bank”) filed a Form 6-K with the SEC on December 23, 2016. The Form 6-K states that Deutsche Bank “has reached a settlement in principle with the Department of Justice in the United States (“DOJ”) regarding civil claims that the DOJ considered in connection with the bank’s issuance and underwriting of residential mortgage-backed securities (RMBS) and related securitization activities between 2005 and 2007. Under the terms of the settlement agreement, Deutsche Bank agreed to pay a civil monetary penalty of US dollar 3.1 billion and to provide US dollar 4.1 billion in consumer relief in the United States. The consumer relief is expected to be primarily in the form of loan modifications and other assistance to homeowners and borrowers, and other similar initiatives to be determined, and delivered over a period of at least five years.” On January 17, 2017, the DOJ issued a press release officially announcing a $7.2 billion settlement with Deutsche Bank “resolving federal civil claims that Deutsche Bank misled investors in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS) between 2006 and 2007. . . . The settlement requires Deutsche Bank to pay a $3.1 billion civil penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). Under the settlement, Deutsche Bank will also provide $4.1 billion in relief to underwater homeowners, distressed borrowers and affected communities.”
GACC’s Securitization Program. GACC has been engaged as an originator and/or seller/contributor of loans into CMBS securitizations for more than ten years.
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GACC has been a seller of loans into securitization programs including (i) the “COMM” program, in which its affiliate Deutsche Mortgage & Asset Receiving Corporation (“DMARC”) is the depositor, (ii) the “CD” program in which DMARC is the depositor on a rotating basis with Citigroup Commercial Mortgage Securities Inc., (iii) the “Benchmark” program in which DMARC is the depositor on a rotating basis with GS Mortgage Securities Corporation II, J.P. Morgan Chase Commercial Mortgage Securities Corp. and Citigroup Commercial Mortgage Securities Inc., and (iv) programs where third party entities, including affiliates of General Electric Capital Corporation, Capmark Finance Inc. (formerly GMAC Commercial Mortgage Corporation) and others, have acted as depositors.
Under the COMM name, GACC has had two primary securitization programs, the “COMM FL” program, into which large floating rate commercial mortgage loans were securitized, and the “COMM Conduit/Fusion” program, into which both fixed rate conduit loans and large loans were securitized.
GACC acquires both fixed rate and floating rate commercial mortgage loans backed by a range of commercial real estate properties including office buildings, apartments, shopping malls, hotels, and industrial/warehouse properties. The total amount of loans securitized by GACC from October 1, 2010 through December 31, 2021 is approximately $98.41 billion.
GACC or its affiliates have purchased loans for securitization in the past and it may elect to purchase loans for securitization in the future. If GACC or its affiliates purchase loans for securitization, GACC or such affiliate will either reunderwrite the mortgage loans it purchases, or perform other procedures to ascertain the quality of such loans, which procedures will be subject to approval by credit risk management officers.
In coordination with Deutsche Bank Securities Inc. and other underwriters or initial purchasers, GACC works with NRSROs, other loan sellers, servicers and investors in structuring a securitization transaction to maximize the overall value and capital structure, taking into account numerous factors, including without limitation geographic and property type diversity and NRSRO criteria.
For the most part, GACC and its affiliates rely on independent rated third parties to service loans held pending sale or securitization. It maintains interim servicing agreements with large, institutional commercial mortgage loan servicers who are highly rated by the NRSROs. Periodic financial review and analysis, including monitoring of ratings, of each of the servicers with which GACC and its affiliates have servicing arrangements is conducted under the purview of loan underwriting personnel.
Pursuant to an MLPA, GACC will make certain representations and warranties, subject to certain exceptions set forth therein (and in Annex D-2), to the depositor and will covenant to provide certain documents regarding the Mortgage Loans it is selling to the depositor (the “GACC Mortgage Loans”) and, in connection with certain breaches of such representations and warranties or certain defects with respect to such documents, which breaches or defects are determined to have a material adverse effect on the value of the subject GACC Mortgage Loans or such other standard as is described in the related MLPA, may have an obligation to repurchase such Mortgage Loan, cure the subject defect or breach, replace the subject Mortgage Loan with a Qualified Substitute Mortgage Loan or make a Loss of Value Payment, as the case may be. The depositor will assign certain of its rights under each MLPA to the issuing entity. In addition, GACC has agreed to indemnify the depositor, the underwriters and/or certain of their respective affiliates with respect to certain liabilities arising in connection with the issuance and sale of the certificates. See “Pooling and Servicing Agreement—Assignment of the Mortgage Loans”.
Review of GACC Mortgage Loans.
Overview. GACC, in its capacity as the Sponsor of the GACC Mortgage Loans, has conducted a review of the GACC Mortgage Loans in connection with the securitization described in this prospectus. GACC determined the nature, extent and timing of the review and the level of assistance provided by any third parties. The review of the GACC Mortgage Loans was performed by a deal team comprised of real estate and securitization professionals who are employees of one or more of GACC’s affiliates (the “GACC Deal Team”). The review procedures described below were employed with respect to all of the GACC Mortgage Loans, except that certain review procedures only were relevant to the large loan
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disclosures in this prospectus, as further described below. No sampling procedures were used in the review process.
Data Tape. To prepare for securitization, members of the GACC Deal Team created a data tape (the “GACC Data Tape”) containing detailed loan-level and property-level information regarding each GACC Mortgage Loan. The GACC Data Tape was compiled from, among other sources, the related Mortgage Loan documents, appraisals, environmental reports, seismic reports, property condition reports, zoning reports, insurance policies, borrower supplied information (including, but not limited to, rent rolls, leases, operating statements and budgets) and information collected by the DB Originators during the underwriting process. After origination of each GACC Mortgage Loan, the GACC Deal Team updated the information in the GACC Data Tape with respect to the GACC Mortgage Loan based on updates provided by the related loan servicer relating to loan payment status and escrows, updated operating statements, rent rolls and leasing activity, and information otherwise brought to the attention of the GACC Deal Team. The GACC Data Tape was used by the GACC Deal Team to provide the numerical information regarding the GACC Mortgage Loans in this prospectus.
Data Comparison and Recalculation. GACC engaged a third party accounting firm to perform certain data comparison and recalculation procedures designed by GACC relating to information in this prospectus regarding the GACC Mortgage Loans. These procedures included:
| ● | comparing the information in the GACC Data Tape against various source documents provided by GACC that are described above under “—Data Tape”; |
| ● | comparing numerical information regarding the GACC Mortgage Loans and the related Mortgaged Properties disclosed in this prospectus against the GACC Data Tape; and |
| ● | recalculating certain percentages, ratios and other formulae relating to the GACC Mortgage Loans disclosed in this prospectus. |
Legal Review. GACC engaged various law firms to conduct certain legal reviews of the GACC Mortgage Loans for disclosure in this prospectus. In anticipation of securitization of each GACC Mortgage Loan originated by the applicable DB Originator, origination counsel prepared a loan summary that sets forth salient loan terms and summarizes material deviations from GACC’s standard form loan documents. In addition, origination counsel for each GACC Mortgage Loan reviewed GACC’s representations and warranties set forth on Annex D-1 and, if applicable, identified exceptions to those representations and warranties set forth on Annex D-2.
Securitization counsel was also engaged to assist in the review of the GACC Mortgage Loans. Such assistance included, among other things, (i) a review of sections of the loan documents with respect to certain of the GACC Mortgage Loans that deviate materially from GACC’s standard form document, (ii) a review of the loan summaries referred to above relating to the GACC Mortgage Loans prepared by origination counsel, and (iii) a review of a due diligence questionnaire completed by the origination counsel. Securitization counsel also reviewed the property release provisions (other than the partial defeasance provisions), if any, for each GACC Mortgage Loan with multiple Mortgaged Properties or, to the extent identified by origination counsel, for each GACC Mortgage Loan with permitted outparcel releases or similar releases for compliance with the REMIC provisions of the Code.
GACC prepared, and reviewed with origination counsel and/or securitization counsel, the loan summaries for those of the GACC Mortgage Loans included in the 10 largest Mortgage Loans in the mortgage pool, and the abbreviated loan summaries for those of the GACC Mortgage Loans included in the next 5 largest Mortgage Loans in the mortgage pool, which loan summaries and abbreviated loan summaries are incorporated in Annex A-3.
Other Review Procedures. With respect to any pending litigation that existed at the origination of any GACC Mortgage Loan, GACC requested updates from the related borrower, origination counsel and/or borrower’s litigation counsel. In connection with the origination of each GACC Mortgage Loan, GACC, together with origination counsel, conducted a search with respect to each borrower under the related
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GACC Mortgage Loan to determine whether it filed for bankruptcy. If GACC became aware of a significant natural disaster in the vicinity of any Mortgaged Property securing a GACC Mortgage Loan, GACC obtained information on the status of the Mortgaged Property from the related borrower to confirm no material damage to the Mortgaged Property.
With respect to the GACC Mortgage Loans originated by a DB Originator, the GACC Deal Team also consulted with the applicable GACC Mortgage Loan origination team to confirm that the GACC Mortgage Loans were originated in compliance with the origination and underwriting criteria described below under “—DB Originators’ Underwriting Guidelines and Processes”, as well as to identify any material deviations from those origination and underwriting criteria. See “—Exceptions” below.
Findings and Conclusions. Based on the foregoing review procedures, GACC determined that the disclosure regarding the GACC Mortgage Loans in this prospectus is accurate in all material respects. GACC also determined that the GACC Mortgage Loans were originated (or acquired and re-underwritten) in accordance with the applicable DB Originator’s origination procedures and underwriting criteria, except as described below under “—Exceptions”. GACC attributes to itself all findings and conclusions resulting from the foregoing review procedures.
DB Originators’ Underwriting Guidelines and Processes.
General. DBRI and DBNY are each an originator and are affiliated with each other, GACC, Deutsche Bank Securities Inc., one of the underwriters, and the depositor. DBRI and DBNY are referred to as the “DB Originators” in this prospectus. Each DB Originator originates loans located in the United States that are secured by retail, multifamily, office, hotel and industrial/warehouse properties. All of the mortgage loans originated by a DB Originator generally are originated in accordance with the underwriting criteria described below. However, each lending situation is unique, and the facts and circumstance surrounding the mortgage loan, such as the quality and location of the real estate, the sponsorship of the borrower and the tenancy of the property, will impact the extent to which the general guidelines below are applied to a specific loan. This underwriting criteria is general, and we cannot assure you that every mortgage loan will conform in all respects with the guidelines.
Loan Analysis. In connection with the origination of mortgage loans, the applicable DB Originator conducts an extensive review of the related mortgaged property, including an analysis of the appraisal, environmental report, property operating statements, financial data, rent rolls, sales where applicable and related information or statements of occupancy rates provided by the borrower and, with respect to the mortgage loans secured by retail and office properties, certain major tenant leases and the tenant’s credit. Generally, borrowers are required to be single purpose entities which do not have a credit history; therefore, the financial strength and character of certain of the borrower’s key principals are examined prior to approval of the mortgage loan through a review of available financial statements and public records searches. A member of the applicable DB Originator’s underwriting or due diligence team, or a consultant or other designee, visits the mortgaged property for a site inspection to confirm the occupancy rates of the mortgaged property, and analyzes the mortgaged property’s sub-market and the utility of the mortgaged property within the sub-market. Unless otherwise specified in this prospectus, all financial, occupancy and other information contained in this prospectus is based on such information and we cannot assure you that such financial, occupancy and other information remains accurate.
Cash Flow Analysis. The applicable DB Originator reviews, among other things, historical operating statements, rent rolls, tenant leases and/or budgeted income and expense statements provided by the borrower and makes adjustments in order to determine a debt service coverage ratio, including taking into account the benefits of any governmental assistance programs. See “Description of the Mortgage Pool—Additional Information”.
Debt Service Coverage Ratio and Loan-to-Value Ratio. The underwriting includes a calculation of the debt service coverage ratio and the loan-to-value ratio in connection with the origination of each loan.
The debt service coverage ratio will generally be calculated based on the ratio of the underwritten net cash flow from the property in question as determined by the applicable DB Originator and payments on
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the loan based on actual principal and/or interest due on the loan. However, underwritten net cash flow is often a highly subjective number based on a variety of assumptions regarding, and adjustments to, revenues and expenses with respect to the related real property collateral. For example, when calculating the debt service coverage ratio for a multifamily or commercial mortgage loan, annual net cash flow that was calculated based on assumptions regarding projected future rental income, expenses and/or occupancy may be utilized. We cannot assure you that the foregoing assumptions made with respect to any prospective multifamily or commercial mortgage loan will, in fact, be consistent with actual property performance. For specific discussions on the particular assumptions and adjustments, see “Description of the Mortgage Pool” and Annex A-1 and Annex A-3. The loan-to-value ratio, in general, is the ratio, expressed as a percentage, of the then-outstanding principal balance of the mortgage loan divided by the estimated value of the related property based on an appraisal obtained in accordance with the guidelines described under “—Appraisal and Loan-to-Value Ratio” below. In addition, with respect to certain mortgage loans, there may exist subordinate mortgage debt or mezzanine debt. Such mortgage loans will have a lower combined debt service coverage ratio and/or a higher combined loan-to-value ratio when such subordinate or mezzanine debt is taken into account. Additionally, certain mortgage loans may provide for interest only payments prior to maturity, or for an interest-only period during a portion of the term of the mortgage loan.
Appraisal and Loan-to-Value Ratio. For each Mortgaged Property, the applicable DB Originator obtains (or, in connection with the applicable DB Originator’s acquisition and reunderwriting of a mortgage loan, the related originator obtains and the applicable DB Originator relies upon) a current (within 6 months of the origination date of the mortgage loan) comprehensive narrative appraisal conforming to the requirements of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”) and Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation. The appraisal is based on the “as-is” market value of the Mortgaged Property as of the date of value in its then-current condition, and in accordance with the Mortgaged Property’s highest and best use as determined within the appraisal. In certain cases, the applicable DB Originator may also obtain prospective or hypothetical values on an “as-stabilized”, “as-complete” and/or “hypothetical as-is” basis, reflecting stipulated assumptions including, but not limited to, leasing, occupancy, income normalization, construction, renovation, restoration and/or repairs at the Mortgaged Property. The applicable DB Originator then determines the loan-to-value ratio of the mortgage loan for origination or, if applicable, in connection with its acquisition of the mortgage loan, in each case based on the value and effective value dates set forth in the appraisal. In connection with the applicable DB Originator’s acquisition and reunderwriting of a mortgage loan, the applicable DB Originator relies upon the appraisal(s) obtained by the related originator. Such appraisal(s) may reflect a value for a particular Mortgaged Property that varies from an opinion of value of the applicable DB Originator. The information in this prospectus regarding such acquired mortgage loans, including, but not limited to, appraised values and loan-to-value ratios, reflects the information contained in such originator’s appraisal. We cannot assure you that the information set forth in this prospectus regarding the appraised values or loan-to-value ratios of such acquired mortgage loans would not be different if a DB Originator had originated such mortgage loans. See “Risk Factors—Risks Relating to the Mortgage Loans—Appraisals May Not Reflect Current or Future Market Value of Each Property”.
Evaluation of Borrower. The applicable DB Originator evaluates the borrower and its principals with respect to credit history and prior experience as an owner and operator of commercial real estate properties. The evaluation will generally include obtaining and reviewing a credit report or other reliable indication of the borrower’s financial capacity; obtaining and verifying credit references and/or business and trade references; and obtaining and reviewing certifications provided by the borrower as to prior real estate experience and current contingent liabilities. Finally, although the mortgage loans generally are non-recourse in nature, in the case of certain mortgage loans, the borrower and certain principals of the borrower may be required to assume legal responsibility for liabilities as a result of, among other things, fraud, misrepresentation, misappropriation or conversion of funds and breach of environmental or hazardous materials requirements. The applicable DB Originator evaluates the financial capacity of the borrower and such principals to meet any obligations that may arise with respect to such liabilities.
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Environmental Site Assessment. Prior to origination, the applicable DB Originator either (i) obtains or updates (or, in connection with the applicable DB Originator’s acquisition and reunderwriting of a mortgage loan, the related originator obtains or updates and the applicable DB Originator relies upon) an environmental site assessment (“ESA”) for a Mortgaged Property prepared by a qualified environmental firm or (ii) obtains (or, in connection with the applicable DB Originator’s acquisition and reunderwriting of a mortgage loan, the related originator obtains or updates and the applicable DB Originator relies upon) an environmental insurance policy for a Mortgaged Property. If an ESA is obtained or updated, the applicable DB Originator reviews the ESA to verify the absence of reported violations of applicable laws and regulations relating to environmental protection and hazardous materials or other material adverse environmental condition or circumstance. In cases in which the ESA identifies conditions that would require cleanup, remedial action or any other response estimated to cost in excess of 5% of the outstanding principal balance of the mortgage loan, the applicable DB Originator either (i) determines that another party with sufficient assets is responsible for taking remedial actions directed by an applicable regulatory authority or (ii) requires the borrower to do one of the following: (A) carry out satisfactory remediation activities or other responses prior to the origination of the mortgage loan, (B) establish an operations and maintenance plan, (C) place sufficient funds in escrow or establish a letter of credit at the time of origination of the mortgage loan to complete such remediation within a specified period of time, (D) obtain an environmental insurance policy for the Mortgaged Property, (E) provide or obtain an indemnity agreement or a guaranty with respect to such condition or circumstance, or (F) receive appropriate assurances that significant remediation activities or other significant responses are not necessary or required.
Certain of the mortgage loans may also have environmental insurance policies. See “Description of the Mortgage Pool—Insurance Considerations”.
Physical Assessment Report. Prior to origination, the applicable DB Originator obtains (or, in connection with the applicable DB Originator’s acquisition and reunderwriting of a mortgage loan, the related originator obtains and the applicable DB Originator relies upon) a physical assessment report (“PAR”) for each Mortgaged Property prepared by a qualified structural engineering firm. The applicable DB Originator reviews the PAR to verify that the property is reported to be in satisfactory physical condition, and to determine the anticipated costs of necessary repair, replacement and major maintenance or capital expenditure needs over the term of the mortgage loan. In cases in which the PAR identifies material repairs or replacements needed immediately, the applicable DB Originator generally requires the borrower to carry out such repairs or replacements prior to the origination of the mortgage loan, or, in many cases, requires the borrower to place sufficient funds in escrow at the time of origination of the mortgage loan to complete such repairs or replacements within not more than twelve months. In certain instances, the applicable DB Originator may waive such escrows but require the related borrower to complete such repairs within a stated period of time in the related Mortgage Loan documents.
Title Insurance Policy. The borrower is required to provide, and the applicable DB Originator reviews, a title insurance policy for each Mortgaged Property. The title insurance policy must meet the following requirements: (a) the policy must be written by a title insurer licensed to do business in the jurisdiction where the Mortgaged Property is located; (b) the policy must be in an amount equal to the original principal balance of the mortgage loan; (c) the protection and benefits must run to the mortgagee and its successors and assigns; (d) the policy should be written on a standard policy form of the American Land Title Association or equivalent policy promulgated in the jurisdiction where the Mortgaged Property is located; and (e) the legal description of the Mortgaged Property in the title policy must conform to that shown on the survey of the Mortgaged Property, where a survey has been required.
Property Insurance. The borrower is required to provide, and the applicable DB Originator reviews, certificates of required insurance with respect to the Mortgaged Property. Such insurance may include: (1) commercial general liability insurance for bodily injury or death and property damage; (2) a fire and extended perils insurance policy providing “special” form coverage including coverage against loss or damage by fire, lightning, explosion, smoke, windstorm and hail, riot or strike and civil commotion; (3) if applicable, boiler and machinery coverage; (4) if the Mortgaged Property is located in a flood hazard
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area, flood insurance; and (5) such other coverage as the applicable DB Originator may require based on the specific characteristics of the Mortgaged Property.
Seismic Report. A seismic report is required for all properties located in seismic zones 3 or 4.
Zoning and Building Code Compliance. In connection with the origination of a multifamily or commercial mortgage loan, the originator will examine whether the use and occupancy of the related real property collateral is in material compliance with zoning, land-use, building rules, regulations and orders then applicable to that property. Evidence of this compliance may be in the form of one or more of the following: a zoning report, legal opinions, surveys, recorded documents, temporary or permanent certificates of occupancy, letters from government officials or agencies, title insurance endorsements, engineering or consulting reports and/or representations by the related borrower.
Escrow Requirements. The applicable DB Originator may require borrowers to fund various escrows for taxes, insurance, capital expenses and replacement reserves, which reserves in many instances will be limited to certain capped amounts. In addition, the applicable DB Originator may identify certain risks that warrant additional escrows or holdbacks for items such as leasing-related matters, deferred maintenance, environmental remediation or unfunded obligations, which escrows or holdbacks would be released upon satisfaction of the applicable conditions. Springing escrows may also be structured for identified risks such as specific rollover exposure, to be triggered upon the non-renewal of one or more key tenants. Escrows are evaluated on a case-by-case basis and are not required for all commercial mortgage loans originated by a DB Originator. The typical required escrows for mortgage loans originated by a DB Originator are as follows:
| ● | Taxes – An initial deposit and monthly escrow deposits equal to approximately 1/12th of the estimated annual property taxes (based on the most recent property assessment and the current millage rate) are required to provide the applicable DB Originator with sufficient funds to satisfy all taxes and assessments. The applicable DB Originator may waive this escrow requirement in certain circumstances, including, but not limited to: (i) the Mortgaged Property is a single tenant property (or substantially leased to single tenant) and the tenant pays taxes directly (or the applicable DB Originator may waive the escrow for a portion of the Mortgaged Property which is leased to a tenant that pays taxes for its portion of the Mortgaged Property directly); or (ii) any Escrow/Reserve Mitigating Circumstances. |
| ● | Insurance – An initial deposit and monthly escrow deposits equal to approximately 1/12th of the estimated annual property insurance premium are required to provide the applicable DB Originator with sufficient funds to pay all insurance premiums. The applicable DB Originator may waive this escrow requirement in certain circumstances, including, but not limited to: (i) the borrower maintains a blanket insurance policy; (ii) the Mortgaged Property is a single tenant property (or substantially leased to single tenant) and the tenant maintains the property insurance or self-insures (or may waive the escrow for a portion of the Mortgaged Property which is leased to a tenant that maintains property insurance for its portion of the Mortgaged Property or self-insures); or (iii) any Escrow/Reserve Mitigating Circumstances. |
| ● | Replacement Reserves – Replacement reserves are generally calculated in accordance with the expected useful life of the components of the property during the term of the mortgage loan. Annual replacement reserves are generally underwritten to the suggested replacement reserve amount from an independent, third-party property condition or engineering report, or to certain minimum requirements by property type. The applicable DB Originator may waive this escrow requirement in certain circumstances, including, but not limited to: (i) the Mortgaged Property is a single tenant property (or substantially leased to single tenant) and the tenant repairs and maintains the Mortgaged Property (or may waive the escrow for a portion of the Mortgaged Property which is leased to a tenant that repairs and maintains its portion of the Mortgaged Property); or (ii) any Escrow/Reserve Mitigating Circumstances. |
| ● | Tenant Improvement/Lease Commissions – A tenant improvement/leasing commission reserve may be required to be funded either at loan origination and/or during the related |
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| mortgage loan term and/or springing upon certain tenant events to cover certain anticipated leasing commissions, free rent periods or tenant improvement costs which might be associated with re-leasing the space occupied by such tenants. The applicable DB Originator may waive this escrow requirement in certain circumstances, including, but not limited to: (i) the Mortgaged Property is a single tenant property (or substantially leased to single tenant), with a lease that extends beyond the loan term; or (ii) any Escrow/Reserve Mitigating Circumstances. |
| ● | Deferred Maintenance – A deferred maintenance reserve may be required to be funded at loan origination in an amount equal to 100% to 125% of the estimated cost of material immediate repairs or replacements identified in the property condition or engineering report. The applicable DB Originator may waive this escrow requirement in certain circumstances, including, but not limited to: (i) the sponsor of the borrower delivers a guarantee to complete the immediate repairs; (ii) the deferred maintenance items do not materially impact the function, performance or value of the property; (iii) the deferred maintenance cost does not exceed $50,000; (iv) the Mortgaged Property is a single tenant property (or substantially leased to single tenant), and the tenant is responsible for the repairs; or (v) any Escrow/Reserve Mitigating Circumstances. |
| ● | Environmental Remediation – An environmental remediation reserve may be required at loan origination in an amount equal to 100% to 125% of the estimated remediation cost identified in the environmental report. The applicable DB Originator may waive this escrow requirement in certain circumstances, including, but not limited to: (i) the sponsor of the borrower delivers a guarantee agreeing to complete the remediation; (ii) environmental insurance is in place or obtained; or (iii) any Escrow/Reserve Mitigating Circumstances. |
The applicable DB Originator may determine that establishing any of the foregoing escrows or reserves is not warranted in one or more of the following instances (collectively, the “Escrow/Reserve Mitigating Circumstances”): (i) the amounts involved are de minimis, (ii) the applicable DB Originator’s evaluation of the ability of the Mortgaged Property, the borrower or a holder of direct or indirect ownership interests in the borrower to bear the subject expense or cost absent creation of an escrow or reserve, (iii) based on the Mortgaged Property maintaining a specified debt service coverage ratio, (iv) the applicable DB Originator has structured springing escrows that arise for identified risks, (v) the applicable DB Originator has an alternative to a cash escrow or reserve, such as a letter of credit or a guarantee from the borrower or an affiliate of the borrower; (vi) the applicable DB Originator believes there are credit positive characteristics of the borrower, the sponsor of the borrower and/or the Mortgaged Property that would offset the need for the escrow or reserve; or (vii) the reserves are being collected and held by a third party, such as a management company, a franchisor, or an association.
Notwithstanding the foregoing discussion under this caption “—DB Originators’ Underwriting Guidelines and Processes”, one or more of the mortgage loans contributed to this securitization by GACC may vary from, or may not comply with, the applicable DB Originator’s underwriting guidelines described above. In addition, in the case of one or more of the mortgage loans contributed to this securitization by GACC, the applicable DB Originator may not have strictly applied these underwriting guidelines as the result of a case-by-case permitted exception based upon other compensating or mitigating factors.
Exceptions. Disclosed above are the DB Originator’s general underwriting guidelines with respect to the GACC Mortgage Loans. One or more GACC Mortgage Loans may vary from the specific DB Originator’s underwriting guidelines described above when additional credit positive characteristics are present as discussed above. In addition, in the case of one or more GACC Mortgage Loans, a DB Originator may not have applied each of the specific underwriting guidelines described above as the result of case-by-case permitted flexibility based upon other compensating factors. In certain cases set forth below, the applicable DB Originator made exceptions and the underwriting of a particular GACC Mortgage Loan did not comply with all aspects of the disclosed criteria.
The GACC Mortgage Loans were originated in accordance with the underwriting standards set forth above.
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Compliance with Rule 15Ga-1 under the Exchange Act. GACC most recently filed a Form ABS-15G with the Securities and Exchange Commission (the “SEC”) pursuant to Rule 15Ga-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on February 15, 2022. GACC’s “Central Index Key” number is 0001541294. With respect to the period from and including January 1, 2019 to and including December 31, 2021, GACC did not have any activity to report as required by Rule 15Ga-1 under the Exchange Act with respect to repurchase or replacement requests in connection with breaches of representations and warranties made by it as a sponsor of commercial mortgage securitizations.
Retained Interests in This Securitization. Neither GACC nor any of its affiliates intends to retain on the Closing Date any certificates issued by the issuing entity or any other economic interest in this securitization, except that DBNY (a “majority-owned affiliate” (as defined in the Credit Risk Retention Rules) of GACC) will retain the DBNY VRR Interest Portion as described under “Credit Risk Retention”. However, GACC and/or its affiliates may acquire or own in the future certain additional classes of certificates issued by the issuing entity. Any such party will have the right to dispose of any such certificates (other than the DBNY VRR Interest Portion) at any time. DBNY or an affiliate will be required to retain the DBNY VRR Interest Portion as further described under “Credit Risk Retention”.
The information set forth under “—German American Capital Corporation” has been provided by GACC.
Citi Real Estate Funding Inc.
Citi Real Estate Funding Inc. (“CREFI”) is a sponsor and a mortgage loan seller. The respective Mortgage Loans that CREFI is selling to the depositor in this securitization transaction are collectively referred to in this prospectus as the “CREFI Mortgage Loans”. CREFI originated or co-originated all of the CREFI Mortgage Loans.
CREFI is a New York corporation organized in 2014 and is a wholly-owned subsidiary of Citibank, N.A., a national banking association, which is in turn a wholly-owned subsidiary of Citicorp LLC, a Delaware limited liability company, which is in turn a wholly-owned subsidiary of Citigroup Inc., a Delaware corporation. CREFI maintains its principal office at 388 Greenwich Street, New York, New York 10013, Attention: Mortgage Finance Group, and its facsimile number is (212) 723-8604. CREFI is an affiliate of Citigroup Global Markets Inc. (one of the underwriters). CREFI makes, and purchases (or may purchase) from lenders, commercial and multifamily mortgage loans primarily for the purpose of securitizing them in CMBS transactions.
Neither CREFI nor any of its affiliates will insure or guarantee distributions on the certificates. The Certificateholders will have no rights or remedies against CREFI for any losses or other claims in connection with the certificates or the Mortgage Loans except in respect of the repurchase and substitution obligations for material document defects or material breaches of the representations and warranties made by CREFI in the related MLPA as described under “Description of the Mortgage Loan Purchase Agreements—General”.
CREFI’s Commercial Mortgage Origination and Securitization Program
CREFI, directly or through correspondents or affiliates, originates multifamily and commercial mortgage loans throughout the United States. CREFI has been engaged in the origination of multifamily and commercial mortgage loans for securitization since January 2017, and in the securitization of multifamily and commercial mortgage loans since April 2017. CREFI is an affiliate of Citigroup Global Markets Realty Corp. (“CGMRC”), which was engaged in the origination of multifamily and commercial mortgage loans for securitization from 1996 to 2017. Many CREFI staff worked for CGMRC, and CREFI’s underwriting guidelines, credit committee approval process and loan documentation are substantially similar to CGMRC’s. The multifamily and commercial mortgage loans originated by CREFI may include both fixed rate loans and floating rate loans.
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In addition, in the normal course of its business, CREFI may also acquire multifamily and commercial mortgage loans from various third-party originators. These mortgage loans may have been originated using underwriting guidelines not established by CREFI.
In connection with the commercial mortgage securitization transactions in which it participates, CREFI generally transfers the subject mortgage assets to a depositor, who then transfers those mortgage assets to the issuing entity for the related securitization. In return for the transfer of the subject mortgage assets by the depositor to the issuing entity, the issuing entity issues commercial mortgage pass-through certificates that are in whole or in part backed by, and supported by the cash flows generated by, those mortgage assets.
CREFI will generally act as a sponsor, originator and/or mortgage loan seller in the commercial mortgage securitization transactions in which it participates. In such transactions there may be a co-sponsor and/or other mortgage loan sellers and originators.
CREFI generally works with rating agencies, unaffiliated mortgage loan sellers, servicers, affiliates and underwriters in structuring a securitization transaction. Generally, CREFI and/or the related depositor contract with other entities to service the multifamily and commercial mortgage loans following their transfer into a trust fund in exchange for a series of certificates and, in certain cases, uncertificated interests.
Review of the CREFI Mortgage Loans
Overview. In connection with the preparation of this prospectus, CREFI conducted a review of the Mortgage Loans or portions thereof that it is selling to the depositor. The review was conducted as set forth below and was conducted with respect to each of the CREFI Mortgage Loans. No sampling procedures were used in the review process.
Database. First, CREFI created a database of information (the “CREFI Securitization Database”) obtained in connection with the origination of the CREFI Mortgage Loans, including:
| ● | certain information from the CREFI Mortgage Loan documents; |
| ● | certain information from the rent rolls and operating statements for, and certain leases relating to, the related Mortgaged Properties (in each case to the extent applicable); |
| ● | insurance information for the related Mortgaged Properties; |
| ● | information from third party reports such as the appraisals, environmental and property condition reports, seismic reports, zoning reports and other zoning information; |
| ● | bankruptcy searches with respect to the related borrowers; and |
| ● | certain information and other search results obtained by CREFI’s deal team for each of the CREFI Mortgage Loans during the underwriting process. |
CREFI also included in the CREFI Securitization Database certain updates to such information received by CREFI’s securitization team after origination, such as information from the interim servicer regarding loan payment status and current escrows, updated rent rolls and leasing activity information provided pursuant to the Mortgage Loan documents, and information otherwise brought to the attention of CREFI’s securitization team. Such updates were not intended to be, and do not serve as, a re-underwriting of any CREFI Mortgage Loan.
Using the information in the CREFI Securitization Database, CREFI created a Microsoft Excel file (the “CREFI Data File”) and provided that file to the depositor for the inclusion in this prospectus (particularly in Annexes A-1, A-2 and A-3 to this prospectus) of information regarding the CREFI Mortgage Loans.
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With respect to the 601 Lexington Avenue Whole Loan, which was co-originated by DBRI, CREFI, Wells Fargo Bank, National Association and Morgan Stanley Bank, N.A., portions of which are being sold by GACC and CREFI, the GACC Data Tape was used to provide the numerical information regarding the related Mortgage Loan in this prospectus.
Data Comparison and Recalculation. CREFI engaged a third-party accounting firm to perform certain data comparison and recalculation procedures designed by CREFI, relating to information in this prospectus regarding the CREFI Mortgage Loans. These procedures included:
| ● | comparing the information in the CREFI Data File against various source documents provided by CREFI that are described above under “—Database” above; |
| ● | comparing numerical information regarding the CREFI Mortgage Loans and the related Mortgaged Properties disclosed in this prospectus against the CREFI Data File; and |
| ● | recalculating certain percentages, ratios and other formulae relating to the CREFI Mortgage Loans disclosed in this prospectus. |
Legal Review. CREFI also reviewed and responded to a Due Diligence Questionnaire (as defined below) relating to the CREFI Mortgage Loans, which questionnaire was prepared by the depositor’s legal counsel for use in eliciting information relating to the CREFI Mortgage Loans and including such information in this prospectus to the extent material.
Although the Due Diligence Questionnaire may be revised from time to time, it typically contains various questions regarding the CREFI Mortgage Loans, the related Mortgaged Properties, the related borrowers, sponsors and tenants, and any related additional debt. For example, the due diligence questionnaire (a “Due Diligence Questionnaire”) may seek to elicit, among other things, the following information:
| ● | whether any mortgage loans were originated by third party originators and the names of such originators, and whether such mortgage loans were underwritten or re-underwritten in accordance with CREFI’s (or the applicable mortgage loan seller’s) criteria; |
| ● | whether any mortgage loans are not first liens, or have a loan-to-value ratio greater than 80%; |
| ● | whether any mortgage loans are 30 days or more delinquent with respect to any monthly debt service payment as of the Cut-off Date or have been 30 days or more delinquent at any time during the 12-month period immediately preceding the Cut-off Date; |
| ● | a description of any material issues with respect to any of the mortgage loans; |
| ● | whether any mortgage loans permit, or have existing, mezzanine debt, additional debt secured by the related mortgaged properties or other material debt, and the material terms and conditions for such debt; |
| ● | whether any mortgaged properties have additional debt that is included in another securitization transaction and information related to such other securitization transaction; |
| ● | whether intercreditor agreements, subordination and standstill agreements or similar agreements are in place with respect to secured debt, mezzanine debt or additional debt and the terms of such agreements; |
| ● | whether any mortgage loans are interest-only for their entire term or a portion of their term; |
| ● | whether any mortgage loans permit prepayment or defeasance (in whole or in part), or provide for yield maintenance, and the types of prepayment lock-out provisions and prepayment charges that apply; |
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| ● | whether any mortgage loans permit the release of all or a portion of the related mortgaged properties, and the material terms of any partial release, substitution and condemnation/casualty provisions; |
| ● | whether any mortgage loans are cross-collateralized or secured by multiple properties, or have related borrowers with other mortgage loans in the subject securitization; |
| ● | whether any mortgage loans have a right of first refusal or right of first offer or similar options, in favor of a tenant or any other party; |
| ● | whether there are post-close escrows or earn-out reserves that could be used to pay down the mortgage loan, or whether there are escrows or holdbacks that have not been fully funded; |
| ● | information regarding lockbox arrangements, grace periods interest accrual and amortization provisions, non-recourse carveouts, and any other material provisions with respect to the mortgage loan; |
| ● | whether the borrower or sponsor of any related borrower has been subject to bankruptcy proceedings, or has a past or present material criminal charge or record; |
| ● | whether any borrower is not a special purpose entity; |
| ● | whether any borrowers or sponsors of related borrowers have been subject to litigation or similar proceedings and the material terms thereof; |
| ● | whether any borrower under a mortgage loan is affiliated with a borrower under another mortgage loan to be included in the issuing entity; |
| ● | whether any of the mortgage loans is a leasehold mortgage, the terms of the related ground lease, and whether the term of the related ground lease extends at least 20 years beyond the stated loan maturity; |
| ● | a list of any related Mortgaged Properties for which a single tenant occupies over 50% of such property, and whether there are any significant lease rollovers at a particular Mortgaged Property; |
| ● | a list of any significant tenant concentrations or material tenant issues, e.g., dark tenants, subsidized tenants, government or student tenants, or Section 8 tenants, etc.; |
| ● | a description of any material leasing issues at the related Mortgaged Properties; |
| ● | whether any related Mortgaged Properties are subject to condemnation proceedings or litigation; |
| ● | a list of related Mortgaged Properties for which a Phase I environmental site assessment has not been completed, or for which a Phase II environmental site assessment was performed, and whether any environmental site assessment reveals any material adverse environmental condition or circumstance at any related Mortgaged Property except for those which will be remediated by the Cut-off Date; |
| ● | whether there is any terrorism, earthquake, tornado, flood, fire or hurricane damage with respect to any of the related Mortgaged Properties, or whether there are any zoning issues at the mortgaged properties; |
| ● | a list of Mortgaged Properties for which an engineering inspection has not been completed and whether any property inspection revealed material issues; and/or |
| ● | general information regarding property type, condition, use, plans for renovation, etc. |
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CREFI also provided to origination counsel a set of mortgage loan representations and warranties substantially similar to those attached as Annex D-1 to this prospectus and requested that origination counsel identify exceptions to such representations and warranties. CREFI compiled and reviewed the draft exceptions received from origination counsel, engaged separate counsel to review the exceptions, revised the exceptions and provided them to the depositor for inclusion on Annex D-3 to this prospectus. In addition, for each CREFI Mortgage Loan originated by CREFI or one of its affiliates, CREFI prepared and delivered to its securitization counsel for review an asset summary, which summary includes important loan terms and certain property level information obtained during the origination process. The loan terms included in each asset summary may include, without limitation, the principal amount, the interest rate, the loan term, the interest calculation method, the due date, any applicable interest-only period, any applicable amortization period, a summary of any prepayment and/or defeasance provisions, a summary of any lockbox and/or cash management provisions, a summary of any release provisions, and a summary of any requirement for the related borrower to fund up-front and/or on-going reserves. The property level information obtained during the origination process included in each asset summary may include, without limitation, a description of the related Mortgaged Property (including property type, ownership structure, use, location, size, renovations, age and physical attributes), information relating to the commercial real estate market in which the Mortgaged Property is located, information relating to the related borrower and sponsor of the related borrower, an underwriter’s assessment of strengths and risks of the loan transaction, tenant analysis, and summaries of third party reports such as appraisal, environmental and property condition reports.
For each CREFI Mortgage Loan, if any, purchased by CREFI or its affiliates from a third-party originator of such CREFI Mortgage Loan, CREFI reviewed the purchase agreement and related representations and warranties, and exceptions to those representations and warranties, made by the seller of such CREFI Mortgage Loan to CREFI or its affiliates, reviewed certain provisions of the related Mortgage Loan documents and third party reports concerning the related Mortgaged Property provided by the originator of such CREFI Mortgage Loan, prepared exceptions to the representations and warranties in the MLPA based upon such review, and provided them to the depositor for inclusion on Annex D-3 to this prospectus. With respect to any CREFI Mortgage Loan that is purchased by CREFI or its affiliates from a third party originator, the representations and warranties made by the third party originator in the related purchase agreement between CREFI or its affiliates, on the one hand, and the third party originator, on the other hand, are solely for the benefit of CREFI or its affiliates. The rights, if any, that CREFI or its affiliates may have under such purchase agreement upon a breach of such representations and warranties made by the third party originator will not be assigned to the trustee for this securitization, and the Certificateholders and the trustee for this securitization will not have any recourse against the third party originator in connection with any breach of the representations and warranties made by such third party originator. As described under “Description of the Mortgage Loan Purchase Agreements—General”, the substitution or repurchase obligation of, or the obligation to make a Loss of Value Payment on the part of, CREFI, as mortgage loan seller, with respect to the CREFI Mortgage Loans under the related MLPA constitutes the sole remedy available to the Certificateholders and the trustee for this securitization for any uncured material breach of any of CREFI’s representations and warranties regarding the CREFI Mortgage Loans, including any CREFI Mortgage Loans that were purchased by CREFI or its affiliates from a third party originator.
In addition, with respect to each CREFI Mortgage Loan, CREFI reviewed, and in certain cases requested that its counsel review, certain Mortgage Loan document provisions as necessary for disclosure of such provisions in this prospectus, such as property release provisions and other provisions specifically disclosed in this prospectus.
Certain Updates. Furthermore, CREFI requested the borrowers under the CREFI Mortgage Loans (or the borrowers’ respective counsel) for updates on any significant pending litigation that existed at origination. Moreover, if CREFI became aware of a significant natural disaster in the vicinity of a Mortgaged Property relating to a CREFI Mortgage Loan, CREFI requested information on the property status from the related borrower in order to confirm whether any material damage to the property had occurred.
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Large Loan Summaries. Finally, CREFI prepared, and reviewed with origination counsel and/or securitization counsel, the Mortgage Loan summaries for those of the CREFI Mortgage Loans included in the ten largest Mortgage Loans in the Mortgage Pool, and the abbreviated Mortgage Loan summaries for those of the CREFI Mortgage Loans included in the next five largest Mortgage Loans in the Mortgage Pool, which summaries are incorporated in “Description of Top Fifteen Mortgage Loans and Additional Mortgage Loan Information” on Annex A-3.
Findings and Conclusions. Based on the foregoing review procedures, CREFI found and concluded that the disclosure regarding the CREFI Mortgage Loans in this prospectus is accurate in all material respects. CREFI also found and concluded that the CREFI Mortgage Loans were originated in accordance with CREFI’s origination procedures and underwriting criteria, except for any material deviations described under “—Exceptions to CREFI’s Disclosed Underwriting Guidelines” below. CREFI attributes to itself all findings and conclusions resulting from the foregoing review procedures.
CREFI’s Underwriting Guidelines and Processes
General. CREFI’s commercial mortgage loans (including any co-originated mortgage loans) are primarily originated in accordance with the procedures and underwriting criteria described below. However, variations from the procedures and criteria described below may be implemented as a result of various conditions including each loan’s specific terms, the quality or location of the underlying real estate, the property’s tenancy profile, the background or financial strength of the borrower/sponsor or any other pertinent information deemed material by CREFI. Therefore, this general description of CREFI’s origination procedures and underwriting criteria is not intended as a representation that every commercial mortgage loan originated by it or on its behalf complies entirely with all criteria set forth below.
Process. The credit underwriting process for each of CREFI’s loans is performed by a deal team comprised of real estate professionals which typically includes an originator, an underwriter, a commercial closer and a third party due diligence provider operating under the review of CREFI. This team conducts a thorough review of the related mortgaged property, which in most cases includes an examination of the following information, to the extent both applicable and available: historical operating statements, rent rolls, tenant leases, current and historical real estate tax information, insurance policies and/or schedules, and third party reports pertaining to appraisal/valuation, zoning, environmental status and physical condition/seismic condition/engineering (see “—Escrow Requirements”, “—Title Insurance Policy”, “—Property Insurance”, “—Third Party Reports—Appraisal”, “—Third Party Reports—Environmental Report” and “—Third Party Reports—Property Condition Report” below). In some cases (such as a property having a limited operating history or having been recently acquired by its current owner), historical operating statements may not be available. Rent rolls would not be examined for certain property types, such as hospitality properties or single tenant properties, and tenant leases would not be examined for certain property types, such as hospitality, self-storage, multifamily and manufactured housing community properties.
A member of CREFI’s deal team or one of its agents performs an inspection of the property as well as a review of the surrounding market environment, including demand generators and competing properties (if any), in order to confirm tenancy information, assess the physical quality of the collateral, determine visibility and access characteristics, and evaluate the property’s competitiveness within its market.
CREFI’s deal team or one of its agents also performs a detailed review of the financial status, credit history, credit references and background of the borrower and certain key principals using financial statements, income tax returns, credit reports, criminal/background investigations, and specific searches for judgments, liens, bankruptcy and pending litigation. Circumstances may also warrant an examination of the financial strength and credit of key tenants as well as other factors that may impact the tenants’ ongoing occupancy or ability to pay rent.
After the compilation and review of all documentation and other relevant considerations, the deal team finalizes its detailed underwriting analysis of the property’s cash flow in accordance with CREFI’s property-specific, cash flow underwriting guidelines. Determinations are also made regarding the implementation of appropriate loan terms to structure around risks, resulting in features such as ongoing
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escrows or up-front reserves, letters of credit, lockboxes/cash management agreements or guarantees. A complete credit committee package is prepared to summarize all of the above referenced information.
Credit Approval. All commercial mortgage loans must be presented to one or more credit committees that include senior real estate professionals among others. After a review of the credit committee package and a discussion of the loan, the committee may approve the loan as recommended or request additional due diligence, modify the terms, or reject the loan entirely.
Debt Service Coverage Ratio and Loan-to-Value Ratio Requirements. CREFI’s underwriting standards generally require a minimum debt service coverage ratio of 1.20x and a maximum loan-to-value ratio of 80%. However, these thresholds are guidelines and exceptions are permitted under the guidelines on the merits of each individual loan, such as reserves, letters of credit and/or guarantees and CREFI’s assessment of the property’s future prospects. Property and loan information is not updated for securitization unless CREFI determines that information in its possession has become stale.
Certain properties may also be encumbered by subordinate debt secured by such property and/or mezzanine debt secured by direct or indirect ownership interests in the borrower and, when such mezzanine or subordinate debt is taken into account, may result in aggregate debt that does not conform to the aforementioned debt service coverage ratio and loan-to-value ratio parameters.
Amortization Requirements. While CREFI’s underwriting guidelines generally permit a maximum amortization period of 30 years, certain loans may provide for interest-only payments through maturity or for a portion of the loan term. If the loan entails only a partial interest-only period, the monthly debt service, annual debt service and debt service coverage ratio set forth in this prospectus and Annex A-1 to this prospectus reflect a calculation on the future (larger) amortizing loan payment. See “Description of the Mortgage Pool”.
Escrow Requirements. CREFI may require borrowers to fund escrows for taxes, insurance, capital expenditures and replacement reserves. In addition, CREFI may identify certain risks that warrant additional escrows or holdbacks for items to be released to the borrower upon the satisfaction of certain conditions. Such escrows or holdbacks may cover tenant improvements/leasing commissions, deferred maintenance, environmental remediation or unfunded obligations, among other things. Springing escrows may also be structured for identified risks such as specific rollover exposure, to be triggered upon the non-renewal of one or more key tenants. In some cases, the borrower may be allowed to post a letter of credit or guaranty in lieu of a cash reserve, or provide periodic evidence of timely payment of a typical escrow item. Escrows are evaluated on a case-by-case basis and are not required for all of CREFI’s commercial mortgage loans.
Generally, CREFI requires escrows as follows:
| ● | Taxes—An initial deposit and monthly escrow deposits equal to 1/12th of the annual property taxes (based on the most recent property assessment and the current millage rate) are typically required to satisfy all taxes and assessments, except that such escrows are not required in certain circumstances, including, but not limited to, (i) if there is an institutional sponsor or the sponsor is a high net worth individual or (ii) if and to the extent that a single or major tenant (which may be a ground tenant) at the related mortgaged property is required to pay taxes directly or reimburse the landlord for the real estate taxes paid. |
| ● | Insurance—An initial deposit and monthly escrow deposits equal to 1/12th of the annual property insurance premium are typically required to pay all insurance premiums, except that such escrows are not required in certain circumstances, including, but not limited to, (i) if the related borrower or an affiliate thereof maintains a blanket insurance policy, (ii) if and to the extent that a single or major tenant (which may be a ground tenant) at the related mortgaged property is obligated to maintain the insurance or is permitted to self-insure, or (iii) if and to the extent that another third party unrelated to the borrower (such as a condominium board, if applicable) is obligated to maintain the insurance. |
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| ● | Replacement Reserves—Replacement reserves are generally calculated in accordance with the expected useful life of the components of the mortgaged property during the term of the mortgage loan. Annual replacement reserves are generally underwritten to the suggested replacement reserve amount from an independent, third-party property condition or engineering report, or to certain minimum requirements depending on the property type, except that such escrows are not required in certain circumstances, including, but not limited to, if and to the extent that a single or major tenant (which may be a ground tenant) at the related mortgaged property is responsible for all repairs and maintenance, including those required with respect to the roof and structure of the improvements. |
| ● | Tenant Improvement / Leasing Commissions—In the case of retail, office and industrial properties, a tenant improvement / leasing commission reserve may be required to be funded either at loan origination and/or during the term of the mortgage loan to cover anticipated leasing commissions or tenant improvement costs that might be associated with re-leasing certain space involving major tenants, except that such escrows are not required in certain circumstances, including, but not limited to, (i) if the tenant’s lease extends beyond the loan term or (ii) if the rent for the space in question is considered below market. |
| ● | Deferred Maintenance—A deferred maintenance reserve may be required to be funded at loan origination in an amount equal to 125% of the estimated cost of material immediate repairs or replacements identified in the property condition report, except that such escrows are not required in certain circumstances, including, but not limited to, (i) if the sponsor of the borrower delivers a guarantee to complete the immediate repairs in a specified amount of time, (ii) if the deferred maintenance amount does not materially impact the related mortgaged property’s function, performance or value or (iii) if a single or major tenant (which may be a ground tenant) at the related mortgaged property is responsible for the repairs. |
| ● | Environmental Remediation—An environmental remediation reserve may be required to be funded at loan origination in an amount equal to 100% to 125% of the estimated remediation cost identified in the environmental report, except that such escrows are not required in certain circumstances, including, but not limited to, (i) if the sponsor of the borrower delivers a guarantee wherein it agrees to take responsibility and pay for the identified environmental issues, (ii) if environmental insurance is obtained or already in place or (iii) if a third party unrelated to the borrower is identified as the responsible party. |
For a description of the escrows collected with respect to the CREFI Mortgage Loans, please see Annex A-1 to this prospectus.
Title Insurance Policy. The borrower is required to provide, and CREFI or its counsel typically will review, a title insurance policy for each property. The provisions of the title insurance policy are required to comply with the mortgage loan representation and warranty set forth in paragraph (6) on Annex D-1 to this prospectus without any exceptions that CREFI deems material.
Property Insurance. CREFI requires the borrower to provide, or authorizes the borrower to rely on a tenant or other third party to obtain, insurance policies meeting the requirements set forth in the mortgage loan representations and warranties in paragraphs (16) and (29) on Annex D-1 to this prospectus without any exceptions that CREFI deems material (other than with respect to deductibles and allowing a tenant to self-insure).
Third Party Reports. In addition to or as part of applicable origination guidelines or reviews described above, in the course of originating the CREFI Mortgage Loans, CREFI generally considered the results of third party reports as described below. In many instances, however, one or more provisions of the guidelines were waived or modified in light of the circumstances of the relevant loan or property.
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| Appraisal |
CREFI obtains an appraisal meeting the requirements described in the mortgage loan representation and warranty set forth in paragraph (41) on Annex D-1 to this prospectus without any exceptions that CREFI deems material. In addition, the appraisal (or a separate letter) includes a statement by the appraiser that the guidelines in Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended, were followed in preparing the appraisal.
Environmental Report
CREFI generally obtains a Phase I site assessment or an update of a previously obtained site assessment for each mortgaged property prepared by an environmental firm approved by CREFI. CREFI or its designated agent typically reviews the Phase I site assessment to verify the presence or absence of potential adverse environmental conditions. In cases in which the Phase I site assessment identifies any such conditions, CREFI generally requires that the condition be addressed in a manner that complies with the mortgage loan representation and warranty set forth in paragraph (40) on Annex D-1 to this prospectus without any exceptions that CREFI deems material.
Property Condition Report
CREFI generally obtains a current property condition report (a “PCR”) for each mortgaged property prepared by a structural engineering firm approved by CREFI. CREFI or an agent typically reviews the PCR to determine the physical condition of the property and to determine the anticipated costs of necessary repair, replacement and major maintenance or capital expenditure over the term of the mortgage loan. In cases in which the PCR identifies an immediate need for material repairs or replacements with an anticipated cost that is over a certain minimum threshold or percentage of loan balance, CREFI often requires that funds be put in escrow at the time of origination of the mortgage loan to complete such repairs or replacements or obtains a guarantee from a sponsor of the borrower in lieu of reserves. See “—Escrow Requirements” above.
| Servicing |
Interim servicing for all of CREFI’s loans prior to securitization is typically performed by a nationally recognized rated third party interim servicer. In addition, primary servicing is occasionally retained by certain qualified mortgage brokerage firms under established sub-servicing agreements with CREFI, which firms may continue primary servicing certain loans following the securitization closing date. Otherwise, servicing responsibilities are transferred from the interim servicer to the master servicer of the securitization trust (and a primary servicer when applicable) at closing of the securitization. From time to time, the interim servicer may retain primary servicing.
Exceptions to CREFI’s Disclosed Underwriting Guidelines
One or more of the CREFI Mortgage Loans may vary from the specific CREFI underwriting guidelines described above when additional credit positive characteristics are present as discussed above. In addition, in the case of one or more of the CREFI Mortgage Loans, CREFI may not have applied each of the specific underwriting guidelines described above as the result of case-by-case permitted flexibility based upon other compensating factors. None of the CREFI Mortgage Loans have exceptions to the related underwriting criteria.
Certain characteristics of the CREFI Mortgage Loans can be found on Annex A-1.
Compliance with Rule 15Ga-1 under the Exchange Act
CREFI most recently filed a Form ABS-15G pursuant to Rule 15Ga-1 under the Exchange Act on February 11, 2022. CREFI’s Central Index Key is 0001701238. With respect to the period from and including January 1, 2019 to December 31, 2021, CREFI has no demand, repurchase or replacement history to report as required by Rule 15Ga-1 under the Exchange Act with respect to repurchase or
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replacement requests in connection with breaches of representations and warranties made by it as a sponsor of commercial mortgage securitizations.
Retained Interests in This Securitization
Neither CREFI nor any of its affiliates intends to retain on the Closing Date any certificates issued by the issuing entity or any other economic interest in this securitization, except that (i) CREFI (or a “majority-owned affiliate” (as defined in Regulation RR) of CREFI) will retain the CREFI VRR Interest Portion and (ii) an affiliate of CREFI may purchase the Class R certificates. However, CREFI and/or its affiliates may retain on the Closing Date, or own in the future certain additional classes of certificates. Any such party will have the right to dispose of any such certificates (other than the CREFI VRR Interest Portion) at any time. CREFI (or a majority-owned affiliate of CREFI) will be required to retain the CREFI VRR Interest Portion as further described under “Credit Risk Retention”.
The information set forth under “—Citi Real Estate Funding Inc.” has been provided by CREFI.
Goldman Sachs Mortgage Company
| General |
Goldman Sachs Mortgage Company (“GSMC”) is a New York limited partnership, is a sponsor and a mortgage loan seller. The respective Mortgage Loans that GSMC is selling to the depositor in this securitization transaction are collectively referred to in this prospectus as the “GSMC Mortgage Loans”.
GSMC was formed in 1984. Its general partner is Goldman Sachs Real Estate Funding Corp. and its limited partner is Goldman Sachs Bank USA (“GS Bank”). GSMC’s executive offices are located at 200 West Street, New York, New York 10282, telephone number (212) 902-1000. GSMC is an affiliate of GS Bank, an originator, and Goldman Sachs & Co. LLC, an underwriter.
GS Bank is the originator (or co-originator) of all of the GSMC Mortgage Loans. See “Description of the Mortgage Pool—Co-Originated or Unaffiliated Third-Party Originated Mortgage Loans” for additional information.
Neither GSMC nor any of its affiliates will insure or guarantee distributions on the certificates. The Certificateholders will have no rights or remedies against GSMC for any losses or other claims in connection with the certificates or the Mortgage Loans except in respect of the repurchase and substitution obligations for material document defects or the material breaches of representations and warranties made by GSMC in the related MLPA as described under “Description of the Mortgage Loan Purchase Agreements”.
GSMC’s Commercial Mortgage Securitization Program
As a sponsor, GSMC originates and acquires fixed and floating rate commercial mortgage loans and either by itself or together with other sponsors or mortgage loan sellers, organizes and initiates the public and/or private securitization of such commercial mortgage loans by transferring the commercial mortgage loans to a securitization depositor, including GS Mortgage Securities Corporation II or another entity that acts in a similar capacity. In coordination with its affiliates, Goldman Sachs Commercial Mortgage Capital, L.P., Goldman Sachs Bank USA (“GS Bank”) and other unaffiliated underwriters, GSMC works with rating agencies, investors, unaffiliated mortgage loan sellers and servicers in structuring the securitization transaction.
From the beginning of its participation in commercial mortgage securitization programs in 1996 through December 31, 2021, GSMC originated or acquired approximately 3,236 fixed and floating rate commercial and multifamily mortgage loans with an aggregate original principal balance of approximately $153.9 billion. As of December 31, 2021, GSMC had acted as a sponsor and mortgage loan seller on approximately 331 fixed and floating-rate commercial mortgage-backed securitization transactions. GSMC securitized approximately $2.165 billion, $4.636 billion, $6.586 billion, $5.098 billion, $6.284
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billion, $6.972 billion, $11.730 billion, $8.548 billion, $9.960 billion, $6.823 billion and $14.906 billion of commercial mortgage loans in public and private offerings in calendar years 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020 and 2021, respectively.
Review of GSMC Mortgage Loans
Overview. GSMC, in its capacity as the sponsor of the GSMC Mortgage Loans, has conducted a review of the GSMC Mortgage Loans in connection with the securitization described in this prospectus. The review of the GSMC Mortgage Loans was performed by a deal team comprised of real estate and securitization professionals who are employees of one or more of GSMC’s affiliates (the “GSMC Deal Team”). The review procedures described below were employed with respect to all of the GSMC Mortgage Loans, except that certain review procedures only were relevant to the large loan disclosures in this prospectus, as further described below. No sampling procedures were used in the review process.
Database. To prepare for securitization, members of the GSMC Deal Team created a database of loan-level and property-level information relating to each GSMC Mortgage Loan. The database was compiled from, among other sources, the related Mortgage Loan documents, third party reports, zoning reports, insurance policies, borrower supplied information (including, but not limited to, rent rolls, leases, operating statements and budgets) and information collected by the Goldman Originator during the underwriting process. After origination of each GSMC Mortgage Loan, the GSMC Deal Team updated the information in the database with respect to the GSMC Mortgage Loan based on updates provided by the related servicer relating to loan payment status and escrows, updated operating statements, rent rolls and leasing activity, and information otherwise brought to the attention of the GSMC Deal Team.
A data tape (the “GSMC Data Tape”) containing detailed information regarding each GSMC Mortgage Loan was created from the information in the database referred to in the prior paragraph. The GSMC Data Tape was used by the GSMC Deal Team to provide certain numerical information regarding the GSMC Mortgage Loans in this prospectus.
Data Comparison and Recalculation. GSMC engaged a third party accounting firm to perform certain data comparison and recalculation procedures designed by GSMC, relating to information in this prospectus regarding the GSMC Mortgage Loans. These procedures included:
| ● | comparing certain information in the GSMC Data Tape against various source documents provided by GSMC that are described above under “—Database”; |
| ● | comparing numerical information regarding the GSMC Mortgage Loans and the related Mortgaged Properties disclosed in this prospectus against the GSMC Data Tape; and |
| ● | recalculating certain percentages, ratios and other formulae relating to the GSMC Mortgage Loans disclosed in this prospectus. |
Legal Review. GSMC engaged various law firms to conduct certain legal reviews of the GSMC Mortgage Loans for disclosure in this prospectus. In anticipation of the securitization of each GSMC Mortgage Loan, origination counsel prepared a loan and property summary that sets forth salient loan terms and summarizes material deviations from GSMC’s standard form loan documents. In addition, origination counsel for each GSMC Mortgage Loan reviewed GSMC’s representations and warranties set forth on Annex F-1 and, if applicable, identified exceptions to those representations and warranties.
Securitization counsel was also engaged to assist in the review of the GSMC Mortgage Loans. Such assistance included, among other things, (i) a review of sections of the loan agreement relating to certain GSMC Mortgage Loans marked against the standard form document, (ii) a review of the loan and property summaries referred to above relating to the GSMC Mortgage Loans prepared by origination counsel and (iii) a review of a due diligence questionnaire completed by the GSMC Deal Team. Securitization counsel also reviewed the property release provisions, if any, for each GSMC Mortgage Loan with multiple Mortgaged Properties for compliance with the REMIC provisions. In addition, for each GSMC Mortgage Loan originated by GSMC or its affiliates, GSMC prepared and delivered to its
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securitization counsel for review an asset summary, which summary includes important loan terms and certain property level information obtained during the origination process.
Based on their respective reviews of pertinent sections of the related Mortgage Loan documents, origination counsel or securitization counsel also assisted in the preparation of the Mortgage Loan summaries of those of the GSMC Mortgage Loans included in the ten largest Mortgage Loans in the Mortgage Pool, and the abbreviated Mortgage Loan summaries for those of the GSMC Mortgage Loans included in the next five largest Mortgage Loans in the Mortgage Pool, which summaries are incorporated in “Description of Top Fifteen Mortgage Loans and Additional Mortgage Loan Information” on Annex A-3. The applicable borrowers and borrowers’ counsel reviewed these GSMC Mortgage Loan summaries as well.
Other Review Procedures. With respect to any pending litigation that existed at the origination of any GSMC Mortgage Loan, GSMC requested updates from the related borrower, origination counsel and/or borrower’s litigation counsel. GSMC conducted a search with respect to each borrower under a GSMC Mortgage Loan to determine whether it filed for bankruptcy after origination of the GSMC Mortgage Loan. If GSMC became aware of a significant natural disaster in the vicinity of any Mortgaged Property securing a GSMC Mortgage Loan, GSMC obtained information on the status of the Mortgaged Property from the related borrower to confirm no material damage to the Mortgaged Property.
The GSMC Deal Team also consulted with the Goldman Originator to confirm that the GSMC Mortgage Loans were originated in compliance with the origination and underwriting criteria described below under “—Goldman Originator’s Underwriting Guidelines and Processes”, as well as to identify any material deviations from those origination and underwriting criteria. See “—Goldman Originator’s Underwriting Guidelines and Processes—Exceptions to Goldman Originator’s Disclosed Underwriting Guidelines” below.
Findings and Conclusions. Based on the foregoing review procedures, GSMC determined that the disclosure regarding the GSMC Mortgage Loans in this prospectus is accurate in all material respects. GSMC also determined that the GSMC Mortgage Loans were originated or acquired in accordance with GSMC’s origination procedures and underwriting criteria except as described under “—Goldman Originator’s Underwriting Guidelines and Processes—Exceptions to Goldman Originator’s Disclosed Underwriting Guidelines” below. GSMC attributes to itself all findings and conclusions resulting from the foregoing review procedures.
The Goldman Originator
GS Bank is affiliated with GSMC, one of the sponsors, and Goldman Sachs & Co. LLC, one of the underwriters. GS Bank is referred to as the “Goldman Originator” in this prospectus.
The primary business of the Goldman Originator is the underwriting and origination, either by itself or together with another originator, of mortgage loans secured by commercial or multifamily properties. The commercial mortgage loans originated by the Goldman Originator include both fixed and floating rate commercial mortgage loans and such commercial mortgage loans are often included in both public and private securitizations. Many of the commercial mortgage loans originated by GS Bank are acquired by GSMC and sold to securitizations in which GSMC acts as sponsor and/or loan seller.
Fixed Rate Commercial Mortgage Loans(1)
Year | Total
Goldman Originator Fixed Rate Loans Originated (approximate) | Total
Goldman Originator Fixed Rate Loans Securitized (approximate) | ||
| 2021 | $4.2 billion | $2.6 billion | ||
| 2020 | $2.7 billion | $3.7 billion | ||
| 2019 | $6.0 billion | $5.3 billion | ||
| 2018 | $3.1 billion | $2.6 billion | ||
| 2017 | $7.3 billion | $7.7 billion |
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| Year | Total
Goldman Originator Fixed Rate Loans Originated (approximate) | Total
Goldman Originator Fixed Rate Loans Securitized (approximate) | ||
| 2016 | $6.1 billion | $5.2 billion | ||
| 2015 | $6.2 billion | $6.0 billion | ||
| 2014 | $2.9 billion | $3.1 billion | ||
| 2013 | $5.0 billion | $5.3 billion | ||
| 2012 | $5.6 billion | $4.6 billion | ||
| 2011 | $2.3 billion | $2.2 billion | ||
| 2010 | $1.6 billion | $1.1 billion | ||
| 2009 | $400 million | $400 million |
(1) Represents origination for the Goldman Originator and affiliates of the Goldman Originator originating commercial mortgage loans.
Floating Rate Commercial Mortgage Loans(1)
| Year | Total Goldman
Originator Floating Rate Loans Originated (approximate) | Total Goldman
Originator Floating Rate Loans Securitized (approximate) | ||
| 2021 | $9.5 billion | $12.4 billion | ||
| 2020 | $4.8 billion | $3.1 billion | ||
| 2019 | $6.4 billion | $4.7 billion | ||
| 2018 | $8.1 billion | $5.9 billion | ||
| 2017 | $5.6 billion | $4.0 million | ||
| 2016 | $2.3 billion | $1.6 million | ||
| 2015 | $2.0 billion | $261.0 million | ||
| 2014 | $3.2 billion | $2.0 billion | ||
| 2013 | $777 million | $1.3 billion | ||
| 2012 | $1.9 billion | $0 | ||
| 2011 | $140 million | $0 | ||
| 2010 | $0 | $0 | ||
| 2009 | $40 million | $0 |
(1) Represents origination for the Goldman Originator and affiliates of the Goldman Originator originating commercial mortgage loans.
Goldman Originator’s Underwriting Guidelines and Processes
The Goldman Originator’s commercial mortgage loans are primarily originated in accordance with the origination procedures and underwriting criteria described below. However, variations from these procedures and criteria may occur as a result of various conditions including each loan’s specific terms, the quality or location of the underlying real estate, the property’s tenancy profile, the background or financial strength of the borrower/sponsor, or any other pertinent information deemed material by the Goldman Originator. Therefore, this general description of the Goldman Originator’s origination procedures and underwriting criteria is not intended as a representation that every commercial mortgage loan originated by it complies entirely with all procedures and criteria set forth below. For important information about the circumstances that have affected the underwriting of a GSMC Mortgage Loan in the mortgage pool, see “—Exceptions to Goldman Originator’s Disclosed Underwriting Guidelines” below and “Annex F-2—Exceptions to GSMC Representations and Warranties”.
The underwriting process for each mortgage loan originated by the Goldman Originator is performed by an origination team comprised of real estate professionals which typically includes an originator, analyst, loan officer and commercial closer. This team conducts a review of the related mortgaged property, which typically includes an examination of historical operating statements (if available), rent rolls, certain tenant leases, current and historical real estate tax information, insurance policies and/or schedules, and third party reports pertaining to appraisal/valuation, zoning, environmental status and
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physical condition/seismic/engineering. In certain cases, the Goldman Originator may engage an independent third party due diligence provider, pursuant to a program of specified procedures, to assist in the underwriting and preparation of analyses required by such procedures, subject to the oversight and ultimate review and approval by the Goldman Originator origination team.
A member of the Goldman Originator origination team performs or engages a third party to perform an inspection of the property in order to assess the physical quality of the collateral, confirm tenancy, and determine visibility and accessibility of the property as well as proximity to major thoroughfares, transportation centers, employment sources, retail areas, educational facilities and recreational areas. Such site inspections are also generally used to assess the submarket in which the property is located and to evaluate the property’s competitiveness within its market.
The Goldman Originator origination team also performs a review of the financial status, credit history and background of the borrower and certain key principals of the borrower. Among the items generally reviewed are financial statements, independent credit reports, criminal/background investigations, and specific searches in select jurisdictions for judgments, liens, bankruptcy and pending litigation.
After the compilation and review of all documentation and other relevant considerations, the origination team finalizes its underwriting analysis of the property’s cash flow in accordance with the property specific cash flow underwriting guidelines of the Goldman Originator. Determinations are also made regarding the implementation of appropriate loan terms to structure around risks, resulting in features such as ongoing escrows or up front reserves, letters of credit, lockboxes/cash management agreements or guarantees. A complete credit committee package is prepared to summarize all of the above referenced information.
All commercial mortgage loans must be presented to one or more credit committees which consist of senior real estate professionals, among others. After a review of the credit committee package and a discussion of the loan, the committee may approve the loan as recommended or request additional due diligence, modify the terms, or reject the loan entirely.
The Goldman Originator’s underwriting guidelines generally require that a mortgage loan have, at origination, a minimum underwritten debt service coverage ratio of 1.20x for multifamily properties, 1.40x for hospitality properties and 1.25x for all other property types and maximum loan-to-value ratio of 80% for multifamily properties and 75% for all other property types. However these thresholds are guidelines and exceptions may be made on the merits of each individual loan taking into account such factors as reserves, letters of credit and/ or guarantees, the Goldman Originator’s judgment of the property and/or market performance in the future.
Certain properties may also be encumbered by, or otherwise support payments on, subordinate debt and/or mezzanine debt secured by direct or indirect ownership interests in the borrower. It is possible that the Goldman Originator or an affiliate will be a lender on that additional debt, and may either sell such debt to an unaffiliated third party or hold it in inventory. When such additional debt is taken into account, the aggregate debt may not conform to the aforementioned debt service coverage ratio and loan-to-value ratio parameters.
The Goldman Originator may require borrowers to fund various escrows for taxes, insurance, capital expenses and replacement reserves. In addition, the Goldman Originator may identify certain risks that warrant additional escrows or holdbacks for items such as leasing-related matters, deferred maintenance, environmental remediation or unfunded obligations, which escrows or holdbacks would be released upon satisfaction of the applicable conditions. Springing escrows may also be structured for identified risks such as specific rollover exposure, to be triggered upon the non-renewal of one or more key tenants. In some cases, the borrower may be allowed to post a letter of credit or guaranty in lieu of a cash reserve, or provide periodic evidence of timely payment of a typical escrow item. Escrows are evaluated on a case-by-case basis and are not required for all commercial mortgage loans originated by the Goldman Originator.
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Generally, the required escrows for GSMC Mortgage Loans are as follows:
| ● | Taxes—An initial deposit and monthly escrow deposits equal to 1/12th of the annual property taxes (based on the most recent property assessment and the current millage rate) are typically required to satisfy all taxes and assessments, except that such escrows are not required in certain circumstances, including, but not limited to, (i) if there is an institutional or high net-worth individual property sponsor or (ii) if the related mortgaged property is a single tenant property in which the related tenant is required to pay taxes directly. |
| ● | Insurance—An initial deposit and monthly escrow deposits equal to 1/12th of the annual property insurance premium are typically required to pay all insurance premiums, except that such escrows are not required in certain circumstances, including, but not limited to, (i) if the related borrower maintains a blanket insurance policy or (ii) if the related mortgaged property is a single tenant property and the related tenant is required to obtain insurance directly or self-insures. |
| ● | Replacement Reserves—Replacement reserves are generally calculated in accordance with the expected useful life of the components of the property during the term of the mortgage loan. Annual replacement reserves are generally underwritten to the suggested replacement reserve amount from an independent, third party property condition or engineering report, or to certain minimum requirements by property type, except that such escrows are not required in certain circumstances, including, but not limited to, if the related mortgaged property is a single tenant property and the related tenant is responsible for all repairs and maintenance, including those required with respect to the roof and improvement structure. |
| ● | Tenant Improvement / Leasing Commissions—Tenant improvement / leasing commission reserves may be required to be funded either at loan origination and/or during the related mortgage loan term to cover certain anticipated leasing commissions or tenant improvement costs which might be associated with re-leasing the space, except that such escrows are not required in certain circumstances, including, but not limited to, (i) if the related mortgaged property is a single tenant property and the related tenant’s lease extends beyond the loan term or (ii) where rent at the related mortgaged property is considered below market. |
| ● | Deferred Maintenance—A deferred maintenance reserve may be required to be funded at loan origination in an amount equal to 100% to 125% of the estimated cost of material immediate repairs or replacements identified in the property condition or engineering report, except that such escrows are not required in certain circumstances, including, but not limited to, (i) the sponsor of the borrower delivers a guarantee to complete the immediate repairs in a specified amount of time, (ii) the deferred maintenance amount does not materially impact the function, performance or value of the property or (iii) if the related mortgaged property is a single tenant property the tenant is responsible for the repairs. |
| ● | Environmental Remediation—An environmental remediation reserve may be required at loan origination in an amount equal to 100% to 125% of the estimated remediation cost identified in the environmental report, except that such escrows are not required in certain circumstances, including, but not limited to, (i) the sponsor of the borrower delivers a guarantee agreeing to take responsibility and pay for the identified environmental issues or (ii) environmental insurance is obtained or already in place. |
For a description of the escrows collected with respect to the GSMC Mortgage Loans, please see Annex A-1.
The Goldman Originator and its origination counsel will generally examine whether the use and occupancy of the property is in material compliance with zoning, land-use, building rules, regulations and orders then applicable to that property. Evidence of this compliance may be in the form of one or more of the following: legal opinions, surveys, recorded documents, temporary or permanent certificates of occupancy, letters from government officials or agencies, title insurance endorsements, engineering or consulting reports, zoning reports and/or representations by the related borrower. In some cases, a
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mortgaged property may constitute a legal non-conforming use or structure. In such cases, the Goldman Originator may require an endorsement to the title insurance policy and/or the acquisition of law and ordinance coverage in the casualty insurance policy with respect to the particular non-conformity unless it determines that: (i) the non-conformity should not have a material adverse effect on the ability of the borrower to rebuild; or (ii) if the improvements are rebuilt in accordance with currently applicable law, the value and performance of the property would be acceptable; or (iii) any major casualty that would prevent rebuilding has a sufficiently remote likelihood of occurring; or (iv) a cash reserve, a letter of credit or an agreement imposing recourse liability from a principal of the borrower is provided to cover losses.
The borrower is required to provide, and the Goldman Originator or its origination counsel typically will review, a title insurance policy for each property. The title insurance policies provided typically must meet the following requirements: (i) written by a title insurer licensed to do business in the jurisdiction where the mortgaged property is located, (ii) in an amount at least equal to the original principal balance of the mortgage loan, (iii) protection and benefits run to the mortgagee and its successors and assigns, (iv) written on an American Land Title Association form or equivalent policy promulgated in the jurisdiction where the mortgaged property is located and (v) if a survey was prepared, the legal description of the mortgaged property in the title policy conforms to that shown on the survey.
Except in certain instances where credit rated tenants are required to obtain insurance or may self-insure, the Goldman Originator typically requires that the related mortgaged property be insured by a hazard insurance policy with a customary deductible and in an amount at least equal to the lesser (x) of the outstanding principal balance of the mortgage loan and (y) 100% of the full insurable replacement cost of the improvements located on the property. If applicable, the policy contains appropriate endorsements to avoid the application of coinsurance and does not permit reduction in insurance proceeds for depreciation, except that the policy may permit a deduction for depreciation in connection with a cash settlement after a casualty if the insurance proceeds are not being applied to rebuild or repair the damaged improvements.
Flood insurance, if available, must be in effect for any mortgaged property that at the time of origination included material improvements in any area identified in the Federal Register by the Federal Emergency Management Agency as a special flood hazard area. The flood insurance policy must meet the requirements of the then-current guidelines of the Federal Insurance Administration, be provided by a generally acceptable insurance carrier and be in an amount representing coverage not less than the least of: (i) the outstanding principal balance of the mortgage loan, (ii) the full insurable value of the property and (iii) the maximum amount of insurance available under the National Flood Insurance Act of 1968, except in some cases where self-insurance is permitted.
The standard form of hazard insurance policy typically covers physical damage or destruction of the improvements on the mortgaged property caused by fire, lightning, explosion, smoke, windstorm and hail, riot or strike and civil commotion. The policies may contain some conditions and exclusions to coverage, including exclusions related to acts of terrorism. Generally, each of the mortgage loans requires that the related property have coverage for terrorism or terrorist acts, if such coverage is available at commercially reasonable rates. In some cases, there is a cap on the amount that the related borrower will be required to expend on terrorism insurance.
Each mortgage typically also requires the borrower to maintain comprehensive general liability insurance against claims for personal and bodily injury, death or property damage occurring on, in or about the property in an amount customarily required by institutional lenders.
Each mortgage typically further requires the related borrower to maintain business interruption or rent loss insurance in an amount not less than 100% of the projected rental income from the related property for not less than twelve months.
Although properties are typically not insured for earthquake risk, a borrower will be required to obtain earthquake insurance if the seismic report indicates that the PML or SEL is greater than 20%.
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In the course of originating the GSMC Mortgage Loans, the Goldman Originator generally considered the results of third party reports as described below:
| ● | Appraisal—The Goldman Originator obtains an appraisal or an update of an existing appraisal for each mortgaged property prepared by an appraisal firm approved in accordance with the Goldman Originator’s internal documented appraisal policy. The Goldman Originator origination team and a third party consultant engaged by the Goldman Originator typically reviews the appraisal. All appraisals are conducted by an independent appraiser that is state certified, an appraiser belonging to the Appraisal Institute, a member association of professional real estate appraisers, or any otherwise qualified appraiser. All appraisals are conducted in accordance with the Uniform Standards of Professional Appraisal Practices. In addition, the appraisal report (or a separate letter) includes a statement by the appraiser that the guidelines in Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended, were followed in preparing the appraisal. |
| ● | Environmental Report—The Goldman Originator obtains a Phase I site assessment or an update of a previously obtained site assessment for each mortgaged property prepared by an environmental firm approved by the Goldman Originator. In certain cases, the borrower may have obtained the Phase I site assessment, and the assessment is then re-addressed to the Goldman Originator. The Goldman Originator origination team and a third party environmental consultant engaged by the Goldman Originator or the borrower typically reviews the Phase I site assessment to verify the presence or absence of potential adverse environmental conditions. Furthermore, an environmental assessment conducted at any particular real property collateral will not necessarily cover all potential environmental issues. For example, an analysis for radon, lead-based paint, mold and lead in drinking water will usually be conducted only at multifamily rental properties and only when the Goldman Originator or the environmental consultant believes that such an analysis is warranted under the circumstances. In cases in which the Phase I site assessment identifies any potential adverse environmental conditions and no third party is identified as responsible for such condition, or the condition has not otherwise been satisfactorily mitigated, the Goldman Originator generally requires additional environmental testing, such as a Phase II environmental assessment on the related mortgaged property, an environmental insurance policy, the borrower to conduct remediation activities or to establish an operations and maintenance plan, or to place funds in escrow to be used to address any required remediation. |
| ● | Physical Condition Report—The Goldman Originator obtains a physical condition report (“PCR”) or an update of a previously obtained PCR for each mortgaged property prepared by a structural engineering firm approved by the Goldman Originator to assess the structure, exterior walls, roofing, interior structure and/ or mechanical and electrical systems. In certain cases, the borrower may have obtained the PCR, and the PCR is then re-addressed to the Goldman Originator. The Goldman Originator and a third party structural consultant engaged by the Goldman Originator or the borrower typically reviews the PCR to determine the physical condition of the property, and to determine the anticipated costs of necessary repair, replacement and major maintenance or capital expenditure over the term of the mortgage loan. In cases in which the PCR identifies an immediate need for material repairs or replacements with an anticipated cost that is over a certain minimum threshold or percentage of loan balance, the Goldman Originator generally requires that funds be put in escrow at the time of origination of the mortgage loan to complete such repairs or replacements or obtains a guarantee from a sponsor of the borrower in lieu of reserves. |
| ● | Seismic—The Goldman Originator generally obtains a seismic report or an update of a previously obtained seismic report for all mortgaged properties located in seismic zone 3 or 4 to assess probable maximum loss (“PML”) or scenario expected loss (“SEL”) for the related mortgaged property. In certain cases, the borrower may have obtained the seismic report and the seismic report is then re-addressed to the Goldman Originator. |
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From time to time, the Goldman Originator originates mortgage loans together with other financial institutions. The resulting mortgage loans are evidenced by two or more promissory notes, at least one of which will reflect the Goldman Originator as the payee. GSMC has in the past and may in the future deposit such promissory notes for which the Goldman Originator is named as payee with one or more securitization trusts, while the co-originators have in the past and may in the future deposit such promissory notes for which they are named payee into other securitization trusts.
| Servicing |
Interim servicing for all of GSMC’s loans prior to securitization is typically performed by a nationally recognized rated third party interim servicer. In addition, primary servicing is occasionally retained by certain qualified mortgage brokerage firms under established sub-servicing agreements with GSMC, which firms may continue primary servicing certain loans following the securitization closing date. Otherwise, servicing responsibilities are transferred from the interim servicer to the master servicer of the securitization trust (and a primary servicer when applicable) at closing of the securitization. From time to time, the interim servicer may retain primary servicing.
Exceptions to Goldman Originator’s Disclosed Underwriting Guidelines
The Goldman Originator has disclosed generally its underwriting guidelines with respect to the GSMC Mortgage Loans. However, one or more of the GSMC Mortgage Loans may vary from the specific Goldman Originator underwriting guidelines described above when additional credit positive characteristics are present as discussed above. In addition, in the case of one or more of the GSMC Mortgage Loans, the Goldman Originator may not have applied each of the specific underwriting guidelines described above as the result of case-by-case permitted flexibility based upon other compensating factors. In certain cases, the Goldman Originator may have made exceptions and the underwriting of a particular mortgage loan did not comply with all aspects of the disclosed criteria.
The GSMC Mortgage Loans were originated in accordance with the underwriting standards set forth above.
Certain characteristics of the GSMC Mortgage Loans can be found on Annex A-1.
Compliance with Rule 15Ga-1 under the Exchange Act. GSMC most recently filed a Form ABS-15G pursuant to Rule 15Ga-1 under the Exchange Act on February 14, 2022. GSMC’s Central Index Key is 0001541502. With respect to the period from and including January 1, 2019 to and including December 31, 2021, GSMC has the following activity to report as required by Rule 15Ga-1 under the Exchange Act with respect to repurchase or replacement requests in connection with breaches of representations and warranties made by it as a sponsor of commercial mortgage securitizations.
| % of principal balance | Check
if Regis- tered |
Name of Originator | Total Assets in ABS by Originator |
Assets That Were Subject of Demand |
Assets That Were Repurchased or Replaced |
Assets Pending Repurchase or Replacement (due to expired cure period) |
Demand in Dispute |
Demand Withdrawn |
Demand Rejected | |||||||||||||||
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| Asset Class: Commercial Mortgage Backed Securities | ||||||||||||||||||||||||
| GS
Mortgage Securities Trust 2012-GCJ9 (CIK 0001560456) |
X | Goldman Sachs Mortgage Company | 12 | 411,105,625 | 29.6 | 1 | 0 | 0.00 | 0 | 0 | 0.00 | 0 | 0 | 0.00 | 1 | 0 | 0.00 | 0 | 0 | 0.00 | 0 | 0 | 0.00 | |
| Citigroup Global Markets Realty Corp. | 30 | 313,430,906 | 22.6 | 0 | 0 | 0.00 | 0 | 0 | 0.00 | 0 | 0 | 0.00 | 0 | 0 | 0.00 | 0 | 0 | 0.00 | 0 | 0 | 0.00 | |||
| Archetype Mortgage Funding I LLC | 14 | 137,272,372 | 9.9 | 0 | 0 | 0.00 | 0 | 0 | 0.00 | 0 | 0 | 0.00 | 0 | 0 | 0.00 | 0 | 0 | 0.00 | 0 | 0 | 0.00 | |||
| Jefferies LoanCore LLC | 18 | 527,119,321 | 38.0 | 0 | 0 | 0.00 | 0 | 0 | 0.00 | 0 | 0 | 0.00 | 0 | 0 | 0.00 | 0 | 0 | 0.00 | 0 | 0 | 0.00 | |||
| Total by Asset Class | 74 | 1,388,928,224 | 100% | 1 | 0 | 0.00 | 0 | 0 | 0.00 | 0 | 0 | 0.00 | 1 | 0 | 0.00 | 0 | 0 | 0.00 | 0 | 0 | 0.00 | |||
Retained Interests in This Securitization
As of the date of this prospectus, neither GSMC nor any of its affiliates intends to retain any certificates issued by the issuing entity or any other economic interest in this securitization. However,
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GSMC and/or its affiliates may retain on the Closing Date or own in the future certain classes of certificates. Any such party will have the right to dispose of any such certificates at any time.
The information set forth under “—Goldman Sachs Mortgage Company” has been provided by GSMC.
JPMorgan Chase Bank, National Association
| General |
JPMorgan Chase Bank, National Association (“JPMCB”) is a national banking association and wholly owned bank subsidiary of JPMorgan Chase & Co., a Delaware corporation whose principal office is located in New York, New York. JPMCB offers a wide range of banking services to its customers, both domestically and internationally. It is chartered and its business is subject to examination and regulation by the Office of the Comptroller of the Currency. JPMCB is an affiliate of J.P. Morgan Securities LLC, an underwriter. Additional information, including the most recent Annual Report on Form 10-K for the year ended December 31, 2021, of JPMorgan Chase & Co. (“JPMC”), and additional annual, quarterly and current reports filed with or furnished to the SEC by JPMC, as they become available, may be obtained without charge by each person to whom this prospectus is delivered at the SEC’s website at www.sec.gov. The 2020 Annual Report of JPMC is available on JPMC’s website. None of the documents that JPMC files with the SEC or JPMC’s website or any of the information on, or accessible through, the SEC’s or JPMC’s website, is part of, or incorporated by reference into, this prospectus.
JPMCB’s Securitization Program. The following is a description of JPMCB’s commercial mortgage-backed securitization program.
JPMCB underwrites and originates mortgage loans secured by commercial, multifamily and manufactured housing community properties for its securitization program. As sponsor, JPMCB sells the loans it originates or acquires through commercial mortgage-backed securitizations. JPMCB, with its commercial mortgage lending affiliates and predecessors, began originating commercial mortgage loans for securitization in 1994 and securitizing commercial mortgage loans in 1995. As of December 31, 2019, the total amount of commercial mortgage loans originated and securitized by JPMCB and its predecessors is in excess of $150 billion. Of that amount, approximately $124.6 billion has been securitized by J.P. Morgan Chase Commercial Mortgage Securities Corp. (“JPMCCMSC”), a subsidiary of JPMCB, as depositor. In its fiscal year ended December 31, 2019, JPMCB originated approximately $9.0 billion of commercial mortgage loans, of which approximately $4.2 billion were securitized by JPMCCMSC.
On May 30, 2008, JPMorgan Chase & Co., the parent of JPMCB, merged with The Bear Stearns Companies Inc. As a result of such merger, Bear Stearns Commercial Mortgage, Inc. (“BSCMI”) became a subsidiary of JPMCB. Subsequent to such merger, BSCMI changed its name to J.P. Morgan Commercial Mortgage Inc. Prior to the merger, BSCMI was a sponsor of its own commercial mortgage-backed securitization program. BSCMI, with its commercial mortgage lending affiliates and predecessors, began originating commercial mortgage loans in 1995 and securitizing commercial mortgage loans in 1996. As of November 30, 2007, the total amount of commercial mortgage loans originated by BSCMI was in excess of $60 billion, of which approximately $39 billion has been securitized. Of that amount, approximately $22 billion has been securitized by an affiliate of BSCMI acting as depositor. BSCMI’s annual commercial mortgage loan originations grew from approximately $65 million in 1995 to approximately $1.0 billion in 2000 and to approximately $21.0 billion in 2007. After the merger, only JPMCB continued to be a sponsor of commercial mortgage-backed securitizations.
The commercial mortgage loans originated, co-originated or acquired by JPMCB include both fixed-rate and floating-rate loans and both smaller “conduit” loans and large loans. JPMCB primarily originates loans secured by retail, office, multifamily, hospitality, industrial and self-storage properties, but also originates loans secured by manufactured housing communities, theaters, land subject to a ground lease and mixed use properties. JPMCB originates loans in every state.
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As a sponsor, JPMCB originates, co-originates or acquires mortgage loans and, either by itself or together with other sponsors or loan sellers, initiates their securitization by transferring the mortgage loans to a depositor, which in turn transfers them to the issuing entity for the related securitization. In coordination with its affiliate, J.P. Morgan Securities LLC, and other underwriters, JPMCB works with rating agencies, loan sellers, subordinated debt purchasers and master servicers in structuring the securitization transaction. JPMCB acts as sponsor, originator or loan seller both in transactions in which it is the sole sponsor and mortgage loan seller as well as in transactions in which other entities act as sponsor and/or mortgage loan seller. Some of these loan sellers may be affiliated with underwriters on the transactions.
Neither JPMCB nor any of its affiliates acts as master servicer of the commercial mortgage loans in its securitizations. Instead, JPMCB sells the right to be appointed master servicer of its securitized loans to rating-agency approved master servicers.
For a description of certain affiliations, relationships and related transactions between the sponsor and the other transaction parties, see “Risk Factors—Risks Related to Conflicts of Interest—Interests and Incentives of the Underwriter Entities May Not Be Aligned With Your Interests” and “Certain Affiliations, Relationships and Related Transactions Involving Transaction Parties”.
Review of JPMCB Mortgage Loans
Overview. JPMCB, in its capacity as the sponsor of the Mortgage Loans it is selling to the depositor (the “JPMCB Mortgage Loans”), has conducted a review of the JPMCB Mortgage Loans in connection with the securitization described in this prospectus. The review of the JPMCB Mortgage Loans was performed by a deal team comprised of real estate and securitization professionals who are employees of JPMCB, or one or more of JPMCB’s affiliates, or, in certain circumstances, are consultants engaged by JPMCB (the “JPMCB Deal Team”). The review procedures described below were employed with respect to all of the JPMCB Mortgage Loans, except that certain review procedures only were relevant to the large loan disclosures in this prospectus, as further described below. No sampling procedures were used in the review process.
Database. To prepare for securitization, members of the JPMCB Deal Team updated its internal origination database of loan-level and property-level information relating to each JPMCB Mortgage Loan. The database was compiled from, among other sources, the related Mortgage Loan documents, third party appraisals (as well as environmental reports, engineering assessments and seismic reports, if applicable and obtained), zoning reports, if applicable, evidence of insurance coverage or summaries of the same prepared by an outside insurance consultant, borrower supplied information (including, but not limited to, rent rolls, leases, operating statements and budgets) and information collected by JPMCB during the underwriting process. After origination or acquisition of each JPMCB Mortgage Loan, the JPMCB Deal Team updated the information in the database with respect to such JPMCB Mortgage Loan based on updates provided by the related servicer relating to loan payment status and escrows, updated operating statements, rent rolls and leasing activity, and information otherwise brought to the attention of the JPMCB Deal Team.
A data tape (the “JPMCB Data Tape”) containing detailed information regarding each JPMCB Mortgage Loan was created from the information in the database referred to in the prior paragraph. The JPMCB Data Tape was used by the JPMCB Deal Team to provide the numerical information regarding the JPMCB Mortgage Loans in this prospectus.
Data Comparison and Recalculation. JPMCB engaged a third party accounting firm to perform certain data comparison and recalculation procedures designed by JPMCB relating to information in this prospectus regarding the JPMCB Mortgage Loans. These procedures included:
| ● | comparing the information in the JPMCB Data Tape against various source documents provided by JPMCB that are described above under “—Database”; |
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| ● | comparing numerical information regarding the JPMCB Mortgage Loans and the related Mortgaged Properties disclosed in this prospectus against the JPMCB Data Tape; and |
| ● | recalculating certain percentages, ratios and other formulae relating to the JPMCB Mortgage Loans disclosed in this prospectus. |
Legal Review. JPMCB engaged various law firms to conduct certain legal reviews of the JPMCB Mortgage Loans to assist in the preparation of the disclosure in this prospectus. In anticipation of a securitization of each JPMCB Mortgage Loan, origination counsel prepared a loan and property summary that sets forth salient loan terms and summarizes material deviations from material provisions of JPMCB’s standard form loan documents. In addition, origination counsel for each JPMCB Mortgage Loan reviewed JPMCB’s representations and warranties set forth on Annex E-1 and, if applicable, identified exceptions to those representations and warranties.
Securitization counsel was also engaged to assist in the review of the JPMCB Mortgage Loans. Such assistance included, among other things, (i) a review of sections of the loan agreement relating to certain JPMCB Mortgage Loans marked against the standard form document, (ii) a review of the loan and property summaries referred to above relating to the JPMCB Mortgage Loans prepared by origination counsel, and (iii) a review of due diligence questionnaires completed by the JPMCB Deal Team and origination counsel. Securitization counsel also reviewed the property release provisions, if any, and condemnation provisions for each JPMCB Mortgage Loan for compliance with the REMIC provisions.
Origination counsel and securitization counsel also assisted in the preparation of the risk factors and mortgage loan summaries set forth in Annex A-1, based on their respective reviews of pertinent sections of the related Mortgage Loan documents.
Other Review Procedures. On a case-by-case basis as deemed necessary by JPMCB, with respect to any pending litigation that existed at the origination of any JPMCB Mortgage Loan that is material and not covered by insurance, JPMCB requested updates from the related borrower, origination counsel and/or borrower’s litigation counsel. JPMCB confirmed with the related servicer that there has not been recent material casualty to any improvements located on real property that serves as collateral for JPMCB Mortgage Loans. In addition, if JPMCB became aware of a significant natural disaster in the immediate vicinity of any Mortgaged Property securing a JPMCB Mortgage Loan, JPMCB obtained information on the status of the Mortgaged Property from the related borrower to confirm no material damage to the Mortgaged Property.
The JPMCB Deal Team also consulted with JPMCB personnel responsible for the origination of the JPMCB Mortgage Loans to confirm that the JPMCB Mortgage Loans were originated or acquired in compliance with the origination and underwriting criteria described below under “—JPMCB’s Underwriting Guidelines and Processes”, as well as to identify any material deviations from those origination and underwriting criteria. See “Description of the Mortgage Pool—Exceptions to Underwriting Guidelines”.
Findings and Conclusions. Based on the foregoing review procedures, JPMCB determined that the disclosure regarding the JPMCB Mortgage Loans in this prospectus is accurate in all material respects. JPMCB also determined that the JPMCB Mortgage Loans were originated or acquired in accordance with JPMCB’s origination procedures and underwriting criteria, except as described under “Description of the Mortgage Pool—Exceptions to Underwriting Guidelines”. JPMCB attributes to itself all findings and conclusions resulting from the foregoing review procedures.
Review Procedures in the Event of a Mortgage Loan Substitution. JPMCB will perform a review of any mortgage loan that it elects to substitute for a mortgage loan in the pool in connection with material breach of a representation or warranty or a material document defect. JPMCB, and if appropriate its legal counsel, will review the Mortgage Loan documents and servicing history of the substitute mortgage loan to confirm it meets each of the criteria required under the terms of the related mortgage loan purchase agreement and the pooling and servicing agreement (the “JPMCB’s Qualification Criteria”). JPMCB will engage a third party accounting firm to compare the JPMCB’s Qualification Criteria against the underlying source documentation to verify the accuracy of the review by JPMCB and to confirm any numerical and/or
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statistical information to be disclosed in any required filings under the Exchange Act. Legal counsel will also be engaged by JPMCB to render any tax opinion required in connection with the substitution.
JPMCB’s Underwriting Guidelines and Processes
General. JPMCB has developed guidelines establishing certain procedures with respect to underwriting the mortgage loans originated or purchased by it. All of the mortgage loans sold to the issuing entity by JPMCB were generally underwritten in accordance with the guidelines below. In some instances, one or more provisions of the guidelines were waived or modified by JPMCB at origination where it was determined not to adversely affect the related mortgage loan originated by it in any material respect. The mortgage loans to be included in the issuing entity were originated or acquired by JPMCB generally in accordance with the commercial mortgage-backed securitization program of JPMCB. For a description of any material exceptions to the underwriting guidelines in this prospectus, see “Description of the Mortgage Pool—Exceptions to Underwriting Guidelines”.
Notwithstanding the discussion below, given the differences between individual commercial Mortgaged Properties, the underwriting and origination procedures and the credit analysis with respect to any particular commercial mortgage loan may significantly differ from one asset to another, and will be driven by circumstances particular to that property, including, among others, its type, current and alternative uses, size, location, market conditions, reserve requirements and additional collateral, tenants and leases, borrower identity, sponsorship, performance history and/or other factors. However, except as described in the exceptions to the underwriting guidelines (see “Description of the Mortgage Pool—Exceptions to Underwriting Guidelines”), the underwriting of the JPMCB Mortgage Loans will conform to the general guidelines described below.
Property Analysis. JPMCB performs or causes to be performed a site inspection to evaluate the location and quality of the related Mortgaged Properties. Such inspection generally includes an evaluation of functionality, design, attractiveness, visibility and accessibility, as well as location to major thoroughfares, transportation centers, employment sources, retail areas and educational or recreational facilities. JPMCB assesses the submarket in which the property is located to evaluate competitive or comparable properties as well as market trends. In addition, JPMCB evaluates the property’s age, physical condition, operating history, lease and tenant mix, and management.
Cash Flow Analysis. JPMCB reviews, among other things, historical operating statements, rent rolls, tenant leases and/or budgeted income and expense statements provided by the borrower and makes adjustments in order to determine a debt service coverage ratio, including taking into account the benefits of any governmental assistance programs. See “Description of the Mortgage Pool—Additional Information”.
Loan Approval. All mortgage loans originated by JPMCB require preliminary and final approval by a loan credit committee which includes senior executives of JPMCB. Prior to delivering a term sheet to a prospective borrower sponsor, the JPMCB origination team will submit a preliminary underwriting package to the preliminary CMBS underwriting committee. For loans under $30.0 million, approval by two committee members is required prior to sending a term sheet to the borrower sponsor. For loans over $30.0 million unanimous committee approval is required prior to sending the term sheet to the borrower sponsor. Prior to funding the loan, after all due diligence has been completed, a loan will then be reviewed by the CMBS underwriting committee and approval by the committee must be unanimous. The CMBS underwriting committee may approve a mortgage loan as recommended, request additional due diligence prior to approval, approve it subject to modifications of the loan terms or decline a loan transaction.
Debt Service Coverage Ratio and LTV Ratio. The underwriting includes a calculation of the debt service coverage ratio and the loan-to-value ratio in connection with the origination of each loan.
The debt service coverage ratio will generally be calculated based on the ratio of the underwritten net cash flow from the property in question as determined by JPMCB and payments on the loan based on actual principal and/or interest due on the loan. However, underwritten net cash flow is often a highly
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subjective number based on a variety of assumptions regarding, and adjustments to, revenues and expenses with respect to the related real property collateral. For example, when calculating the debt service coverage ratio for a multifamily or commercial mortgage loan, annual net cash flow that was calculated based on assumptions regarding projected future rental income, expenses and/or occupancy may be utilized. We cannot assure you that the foregoing assumptions made with respect to any prospective multifamily or commercial mortgage loan will, in fact, be consistent with actual property performance. For specific discussions on the particular assumptions and adjustments, see “Description of the Mortgage Pool—Additional Information” and Annex A-1 and Annex A-3. The loan-to-value ratio, in general, is the ratio, expressed as a percentage, of the then-outstanding principal balance of the mortgage loan divided by the estimated value of the related property based on an appraisal. In addition, with respect to certain mortgage loans, there may exist mezzanine debt. Such mortgage loans will have a lower combined debt service coverage ratio and/or a higher combined loan-to-value ratio when such subordinate or mezzanine debt is taken into account. Additionally, certain mortgage loans may provide for interest only payments prior to maturity, or for an interest-only period during a portion of the term of the mortgage loan.
Appraisal and LTV Ratio. For each Mortgaged Property, JPMCB obtains a current (within 6 months of the origination date of the mortgage loan) full narrative appraisal conforming at least to the requirements of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”). The appraisal is based on the current use of the Mortgaged Property and must include an estimate of the then-current market value of the property “as-stabilized”, “as-complete” and “as-is” values. The “as-stabilized” or “as-complete” value may be based on certain assumptions, such as future construction completion, projected re-tenanting, payment of tenant improvement or leasing commissions allowances or free or abated rent periods, or increased tenant occupancies. JPMCB then determines the loan-to-value ratio of the mortgage loan at the date of origination or, if applicable, in connection with its acquisition, in each case based on the value or values set forth in the appraisal and relevant loan structure.
Evaluation of Borrower. JPMCB evaluates the borrower and its principals with respect to credit history and prior experience as an owner and operator of commercial real estate properties. The evaluation will generally include obtaining and reviewing a credit report or other reliable indication of the borrower’s financial capacity; obtaining and verifying credit references and/or business and trade references; and obtaining and reviewing certifications provided by the borrower as to prior real estate experience and current contingent liabilities. Finally, although the mortgage loans generally are non-recourse in nature, in the case of certain mortgage loans, the borrower and certain principals of the borrower may be required to assume legal responsibility for liabilities as a result of, among other things, fraud, misrepresentation, misappropriation or conversion of funds and breach of environmental or hazardous materials requirements. JPMCB evaluates the financial capacity of the borrower and such principals to meet any obligations that may arise with respect to such liabilities.
Environmental Site Assessment. Prior to origination, JPMCB either (i) obtains or updates an environmental site assessment (“ESA”) for a Mortgaged Property prepared by a qualified environmental firm or (ii) obtains an environmental insurance policy for a Mortgaged Property. If an ESA is obtained or updated, JPMCB reviews the ESA to verify the absence of reported violations of applicable laws and regulations relating to environmental protection and hazardous materials or other material adverse environmental condition or circumstance. In cases in which the ESA identifies conditions that would require cleanup, remedial action or any other response estimated to cost in excess of 5% of the outstanding principal balance of the mortgage loan, JPMCB either (i) determines that another party with sufficient assets is responsible for taking remedial actions directed by an applicable regulatory authority or (ii) requires the borrower to do one of the following: (A) carry out satisfactory remediation activities or other responses prior to the origination of the mortgage loan, (B) establish an operations and maintenance plan, (C) place sufficient funds in escrow or establish a letter of credit at the time of origination of the mortgage loan to complete such remediation within a specified period of time, (D) obtain an environmental insurance policy for the Mortgaged Property, (E) provide or obtain an indemnity agreement or a guaranty with respect to such condition or circumstance, or (F) receive appropriate assurances that significant remediation activities or other significant responses are not necessary or required.
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Certain of the mortgage loans may also have environmental insurance policies. See “Description of the Mortgage Pool—Certain Terms of the Mortgage Loans”.
Physical Assessment Report. Prior to origination, JPMCB obtains a physical assessment report (“PAR”) for each Mortgaged Property prepared by a qualified structural engineering firm. JPMCB reviews the PAR to verify that the property is reported to be in satisfactory physical condition, and to determine the anticipated costs of necessary repair, replacement and major maintenance or capital expenditure needs over the term of the mortgage loan. In cases in which the PAR identifies material repairs or replacements needed immediately, JPMCB generally requires the borrower to carry out such repairs or replacements prior to the origination of the mortgage loan, or, in many cases, requires the borrower to place sufficient funds in escrow at the time of origination of the mortgage loan to complete such repairs or replacements within not more than twelve months. In certain instances, JPMCB may waive such escrows but require the related borrower to complete such repairs within a stated period of time in the related Mortgage Loan documents.
Title Insurance Policy. The borrower is required to provide, and JPMCB reviews, a title insurance policy for each Mortgaged Property. The title insurance policy must meet the following requirements: (a) the policy must be written by a title insurer licensed to do business in the jurisdiction where the Mortgaged Property is located; (b) the policy must be in an amount equal to the original principal balance of the mortgage loan; (c) the protection and benefits must run to the mortgagee and its successors and assigns; (d) the policy should be written on a standard policy form of the American Land Title Association or equivalent policy promulgated in the jurisdiction where the Mortgaged Property is located; and (e) the legal description of the Mortgaged Property in the title policy must conform to that shown on the survey of the Mortgaged Property, where a survey has been required.
Property Insurance. The borrower is required to provide, and JPMCB reviews, certificates of required insurance with respect to the Mortgaged Property. Such insurance may include: (1) commercial general liability insurance for bodily injury or death and property damage; (2) a fire and extended perils insurance policy providing “special” form coverage including coverage against loss or damage by fire, lightning, explosion, smoke, windstorm and hail, riot or strike and civil commotion; (3) if applicable, boiler and machinery coverage; (4) if the Mortgaged Property is located in a flood hazard area, flood insurance; and (5) such other coverage as JPMCB may require based on the specific characteristics of the Mortgaged Property.
Seismic Report. A seismic report is required for all properties located in seismic zones 3 or 4.
Zoning and Building Code Compliance. In connection with the origination of a multifamily or commercial mortgage loan, the originator will examine whether the use and occupancy of the related real property collateral is in material compliance with zoning, land-use, building rules, regulations and orders then applicable to that property. Evidence of this compliance may be in the form of one or more of the following: a zoning report, legal opinions, surveys, recorded documents, temporary or permanent certificates of occupancy, letters from government officials or agencies, title insurance endorsements, engineering or consulting reports and/or representations by the related borrower.
Escrow Requirements. JPMCB generally requires borrowers to fund various escrows for taxes, insurance, capital expenses and replacement reserves, which reserves in many instances will be limited to certain capped amounts, however, it may waive certain of those requirements on a case by case basis based on the Escrow/Reserve Mitigating Circumstances described below. In addition, JPMCB may identify certain risks that warrant additional escrows or holdbacks for items such as leasing-related matters, deferred maintenance, environmental remediation or unfunded obligations, which escrows or holdbacks would be released upon satisfaction of the applicable conditions. Springing escrows may also be structured for identified risks such as specific rollover exposure, to be triggered upon the non-renewal of one or more key tenants. Escrows are evaluated on a case-by-case basis and are not required for all commercial mortgage loans originated by JPMCB. The typical required escrows for mortgage loans originated by JPMCB are as follows:
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| ● | Taxes – An initial deposit and monthly escrow deposits equal to approximately 1/12th of the estimated annual property taxes (based on the most recent property assessment and the current millage rate) are required to provide JPMCB with sufficient funds to satisfy all taxes and assessments. JPMCB may waive this escrow requirement in certain circumstances, including, but not limited to: (i) the Mortgaged Property is a single tenant property (or substantially leased to single tenant) and the tenant pays taxes directly (or JPMCB may waive the escrow for a portion of the Mortgaged Property which is leased to a tenant that pays taxes for its portion of the Mortgaged Property directly); or (ii) any Escrow/Reserve Mitigating Circumstances. |
| ● | Insurance – An initial deposit and monthly escrow deposits equal to approximately 1/12th of the estimated annual property insurance premium are required to provide JPMCB with sufficient funds to pay all insurance premiums. JPMCB may waive this escrow requirement in certain circumstances, including, but not limited to: (i) the borrower maintains a blanket insurance policy; (ii) the Mortgaged Property is a single tenant property (or substantially leased to single tenant) and the tenant maintains the property insurance or self-insures (or may waive the escrow for a portion of the Mortgaged Property which is leased to a tenant that maintains property insurance for its portion of the Mortgaged Property or self-insures); or (iii) any Escrow/Reserve Mitigating Circumstances. |
| ● | Replacement Reserves – Replacement reserves are generally calculated in accordance with the expected useful life of the components of the property during the term of the mortgage loan. Annual replacement reserves are generally underwritten to the suggested replacement reserve amount from an independent, third-party property condition or engineering report, or to certain minimum requirements by property type. JPMCB may waive this escrow requirement in certain circumstances, including, but not limited to: (i) the Mortgaged Property is a single tenant property (or substantially leased to single tenant) and the tenant repairs and maintains the Mortgaged Property (or may waive the escrow for a portion of the Mortgaged Property which is leased to a tenant that repairs and maintains its portion of the Mortgaged Property); or (ii) any Escrow/Reserve Mitigating Circumstances. |
| ● | Tenant Improvement/Lease Commissions – A tenant improvement/leasing commission reserve may be required to be funded either at loan origination and/or during the related mortgage loan term and/or springing upon certain tenant events to cover certain anticipated leasing commissions, free rent periods or tenant improvement costs which might be associated with re-leasing the space occupied by such tenants. JPMCB may waive this escrow requirement in certain circumstances, including, but not limited to: (i) the Mortgaged Property is a single tenant property (or substantially leased to single tenant), with a lease that extends beyond the loan term; or (ii) any Escrow/Reserve Mitigating Circumstances. |
| ● | Deferred Maintenance – A deferred maintenance reserve may be required to be funded at loan origination in an amount equal to 100% to 125% of the estimated cost of material immediate repairs or replacements identified in the property condition or engineering report. JPMCB may waive this escrow requirement in certain circumstances, including, but not limited to: (i) the sponsor of the borrower delivers a guarantee to complete the immediate repairs; (ii) the deferred maintenance items do not materially impact the function, performance or value of the property; (iii) the deferred maintenance cost does not exceed $50,000; (iv) the Mortgaged Property is a single tenant property (or substantially leased to single tenant), and the tenant is responsible for the repairs; or (v) any Escrow/Reserve Mitigating Circumstances. |
| ● | Environmental Remediation – An environmental remediation reserve may be required at loan origination in an amount equal to 100% to 125% of the estimated remediation cost identified in the environmental report. JPMCB may waive this escrow requirement in certain circumstances, including, but not limited to: (i) the sponsor of the borrower delivers a guarantee agreeing to complete the remediation; (ii) environmental insurance is in place or obtained; or (iii) any Escrow/Reserve Mitigating Circumstances. |
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JPMCB may determine that establishing any of the foregoing escrows or reserves is not warranted in one or more of the following instances (collectively, the “Escrow/Reserve Mitigating Circumstances”): (i) the amounts involved are de minimis, (ii) JPMCB’s evaluation of the ability of the Mortgaged Property, the borrower or a holder of direct or indirect ownership interests in the borrower to bear the subject expense or cost absent creation of an escrow or reserve, (iii) based on the Mortgaged Property maintaining a specified debt service coverage ratio, (iv) JPMCB has structured springing escrows that arise for identified risks, (v) JPMCB has an alternative to a cash escrow or reserve, such as a letter of credit or a guarantee from the borrower or an affiliate of the borrower; (vi) JPMCB believes there are credit positive characteristics of the borrower, the sponsor of the borrower and/or the Mortgaged Property that would offset the need for the escrow or reserve; or (vii) the reserves are being collected and held by a third party, such as a management company, a franchisor, or an association.
Notwithstanding the foregoing discussion under this caption “—JPMCB’s Underwriting Guidelines and Processes”, one or more of the mortgage loans contributed to this securitization by JPMCB may vary from, or may not comply with, JPMCB’s underwriting guidelines described above. In addition, in the case of one or more of the mortgage loans contributed to this securitization by JPMCB, JPMCB may not have strictly applied these underwriting guidelines as the result of a case-by-case permitted exception based upon other compensating or mitigating factors.
Exceptions. Disclosed above are JPMCB’s general underwriting guidelines with respect to the JPMCB Mortgage Loans. One or more JPMCB Mortgage Loans may vary from the specific JPMCB underwriting guidelines described above when additional credit positive characteristics are present as discussed above. In addition, in the case of one or more JPMCB Mortgage Loans, JPMCB may not have applied each of the specific underwriting guidelines described above as the result of case-by-case permitted flexibility based upon other compensating factors. None of the JPMCB Mortgage Loans were originated with variances from the underwriting guidelines disclosed above.
Compliance with Rule 15Ga-1 under the Exchange Act. JPMCCMSC’s most recently filed Form ABS-15G, which includes information related to JPMCB, was filed with the SEC on February 14, 2022, which is the same date as JPMCB’s most recently filed Form ABS-15G for this asset class. The Central Index Key (or CIK) number for JPMCCMSC is 0001013611 and the CIK number for JPMCB is set forth on the cover of this prospectus. With respect to the three-year period ending December 31, 2021, JPMCB has no activity to report as required by Rule 15Ga-1 under the Exchange Act (“Rule 15Ga-1”) with respect to repurchase or replacement requests in connection with breaches of representations and warranties made by it as a sponsor of commercial mortgage securitizations.
Retained Interests in This Securitization. Neither JPMCB nor any of its affiliates intends to retain on the Closing Date any certificates issued by the issuing entity or any other economic interest in this securitization except that JPMCB may retain the Class R certificates. However, JPMCB and/or its affiliates may acquire in the future certain additional classes of certificates. Any such party will have the right to dispose of any such certificates at any time.
Compensation of the Sponsors
In connection with the offering and sale of the certificates contemplated by this prospectus, the sponsors (including affiliates of the sponsors) will be compensated for the sale of their respective percentage interest in the Mortgage Loans in an amount equal to the excess, if any, of:
(a) the sum of any proceeds received from the sale of the certificates to investors and the sale of servicing rights to KeyBank National Association for the servicing of the Mortgage Loans, over
(b) the sum of the costs and expense of originating or acquiring the Mortgage Loans and the costs and expenses related to the issuance, offering and sale of the certificates as described in this prospectus.
The mortgage servicing rights were sold to the master servicer for a price based on the value of the Servicing Fee to be paid to the master servicer with respect to each Mortgage Loan and, which may
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include, among other things, the value of the right to earn income on investments on amounts held by the master servicer with respect to the Mortgage Loans.
The Depositor
The depositor is Deutsche Mortgage & Asset Receiving Corporation. The depositor is a special purpose corporation incorporated in the State of Delaware on March 22, 1996, for the purpose of engaging in the business, among other things, of acquiring and depositing mortgage loans in trust in exchange for certificates evidencing interest in such trusts and selling or otherwise distributing such certificates. The principal executive offices of the depositor are located at 1 Columbus Circle, New York, New York 10019. The telephone number is (212) 250-2500. The depositor’s capitalization is nominal. All of the shares of capital stock of the depositor are held by DB U.S. Financial Markets Holding Corporation.
During the 10 year-period ending December 31, 2021, the depositor has acted as depositor with respect to public and private conduit or combined conduit/large loan commercial mortgage securitization transactions in an aggregate amount of approximately $119.28 billion.
The depositor does not have, nor is it expected in the future to have, any significant assets and is not engaged in activities unrelated to the securitization of mortgage loans. The depositor will not have any business operations other than securitizing mortgage loans and related activities.
The depositor purchases commercial mortgage loans and interests in commercial mortgage loans for the purpose of selling those assets to trusts created in connection with the securitization of pools of assets and does not engage in any activities unrelated to those securitizations. On the Closing Date, the depositor will acquire the mortgage loans from each mortgage loan seller and will simultaneously transfer them, without recourse, to the trustee for the benefit of the Certificateholders.
The depositor remains responsible under the PSA for providing the master servicer, special servicer, certificate administrator and trustee with certain information and other assistance requested by those parties and reasonably necessary to performing their duties under the PSA. The depositor also remains responsible for mailing notices to the Certificateholders upon the appointment of certain successor entities under the PSA.
The Issuing Entity
The issuing entity, Benchmark 2022-B34 Mortgage Trust (the “Trust”), will be a New York common law trust, formed on the Closing Date pursuant to the PSA.
The only activities that the issuing entity may perform are those set forth in the PSA, which are generally limited to owning and administering the mortgage loans and any REO Property, disposing of defaulted mortgage loans and REO Property, issuing the certificates, making distributions, providing reports to Certificateholders and other activities described in this prospectus. Accordingly, the issuing entity may not issue securities other than the certificates, or invest in securities, other than investing of funds in the Collection Account and other accounts maintained under the PSA in certain short-term permitted investments. The issuing entity may not lend or borrow money, except that the master servicer, the special servicer and the trustee may make Advances of delinquent monthly debt service payments and Servicing Advances to the issuing entity, but only to the extent it does not deem such Advances to be non-recoverable from the related mortgage loan; such Advances are intended to provide liquidity, rather than credit support. The PSA may be amended as set forth under “Pooling and Servicing Agreement—Amendment”. The issuing entity administers the mortgage loans through the trustee, the certificate administrator, the master servicer and the special servicer. A discussion of the duties of the trustee, the certificate administrator, the master servicer and the special servicer, including any discretionary activities performed by each of them, is set forth under “Transaction Parties—The Certificate Administrator”, “—The Trustee”, “—The Master Servicer”, “—The Special Servicer” and “Pooling and Servicing Agreement”.
The only assets of the issuing entity other than the mortgage loans and any REO Properties are the Collection Account and other accounts maintained pursuant to the PSA, the short-term investments in
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which funds in the Collection Account and other accounts are invested. The issuing entity has no present liabilities, but has potential liability relating to ownership of the mortgage loans and any REO Properties and certain other activities described in this prospectus, and indemnity obligations to the trustee, the certificate administrator, the depositor, the master servicer, the special servicer, the asset representations reviewer and the operating advisor. The fiscal year of the issuing entity is the calendar year. The issuing entity has no executive officers or board of directors and acts through the trustee, the certificate administrator, the master servicer and the special servicer.
The depositor will be contributing the mortgage loans to the issuing entity. The depositor will be purchasing the mortgage loans from the mortgage loan sellers, as described under “Description of the Mortgage Loan Purchase Agreements”.
The Certificate Administrator
Computershare Trust Company, N.A. (“Computershare Trust Company”) will act as Certificate Administrator (in such capacity, the “Certificate Administrator”) under the Pooling and Servicing Agreement.
Computershare Trust Company is a national banking association and a wholly-owned subsidiary of Computershare Limited (“Computershare Limited”), an Australian financial services company with approximately $5.251 billion (USD) in assets as of June 30, 2021. Computershare Limited and its affiliates have been engaging in financial service activities, including stock transfer related services, since 1997, and corporate trust related services since 2000. Computershare Trust Company provides corporate trust, custody, securities transfer, cash management, investment management and other financial and fiduciary services, and has been engaged in providing financial services, including corporate trust services, since 2000. The transaction parties may maintain commercial relationships with Computershare Trust Company and its affiliates. Computershare Trust Company maintains corporate trust offices at 9062 Old Annapolis Road, Columbia, Maryland 21045-1951 (among other locations), and its office for correspondence related to certificate transfer services is located at 600 South 4th Street, 7th Floor, Minneapolis, Minnesota 55415.
On March 23, 2021, Wells Fargo Bank, N.A. (“Wells Fargo Bank”) announced that it had entered into a definitive agreement with Computershare Trust Company, Computershare Delaware Trust Company (“CDTC”) and Computershare Limited (collectively, “Computershare”) to sell substantially all of its Corporate Trust Services (“CTS”) business. The sale to Computershare closed on November 1, 2021, and virtually all CTS employees of Wells Fargo Bank, along with most existing CTS systems, technology, and offices transferred to Computershare as part of the sale. On November 1, 2021, for some of the transactions in its CTS business, Wells Fargo Bank transferred its roles, and the duties, rights, and liabilities for such roles, under the relevant transaction agreements to Computershare Trust Company. For other transactions in its CTS business, Wells Fargo Bank intends to transfer such roles, duties, rights, and liabilities to Computershare Trust Company or CDTC, as applicable, in stages after November 1, 2021. For any transaction where Wells Fargo Bank’s roles did not transfer to Computershare Trust Company or CDTC on November 1, 2021, Computershare Trust Company or CDTC performs all or virtually all of Wells Fargo Bank’s obligations as its agent as of such date.
Under the terms of the Pooling and Servicing Agreement, Computershare Trust Company is responsible for securities administration, which includes pool performance calculations, distribution calculations, and the preparation of monthly distribution reports. As certificate administrator, Computershare Trust Company is responsible for the preparation and filing of all REMIC tax returns on behalf of the Trust REMICs and, to the extent required under the Pooling and Servicing Agreement, the preparation of monthly reports on Form 10-D, certain current reports on Form 8-K, and annual reports on Form 10-K that are required to be filed with the SEC on behalf of the Issuing Entity. With its acquisition of the CTS business from Wells Fargo Bank on November 1, 2021, Computershare Trust Company acquired a business that has been engaged in the business of securities administration since June 30, 1995. As of November 1, 2021, when it acquired the CTS business from Wells Fargo Bank, Computershare Trust Company was acting as agent for the certificate administrator on approximately
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1,102 commercial mortgage-backed securities transactions with an aggregate outstanding principal balance of more than $622 billion (USD).
As a result of Computershare Trust Company not being a deposit-taking institution, any accounts that the Certificate Administrator is required to maintain pursuant to the Pooling and Servicing Agreement will be established and maintained with one or more institutions in a manner satisfying the requirements of the Pooling and Servicing Agreement, including any applicable eligibility criteria for account banks set forth in the Pooling and Servicing Agreement.
Computershare Trust Company is acting as the custodian of the mortgage loan files pursuant to the Pooling and Servicing Agreement. In that capacity, Computershare Trust Company is responsible to hold and safeguard the mortgage notes and other contents of the mortgage files on behalf of the Trustee and the Certificateholders. Computershare Trust Company maintains each mortgage loan file in a separate file folder marked with a unique bar code to assure loan-level file integrity and to assist in inventory management. Files are segregated by transaction or investor. With its acquisition of the CTS business from Wells Fargo Bank on November 1, 2021, Computershare Trust Company acquired a business that has been engaged in the mortgage document custody business for more than 25 years. As of November 1, 2021, when it acquired the CTS business from Wells Fargo Bank, Computershare Trust Company was acting primarily as agent for the custodian, but in some cases as custodian, for approximately for approximately 320,000 commercial mortgage loan files.
Computershare Trust Company, through the CTS business acquired from Wells Fargo Bank, serves or may have served within the past two years as loan file custodian or the agent of the loan file custodian for various mortgage loans owned by the Sponsor or an affiliate of the Sponsor and anticipates that one or more of those mortgage loans may be included in the Trust. The terms of any custodial agreement under which those services are provided are customary for the mortgage-backed securitization industry and provide for the delivery, receipt, review and safekeeping of mortgage loan files.
For two CMBS transactions, Wells Fargo Bank through its Corporate Trust Services division disclosed transaction-level noncompliance related to its CMBS bond administration function on its 2021 Annual Statement of Compliance furnished pursuant to Item 1123 of Regulation AB (each, a “Subject 2021 Wells Fargo CTS CMBS Annual Statement of Compliance”). One Subject 2021 Wells Fargo CTS CMBS Annual Statement of Compliance stated that a distribution was paid one day late due to an inadvertent administrative error. The other Subject 2021 Wells Fargo CTS CMBS Annual Statement of Compliance also stated that there were payment errors that occurred in two successive months that were each corrected in the third month. In both cases, the transaction-level noncompliance disclosed on the Subject 2021 Wells Fargo CTS CMBS Annual Statement of Compliance occurred prior to the sale by Wells Fargo Bank of its Corporate Trust Services division to Computershare on November 1, 2021.
Neither Computershare Trust Company nor any of its affiliates intends to retain any economic interest in this securitization, including without limitation any certificates issued by the issuing entity. However, each of Computershare Trust Company and its affiliates will be entitled at their discretion to acquire certificates issued by the issuing entity, and in each such case will have the right to dispose of any such certificates at any time.
Other than the above paragraphs, Computershare Trust Company has not participated in the preparation of, and is not responsible for, any other information contained in this Prospectus Supplement.
The foregoing information set forth under this heading “—The Certificate Administrator” has been provided by Computershare Trust Company, N.A..
For a description of any material affiliations, relationships and related transactions between the certificate administrator and the other transaction parties, see “Certain Affiliations, Relationships and Related Transactions Involving Transaction Parties”.
The certificate administrator will only be liable under the PSA to the extent of its obligations specifically imposed by the PSA. For further information regarding the duties, responsibilities, rights and
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obligations of the certificate administrator under the PSA, including those related to indemnification, see “Pooling and Servicing Agreement—Limitation on Liability; Indemnification”. Certain terms of the PSA regarding the certificate administrator’s removal, replacement or resignation are described under “Pooling and Servicing Agreement—Resignation and Removal of the Trustee and the Certificate Administrator”.
The Trustee
Wilmington Trust, National Association (“WTNA”) will act as trustee (the “Trustee”) on behalf of the Certificateholders pursuant to the Pooling and Servicing Agreement. WTNA is a national banking association with trust powers incorporated in 1995. WTNA’s principal place of business is located at 1100 North Market Street, Wilmington, Delaware 19890. WTNA is an affiliate of Wilmington Trust Company and both WTNA and Wilmington Trust Company are subsidiaries of Wilmington Trust Corporation and Wilmington Trust Corporation is a wholly-owned subsidiary of M&T Bank Corporation. Since 1998, Wilmington Trust Company has served as trustee in numerous asset-backed securities transactions. As of December 31, 2021, WTNA served as trustee on over 2,064 mortgage-backed related securities transactions having an aggregate original principal balance in excess of $599 billion, of which approximately 797 transactions were commercial mortgage-backed securities transactions having an aggregate original principal balance of approximately $545 billion.
The parties to this transaction may maintain banking and other commercial relationships with WTNA and its affiliates. In its capacity as trustee on commercial mortgage securitizations, WTNA and its affiliates are generally required to make an advance if the related servicer or special servicer fails to make a required advance. In the past three years, WTNA and its affiliates have not been required to make an advance on a commercial mortgage-backed securities transaction.
WTNA is subject to various legal proceedings that arise from time to time in the ordinary course of business. WTNA does not believe that the ultimate resolution of any of these proceedings will have a material adverse effect on its services as Trustee for this transaction.
The foregoing information concerning the Trustee has been provided by it. The Trustee does not make any representation as to the validity or sufficiency of the Pooling and Servicing Agreement (other than as to it being a valid obligation of the Trustee), the Certificates, the Mortgage Loans, this Prospectus Supplement (other than as to the accuracy of the information provided by the Trustee) or any related documents and will not be accountable for the use or application by or on behalf of the Master Servicer or the Special Servicer of any funds paid to the Master Servicer or the Special Servicer in respect of the Certificates or the Mortgage Loans, or any funds deposited into or withdrawn from the collection account or any other account by or on behalf of the Master Servicer or the Special Servicer.
The Pooling and Servicing Agreement provides that no provision of such agreement will be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct or bad faith; provided that if no Servicer Termination Event has occurred and is continuing, the Trustee will be required to perform, and will be liable for, only those duties specifically required under the Pooling and Servicing Agreement. Upon receipt of any of the various certificates, reports or other instruments required to be furnished to it pursuant to the Pooling and Servicing Agreement, the Trustee will be required to examine those documents and to determine whether they conform to the requirements of that agreement. Within 30 days after the occurrence of any Servicer Termination Event of which the responsible officer of the Trustee has actual knowledge, the Trustee is required to promptly transmit by mail to the Depositor, the Certificate Administrator (who then is required to notify all Certificateholders) and the 17g-5 Information Provider (who will promptly post such notice to the 17g-5 Information Provider’s website) notice of such occurrence, unless such Servicer Termination Event has been cured.
For a description of any material affiliations, relationships and related transactions between the Trustee and the other transaction parties, see “Certain Affiliations, Relationships and Related Transactions Involving Transaction Parties”.
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The Trustee will only be liable under the PSA to the extent of its obligations specifically imposed by the PSA. For further information regarding the duties, responsibilities, rights and obligations of the Trustee under the PSA, including those related to indemnification, see “Pooling and Servicing Agreement—Limitation on Liability; Indemnification”. Certain terms of the PSA regarding the Trustee’s removal, replacement or resignation are described under “Pooling and Servicing Agreement—Resignation and Removal of the Trustee and the Certificate Administrator”.
The Master Servicer and the Outside Special Servicer
KeyBank National Association (“KeyBank”), a national banking association, will act as the master servicer (the “Master Servicer”) under the PSA. KeyBank is a wholly-owned subsidiary of KeyCorp. KeyBank maintains a servicing office at 11501 Outlook Street, Suite 300, Overland Park, Kansas 66211. KeyBank is not an affiliate of the issuing entity, the depositor, the special servicer, any Mortgage Loan Seller, the Trustee, the Certificate Administrator, the operating advisor, or the asset representations reviewer. KeyBank is also the special servicer under the Benchmark 2022-B32 transaction (with respect to the Bedrock Portfolio Whole Loan, the One Wilshire Whole Loan, the JW Marriott Desert Springs Whole Loan and the Glen Forest Office Portfolio Whole Loan) (the “Outside Special Servicer”).
KeyBank has been engaged in the servicing of commercial mortgage loans since 1995 and commercial mortgage loans originated for securitization since 1998. The following table sets forth information about KeyBank’s portfolio of master or primary serviced commercial mortgage loans as of the dates indicated.
Loans |
12/31/19 |
12/31/20 |
12/31/21 | |||
| By Approximate Number | 18,882 | 17,008 | 18,122 | |||
| By Approximate Aggregate Principal Balance (in billions) | $289.6 | $308.5 | $379.3 |
Within this servicing portfolio are, as of December 31, 2021, approximately 11,586 loans with a total principal balance of approximately $275.4 billion that are included in approximately 852 commercial mortgage-backed securitization transactions.
KeyBank’s servicing portfolio includes mortgage loans secured by multifamily, office, retail, hospitality, and other types of income-producing properties that are located throughout the United States. KeyBank also services newly-originated commercial mortgage loans and mortgage loans acquired in the secondary market for issuers of commercial and multifamily mortgage-backed securities, financial institutions and a variety of investors and other third parties. Based on the aggregate outstanding principal balance of loans being serviced as of December 31, 2021, the Mortgage Bankers Association of America ranked KeyBank the third largest commercial mortgage loan servicer for loans related to commercial mortgage-backed securities in terms of total master and primary servicing volume.
KeyBank has been a special servicer of commercial mortgage loans and commercial real estate assets included in commercial mortgage-backed securities transactions since 1998. As of December 31, 2021, KeyBank was named as special servicer with respect to commercial mortgage loans in 357 commercial mortgage-backed securities transactions totaling approximately $178.9 billion in aggregate outstanding principal balance and was special servicing a portfolio that included approximately 114 commercial mortgage loans with an aggregate outstanding principal balance of approximately $2.258 billion, which portfolio includes multifamily, office, retail, hospitality and other types of income-producing properties that are located throughout the United States.
The following table sets forth information on the size and growth of KeyBank’s managed portfolio of specially serviced commercial mortgage loans for which KeyBank is the named special servicer in commercial mortgage-backed securities transactions in the United States.
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CMBS (US) |
12/31/19 |
12/31/20 |
12/31/21 | |||
| By Approximate Number of Transactions | 281 | 363 | 357 | |||
| By Approximate Aggregate Unpaid Principal Balance (in billions) | $111.4 | $148.6 | $178.9 |
KeyBank has resolved over $12.7 billion of U.S. commercial mortgage loans over the past 10 years.
The following table sets forth information on the amount of U.S. commercial mortgage loans that KeyBank has resolved in each of the past 10 calendar years (in billions).
2012 |
2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
2021 |
| $1.89 | $2.69 | $0.63 | $1.40 | $0.27 | $0.23 | $0.12 | $0.32 | $3.20 | $2.00 |
KeyBank is approved as the master servicer, primary servicer, and special servicer for commercial mortgage-backed securities rated by Moody’s Investors Service, Inc. (“Moody’s”), S&P Global Ratings (“S&P”), Fitch Ratings, Inc. (“Fitch”), and DBRS, Inc. (“DBRS Morningstar”). Moody’s does not assign specific ratings to servicers. KeyBank is on S&P’s Select Servicer list as a U.S. Commercial Mortgage Master Servicer and as a U.S. Commercial Mortgage Special Servicer, and S&P has assigned to KeyBank the rating of “Strong” as a master servicer, primary servicer, and special servicer. Fitch has assigned to KeyBank the ratings of “CMS1” as a master servicer, “CPS1” as a primary servicer, and “CSS1-” as a special servicer. DBRS Morningstar has assigned to KeyBank the rankings of “MOR CS1” as master servicer, “MOR CS1” as primary servicer, and “MOR CS1” as special servicer. S&P’s, Fitch’s and DBRS Morningstar’s ratings of a servicer are based on an examination of many factors, including the servicer’s financial condition, management team, organizational structure, and operating history.
KeyBank’s servicing system utilizes a mortgage-servicing technology platform with multiple capabilities and reporting functions. This platform allows KeyBank to process mortgage servicing activities including: (i) performing account maintenance; (ii) tracking borrower communications; (iii) tracking real estate tax escrows and payments, insurance escrows and payments, replacement reserve escrows and operating statement data and rent rolls; (iv) entering and updating transaction data; and (v) generating various reports. KeyBank generally uses the CREFC® format to report to trustees and certificate administrators of commercial mortgage-backed securities (CMBS) transactions and maintains a website (www.key.com/key2cre) that provides access to reports and other information to investors in CMBS transactions that KeyBank is the servicer.
KeyBank maintains the accounts it uses in connection with servicing commercial mortgage loans. The following table sets forth the ratings assigned to KeyBank’s debt obligations and deposits.
S&P |
Fitch |
Moody’s | ||||
| Long-Term Debt Obligations | A- | A- | A3 | |||
| Short-Term Debt Obligations | A-2 | F1 | P-2 | |||
| Long-Term Deposits | N/A | A | A1 | |||
| Short-Term Deposits | N/A | F1 | P-1 |
KeyBank believes that its financial condition will not have any material adverse effect on the performance of its duties under the PSA and, accordingly, will not have any material adverse impact on the performance of the underlying mortgage loans or the performance of the certificates.
KeyBank has developed policies, procedures and controls for the performance of its master servicing and special servicing obligations in compliance with applicable servicing agreements, servicing standards and the servicing criteria set forth in Item 1122 of Regulation AB. These policies, procedures and controls include, among other things, procedures to (i) notify borrowers of payment delinquencies and other loan defaults, (ii) work with borrowers to facilitate collections and performance prior to the occurrence of a servicing transfer event, (iii) if a servicing transfer event occurs as a result of a delinquency, loss, bankruptcy or other loan default, transfer the subject loan to the special servicer, and (iv) manage delinquent loans and loans subject to the bankruptcy of the borrowers.
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KeyBank’s servicing policies and procedures for the servicing functions it will perform under the PSA for assets of the same type included in this transaction are updated periodically to keep pace with the changes in the CMBS industry. For example, KeyBank has, in response to changes in federal or state law or investor requirements, (i) made changes in its insurance monitoring and risk-management functions as a result of the Terrorism Risk Insurance Act of 2002, as amended, and (ii) established a website where investors and mortgage loan borrowers can access information regarding their investments and mortgage loans. Otherwise, KeyBank’s servicing policies and procedures have been generally consistent for the last three years in all material respects.
KeyBank is, as the Master Servicer, generally responsible for the master servicing and primary servicing functions with respect to the mortgage loans. KeyBank, as the Master Servicer, will be permitted to appoint one or more sub-servicers to perform all or any portion of its primary servicing functions under the PSA pursuant to one or more sub-servicing agreements and any such sub-servicer will receive a fee for the services specified in such sub-servicing agreement. Additionally, KeyBank may from time to time perform some of its servicing obligations under the PSA through one or more third-party vendors that provide servicing functions such as tracking and reporting of flood zone changes, performing UCC searches, filing UCC financing statements and amendments, appraisals, environmental assessments, property condition assessments and property management. KeyBank will, in accordance with its internal procedures and applicable law, monitor and review the performance of any third-party vendors retained by it to perform servicing functions, and KeyBank will remain liable for its servicing obligations under the PSA as if KeyBank had not retained any such vendors.
The manner in which collections on the underlying mortgage loans are to be maintained is described in “Pooling and Servicing Agreement—Accounts”, “Pooling and Servicing Agreement—Withdrawals from the Collection Account”, “Pooling and Servicing Agreement—Realization Upon Mortgage Loans”. Generally, all amounts received by KeyBank on the mortgage loans will be initially deposited into a common clearing account with collections on other commercial mortgage loans serviced by KeyBank and are then allocated and transferred to the appropriate account within the time required by the PSA. Similarly, KeyBank generally transfers any amount that is to be disbursed to a common disbursement account on the day of the disbursement.
KeyBank will not have primary responsibility for custody services of original documents evidencing the underlying Mortgage Loan. KeyBank may from time to time have custody of certain of such documents as necessary for enforcement actions involving the Mortgage Loan or otherwise. To the extent that KeyBank has custody of any such documents for any such servicing purposes, such documents will be maintained in a manner consistent with the Servicing Standard.
No securitization transaction involving commercial or multifamily mortgage loans in which KeyBank was acting as primary servicer or special servicer has experienced a servicer event of default as a result of any action or inaction of KeyBank as primary servicer or special servicer, as applicable, including as a result of KeyBank’s failure to comply with the applicable servicing criteria in connection with any securitization transaction. KeyBank has made all advances required to be made by it under its servicing agreements for commercial and multifamily mortgage loans.
From time to time KeyBank is a party to lawsuits and other legal proceedings as part of its duties as a loan servicer and otherwise arising in the ordinary course of its business. KeyBank does not believe that any lawsuits or legal proceedings that are pending at this time would, individually or in the aggregate, have a material adverse effect on its business or its ability to service the underlying mortgage loans pursuant to the PSA.
KeyBank is not aware of any lawsuits or legal proceedings, contemplated or pending, by governmental authorities against KeyBank at this time.
The foregoing information under this heading “Transaction Parties—The Master Servicer and the Outside Special Servicer” has been provided by KeyBank.
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For a description of any material affiliations, relationships and related transactions between the master servicer, the general special servicer and the other transaction parties, see “Certain Affiliations, Relationships and Related Transactions Involving Transaction Parties”.
The Outside Primary Servicer
Midland Loan Services, a Division of PNC Bank, National Association
Midland Loan Services, a Division of PNC Bank, National Association, a national banking association (“Midland”), is expected to act as the primary servicer of certain Non-Serviced Whole Loans and master servicer of certain Non-Serviced Companion Loans (such Mortgage Loans, the “Midland Serviced Mortgage Loans”). Certain servicing and administrative functions may also be provided by one or more subservicers that previously serviced the mortgage loans for the applicable loan seller.
Midland’s principal servicing office is located at 10851 Mastin Street, Building 82, Suite 300, Overland Park, Kansas 66210.
Midland is a commercial financial services company that provides loan servicing, asset management and technology solutions for large pools of commercial and multifamily real estate assets. Midland is approved as a master servicer, special servicer and primary servicer for investment-grade commercial mortgage-backed securities (“CMBS”) by Standard & Poor’s Rating Services, Moody’s Investors Service, Inc., Fitch Ratings, Inc., DBRS Morningstar and Kroll Bond Rating Agency, LLC. Midland has received rankings as a master, primary and special servicer of real estate assets under U.S. CMBS transactions from S&P, Fitch and DBRS Morningstar. For each category, S&P ranks Midland as “Above Average”. DBRS Morningstar ranks Midland as “MOR CS2” for master servicer and primary servicer, and “MOR CS1” for special servicer. Fitch ranks Midland as “CMS2” for master servicer, “CPS2” for primary servicer, and “CSS2+” for special servicer. Midland is also a HUD/FHA-approved mortgagee and a Fannie Mae-approved multifamily loan servicer.
Midland has detailed operating procedures across the various servicing functions to maintain compliance with its servicing obligations and the servicing standards under Midland’s servicing agreements, including procedures for managing delinquent and specially serviced loans. The policies and procedures are reviewed annually and centrally managed. Furthermore, Midland’s business continuity and disaster recovery plans are reviewed and tested annually. Midland’s policies, operating procedures and business continuity plan anticipate and provide the mechanism for some or all of Midland’s personnel to work remotely as determined by management to comply with changes in federal, state or local laws, regulations, executive orders, other requirements and/or guidance, to address health and/or other concerns related to a pandemic or other significant event or to address market or other business purposes. In light of the COVID-19 pandemic and related federal, state, and local orders, requirements and/or guidance, Midland implemented part of its business continuity plan that includes the requirement that most of its personnel work remotely until management determines otherwise. However, beginning on June 14, 2021, Midland personnel who have been working remotely during the COVID-19 pandemic are generally permitted to voluntarily return to the workplace, subject to certain exceptions and limitations.
Midland will not have primary responsibility for custody services of original documents evidencing the underlying Mortgage Loans. Midland may from time to time have custody of certain of such documents as necessary for enforcement actions involving particular mortgage loans or otherwise. To the extent that Midland has custody of any such documents for any such servicing purposes, such documents will be maintained in a manner consistent with the applicable servicing standard.
No securitization transaction involving commercial or multifamily mortgage loans in which Midland was acting as master servicer, primary servicer or special servicer has experienced a servicer event of default as a result of any action or inaction of Midland as master servicer, primary servicer or special servicer, as applicable, including as a result of Midland’s failure to comply with the applicable servicing criteria in connection with any securitization transaction. Midland has made all advances required to be made by it under the servicing agreements on the commercial and multifamily mortgage loans serviced by Midland in securitization transactions.
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From time-to-time Midland is a party to lawsuits and other legal proceedings as part of its duties as a loan servicer (e.g., enforcement of loan obligations) and/or arising in the ordinary course of business. Midland does not believe that any such lawsuits or legal proceedings would, individually or in the aggregate, have a material adverse effect on its business or its ability to service loans pursuant to the pooling and servicing agreement.
Midland currently maintains an Internet-based investor reporting system, CMBS Investor Insight®, that contains performance information at the portfolio, loan and property levels on the various commercial mortgage-backed securities transactions that it services. Certificateholders, prospective transferees of the certificates and other appropriate parties may obtain access to CMBS Investor Insight through Midland’s website at www.pnc.com/midland. Midland may require registration and execution of an access agreement in connection with providing access to CMBS Investor Insight.
As of December 31, 2021, Midland was master and primary servicing approximately 24,801 commercial and multifamily mortgage loans with a principal balance of approximately $530 billion. The collateral for such loans is located in all 50 states, the District of Columbia, Puerto Rico, Guam and Canada. Approximately 13,442 of such loans, with a total principal balance of approximately $302 billion, pertain to commercial and multifamily mortgage-backed securities. The related loan pools include multifamily, office, retail, hospitality and other income-producing properties.
Midland has been servicing mortgage loans in CMBS transactions since 1992. The table below contains information on the size of the portfolio of commercial and multifamily loans and leases in CMBS and other servicing transactions for which Midland has acted as master and/or primary servicer from 2019 to 2021.
Portfolio Size – Master/Primary Servicing |
Calendar Year End (Approximate amounts in billions) | |||||
2019 |
2020 |
2021 | ||||
| CMBS | $219 | $256 | $302 | |||
| Other | $387 |
$317 |
$301 | |||
| Total | $606 |
$573 |
$603 | |||
Midland has acted as a special servicer for commercial and multifamily mortgage loans in CMBS transactions since 1992. The table below contains information on the size of the portfolio of specially serviced commercial and multifamily loans, leases and REO properties that have been referred to Midland as special servicer in CMBS transactions from 2019 to 2021.
As of December 31, 2021, Midland was named the special servicer in approximately 399 commercial mortgage-backed securities transactions with an aggregate outstanding principal balance of approximately $163 billion. With respect to such commercial mortgage-backed securities transactions as of such date, Midland was administering approximately 291 assets with an outstanding principal balance of approximately $5.9 billion.
Portfolio Size –Special Servicing |
Calendar Year End (Approximate amounts in billions) | |||||
2019 |
2020 |
2021 | ||||
| Total | $171 |
$170 |
$163 | |||
Midland is also (i) the master servicer with respect to the One Wilshire Mortgage Loan (9.3%), which is currently being serviced under the Benchmark 2022-B32 PSA, (ii) the master servicer with respect to the Bedrock Portfolio Mortgage Loan (9.3%), which is currently being serviced under the Benchmark 2022-B32 PSA, (iii) the master servicer with respect to the Novo Nordisk HQ Mortgage Loan (2.4%), which is currently being serviced under the Benchmark 2021-B31 PSA, (iv) the master servicer with respect to the JW Marriott Desert Springs Mortgage Loan (2.2%), which is currently being serviced under the Benchmark 2022-B32 PSA and (v) the master servicer with respect to the Glen Forest Office Portfolio Mortgage Loan (1.0%), which is currently being serviced under the Benchmark 2022-B32 PSA.
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From time to time, Midland and/or its affiliates may purchase or sell securities, including, CMBS certificates. Midland and/or its affiliates may review this prospectus and purchase or sell certificates issued in this offering, including in the secondary market.
Pursuant to certain interim servicing agreements between GSMC and certain of its affiliates, on the one hand, and Midland, on the other hand, Midland acts as interim servicer with respect to certain mortgage loans, including prior to their inclusion in the issuing entity certain of the Mortgage Loans.
Pursuant to certain interim servicing agreements between CREFI and certain of its affiliates, on the one hand, and Midland, on the other hand, Midland acts as interim servicer with respect to certain mortgage loans, including prior to their inclusion in the issuing entity certain of the Mortgage Loans.
Pursuant to certain interim servicing agreements between JPMCB and certain of its affiliates, on the one hand, and Midland, on the other hand, Midland acts as interim servicer with respect to certain mortgage loans, including prior to their inclusion in the issuing entity certain of the Mortgage Loans.
Pursuant to certain interim servicing agreements between GACC and certain of its affiliates, on the one hand, and Midland, on the other hand, Midland acts as interim servicer with respect to certain mortgage loans, including prior to their inclusion in the issuing entity certain of the Mortgage Loans.
PNC Bank, National Association (“PNC Bank”), and its affiliates may use some of the same service providers (e.g., legal counsel, accountants and appraisal firms) as are retained on behalf of the issuing entity. In some cases, fee rates, amounts or discounts may be offered to PNC Bank and its affiliates by a third party vendor which differ from those offered to the trust fund as a result of scheduled or ad hoc rate changes, differences in the scope, type or nature of the service or transaction, alternative fee arrangements, and negotiation by PNC Bank or its affiliates other than Midland.
The reports on assessment of compliance with applicable servicing criteria for the twelve-month periods ending on December 31, 2020 and December 31, 2021, respectively, furnished pursuant to Item 1122 of Regulation AB for Midland, did not identify a material instance of noncompliance. The report on assessment of compliance with applicable servicing criteria for the twelve month period ending on December 31, 2019, furnished pursuant to Item 1122 of Regulation AB for Midland, identified a material instance of noncompliance relating to the servicing criterion described in Item 1122(d)(3)(i)(A) of Regulation AB, which requires that:
“Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports: (A) Are prepared in accordance with timeframes and other terms set forth in the transaction agreements….”
For CMBS transactions subject to the reporting requirements of Regulation AB on and after November 23, 2016 (the effective date of the most recent amendment to Regulation AB), Midland as master servicer of certain of those CMBS transactions became responsible for Schedule AL (Asset-Level) reporting on behalf of the related CMBS trusts. Midland’s Schedule AL reporting process was enhanced in April of 2019, however, the process remained manual throughout the 2019 calendar year and additional errors during such year were identified during the related audit. Following identification, Midland made staffing changes and additional improvements to its processes and procedures to support its Schedule AL reporting obligations and has moved to an automated solution for this process.
The information set forth under this “—Midland Loan Services, a Division of PNC Bank, National Association” sub-heading has been provided by Midland.
The Special Servicer
LNR Partners, LLC (“LNR Partners”), a Florida limited liability company and a subsidiary of Starwood Property Trust, Inc. (“STWD”), a Maryland corporation, is expected to be initially appointed to act as
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special servicer for the Mortgage Loans to be deposited into the issuing entity (other than any Non-Serviced Mortgage Loan and any Excluded Special Servicer Loan) and any Serviced Companion Loan. The principal executive offices of LNR Partners are located at 2340 Collins Avenue, Suite 700, Miami Beach, Florida 33139 and its telephone number is (305) 695-5600.
STWD through its subsidiaries, affiliates and joint ventures, is involved in the real estate finance, management and development business and engages in, among other activities:
| ● | acquiring, developing, repositioning, managing and selling commercial and multifamily residential real estate properties, |
| ● | investing in high-yielding real estate-related debt and equity, and |
| ● | investing in, and managing as special servicer, unrated, below investment grade rated and investment grade rated commercial mortgage backed securities. |
LNR Partners and its affiliates have substantial experience in working out loans and in performing the other obligations of the special servicer as more particularly described in the PSA, including, but not limited to, processing borrower requests for lender consent to assumptions, leases, easements, partial releases and expansion and/or redevelopment of the mortgaged properties. LNR Partners and its affiliates have been engaged in the special servicing of commercial real estate assets for over 23 years. The number of commercial mortgage backed securitization pools specially serviced by LNR Partners and its affiliates has increased from 46 in December 1998 to 172 as of December 31, 2021. More specifically, LNR Partners (and its predecessors in interest) acted as special servicer with respect to:
| ● | 84 domestic commercial mortgage backed securitization pools as of December 31, 2001, with a then current face value in excess of $53 billion; |
| ● | 101 domestic commercial mortgage backed securitization pools as of December 31, 2002, with a then current face value in excess of $67 billion; |
| ● | 113 domestic commercial mortgage backed securitization pools as of December 31, 2003, with a then current face value in excess of $79 billion; |
| ● | 134 domestic commercial mortgage backed securitization pools as of December 31, 2004, with a then current face value in excess of $111 billion; |
| ● | 142 domestic commercial mortgage backed securitization pools as of December 31, 2005, with a then current face value in excess of $148 billion; |
| ● | 143 domestic commercial mortgage backed securitization pools as of December 31, 2006, with a then current face value in excess of $201 billion; |
| ● | 143 domestic commercial mortgage backed securitization pools as of December 31, 2007 with a then current face value in excess of $228 billion; |
| ● | 138 domestic commercial mortgage backed securitization pools as of December 31, 2008 with a then current face value in excess of $210 billion; |
| ● | 136 domestic commercial mortgage backed securitization pools as of December 31, 2009 with a then current face value in excess of $191 billion; |
| ● | 144 domestic commercial mortgage backed securitization pools as of December 31, 2010 with a then current face value in excess of $201 billion; |
| ● | 140 domestic commercial mortgage backed securitization pools as of December 31, 2011 with a then current face value in excess of $176 billion; |
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| ● | 131 domestic commercial mortgage backed securitization pools as of December 31, 2012 with a then current face value in excess of $136 billion; |
| ● | 141 domestic commercial mortgage backed securitization pools as of December 31, 2013 with a then current face value in excess of $133 billion; |
| ● | 152 domestic commercial mortgage backed securitization pools as of December 31, 2014 with a then current face value in excess of $135 billion; |
| ● | 159 domestic commercial mortgage backed securitization pools as of December 31, 2015 with a then current face value in excess of $111 billion; |
| ● | 153 domestic commercial mortgage backed securitization pools as of December 31, 2016 with a then current face value in excess of $87 billion; |
| ● | 160 domestic commercial mortgage backed securitization pools as of December 31, 2017 with a then current face value in excess of $68.9 billion; |
| ● | 175 domestic commercial mortgage backed securitization pools as of December 31, 2018 with a then current face value in excess of $84.2 billion; |
| ● | 185 domestic commercial mortgage backed securitization pools as of December 31, 2019 with a then current face value in excess of $93.9 billion; |
| ● | 162 domestic commercial mortgage backed securitization pools as of December 31, 2020 with a then current face value in excess of $82.2 billion; and |
| ● | 172 domestic commercial mortgage backed securitization pools as of December 31, 2021 with a then current face value in excess of $97.4 billion. |
As of December 31, 2021, LNR Partners has resolved approximately $84.8 billion of U.S. commercial and multifamily loans over the past 23 years, including approximately $1.1 billion of U.S. commercial and multifamily mortgage loans during 2001, approximately $1.9 billion of U.S. commercial and multifamily mortgage loans during 2002, approximately $1.5 billion of U.S. commercial and multifamily mortgage loans during 2003, approximately $2.1 billion of U.S. commercial and multifamily mortgage loans during 2004, approximately $2.4 billion of U.S. commercial and multifamily mortgage loans during 2005, approximately $0.9 billion of U.S. commercial and multifamily mortgage loans during 2006, approximately $1.4 billion of U.S. commercial and multifamily mortgage loans during 2007, approximately $1.0 billion of U.S. commercial and multifamily mortgage loans during 2008, approximately $1.2 billion of U.S. commercial and multifamily mortgage loans during 2009, approximately $7.7 billion of U.S. commercial and multifamily mortgage loans during 2010, approximately $10.9 billion of U.S. commercial and multifamily mortgage loans during 2011, approximately $11.7 billion of U.S. commercial and multifamily mortgage loans during 2012, approximately $6.5 billion of U.S. commercial and multifamily mortgage loans during 2013, approximately $6.3 billion of U.S. commercial and multifamily mortgage loans during 2014, approximately $6 billion of U.S. commercial and multifamily mortgage loans during 2015, approximately $3.9 billion of U.S. commercial and multifamily mortgage loans during 2016, approximately $4.5 billion of U.S. commercial and multifamily mortgage loans during 2017, approximately $3.8 billion of U.S. commercial and multifamily mortgage loans during 2018, approximately $2.6 billion of U.S. commercial and multifamily mortgage loans during 2019, approximately $2.9 billion of U.S. commercial and multifamily mortgage loans during 2020 and approximately $4.8 billion of U.S. commercial and multifamily mortgage loans during 2021.
STWD or one of its affiliates generally seeks CMBS investments where it has the right to appoint LNR Partners as the special servicer. LNR Partners and its affiliates have regional offices located across the country in Florida, Georgia, Massachusetts, California, New York and North Carolina. As of December 31, 2021, LNR Partners and its affiliates specially service a portfolio, which included approximately 6,133 assets across the United States with a then current face value of approximately $97.4 billion, all of which
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are commercial real estate assets. Those commercial real estate assets include mortgage loans secured by the same types of income producing properties as secure the mortgage loans backing the certificates. Accordingly, the assets of LNR Partners and its affiliates may, depending upon the particular circumstances, including the nature and location of such assets, compete with the mortgaged real properties securing the underlying mortgage loans for tenants, purchasers, financing and so forth. LNR Partners does not service any assets other than commercial real estate assets.
LNR Partners maintains internal and external watch lists, corresponds with master servicers on a monthly basis and conducts overall deal surveillance and shadow servicing. LNR Partners has developed distinct strategies and procedures for working with borrowers on problem loans (caused by delinquencies, bankruptcies or other breaches of the loan documents) designed to maximize value from the assets for the benefit of the certificateholders. These strategies and procedures vary on a case by case basis, and include, but are not limited to, liquidation of the underlying collateral, note sales, discounted payoffs, and borrower negotiation or workout in accordance with the applicable servicing standard. Generally, four basic factors are considered by LNR Partners as part of its analysis and determination of what strategies and procedures to utilize in connection with problem loans. They are (i) the condition and type of mortgaged property, (ii) the borrower, (iii) the jurisdiction in which the mortgaged property is located and (iv) the actual terms, conditions and provisions of the underlying loan documents. After each of these items is evaluated and considered, LNR Partners’ strategy is guided by the servicing standard and all relevant provisions of the applicable pooling and servicing agreement pertaining to specially serviced and REO mortgage loans.
LNR Partners has the highest ratings afforded to special servicers by S&P and Fitch.
There have not been, during the past three years, any material changes to the policies or procedures of LNR Partners in the servicing function it will perform under the PSA for assets of the same type included in this securitization transaction. LNR Partners has not engaged, and currently does not have any plans to engage, any sub-servicers to perform on its behalf any of its duties with respect to this securitization transaction. LNR Partners does not believe that its financial condition will have any adverse effect on the performance of its duties under the PSA and, accordingly, will not have any material impact on the Mortgage Pool performance or the performance of the Certificates. Generally, LNR Partners’ servicing functions under pooling and servicing agreements do not include collection on the pool assets, however LNR Partners does maintain certain operating accounts with respect to REO mortgage loans in accordance with the terms of the applicable pooling and servicing agreements and consistent with the servicing standard set forth in each of such pooling and servicing agreements. LNR Partners does not have any material advancing obligations with respect to the commercial mortgage backed securitization pools as to which it acts as special servicer. Generally, LNR Partners has the right, but not the obligation, to make property related servicing advances in emergency situations with respect to commercial mortgage backed securitization pools as to which it acts as special servicer.
LNR Partners will not have primary responsibility for custody services of original documents evidencing the underlying mortgage loans. On occasion, LNR Partners may have custody of certain of such documents as necessary for enforcement actions involving particular mortgage loans or otherwise. To the extent that LNR Partners has custody of any such documents, such documents will be maintained in a manner consistent with the Servicing Standard.
No securitization transaction involving commercial or multifamily mortgage loans in which LNR Partners was acting as special servicer has experienced an event of default as a result of any action or inaction by LNR Partners as special servicer. LNR Partners has not been terminated as servicer in a commercial mortgage loan securitization, either due to a servicing default or to application of a servicing performance test or trigger. In addition, there has been no previous disclosure of material noncompliance with servicing criteria by LNR Partners with respect to any other securitization transaction involving commercial or multifamily mortgage loans in which LNR Partners was acting as special servicer.
There are, to the actual current knowledge of LNR Partners, no special or unique factors of a material nature involved in special servicing the particular types of assets included this securitization, as compared to the types of assets specially serviced by LNR Partners in other commercial mortgage backed
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securitization pools generally, for which LNR Partners has developed processes and procedures which materially differ from the processes and procedures employed by LNR Partners in connection with its special servicing of commercial mortgaged backed securitization pools generally.
There are currently no legal proceedings pending, and no legal proceedings known to be contemplated, by governmental authorities, against LNR Partners or of which any of its property is the subject, that are material to the Certificateholders.
LNR Partners is not an affiliate of the depositor, the underwriters, the Trust, the master servicer, the trustee, the certificate administrator, the operating advisor, the asset representations reviewer, any sponsor, any originator or any significant obligor.
Except as disclosed in this prospectus and except for (i) LNR Partners acting as special servicer for this securitization transaction (with respect to all Serviced Mortgage Loans and Serviced Companion Loans,) and (ii) LNR Partners or its affiliate assisting Eightfold Real Estate Capital Fund V, L.P. (or its affiliate) with due diligence relating to the mortgage loans to be included in the mortgage pool, there are no specific relationships that are material involving or relating to this securitization transaction or the securitized mortgage loans between LNR Partners or any of its affiliates, on the one hand, and the Trust, the Sponsors, the trustee, the certificate administrator, any originator, any significant obligor, the master servicer, the operating advisor or the asset representations reviewer, on the other hand, that currently exist or that existed during the past two years. In addition, other than as disclosed in this prospectus, there are no business relationships, agreements, arrangements, transactions or understandings that have been entered into outside the ordinary course of business or on terms other than would be obtained in an arm’s length transaction with an unrelated third party – apart from this securitization transaction – between LNR Partners or any of its affiliates, on the one hand, and the Trust, the Sponsors, the trustee, the certificate administrator, any originator, any significant obligor, the master servicer, the operating advisor or the asset representations reviewer, on the other hand, that currently exist or that existed during the past two years and that are material to an investor’s understanding of the certificates.
In the commercial mortgage backed securitizations in which LNR Partners acts as special servicer, LNR Partners may enter into one or more arrangements with any party entitled to appoint or remove and replace the special servicer to provide for a discount and/or revenue sharing with respect to certain of the special servicer compensation in consideration of, among other things, LNR Partners’ appointment as special servicer under the applicable servicing agreement and limitations on such person’s right to replace LNR Partners as the special servicer.
Except as described in this prospectus, neither LNR Partners nor any of its affiliates will retain on the Closing Date any certificates issued by the Trust any economic interest in this securitization (although for the avoidance of doubt, LNR Partners will be entitled special servicing fees and certain other fees and compensation as described in this prospectus with respect to the Mortgage Loans and the Serviced Companion Loans). However, LNR Partners or its affiliates may, from time to time after the initial sale of the certificates to investors on the Closing Date, acquire certificates pursuant to secondary market transactions. Any such party will have the right to dispose of such certificates at any time.
The foregoing information regarding LNR Partners under the heading “—The Special Servicer” has been provided by LNR Partners.
Certain duties and obligations of the Special Servicer and the provisions of the Pooling and Servicing Agreement are described under “The Pooling and Servicing Agreement”. The special servicer’s ability to waive or modify any terms, fees, penalties or payments on the Mortgage Loans and the potential effect of that ability on the potential cash flows from the Mortgage Loans are described under “The Pooling and Servicing Agreement—Modifications, Waivers and Amendments”.
The special servicer may be terminated, with respect to the Mortgage Loans serviced under the PSA (a) with or without cause by the Directing Holder, (b) for cause at any time, and (c) otherwise without cause as described under “The Pooling and Servicing Agreement—Replacement of Special Servicer Without Cause”, upon satisfaction of certain conditions specified in the PSA. The special servicer may
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resign under the PSA as described under “The Pooling and Servicing Agreement—Resignation of the Master Servicer and Special Servicer”. The Special Servicer and various related persons and entities will be entitled to be indemnified by the Issuing Entity for certain losses and liabilities incurred by the special servicer as described under “The Pooling and Servicing Agreement—Limitation on Liability; Indemnification”.
The Operating Advisor and Asset Representations Reviewer
Park Bridge Lender Services LLC (“Park Bridge Lender Services”), a New York limited liability company and an indirect, wholly owned subsidiary of Park Bridge Financial LLC (“Park Bridge Financial”), will act as operating advisor under the PSA with respect to each Serviced Mortgage Loan. Park Bridge Lender Services will also act as asset representations reviewer under the PSA with respect to each Mortgage Loan. Park Bridge Lender Services has an address at 600 Third Avenue, 40th Floor, New York, New York 10016 and its telephone number is (212) 230-9090.
Park Bridge Financial is a privately held commercial real estate finance advisory firm headquartered in New York, New York. Since its founding in 2009, Park Bridge Financial and its affiliates have been engaged by commercial banks (community, regional and multi-national), opportunity funds, REITs, investment banks, insurance companies, entrepreneurs and hedge funds on a wide variety of advisory assignments. These engagements have included: mortgage brokerage, loan syndication, contract underwriting, valuations, risk assessments, surveillance, litigation support, expert testimony, loan restructures as well as the disposition of commercial mortgages and related collateral.
Park Bridge Financial’s technology platform is server-based with back-up, disaster-recovery and encryption services performed by vendors and data centers that comply with industry and regulatory standards.
As of December 31, 2021, Park Bridge Lender Services was acting as operating advisor or trust advisor for commercial mortgage-backed securities transactions or other similar transactions with an approximate aggregate cut-off principal balance of $321.1 billion issued in 377 transactions.
As of December 31, 2021, Park Bridge Lender Services is acting as asset representations reviewer for commercial mortgage-backed securities transactions with an approximate aggregate cut-off principal balance of $136.9 billion issued in 141 transactions.
There are no legal proceedings pending against Park Bridge Lender Services, or to which any property of Park Bridge Lender Services is subject, that are material to the Certificateholders, nor does Park Bridge Lender Services have actual knowledge of any proceedings of this type contemplated by governmental authorities.
The foregoing information under this heading “Transaction Parties—The Operating Advisor and Asset Representations Reviewer” has been provided by Park Bridge Lender Services.
For a description of any material affiliations, relationships and related transactions between the operating advisor, the asset representations reviewer and the other transaction parties, see “Certain Affiliations, Relationships and Related Transactions Involving Transaction Parties”.
The operating advisor and the asset representations reviewer will only be liable under the PSA to the extent of their respective obligations specifically imposed by the PSA and no implied duties or obligations may be asserted against the operating advisor or asset representations reviewer. For further information regarding the duties, responsibilities, rights and obligations of the operating advisor and the asset representations reviewer, as the case may be, under the PSA, including those related to indemnification, see “Pooling and Servicing Agreement—The Operating Advisor”, “—The Asset Representations Reviewer” and “—Limitation on Liability; Indemnification”. Certain terms of the PSA regarding the operating advisor’s and the asset representations reviewer’s removal, replacement, resignation or transfer are described under “Pooling and Servicing Agreement—The Operating Advisor” and “Pooling and Servicing Agreement—The Asset Representations Reviewer”, as applicable.
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CREDIT RISK RETENTION
This securitization transaction is required to comply with the Credit Risk Retention Rules. German American Capital Corporation has been designated by the Sponsors to act as the “retaining sponsor” under the Credit Risk Retention Rules (in such capacity, the “Retaining Sponsor”) and the Retaining Sponsor intends to satisfy its risk retention requirements of the Credit Risk Retention Rules as follows:
| ● | The Retaining Sponsor is expected to acquire on the Closing Date an “eligible vertical interest” (as such term is defined in the Credit Risk Retention Rules, the “VRR Interest”) in the issuing entity in the form of a “single vertical security” (as defined in the Credit Risk Retention Rules) with an expected initial Certificate Balance of approximately $45,741,597, representing the right to receive approximately 5.0% of all amounts collected on the Mortgage Loans (net of expenses of the issuing entity) that are available for distribution to the Non-VRR Certificates and the VRR Interest (i.e., representing the right to receive the VRR Allocation Percentage of all amounts distributed on the Non-VRR Certificates on each Distribution Date). The Retaining Sponsor is expected to satisfy a portion of its risk retention requirements by transferring $29,045,914.10, representing approximately 63.5% of the entire VRR Interest as of the closing date (the “DBNY VRR Interest Portion”), to Deutsche Bank AG, New York Branch (“DBNY”), as its MOA. DBNY is expected to acquire the DBNY VRR Interest Portion from the Retaining Sponsor on the Closing Date. |
| ● | The Retaining Sponsor is expected to offset a portion of its risk retention requirements by the portion of the VRR Interest acquired on the Closing Date by CREFI, which portion will equal $16,695,682.90, representing approximately 36.5% of the entire VRR Interest as of the Closing Date (the “CREFI VRR Interest Portion”); CREFI originated Mortgage Loans representing approximately 36.5% of the Initial Pool Balance, which is equal to at least 20% of the total Initial Pool Balance and is equal to or greater than its percentage ownership of the aggregate Certificate Balance of the entire VRR Interest as of the Closing Date (which percentage ownership interest is at least 20% of the aggregate Certificate Balance of the entire VRR Interest as of the Closing Date), in accordance with the Credit Risk Retention Rules. CREFI is expected to acquire the CREFI VRR Interest Portion from the Retaining Sponsor on the Closing Date. |
The percentage of all amounts collected on the Mortgage Loans, net of all expenses of the issuing entity, and distributed on the Non-VRR Certificates and the VRR Interest represented by the VRR Interest will equal at least 5% as of the Closing Date.
“Credit Risk Retention Rules” means Regulation RR, 12 C.F.R. Part 244.
“MOA” means a “majority-owned affiliate” (as defined in the Credit Risk Retention Rules).
The Retaining Sponsor and CREFI (and their applicable MOAs) are collectively referred to herein as the “Retaining Parties”.
Notwithstanding any references in this prospectus to the Credit Risk Retention Rules, Regulation RR, the Retaining Sponsor, the Retaining Parties and other risk retention related matters, in the event the Credit Risk Retention Rules and/or Regulation RR (or any relevant portion thereof) are repealed or determined by applicable regulatory agencies to be no longer applicable to this securitization transaction, each of the Retaining Sponsor, the Retaining Parties or any other party may not be required to comply with or act in accordance with the Credit Risk Retention Rules or Regulation RR (or such relevant portion thereof).
Qualifying CRE Loans
The Sponsors have determined that for purposes of this transaction 0.0% of the Initial Pool Balance (the “Qualifying CRE Loan Percentage”) is comprised of mortgage loans that are “qualifying CRE loans” as such term is described in §244.17 of the Credit Risk Retention Rules.
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The total required credit risk retention percentage (the “Required Risk Retention Percentage”) for this transaction is 5.0%. The Required Risk Retention Percentage is equal to the product of (i) 1 minus the Qualifying CRE Loan Percentage (expressed as a decimal) and (ii) 5%; subject to a minimum Required Risk Retention Percentage of no less than 2.50% if the issuing entity includes any non-qualifying CRE loans.
The VRR Interest
Material Terms of the VRR Interest
| General |
The right to payment of the holders of the VRR Interest is pro rata and pari passu with the right to payment of holders of the Non-VRR Certificates (as a collective whole). On each Distribution Date, the portion of Aggregate Available Funds allocable to: (a) the VRR Interest will be the product of such Aggregate Available Funds multiplied by the VRR Percentage; and (b) the Non-VRR Certificates will be the product of such Aggregate Available Funds multiplied by the Non-VRR Percentage. In addition, any losses incurred on the Mortgage Loans will be allocated between the VRR Interest, on the one hand, and the Principal Balance Certificates, on the other hand, pro rata in accordance with the VRR Percentage and the Non-VRR Percentage, respectively.
VRR Available Funds
The amount available for distribution to the holders of the VRR Interest on each Distribution Date will, in general, equal the product of the VRR Percentage multiplied by the Aggregate Available Funds (described under “Description of the Certificates—Distributions—Available Funds”) for such Distribution Date (such amount, the “VRR Available Funds”).
Allocation of VRR Realized Losses
In addition, on each Distribution Date, any VRR Realized Losses will be allocated to the VRR Interest; and, in connection therewith, the Certificate Balance of the VRR Interest will be reduced without distribution, as a write-off, to the extent of such VRR Realized Loss.
The “VRR Realized Loss”, with respect to each Distribution Date, is the amount, if any, by which (i) the aggregate Certificate Balance of the VRR Interest, after giving effect to distributions of principal on such Distribution Date, exceeds (ii) the product of (A) the VRR Percentage and (B) the aggregate Stated Principal Balance of the Mortgage Loans in the Mortgage Pool (for purposes of this calculation, the aggregate Stated Principal Balance will not be reduced by the amount of principal payments received on the Mortgage Loans that were used to reimburse the master servicer or the trustee from general collections of principal on the Mortgage Loans for Workout-Delayed Reimbursement Amounts, to the extent those amounts are not otherwise determined to be Nonrecoverable Advances), including any REO Loans (but in each case, excluding any Companion Loan), as of the end of the last day of the related Collection Period.
In the event that VRR Realized Losses previously allocated to the VRR Interest in reduction of its Certificate Balance are recovered subsequent to such Certificate Balance being reduced to zero, the holders of the VRR Interest may receive distributions in respect of such recoveries (with interest) in accordance with the distribution priorities described under “—The VRR Interest—Material Terms of the VRR Interest—Priority of Distributions on the VRR Interest” below.
Priority of Distributions on the VRR Interest
On each Distribution Date, for so long as the aggregate Certificate Balance of the VRR Interest has not been reduced to zero, the certificate administrator is required to apply amounts on deposit in the
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Distribution Account for distribution to the VRR Interest, to the extent of the VRR Available Funds, in the following order of priority:
First, to the VRR Interest, in respect of interest, up to an amount equal to the VRR Interest Distribution Amount for such Distribution Date;
Second, to the VRR Interest, in reduction of the Certificate Balance thereof, up to an amount equal to the VRR Principal Distribution Amount for such Distribution Date, until the Certificate Balance of the VRR Interest has been reduced to zero; and
Third, to reimburse (with interest) prior write-offs of the Certificate Balance of the VRR Interest, up to an amount equal to the unreimbursed VRR Realized Losses previously allocated to the VRR Interest, plus interest in an amount equal to the VRR Realized Loss Interest Distribution Amount for such Distribution Date;
provided, however, that to the extent any VRR Available Funds remain in the Distribution Account after applying amounts as set forth in clauses First through Third above, any such amounts will be disbursed to the Class R certificates, which evidence the REMIC residual interest in each of the Upper-Tier REMIC, the Lower-Tier REMIC and the STK Chicago Loan REMIC in compliance with the Code and applicable REMIC Regulations. The REMIC residual interest, sometimes commonly referred to as a “non-economic residual”, is a tax-based certificate required to be issued as part of any REMIC securitization and the holder of that interest will incur certain tax liability for the net income of the REMIC trust. The REMIC residual interest is not entitled to any interest or principal in the securitization trust; however, REMIC Regulations require that the amount, if any, remaining in a REMIC trust after all amounts are paid to the regular interests be paid to the REMIC residual interest.
Except for tax reporting purposes, the VRR Interest does not have a specified Pass-Through Rate, however, the effective interest rate on the VRR Interest will be a per annum rate equal to the WAC Rate for the related Distribution Date.
The “Non-VRR Percentage” is an amount expressed as a percentage equal to 100% minus the VRR Percentage. For the avoidance of doubt, at all times, the sum of the VRR Percentage and the Non-VRR Percentage will equal 100%.
The “VRR Percentage” will equal a fraction, expressed as a percentage, the numerator of which is the initial Certificate Balance of the VRR Interest, and the denominator of which is the aggregate initial Certificate Balance of all of the classes of Principal Balance Certificates and the initial Certificate Balance of the VRR Interest.
The “VRR Allocation Percentage” will equal a fraction, expressed as a percentage, equal to the VRR Percentage divided by the Non-VRR Percentage.
The “VRR Interest Distribution Amount” with respect to any Distribution Date and the VRR Interest will equal the product of (a) the VRR Allocation Percentage and (b) the aggregate amount of interest distributed on the Non-VRR Certificates according to clauses First, Fourth, Seventh, Tenth, Thirteenth, Sixteenth, Nineteenth, Twenty-second and Twenty-fifth in “Description of the Certificates—Distributions—Priority of Distributions”.
The “VRR Principal Distribution Amount” with respect to any Distribution Date and the VRR Interest will equal the product of (a) the VRR Allocation Percentage and (b) the aggregate amount of principal distributed on the Non-VRR Certificates according to clauses Second, Fifth, Eighth, Eleventh, Fourteenth, Seventeenth, Twentieth, Twenty-third and Twenty-sixth in “Description of the Certificates—Distributions—Priority of Distributions”.
The “VRR Realized Loss Interest Distribution Amount”, with respect to any Distribution Date, an amount equal to the product of (a) the VRR Allocation Percentage and (b) the aggregate amount of interest on unreimbursed Realized Losses distributed to the holders of the Non-VRR Certificates
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according to clauses Third, Sixth, Ninth, Twelfth, Fifteenth, Eighteenth, Twenty-first, Twenty-fourth and Twenty-seventh in “Description of the Certificates—Distributions—Priority of Distributions”.
Yield Maintenance Charges and Prepayment Premiums
The holders of the VRR Interest will be entitled to the VRR Percentage of each yield maintenance charge and prepayment premium collected on the Mortgage Loans, as described in “Description of the Certificates—Allocation of Yield Maintenance Charges and Prepayment Premiums”.
Excess Interest
On each Distribution Date, the certificate administrator is required to distribute a portion of any Excess Interest received with respect to any ARD Loan during the applicable one-month Collection Period to the holders of the VRR Interest in an amount equal to the VRR Percentage of such Excess Interest. Excess Interest will not be available to make distributions to any other class of Certificates (or interests) (other than the Class S certificates as described in “Description of the Certificates—Distributions—Excess Interest”) or to provide credit support for other classes of certificates or offset any interest shortfalls or to pay any other amounts to any other party under the PSA.
Hedging, Transfer and Financing Restrictions
The Credit Risk Retention Rules include certain restrictions on hedging, transfer and financing of the VRR Interest. These restrictions provide that (i) a Retaining Party may not transfer the VRR Interest except to an MOA of such Retaining Party, (ii) each Retaining Party and its respective affiliates will not be permitted engage in any hedging transactions if payments on the hedge instrument are materially related to the required credit risk retention and the hedge position would limit the financial exposure to the required credit risk retention, and (iii) none of the Retaining Parties or any of their respective affiliates may pledge the required credit risk retention as collateral for any obligation unless such obligation is with full recourse to such Retaining Party or affiliate, respectively.
Unless stated otherwise, the restrictions described under this heading “—Hedging, Transfer and Financing Restrictions” will expire on the earliest of (i) the date that is the latest of (a) the date on which the total unpaid principal balance of the Mortgage Loans has been reduced to 33% of the total unpaid principal balance of the Mortgage Loans as of the Cut-off Date; (b) the date on which the total outstanding Certificate Balance of the certificates has been reduced to 33% of the total outstanding Certificate Balance of the certificates as of the Closing Date; or (c) two years after the Closing Date, or (ii) subject to the consent of the Retaining Sponsor (which consent may not be unreasonably withheld, delayed or conditioned), the date on which the Credit Risk Retention Rules have been officially abolished or officially determined by the applicable regulatory agencies to be no longer applicable to this securitization transaction.
DESCRIPTION OF THE CERTIFICATES
| General |
The Benchmark 2022-B34 Mortgage Trust Commercial Mortgage Pass-Through Certificates, Series 2022-B34 will be issued pursuant to a pooling and servicing agreement, among the depositor, the master servicer, the special servicers, the trustee, the certificate administrator, the operating advisor and the asset representations reviewer (the “PSA”) and will consist of the following classes: Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4, Class A-5, Class X-A, Class X-B, Class X-D, Class X-F, Class X-G, Class X-H, Class A-M, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class R and Class S certificates and the VRR Interest.
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One or more of such classes will also be collectively referred to as follows:
Designation |
Classes | |
| “Offered Certificates” | Class A-1, Class A-2, Class A-SB, Class A-4, Class A-5, Class X-A, Class A-M, Class B and Class C | |
| “Senior Certificates” | Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4, Class A-5, Class X-A, Class X-B, Class X-D, Class X-F, Class X-G and Class X-H | |
| “Senior Principal Balance Certificates” | Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4 and Class A-5 | |
| “Subordinate Certificates” | Class A-M, Class B, Class C, Class D, Class E, Class F, Class G and Class H | |
| “Principal Balance Certificates” | Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4, Class A-5, Class A-M, Class B, Class C, Class D, Class E, Class F, Class G and Class H | |
| “Class X Certificates” | Class X-A, Class X-B, Class X-D, Class X-F, Class X-G and Class X-H | |
| “Residual Certificates” | Class R | |
| “Non-VRR Certificates” | All certificates (other than VRR Interest and Residual Certificates) |
The certificates will represent in the aggregate the entire ownership interest in the issuing entity. The assets of the issuing entity will consist of: (1) the Mortgage Loans and all payments under and proceeds of the Mortgage Loans received after the Cut-off Date (exclusive of payments of principal and/or interest due on or before the Cut-off Date and interest relating to periods prior to, but due after, the Cut-off Date); (2) any REO Property but, with respect to any Whole Loan, only to the extent of the issuing entity’s interest in such Whole Loan; (3) those funds or assets as from time to time are deposited in the accounts discussed in “Pooling and Servicing Agreement—Accounts” (but, with respect to any Whole Loan, only to the extent of the issuing entity’s interest in such Whole Loan), if established; (4) the rights of the mortgagee under all insurance policies with respect to its Mortgage Loans; (5) certain rights of the depositor under each MLPA relating to Mortgage Loan document delivery requirements and the representations and warranties of each mortgage loan seller regarding the Mortgage Loans it sold to the depositor; and (6) the “regular interests” (or portions thereof, as applicable) in the Lower-Tier REMIC.
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Upon initial issuance, the Principal Balance Certificates and the VRR Interest will have the respective Certificate Balances, and the Class X Certificates will have the respective Notional Amounts, shown below (in each case, subject to a variance of plus or minus 5%):
Class |
Initial Certificate Balance or Notional Amount | ||
| Offered Certificates | |||
| A-1 | $ 13,310,000 | ||
| A-2 | $ 114,778,000 | ||
| A-SB | $ 18,021,000 | (1) | |
| A-4 | (2) | ||
| A-5 | (2) | ||
| X-A | $ 675,717,000 | ||
| A-M | $ 67,354,000 | ||
| B | $ 43,455,000 | ||
| C | $ 41,282,000 | ||
| Non-Offered Certificates | |||
| A-3 | $ 110,063,000 | ||
| X-B | $ 43,455,000 | ||
| X-D | $ 44,540,000 | ||
| X-F | $ 26,073,000 | ||
| X-G | $ 8,691,000 | ||
| X-H | $ 29,332,336 | ||
| D | $ 27,159,000 | ||
| E | $ 17,381,000 | ||
| F | $ 26,073,000 | ||
| G | $ 8,691,000 | ||
| H | $ 29,332,336 | ||
| S | N/A | ||
| R | N/A | ||
| VRR Interest | $ 45,741,597 | ||
| (1) | The Class A-SB certificates have a certain priority with respect to reducing the Certificate Balance of those certificates to their scheduled principal balance as described in this prospectus. |
| (2) | The exact initial Certificate Balances of the Class A-4 and Class A-5 certificates are unknown and will be determined based on the final pricing of those classes of certificates. However, the respective initial Certificate Balances of the Class A-4 and Class A-5 certificates are expected to be within the applicable ranges reflected in the following chart. The aggregate initial Certificate Balance of the Class A-4 and Class A-5 certificates is expected to be approximately $352,191,000, subject to a variance of plus or minus 5%. |
Class of Certificates |
Expected Range of Initial Certificate Balance | |
| Class A-4 | $0 - $110,716,000 | |
| Class A-5 | $241,475,000 – $352,191,000 |
The “Certificate Balance” of any class of Principal Balance Certificates and the VRR Interest outstanding at any time represents the maximum amount that its holders are entitled to receive as distributions allocable to principal from the cash flow on the Mortgage Loans and the other assets in the issuing entity, all as described in this prospectus. On each Distribution Date, the Certificate Balance of each class of Principal Balance Certificates and the VRR Interest will be reduced by any distributions of principal actually made on, and by any Realized Losses or VRR Realized Losses, as applicable, actually allocated to, that class of Principal Balance Certificates or the VRR Interest on that Distribution Date. In the event that Realized Losses or VRR Realized Losses previously allocated to a class of Principal Balance Certificates or the VRR Interest in reduction of its Certificate Balance are recovered subsequent to such Certificate Balance being reduced to zero, holders of such class of Principal Balance Certificates or the VRR Interest may receive distributions in respect of such recoveries in accordance with the distribution priorities described under “—Distributions—Priority of Distributions” below and “Credit Risk Retention—The VRR Interest—Material Terms of the VRR Interest—Priority of Distributions on the VRR Interest” above.
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The Residual Certificates will not have a Certificate Balance or entitle their holders to distributions of principal or interest.
The Class X Certificates will not have Certificate Balances, nor will they entitle their holders to distributions of principal, but the Class X Certificates will represent the right to receive distributions of interest in an amount equal to the aggregate interest accrued on their respective notional amounts (each, a “Notional Amount”). The Notional Amount of the Class X-A certificates will equal the aggregate of the Certificate Balances of the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4, Class A-5 and Class A-M certificates. The initial Notional Amount of the Class X-A certificates will be approximately $675,717,000. The Notional Amount of the Class X-B certificates will equal the Certificate Balance of the Class B certificates. The initial Notional Amount of the Class X-B certificates will be approximately $43,455,000. The Notional Amount of the Class X-D certificates will equal the aggregate of the Certificate Balances of the Class D and Class E certificates. The initial Notional Amount of the Class X-D certificates will be approximately $44,540,000. The Notional Amount of the Class X-F certificates will equal the Certificate Balance of the Class F certificates. The initial Notional Amount of the Class X-F certificates will be approximately $26,073,000. The Notional Amount of the Class X-G certificates will equal the Certificate Balance of the Class G certificates. The initial Notional Amount of the Class X-G certificates will be approximately $8,691,000. The Notional Amount of the Class X-H certificates will equal the Certificate Balance of the Class H certificates. The initial Notional Amount of the Class X-H certificates will be approximately $29,332,336.
The Notional Amount of each class of Class X Certificates is subject to change depending upon the final pricing of the Principal Balance Certificates, as follows: (1) if as a result of such pricing the Pass-Through Rate of any class of Principal Balance Certificates whose Certificate Balance comprises such Notional Amount is equal to the WAC Rate, the Certificate Balance of such class of Principal Balance Certificates may not be part of, and reduce accordingly, such notional amount of such class of Class X Certificates (or, if as a result of such pricing the Pass-Through Rate of such class of Class X Certificates is equal to zero, such class of Class X Certificates may not be issued on the Closing Date), and/or (2) if as a result of such pricing the Pass-Through Rate of any class of Principal Balance Certificates that does not comprise such Notional Amount of such class of Class X Certificates is less than the WAC Rate, such class of Principal Balance Certificates may become a part of, and increase accordingly, such Notional Amount of such class of Class X Certificates.
The Class S certificates will not have a Certificate Balance nor will they entitle their holders to distributions of principal, but the Class S certificates will represent the right to receive the Non-VRR Percentage of any Excess Interest received on any ARD Loan allocated as described under “—Distributions—Excess Interest” below.
| Distributions |
Method, Timing and Amount
Distributions on the certificates are required to be made by the certificate administrator, to the extent of available funds as described in this prospectus, on the fourth business day following each Determination Date (each, a “Distribution Date”). The “Determination Date” will be the eleventh day of each calendar month (or, if the eleventh day of that calendar month is not a business day, then the next business day) commencing in May 2022.
All distributions (other than the final distribution on any certificate) are required to be made to the Certificateholders in whose names the certificates are registered at the close of business on each Record Date. With respect to any Distribution Date, the “Record Date” will be the last business day of the month immediately preceding the month in which that Distribution Date occurs. These distributions are required to be made by wire transfer in immediately available funds to the account specified by the Certificateholder at a bank or other entity having appropriate facilities to accept such funds, if the Certificateholder has provided the certificate administrator with written wiring instructions no less than five business days prior to the related Record Date (which wiring instructions may be in the form of a standing
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order applicable to all subsequent distributions) or otherwise by check mailed to the Certificateholder. The final distribution on any certificate is required to be made in like manner, but only upon presentation and surrender of the certificate at the location that will be specified in a notice of the pendency of the final distribution.
The master servicer is authorized but not required to direct the investment of funds held in the Collection Account in U.S. government securities and other obligations that satisfy criteria established by the Rating Agencies (“Permitted Investments”). The master servicer will be entitled to retain any interest or other income earned on such funds and the master servicer will be required to bear any losses resulting from the investment of such funds, as provided in the PSA. For so long as Computershare Trust Company, N.A. is the certificate administrator, funds held in the Lower-Tier REMIC Distribution Account, the Upper-Tier REMIC Distribution Account, the Interest Reserve Account and the Gain-on-Sale Reserve Account may not be invested; provided that if Computershare Trust Company, N.A. is not the certificate administrator, such funds may be invested in Permitted Investments. The certificate administrator will be entitled to retain any interest or other income earned on such funds and the certificate administrator will be required to bear any losses resulting from the investment of such funds, as provided in the PSA.
Available Funds
The aggregate amount available for distribution to holders of the certificates (including the VRR Interest) on each Distribution Date (the “Aggregate Available Funds”) will, in general, equal the sum of the following amounts (without duplication):
(a) the aggregate amount of all cash received on the Mortgage Loans (in the case of any Non-Serviced Mortgage Loan, only to the extent received by the issuing entity pursuant to the related Non-Serviced PSA and/or related Intercreditor Agreement) and any REO Property (including Compensating Interest Payments with respect to the Mortgage Loans required to be deposited by the master servicer) that is on deposit in or credited to any portion of the Collection Account (in each case, exclusive of any amount on deposit in the Collection Account that is held for the benefit of the holder of any related Companion Loan), as of the Master Servicer Remittance Date, exclusive of (without duplication):
| ● | all scheduled payments of principal and/or interest (the “Periodic Payments”) and any balloon payments paid by the borrowers of a Mortgage Loan that are due on a Due Date (without regard to grace periods) after the end of the related Collection Period (without regard to grace periods), excluding Excess Interest and interest relating to periods prior to, but due after, the Cut-off Date; |
| ● | all unscheduled payments of principal (including prepayments (together with any related payments of interest allocable to the period following the Due Date for the related Mortgage Loan during the related Collection Period)), unscheduled interest, liquidation proceeds and Insurance and Condemnation Proceeds and other unscheduled recoveries received subsequent to the related Determination Date (or, with respect to voluntary prepayments of principal of each Mortgage Loan with a Due Date occurring after the related Determination Date, subsequent to the related Due Date) allocable to the Mortgage Loans; |
| ● | all amounts in the Collection Account that are due or reimbursable to any person other than the Certificateholders; |
| ● | with respect to each Actual/360 Loan and any Distribution Date occurring in each February and in any January occurring in a year that is not a leap year (unless, in either case, such Distribution Date is the final Distribution Date), the related Withheld Amount to the extent those funds are on deposit in the Collection Account; |
| ● | all Excess Interest allocable to the Mortgage Loans (which is separately distributed to holders of the Class S certificates and the VRR Interest); |
| ● | all yield maintenance charges and prepayment premiums; |
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| ● | all amounts deposited in the Collection Account in error; and |
| ● | any late payment charges or accrued interest on a Mortgage Loan allocable to the default interest rate for such Mortgage Loan, to the extent permitted by law, excluding any interest calculated at the Mortgage Rate for the related Mortgage Loan; |
(b) if and to the extent not already included in clause (a), the aggregate amount transferred on or before the applicable Determination Date from the REO Account allocable to the Mortgage Loans to the Collection Account for such Distribution Date;
(c) P&I Advances made by the master servicer or the trustee, as applicable, with respect to the Distribution Date (net of certain amounts that are due or reimbursable to persons other than the Certificateholders);
(d) with respect to each Actual/360 Loan and any Distribution Date occurring in each March (or February, if such Distribution Date is the final Distribution Date), the related Withheld Amounts as required to be deposited in the Lower-Tier REMIC Distribution Account pursuant to the PSA; and
(e) the aggregate amount of gain-on-sale proceeds transferred to the Lower-Tier REMIC Distribution Account from the Gain-on-Sale Reserve Account for distribution on the subject Distribution Date.
The amount available for distribution to holders of the Non-VRR Certificates on each Distribution Date (with respect to such Distribution Date, the “Available Funds”) will, in general, equal the Non-VRR Percentage of the Aggregate Available Funds for such Distribution Date.
The “Collection Period” for each Distribution Date and any Mortgage Loan (including any related Companion Loan) will be the period commencing on the day immediately following the Due Date for such Mortgage Loan (including any related Companion Loan) in the month preceding the month in which that Distribution Date occurs or the date that would have been the Due Date if such Mortgage Loan (including any related Companion Loan) had a Due Date in such preceding month and ending on and including the Due Date for such Mortgage Loan (including any related Companion Loan) occurring in the month in which that Distribution Date occurs. Notwithstanding the foregoing, in the event that the last day of a Collection Period (or applicable grace period) is not a business day, any Periodic Payments received with respect to Mortgage Loans (including any related Companion Loan) relating to such Collection Period on the business day immediately following such day will be deemed to have been received during such Collection Period and not during any other Collection Period.
“Due Date” means, with respect to each Mortgage Loan (including any Companion Loan), the date on which scheduled payments of principal, interest or both are required to be made by the related borrower.
Priority of Distributions
On each Distribution Date, prior to the Crossover Date, for so long as the Certificate Balances or Notional Amounts of the certificates have not been reduced to zero, the certificate administrator is required to apply amounts on deposit in the Distribution Account, to the extent of the Available Funds, in the following order of priority:
First, to the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4, Class A-5, Class X-A, Class X-B, Class X-D, Class X-F, Class X-G and Class X-H certificates, in respect of interest, up to an amount equal to, and pro rata in accordance with, the respective Interest Distribution Amount for such Classes;
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Second, to the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4 and Class A-5 certificates, in reduction of the Certificate Balances thereof, in the following priority:
1. to the Class A-SB certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount for such Distribution Date, until the Certificate Balance of the Class A-SB certificates has been reduced to the Class A-SB Planned Principal Balance as set forth on Annex G for such Distribution Date;
2. then, to the Class A-1 certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount (or the portion thereof remaining after distributions on the Class A-SB certificates pursuant to clause (1) above) for such Distribution Date, until the Certificate Balance of the Class A-1 certificates has been reduced to zero;
3. then, to the Class A-2 certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount (or the portion thereof remaining after distributions on the Class A-SB and Class A-1 certificates pursuant to clauses (1) and (2) above) for such Distribution Date, until the Certificate Balance of the Class A-2 certificates has been reduced to zero;
4. then, to the Class A-3 certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount (or the portion thereof remaining after distributions on the Class A-SB, Class A-1 and Class A-2 certificates pursuant to clauses (1), (2) and (3) above) for such Distribution Date, until the Certificate Balance of the Class A-3 certificates has been reduced to zero;
5. then, to the Class A-4 certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount (or the portion thereof remaining after distributions on the Class A-SB, Class A-1, Class A-2 and Class A-3 certificates pursuant to clauses (1), (2), (3) and (4) above) for such Distribution Date, until the Certificate Balance of the Class A-4 certificates has been reduced to zero;
6. then, to the Class A-5 certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount (or the portion thereof remaining after distributions on the Class A-SB, Class A-1, Class A-2, Class A-3 and Class A-4 certificates pursuant to clauses (1), (2), (3), (4) and (5) above) for such Distribution Date, until the Certificate Balance of the Class A-5 certificates has been reduced to zero;
7. then, to the Class A-SB certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount (or the portion thereof remaining after distributions on the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4 and Class A-5 certificates pursuant to clauses (1), (2), (3), (4), (5) and (6) above) for such Distribution Date, until the Certificate Balance of the Class A-SB certificates has been reduced to zero;
Third, to the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4 and Class A-5 certificates, up to an amount equal to, and pro rata, based upon the aggregate unreimbursed Realized Losses previously allocated to each such Class;
Fourth, to the Class A-M certificates, in respect of interest, up to an amount equal to the Interest Distribution Amount of such Class;
Fifth, to the Class A-M certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount less amounts of Principal Distribution Amount distributed pursuant to all prior clauses, until the Certificate Balance of such Class is reduced to zero;
Sixth, to the Class A-M certificates, up to an amount equal to the aggregate of unreimbursed Realized Losses previously allocated to such Class;
Seventh, to the Class B certificates, in respect of interest, up to an amount equal to the Interest Distribution Amount of such Class;
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Eighth, to the Class B certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount less amounts of Principal Distribution Amount distributed pursuant to all prior clauses, until the Certificate Balance of such Class is reduced to zero;
Ninth, to the Class B certificates, up to an amount equal to the aggregate of unreimbursed Realized Losses previously allocated to such Class;
Tenth, to the Class C certificates, in respect of interest, up to an amount equal to the Interest Distribution Amount of such Class;
Eleventh, to the Class C certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount less amounts of Principal Distribution Amount distributed pursuant to all prior clauses, until the Certificate Balance of such Class is reduced to zero;
Twelfth, to the Class C certificates, up to an amount equal to the aggregate of unreimbursed Realized Losses previously allocated to such Class;
Thirteenth, to the Class D certificates, in respect of interest, up to an amount equal to the Interest Distribution Amount of such Class;
Fourteenth, to the Class D certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount less amounts of Principal Distribution Amount distributed pursuant to all prior clauses, until the Certificate Balance of such Class is reduced to zero;
Fifteenth, to the Class D certificates, up to an amount equal to the aggregate of unreimbursed Realized Losses previously allocated to such Class;
Sixteenth, to the Class E certificates, in respect of interest, up to an amount equal to the Interest Distribution Amount of such Class;
Seventeenth, to the Class E Certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount less amounts of Principal Distribution Amount distributed pursuant to all prior clauses, until the Certificate Balance of such Class is reduced to zero;
Eighteenth, to the Class E certificates, up to an amount equal to the aggregate of unreimbursed Realized Losses previously allocated to such Class;
Nineteenth, to the Class F certificates, in respect of interest, up to an amount equal to the Interest Distribution Amount of such Class;
Twentieth, to the Class F certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount less amounts of Principal Distribution Amount distributed pursuant to all prior clauses, until the Certificate Balance of such Class is reduced to zero;
Twenty-first, to the Class F certificates, up to an amount equal to the aggregate of unreimbursed Realized Losses previously allocated to such Class;
Twenty-second, to the Class G certificates, in respect of interest, up to an amount equal to the Interest Distribution Amount of such Class;
Twenty-third, to the Class G certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount less amounts of Principal Distribution Amount distributed pursuant to all prior clauses, until the Certificate Balance of such Class is reduced to zero;
Twenty-fourth, to the Class G certificates, up to an amount equal to the aggregate of unreimbursed Realized Losses previously allocated to such Class;
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Twenty-fifth, to the Class H certificates, in respect of interest, up to an amount equal to the Interest Distribution Amount of such Class;
Twenty-sixth, to the Class H certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount less amounts of Principal Distribution Amount distributed pursuant to all prior clauses, until the Certificate Balance of such Class is reduced to zero;
Twenty-seventh, to the Class H certificates, up to an amount equal to the aggregate of unreimbursed Realized Losses previously allocated to such Class; and
Twenty-eighth, to the Class R certificates as specified in the PSA.
Notwithstanding the foregoing, on each Distribution Date occurring on or after the Crossover Date, regardless of the allocation of principal payments described in priority Second above, the Principal Distribution Amount for such Distribution Date will be distributed to each class of Senior Principal Balance Certificates, pro rata, based on their respective Certificate Balances, in reduction of their respective Certificate Balances, until the Certificate Balance of each such class is reduced to zero, and without regard to the Class A-SB Planned Principal Balance. The “Crossover Date” is the Distribution Date on which the Certificate Balance of each Class of Subordinate Certificates is (or will be) reduced to zero. None of the Class X Certificates will be entitled to any distribution of principal. If and to the extent that any Nonrecoverable Advances (plus interest on such Nonrecoverable Advances) that were reimbursed from principal collections on the Mortgage Loans (including REO Loans) and previously resulted in a reduction of the Aggregate Principal Distribution Amount are subsequently recovered on the related Mortgage Loan or REO Property, then (on the Distribution Date related to the Collection Period during which the recovery occurred): (i) the VRR Percentage of the amount of such recovery will be added to the Certificate Balance of the VRR Interest, up to the lesser of (A) the VRR Percentage of the amount of such recovery and (B) the amount of unreimbursed VRR Realized Losses previously allocated to the VRR Interest; (ii) the Non-VRR Percentage of the amount of such recovery will be added to the Certificate Balance(s) of the class or classes of Principal Balance Certificates that previously were allocated Realized Losses, in the same sequential order as distributions set forth in “—Priority of Distributions” above, in each case up to the lesser of (A) the unallocated portion of the Non-VRR Percentage of the amount of such recovery and (B) the amount of the unreimbursed Realized Losses previously allocated to the subject class of certificates; and (iii) the Interest Shortfall with respect to each affected class of Non-VRR Certificates for the next Distribution Date will be increased by the amount of interest that would have accrued through the then current Distribution Date if the restored write-down for the reimbursed class of Principal Balance Certificates had never been written down. If the Certificate Balance of any class of Principal Balance Certificates or the VRR Interest is so increased, the amount of unreimbursed Realized Losses or VRR Realized Losses, as applicable, of such class of certificates will be decreased by such amount.
Reimbursement of previously allocated Realized Losses or VRR Realized Losses will not constitute distributions of principal for any purpose and will not result in an additional reduction in the Certificate Balance of the class of certificates in respect of which a reimbursement is made.
Pass-Through Rates
The interest rate (the “Pass-Through Rate”) applicable to each class of Non-VRR Certificates for any Distribution Date will equal the rates set forth below:
The Pass-Through Rate for the Class A-1 certificates will be a per annum rate equal to %.
The Pass-Through Rate for the Class A-2 certificates will be a per annum rate equal to %.
The Pass-Through Rate for the Class A-3 certificates will be a per annum rate equal to %.
The Pass-Through Rate for the Class A-SB certificates will be a per annum rate equal to %.
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The Pass-Through Rate for the Class A-4 certificates will be a per annum rate equal to %.
The Pass-Through Rate for the Class A-5 certificates will be a per annum rate equal to %.
The Pass-Through Rate for the Class A-M certificates will be a per annum rate equal to %.
The Pass-Through Rate for the Class B certificates will be a per annum rate equal to %.
The Pass-Through Rate for the Class C certificates will be a per annum rate equal to %.
The Pass-Through Rate for the Class D certificates will be a per annum rate equal to %.
The Pass-Through Rate for the Class E certificates will be a per annum rate equal to %.
The Pass-Through Rate for the Class F certificates will be a per annum rate equal to %.
The Pass-Through Rate for the Class G certificates will be a per annum rate equal to %.
The Pass-Through Rate for the Class H certificates will be a per annum rate equal to %.
The Pass-Through Rate applicable to the Class X-A certificates for the initial Distribution Date will equal approximately % per annum. The Pass-Through Rate applicable to the Class X-A certificates for each Distribution Date will equal the weighted average of the respective strip rates (the “Class X-A Strip Rates”) at which interest accrues from time to time on the respective components of the Notional Amount of the Class X-A certificates outstanding immediately prior to the related Distribution Date (weighted on the basis of the respective balances of such components outstanding immediately prior to such Distribution Date). Each of those components will have a component notional balance that corresponds to the Certificate Balance of the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4, Class A-5 or Class A-M certificates, respectively. The applicable Class X-A Strip Rate with respect to each such component for any Distribution Date will equal the excess, if any, of (a) the WAC Rate for such Distribution Date, over (b) the Pass-Through Rate for such Distribution Date for the class of certificates that comprises such component.
The Pass-Through Rate applicable to the Class X-B certificates for the initial Distribution Date will equal approximately % per annum. The Pass-Through Rate applicable to the Class X-B certificates for each Distribution Date will equal the strip rate (the “Class X-B Strip Rate”) at which interest accrues from time to time on the component of the Notional Amount of the Class X-B certificates outstanding immediately prior to the related Distribution Date. Such component will have a component notional balance that corresponds to the Certificate Balance of the Class B certificates. The applicable Class X-B Strip Rate with respect to each such component for any Distribution Date will equal the excess, if any, of (a) the WAC Rate for such Distribution Date, over (b) the Pass-Through Rate for such Distribution Date for the class of certificates that comprises such component.
The Pass-Through Rate applicable to the Class X-D certificates for the initial Distribution Date will equal approximately % per annum. The Pass-Through Rate applicable to the Class X-D certificates for each Distribution Date will equal to the weighted average of the respective strip rates (the “Class X-D Strip Rate”) at which interest accrues from time to time on the respective components of the Notional Amount of the Class X-D certificates outstanding immediately prior to the related Distribution Date (weighted on the basis of the respective balances of such components outstanding immediately prior to such Distribution Date). Each of those components will have a component notional balance that corresponds to the Certificate Balance of the Class D or Class E certificates, respectively. The applicable Class X-D Strip Rate with respect to each such component for any Distribution Date will equal the excess, if any, of (a) the WAC Rate for such Distribution Date, over (b) the Pass-Through Rate for such Distribution Date for the class of certificates that comprises such component.
The Pass-Through Rate applicable to the Class X-F certificates for the initial Distribution Date will equal approximately % per annum. The Pass-Through Rate applicable to the Class X-F certificates for each Distribution Date will equal the strip rate (the “Class X-F Strip Rate”) at which interest accrues from
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time to time on the component of the Notional Amount of the Class X-F certificates outstanding immediately prior to the related Distribution Date. Such component will have a component notional balance that corresponds to the Certificate Balance of the Class F certificates. The applicable Class X-F Strip Rate with respect to each such component for any Distribution Date will equal the excess, if any, of (a) the WAC Rate for such Distribution Date, over (b) the Pass-Through Rate for such Distribution Date for the class of certificates that comprises such component.
The Pass-Through Rate applicable to the Class X-G certificates for the initial Distribution Date will equal approximately % per annum. The Pass-Through Rate applicable to the Class X-G certificates for each Distribution Date will equal the strip rate (the “Class X-G Strip Rate”) at which interest accrues from time to time on the component of the Notional Amount of the Class X-G certificates outstanding immediately prior to the related Distribution Date. Such component will have a component notional balance that corresponds to the Certificate Balance of the Class G certificates. The applicable Class X-G Strip Rate with respect to each such component for any Distribution Date will equal the excess, if any, of (a) the WAC Rate for such Distribution Date, over (b) the Pass-Through Rate for such Distribution Date for the class of certificates that comprises such component.
The Pass-Through Rate applicable to the Class X-H certificates for the initial Distribution Date will equal approximately % per annum. The Pass-Through Rate applicable to the Class X-H certificates for each Distribution Date will equal the strip rate (the “Class X-H Strip Rate”) at which interest accrues from time to time on the component of the Notional Amount of the Class X-H certificates outstanding immediately prior to the related Distribution Date. Such component will have a component notional balance that corresponds to the Certificate Balance of the Class H certificates. The applicable Class X-H Strip Rate with respect to each such component for any Distribution Date will equal the excess, if any, of (a) the WAC Rate for such Distribution Date, over (b) the Pass-Through Rate for such Distribution Date for the class of certificates that comprises such component.
The Class S certificates will not have a Pass-Through Rate or be entitled to distributions in respect of interest other than the Non-VRR Percentage of any Excess Interest, if any, with respect to any ARD Loan.
Although it does not have a specified Pass-Through Rate (other than for tax reporting purposes), the effective interest rate for the VRR Interest will be the WAC Rate for the related Distribution Date.
The “WAC Rate” with respect to any Distribution Date is equal to the weighted average of the applicable Net Mortgage Rates of the Mortgage Loans (including a Non-Serviced Mortgage Loan) as of the first day of the related Collection Period, weighted on the basis of their respective Stated Principal Balances as of the first day of such Collection Period (after giving effect to any payments received during any applicable grace period).
The “Net Mortgage Rate” for each Mortgage Loan (including a Non-Serviced Mortgage Loan) is a per annum rate equal to the related Mortgage Rate then in effect for the related Interest Accrual Period (without regard to any increase in the interest rate of any ARD Loan after the related Anticipated Repayment Date), less the related Administrative Cost Rate; provided, however, that for purposes of calculating Pass-Through Rates and Withheld Amounts, the Net Mortgage Rate for any Mortgage Loan will be determined without regard to any modification, waiver or amendment of the terms of the related Mortgage Loan, whether agreed to by the master servicer or the special servicer or resulting from a bankruptcy, insolvency or similar proceeding involving the related borrower. Notwithstanding the foregoing, for Mortgage Loans that do not accrue interest on a 30/360 basis, then, solely for purposes of calculating the Pass-Through Rate on the Non-VRR Certificates (other than the Class S certificates) and the VRR Interest (and for the purposes of calculating the Base Interest Fraction), the Net Mortgage Rate of any Mortgage Loan for any one-month period preceding a related Due Date will be the annualized rate at which interest would have to accrue in respect of such Mortgage Loan on the basis of a 360-day year consisting of twelve 30-day months in order to produce the aggregate amount of interest actually required to be paid in respect of such Mortgage Loan during the one-month period at the related Net Mortgage Rate; provided, however, that with respect to each Actual/360 Loan, the Net Mortgage Rate for the one-month period (1) prior to the Due Dates in January and February in any year which is not a leap year or in
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February in any year which is a leap year (in either case, unless the related Distribution Date is the final Distribution Date) will be determined exclusive of Withheld Amounts from that month, and (2) prior to the Due Date in March (or February, if the related Distribution Date is the final Distribution Date), will be determined inclusive of Withheld Amounts for the immediately preceding February and, if applicable, January, as applicable. With respect to any REO Loan, the Net Mortgage Rate will be calculated as described above, as if the predecessor Mortgage Loan had remained outstanding.
“Administrative Cost Rate” as of any date of determination will be a per annum rate equal to the sum of the Servicing Fee Rate, the Certificate Administrator/Trustee Fee Rate, the Operating Advisor Fee Rate and the CREFC® Intellectual Property Royalty License Fee Rate.
“Mortgage Rate” with respect to any Mortgage Loan (including any Non-Serviced Mortgage Loan) or any related Companion Loan is the per annum rate at which interest accrues on the Mortgage Loan or the related Companion Loan (in absence of a default) as stated in the related Mortgage Note or the promissory note evidencing such Companion Loan without giving effect to any default rate or Revised Rate.
Interest Distribution Amount
The “Interest Distribution Amount” with respect to any Distribution Date and each class of Non-VRR Certificates (other than the Class S certificates) will equal (A) the sum of (i) the Interest Accrual Amount with respect to such class for such Distribution Date and (ii) the Interest Shortfall, if any, with respect to such class for such Distribution Date, less (B) any Excess Prepayment Interest Shortfall allocated to such class on such Distribution Date.
The “Interest Accrual Amount” with respect to any Distribution Date and any class of Non-VRR Certificates will be equal to the interest for the related Interest Accrual Period accrued at the Pass-Through Rate for such class on the Certificate Balance or Notional Amount, as applicable, for such class immediately prior to that Distribution Date. Calculations of interest for each Interest Accrual Period will be made on 30/360 basis.
An “Interest Shortfall” with respect to any Distribution Date for any class of Non-VRR Certificates will be equal to the portion of the Interest Distribution Amount for such class remaining unpaid as of the close of business on the preceding Distribution Date.
The “Interest Accrual Period” for each Distribution Date will be the calendar month immediately preceding the month in which that Distribution Date occurs.
Principal Distribution Amount
The “Aggregate Principal Distribution Amount” for any Distribution Date will be equal to the sum of the following amounts:
(a) the Scheduled Principal Distribution Amount for that Distribution Date, and
(b) the Unscheduled Principal Distribution Amount for that Distribution Date;
provided that the Aggregate Principal Distribution Amount for any Distribution Date will be reduced, to not less than zero, by the amount of any reimbursements of:
(A) Nonrecoverable Advances (including any servicing advance with respect to a Non-Serviced Mortgage Loan under the related Non-Serviced PSA reimbursed out of general collections on the Mortgage Loans), with interest on such Nonrecoverable Advances at the Reimbursement Rate, that are paid or reimbursed from principal collections on the Mortgage Loans in a period during which such principal collections would have otherwise been included in the Aggregate Principal Distribution Amount for such Distribution Date, and
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(B) Workout-Delayed Reimbursement Amounts paid or reimbursed from principal collections on the Mortgage Loans in a period during which such principal collections would have otherwise been included in the Aggregate Principal Distribution Amount for such Distribution Date,
provided, further, that in the case of clauses (A) and (B) above, if any of the amounts that were reimbursed from principal collections on the Mortgage Loans (including REO Loans) are subsequently recovered on the related Mortgage Loan (or REO Loan), such recovery will increase the Aggregate Principal Distribution Amount for the Distribution Date related to the period in which such recovery occurs.
The “Principal Distribution Amount” with respect to any Distribution Date and the Principal Balance Certificates will equal the sum of (a) the Principal Shortfall for such Distribution Date and (b) the Non-VRR Percentage of the Aggregate Principal Distribution Amount for such Distribution Date.
The “Scheduled Principal Distribution Amount” for each Distribution Date will equal the aggregate of the principal portions of (a) all Periodic Payments (excluding balloon payments) with respect to the Mortgage Loans due during or, if and to the extent not previously received or advanced and distributed to Certificateholders on a preceding Distribution Date, prior to the related Collection Period and all Assumed Scheduled Payments with respect to the Mortgage Loans for the related Collection Period, in each case to the extent paid by the related borrower as of the related Determination Date (or, with respect to each Mortgage Loan with a Due Date occurring, or a grace period ending, after the related Determination Date, the related Due Date or, last day of such grace period, as applicable, to the extent received by the master servicer as of the business day preceding the Master Servicer Remittance Date) or advanced by the master servicer or the trustee, as applicable, and (b) all balloon payments with respect to the Mortgage Loans to the extent received on or prior to the related Determination Date (or, with respect to each Mortgage Loan with a Due Date occurring, or a grace period ending, after the related Determination Date, the related Due Date or, last day of such grace period, as applicable, to the extent received by the master servicer as of the business day preceding the Master Servicer Remittance Date), and to the extent not included in clause (a) above. The Scheduled Principal Distribution Amount from time to time will include all late payments of principal made by a borrower with respect to the Mortgage Loans, including late payments in respect of a delinquent balloon payment, received by the times described above in this definition, except to the extent those late payments are otherwise available to reimburse the master servicer or the trustee, as the case may be, for prior Advances, as described above.
The “Unscheduled Principal Distribution Amount” for each Distribution Date will equal the aggregate of the following: (a) all prepayments of principal received on the Mortgage Loans as of the Determination Date; and (b) the principal portion of any other collections (exclusive of payments by borrowers) received on the Mortgage Loans and any REO Properties on or prior to the related Determination Date whether in the form of Liquidation Proceeds, Insurance and Condemnation Proceeds, net income, rents, and profits from REO Property or otherwise, that were identified and applied by the master servicer as recoveries of principal of the related Mortgage Loan for which no Advance was previously made; provided that all such Liquidation Proceeds and Insurance and Condemnation Proceeds will be reduced by any unpaid Special Servicing Fees, Liquidation Fees, any amount related to the Loss of Value Payments to the extent that such amount was transferred into the Collection Account during the related collection period, accrued interest on Advances and other additional trust fund expenses incurred in connection with the related Mortgage Loan, thus reducing the Unscheduled Principal Distribution Amount.
The “Assumed Scheduled Payment” for any Collection Period and with respect to any Mortgage Loan (including the Non-Serviced Mortgage Loans) that is delinquent in respect of its balloon payment or any REO Loan (excluding, for purposes of determining or making P&I Advances, the portion allocable to any related Companion Loan), is an amount equal to the sum of (a) the principal portion of the Periodic Payment that would have been due on such Mortgage Loan or REO Loan on the related Due Date based on the constant payment required by such related Mortgage Note or the original amortization schedule of the Mortgage Loan (as calculated with interest at the related Mortgage Rate) (if any), if applicable, assuming the related balloon payment has not become due, after giving effect to any reduction in the principal balance occurring in connection with a modification, a default or a bankruptcy modification (or similar proceeding), and (b) interest on the Stated Principal Balance of that Mortgage Loan or REO Loan
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(excluding, for purposes of determining or making P&I Advances, the portion allocable to any related Companion Loan) at its Mortgage Rate (net of interest at the related Servicing Fee Rate (other than in the case of any Non-Serviced Mortgage Loan, the servicing fee rate pursuant to the applicable pooling and servicing agreement)).
The “Principal Shortfall” for any Distribution Date means the amount, if any, by which (1) the Principal Distribution Amount for the prior Distribution Date exceeds (2) the aggregate amount actually distributed on the preceding Distribution Date to holders of the Principal Balance Certificates in respect of such Principal Distribution Amount.
The “Class A-SB Planned Principal Balance” for any Distribution Date is the balance shown for such Distribution Date in the table set forth in Annex G. Such balances were calculated using, among other things, certain weighted average life assumptions. See “Yield and Maturity Considerations—Weighted Average Life”. Based on such assumptions, the Certificate Balance of the Class A-SB certificates on each Distribution Date would be expected to be reduced to the balance indicated for such Distribution Date in the table set forth in Annex G. We cannot assure you, however, that the mortgage loans will perform in conformity with our assumptions. Therefore, we cannot assure you that the balance of the Class A-SB certificates on any Distribution Date will be equal to the balance that is specified for such Distribution Date in the table.
Certain Calculations with Respect to Individual Mortgage Loans
The “Stated Principal Balance” of each Mortgage Loan will initially equal its Cut-off Date Balance and, on each Distribution Date, will be reduced by the amount of principal payments received on such Mortgage Loan or advanced for such Distribution Date. With respect to any Companion Loan on any date of determination, the Stated Principal Balance will equal the unpaid principal balance of such Companion Loan as of such date. With respect to any Whole Loan on any date of determination, the Stated Principal Balance of such Whole Loan will be the sum of the Stated Principal Balance of the related Mortgage Loan and each related Companion Loan on such date. The Stated Principal Balance of a Mortgage Loan or Whole Loan may also be reduced in connection with any modification that reduces the principal amount due on such Mortgage Loan or Whole Loan, as the case may be, or any forced reduction of its actual unpaid principal balance imposed by a court presiding over a bankruptcy proceeding in which the related borrower is the debtor. See “Certain Legal Aspects of Mortgage Loans”. If any Mortgage Loan or Whole Loan is paid in full or the Mortgage Loan or Whole Loan (or any Mortgaged Property acquired in respect of the Mortgage Loan or Whole Loan) is otherwise liquidated, then, as of the first Distribution Date that follows the end of the Collection Period in which that payment in full or liquidation occurred and notwithstanding that a loss may have occurred in connection with any liquidation, the Stated Principal Balance of the Mortgage Loan or Whole Loan will be zero.
For purposes of calculating allocations of, or recoveries in respect of Realized Losses and VRR Realized Losses, as well as for purposes of calculating the Servicing Fee and Certificate Administrator/Trustee Fee payable each month, each REO Property (including any REO Property with respect to any Non-Serviced Mortgage Loan held pursuant to the related Non-Serviced PSA) will be treated as if there exists with respect to such REO Property an outstanding Mortgage Loan and, if applicable, each related Companion Loan (an “REO Loan”), and all references to Mortgage Loan or Companion Loan and pool of Mortgage Loans in this prospectus, when used in that context, will be deemed to also be references to or to also include, as the case may be, any REO Loans. Each REO Loan will generally be deemed to have the same characteristics as its actual predecessor Mortgage Loan (including related Companion Loan), including the same fixed Mortgage Rate (and, accordingly, the same Net Mortgage Rate) and the same unpaid principal balance and Stated Principal Balance. Amounts due on the predecessor Mortgage Loan (including related Companion Loan) including any portion of it payable or reimbursable to the master servicer, the special servicer, the operating advisor, the asset representations reviewer, the certificate administrator or the trustee, as applicable, will continue to be “due” in respect of the REO Loan; and amounts received in respect of the related REO Property, net of payments to be made, or reimbursement to the master servicer for payments previously advanced, in
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connection with the operation and management of that property, generally will be applied by the master servicer as if received on the predecessor Mortgage Loan or related Companion Loan.
With respect to each Serviced Whole Loan, no amounts relating to the related REO Property or REO Loan allocable to any related Companion Loan will be available for amounts due to the Certificateholders or to reimburse the issuing entity, other than in the limited circumstances related to Servicing Advances, indemnification, Special Servicing Fees and other reimbursable expenses related to such Serviced Whole Loan incurred with respect to such Serviced Whole Loan in accordance with the PSA.
With respect to an AB Whole Loan, no amounts relating to the related REO Property or REO Loan allocable to a Subordinate Companion Loan will be available for amounts due to the Certificateholders other than indirectly in the limited circumstances related to reimbursement of Servicing Advances, indemnification, Special Servicing Fees and other reimbursable expenses related to an AB Whole Loan incurred with respect to an AB Whole Loan in accordance with the PSA.
Excess Interest
On each Distribution Date, the certificate administrator will be required to distribute (i) to the holders of the Class S certificates, the Non-VRR Percentage of any Excess Interest received by the issuing entity with respect to any ARD Loan during the Collection Period for (or, in the case of a Non-Serviced Mortgage Loan, as part of a distribution to the issuing entity during the month of) such Distribution Date, and (ii) to the holders of the VRR Interest, the VRR Percentage of such Excess Interest. Excess Interest will not be available to make distributions to any other class of certificates or to provide credit support for other classes of certificates or offset any interest shortfalls or to pay any other amounts to any other party under the PSA. The Class S certificates and the VRR Interest will be entitled to such distributions of Excess Interest notwithstanding any reduction of their related Certificate Balance to zero.
Application Priority of Mortgage Loan Collections or Whole Loan Collections
Absent express provisions in the related Mortgage Loan documents (and, with respect to each Serviced Whole Loan, the related Intercreditor Agreement), all amounts collected by or on behalf of the issuing entity in respect of any Mortgage Loan in the form of payments from the related borrower, Liquidation Proceeds, condemnation proceeds or insurance proceeds (excluding, if applicable, in the case of each Serviced Whole Loan, any amounts payable to the holder of the related Companion Loan(s) pursuant to the related Intercreditor Agreement) will be deemed to be allocated for purposes of collecting amounts due under the Mortgage Loan, pursuant to the PSA, in the following order of priority:
First, as a recovery of any unreimbursed Advances (including any Workout-Delayed Reimbursement Amount) with respect to the related Mortgage Loan and unpaid interest at the Reimbursement Rate on such Advances and, if applicable, unreimbursed and unpaid expenses of the issuing entity (including Special Servicing Fees, Liquidation Fees and Workout Fees previously paid by the issuing entity from general collections) with respect to the related Mortgage Loan;
Second, as a recovery of Nonrecoverable Advances and any interest on those Nonrecoverable Advances at the Reimbursement Rate, to the extent previously paid or reimbursed from principal collections on the Mortgage Loans (as described in the first proviso in the definition of Aggregate Principal Distribution Amount);
Third, to the extent not previously allocated pursuant to clause First, as a recovery of accrued and unpaid interest on such Mortgage Loan (exclusive of default interest and Excess Interest) to the extent of the excess of (i) accrued and unpaid interest on such Mortgage Loan at the related Mortgage Rate in effect from time to time through the end of the applicable mortgage interest accrual period, over (ii) the sum of (a)(x) the cumulative amount of the reductions (if any) in the amount of related P&I Advances for such Mortgage Loan that have occurred in connection with related Appraisal Reduction Amounts (to the extent collections have not been allocated as recovery of accrued and unpaid interest pursuant to clause Fifth below on earlier dates) or (y) with respect to any accrued and unpaid interest that was not advanced due to a determination that the related P&I Advance would be a Nonrecoverable Advance, the
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amount of interest that (absent such determination of nonrecoverability preventing such P&I Advance from being made) would not have been advanced because of the reductions in the amount of related P&I Advances for such Mortgage Loan that would have occurred in connection with related Appraisal Reduction Amounts, and (b) Accrued AB Loan Interest;
Fourth, to the extent not previously allocated pursuant to clause First, as a recovery of principal of such Mortgage Loan then due and owing, including by reason of acceleration of such Mortgage Loan following a default thereunder (or, if the Mortgage Loan has been liquidated, as a recovery of principal to the extent of its entire remaining unpaid principal balance);
Fifth, as a recovery of (i) accrued and unpaid interest on such Mortgage Loan to the extent of the cumulative amount of the reductions (if any) in the amount of related P&I Advances for such Mortgage Loan that have occurred in connection with related Appraisal Reduction Amounts or would have occurred in connection with the related Appraisal Reduction Amounts but for such P&I Advance not having been made as a result of a determination that such P&I Advance would have been a Nonrecoverable Advance and (ii) Accrued AB Loan Interest (in each of clause (i) and (ii), to the extent collections have not been allocated as recovery of accrued and unpaid interest pursuant to this clause Fifth on earlier dates);
Sixth, as a recovery of amounts to be currently allocated to the payment of, or escrowed for the future payment of, real estate taxes, assessments and insurance premiums and similar items relating to such Mortgage Loan;
Seventh, as a recovery of any other reserves to the extent then required to be held in escrow with respect to such Mortgage Loan;
Eighth, as a recovery of any yield maintenance charge or prepayment premium then due and owing under such Mortgage Loan;
Ninth, as a recovery of any late payment charges and default interest then due and owing under such Mortgage Loan;
Tenth, as a recovery of any assumption fees and Modification Fees then due and owing under such Mortgage Loan;
Eleventh, as a recovery of any other amounts then due and owing under such Mortgage Loan other than remaining unpaid principal (if both consent fees and Operating Advisor Consulting Fees are due and owing, first, allocated to consent fees and then, allocated to Operating Advisor Consulting Fees);
Twelfth, as a recovery of any remaining principal of such Mortgage Loan to the extent of its entire remaining unpaid principal balance; and
Thirteenth, in the case of an ARD Loan after the related Anticipated Repayment Date, any accrued and unpaid Excess Interest;
provided that, to the extent required under the REMIC provisions of the Code, payments or proceeds received (or receivable by exercise of the lender’s rights under the related Mortgage Loan documents) with respect to any partial release of a Mortgaged Property (including in connection with a condemnation) at a time when the loan-to-value ratio of the related Mortgage Loan or Serviced Whole Loan exceeds 125%, or would exceed 125% following any partial release (based solely on the value of real property and excluding personal property and going concern value, if any) must be collected and allocated to reduce the principal balance of the Mortgage Loan or Serviced Whole Loan in the manner permitted by such REMIC provisions.
“Accrued AB Loan Interest” means, with respect to any AB Modified Loan and any date of determination, accrued and unpaid interest that remains unpaid with respect to the junior note(s) of such AB Modified Loan.
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Collections by or on behalf of the issuing entity in respect of any REO Property (exclusive of the amounts to be allocated to the payment of the costs of operating, managing, leasing, maintaining and disposing of such REO Property and, if applicable, in the case of each Serviced Whole Loan, exclusive of any amounts payable to the holder of the related Companion Loan(s), as applicable, pursuant to the related Intercreditor Agreement) will be deemed to be allocated for purposes of collecting amounts due under the Mortgage Loan, pursuant to the PSA, in the following order of priority:
First, as a recovery of any unreimbursed Advances (including any Workout-Delayed Reimbursement Amount) with respect to the related Mortgage Loan and interest at the Reimbursement Rate on all Advances and, if applicable, unreimbursed and unpaid expenses of the issuing entity (including Special Servicing Fees, Liquidation Fees and Workout Fees previously paid by the issuing entity from general collections) with respect to the related Mortgage Loan;
Second, as a recovery of Nonrecoverable Advances and any interest on those Nonrecoverable Advances at the Reimbursement Rate, to the extent previously paid or reimbursed from principal collections on the Mortgage Loans (as described in the first proviso in the definition of Aggregate Principal Distribution Amount);
Third, to the extent not previously allocated pursuant to clause First, as a recovery of accrued and unpaid interest on such Mortgage Loan (exclusive of default interest and Excess Interest) to the extent of the excess of (i) accrued and unpaid interest on such Mortgage Loan at the related Mortgage Rate in effect from time to time through the end of the applicable mortgage interest accrual period, over (ii) the sum of (a)(x) the cumulative amount of the reductions (if any) in the amount of related P&I Advances for such Mortgage Loan that have occurred in connection with related Appraisal Reduction Amounts (to the extent collections have not been allocated as a recovery of accrued and unpaid interest pursuant to clause Fifth below or clause Fifth of the prior waterfall under this “—Application Priority of Mortgage Loan Collections or Whole Loan Collections” on earlier dates) or (y) with respect to any accrued and unpaid interest that was not advanced due to a determination that the related P&I Advance would be a Nonrecoverable Advance, the amount of interest that (absent such determination of nonrecoverability preventing such P&I Advance from being made) would not have been advanced because of the reductions in the amount of related P&I Advances for such Mortgage Loan that would have occurred in connection with related Appraisal Reduction Amounts, and (b) Accrued AB Loan Interest;
Fourth, to the extent not previously allocated pursuant to clause First, as a recovery of principal of such Mortgage Loan to the extent of its entire unpaid principal balance;
Fifth, as a recovery of (i) accrued and unpaid interest on such Mortgage Loan to the extent of the cumulative amount of the reductions (if any) in the amount of related P&I Advances for such Mortgage Loan that have occurred in connection with related Appraisal Reduction Amounts or would have occurred in connection with the related Appraisal Reduction Amounts but for such P&I Advance not having been made as a result of a determination that such P&I Advance would have been a Nonrecoverable Advance and (ii) Accrued AB Loan Interest (in each of clause (i) and (ii), to the extent collections have not been allocated as recovery of accrued and unpaid interest pursuant to this clause Fifth or clause Fifth of the prior waterfall under this “—Application Priority of Mortgage Loan Collections or Whole Loan Collections” on earlier dates);
Sixth, as a recovery of any yield maintenance charge or prepayment premium then due and owing under such Mortgage Loan;
Seventh, as a recovery of any late payment charges and default interest then due and owing under such Mortgage Loan;
Eighth, as a recovery of any assumption fees and Modification Fees then due and owing under such Mortgage Loan;
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Ninth, as a recovery of any other amounts then due and owing under such Mortgage Loan other than remaining unpaid principal (if both consent fees and Operating Advisor Consulting Fees are due and owing, first, allocated to consent fees and then, allocated to Operating Advisor Consulting Fees); and
Tenth, in the case of an ARD Loan after the related Anticipated Repayment Date, any accrued but unpaid Excess Interest.
Allocation of Yield Maintenance Charges and Prepayment Premiums
On any Distribution Date, prepayment premiums and yield maintenance charges collected in respect of the Mortgage Loans during the related Collection Period will be required to be distributed by the certificate administrator in the following manner: (a) to the holders of the Class A-1 through Class E certificates, the product of (1) a fraction, not greater than one, the numerator of which is the amount of principal distributed to such class of certificates on such Distribution Date and the denominator of which is the total amount of principal distributed to the holders of each class of the Principal Balance Certificates on such Distribution Date; (2) the Base Interest Fraction for the related principal prepayment and such class of certificates and (3) the Non-VRR Percentage of such prepayment premiums and yield maintenance charges, and (b) to the VRR Interest, the VRR Percentage of such prepayment premiums and yield maintenance charges.
Any yield maintenance charges or prepayment premiums collected during the related Collection Period remaining after such distributions described in the preceding paragraph (the “IO Group YM Distribution Amount”) will be allocated in the following manner:
(a) first, to the Class X-A certificates, in an amount equal to the product of (a) a fraction, the numerator of which is the aggregate amount of principal distribution to the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4, Class A-5 and Class A-M certificates on such Distribution Date and the denominator of which is the total Principal Distribution Amount in respect of such Distribution Date, multiplied by (b) the IO Group YM Distribution Amount;
(b) second, to the Class X-B certificates, in an amount equal to the product of (a) a fraction, the numerator of which is the amount of principal distribution to the Class B certificates on such Distribution Date and the denominator of which is the total Principal Distribution Amount in respect of such Distribution Date, multiplied by (b) the IO Group YM Distribution Amount; and
(c) third, to the Class X-D Certificates, the IO Group YM Distribution Amount remaining after such distribution to the holders of the Class X-A and Class X-B Certificates described in (a) and (b) above.
The “Base Interest Fraction” for any principal prepayment on any Mortgage Loan and for:
(A) any of the Class A-1 through Class E certificates with a Pass-Through Rate equal to either the WAC Rate or the WAC Rate less a specified rate, will be a fraction (not greater than one) (a) whose numerator is the greater of zero and the amount, if any, by which (i) the Pass-Through Rate on such class of certificates exceeds (ii) the yield rate (as provided by the master servicer) used in calculating the prepayment premium or yield maintenance charge, as applicable, with respect to such principal prepayment and (b) whose denominator is the amount, if any, by which (i) the Net Mortgage Rate on such Mortgage Loan during the related interest accrual period exceeds (ii) the yield rate (as provided by the master servicer) used in calculating the prepayment premium or yield maintenance charge, as applicable, with respect to such principal prepayment; provided, however, that if such yield rate is greater than or equal to the Net Mortgage Rate on such Mortgage Loan during the related interest accrual period, then the respective Base Interest Fraction will be zero; provided, further, that if such yield rate is greater than or equal to the Net Mortgage Rate on such Mortgage Loan during the related interest accrual period, but less than the Pass-Through Rate described in clause (a)(i) above, then the respective Base Interest Fraction will be one; and
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(B) any of the Class A-1 through Class E certificates with a Pass-Through Rate equal to a fixed per annum rate, will be a fraction (not greater than one) (a) whose numerator is the greater of zero and the amount, if any, by which (i) the Pass-Through Rate on such class of certificates exceeds (ii) the yield rate (as provided by the master servicer) used in calculating the prepayment premium or yield maintenance charge, as applicable, with respect to such principal prepayment and (b) whose denominator is the amount, if any, by which (i) the Mortgage Rate on such Mortgage Loan (without regard to any increase in the interest rate of any ARD Loan after the related Anticipated Repayment Date, and net of the Administrative Cost Rate) during the related interest accrual period multiplied by 365/360 exceeds (ii) the yield rate (as provided by the master servicer) used in calculating the prepayment premium or yield maintenance charge, as applicable, with respect to such principal prepayment; provided, however, that if such yield rate is greater than or equal to the amount set forth in clause (b)(i) above, then the respective Base Interest Fraction will be zero; provided, further, that if such yield rate is greater than or equal to the amount set forth in clause (b)(i) above, but less than the Pass-Through Rate described in clause (a)(i) above, then the respective Base Interest Fraction will be one.
The yield rate with respect to any prepaid Mortgage Loan will be equal to the yield rate stated in the related loan documents, or if none is stated, will be the yield rate which, when compounded monthly, is equivalent to the yield, on the U.S. Treasury primary issue with a maturity date closest to the maturity date or the related Anticipated Repayment Date, as applicable, for the prepaid Mortgage Loan. In the event that there are: (a) two or more U.S. Treasury issues with the same coupon, the issue with the lower yield will be selected and (b) two or more U.S. Treasury issues with maturity dates equally close to the maturity date or the related Anticipated Repayment Date, as applicable, for such prepaid Mortgage Loan, the issue with the earlier maturity date will be selected.
In the case of the Serviced Whole Loan, prepayment premiums or yield maintenance charges actually collected in respect of such Serviced Whole Loan will be allocated in the proportions described in the applicable intercreditor agreement. See “Description of the Mortgage Pool—The Whole Loans”.
For a description of yield maintenance charges, see “Description of the Mortgage Pool—Certain Terms of the Mortgage Loans” and “Certain Legal Aspects of Mortgage Loans—Default Interest and Limitations on Prepayments”.
Assumed Final Distribution Date; Rated Final Distribution Date
The “Assumed Final Distribution Date” with respect to any class of certificates is the Distribution Date on which the aggregate Certificate Balance or Notional Amount of that class of certificates would be reduced to zero based on the assumptions set forth below. The Assumed Final Distribution Date with respect to each class of Offered Certificates will in each case be as follows:
Class Designation |
Assumed Final Distribution Date | |
| Class A-1 | November 2026 | |
| Class A-2 | March 2027 | |
| Class A-SB | December 2031 | |
| Class A-4 | NAP – January 2032(1) | |
| Class A-5 | March 2032 | |
| Class X-A | March 2032 | |
| Class A-M | March 2032 | |
| Class B | March 2032 | |
| Class C | April 2032 |
(1) The range of Assumed Final Distribution Dates is based on the initial certificate balance of the Class A-4 certificates ranging from $0 to $110,716,000.
The Assumed Final Distribution Dates set forth above were calculated without regard to any delays in the collection of balloon payments and without regard to delinquencies, defaults or liquidations. Accordingly, in the event of defaults on the Mortgage Loans, the actual final Distribution Date for one or more classes of the Offered Certificates may be later, and could be substantially later, than the related Assumed Final Distribution Date(s).
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In addition, the Assumed Final Distribution Dates set forth above were calculated on the basis of a 0% CPR prepayment rate and the Modeling Assumptions. Since the rate of payment (including prepayments) of the Mortgage Loans may exceed the scheduled rate of payments, and could exceed the scheduled rate by a substantial amount, the actual final Distribution Date for one or more classes of the Offered Certificates may be earlier, and could be substantially earlier, than the related Assumed Final Distribution Date(s). The rate of payments (including prepayments) on the Mortgage Loans will depend on the characteristics of the Mortgage Loans, as well as on the prevailing level of interest rates and other economic factors, and we cannot assure you as to actual payment experience.
The “Rated Final Distribution Date” for each class of Offered Certificates will be the Distribution Date in April 2055. See “Ratings”.
Prepayment Interest Shortfalls
If a borrower prepays a Mortgage Loan or Serviced Whole Loan (with such prepayment allocated between the related Mortgage Loan and Serviced Companion Loan in accordance with the related Intercreditor Agreement) in whole or in part, after the due date but on or before the Determination Date in any calendar month, the amount of interest (net of related Servicing Fees, applicable servicing fees on any Serviced Companion Loan and any Excess Interest) accrued on such prepayment from such due date to, but not including, the date of prepayment (or any later date through which interest accrues) will, to the extent actually collected (without regard to any prepayment premium or yield maintenance charge actually collected) constitute a “Prepayment Interest Excess”. Conversely, if a borrower prepays a Mortgage Loan or Serviced Whole Loan (with such prepayment allocated between the related Mortgage Loan and Serviced Companion Loan in accordance with the related Intercreditor Agreement) in whole or in part after the Determination Date (or, with respect to each Mortgage Loan or Serviced Companion Loan, as applicable, with a due date occurring after the related Determination Date, the related Due Date) in any calendar month and does not pay interest on such prepayment through the following Due Date, then the shortfall in a full month’s interest (net of related Servicing Fees, applicable servicing fees on any Serviced Companion Loan and any Excess Interest) on such prepayment will constitute a “Prepayment Interest Shortfall”.
Prepayment Interest Shortfalls for each Distribution Date with respect to each AB Whole Loan will generally be allocated first, to the related Subordinate Companion Loans in accordance with the related Intercreditor Agreement and then, pro rata to the related Mortgage Loan and any related Pari Passu Companion Loan.
To the extent that the Prepayment Interest Excess for all Mortgage Loans (other than the Non-Serviced Mortgage Loans) or Serviced Companion Loans serviced by the master servicer exceeds the Compensating Interest Payment for all Mortgage Loans (other than the Non-Serviced Mortgage Loans) or Serviced Companion Loans serviced by the master servicer as of any Distribution Date, such excess amount (the “Net Prepayment Interest Excess”) will be payable to the master servicer as additional compensation.
The master servicer will be required to deliver to the certificate administrator for deposit in the Distribution Account (other than the portion of any Compensating Interest Payment described below that is allocable to a Serviced Companion Loan) on each Master Servicer Remittance Date, without any right of reimbursement thereafter, a cash payment (a “Compensating Interest Payment”) in an amount, with respect to each Serviced Mortgage Loan and any related Pari Passu Companion Loan, equal to the lesser of:
(i) the aggregate amount of Prepayment Interest Shortfalls incurred in connection with voluntary principal prepayments received in respect of the Mortgage Loans (other than the Non-Serviced Mortgage Loans) and any related Pari Passu Companion Loan (in each case other than a Specially Serviced Loan or a Mortgage Loan or any related Pari Passu Companion Loan on which the special servicer allowed a prepayment on a date other than the applicable Due Date) for the related Distribution Date, and
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(ii) the aggregate of (A) that portion of the master servicer’s Servicing Fees for the related Distribution Date that is, in the case of each Mortgage Loan, Pari Passu Companion Loan and REO Loan for which such Servicing Fees are being paid in such Collection Period, calculated at a rate of 0.00125% per annum, (B) all Prepayment Interest Excess received by the master servicer during such Collection Period with respect to the Mortgage Loans (and, so long as a Whole Loan is serviced under the PSA, any related Pari Passu Companion Loan) subject to such prepayment and (C) to the extent earned on principal prepayments, net investment earnings payable to the master servicer for such Collection Period received by the master servicer during such Collection Period with respect to the Mortgage Loan or any related Pari Passu Companion Loan, as applicable, subject to such prepayment. In no event will the rights of the Certificateholders to the offset of the aggregate Prepayment Interest Shortfalls be cumulative.
If a Prepayment Interest Shortfall occurs with respect to a Mortgage Loan or Serviced Whole Loan as a result of the master servicer failing to enforce the related Mortgage Loan or Serviced Whole Loan documents regarding principal prepayments (a “Prohibited Prepayment”) (other than (t) the Non-Serviced Mortgage Loans, (u) in accordance with the terms of the Mortgage Loan documents, (v) subsequent to a default under the related Mortgage Loan documents (provided that the master servicer reasonably believes that acceptance of such prepayment is consistent with the Servicing Standard) or if the Mortgage Loan or Serviced Whole Loan is a Specially Serviced Loan, (w) at the request or with the consent of the special servicer and so long as no Control Termination Event is continuing (other than with respect to any applicable Excluded Loan), the Directing Holder, (x) pursuant to applicable law or a court order or otherwise in such circumstances where the master servicer is required to accept such principal prepayment in accordance with the Servicing Standard, (y) in connection with the payment of any Insurance and Condemnation Proceeds unless the master servicer did not apply the proceeds thereof in accordance with the terms of the related loan documents and such failure causes the shortfall or (z) a previously Specially Serviced Loan with respect to which the special servicer has waived or amended the prepayment restriction such that the related borrower is not required to prepay on a Due Date or pay interest that would have accrued on the amount prepaid through and including the last day of the Interest Accrual Period occurring following the date of such prepayment), then for purposes of calculating the Compensating Interest Payment for the related Distribution Date, master servicer will pay, without regard to clause (ii) above, the aggregate amount of Prepayment Interest Shortfalls with respect to such Mortgage Loan or Serviced Whole Loan otherwise described in clause (i) above in connection with such Prohibited Prepayments.
Compensating Interest Payments with respect to the Serviced Whole Loans will be allocated among the related Mortgage Loan and the related Serviced Pari Passu Companion Loan, pro rata, in accordance with their respective principal amounts, and the master servicer will be required to pay the portion of such Compensating Interest Payments allocable to the related Serviced Pari Passu Companion Loan to the applicable master servicer under the related other pooling and servicing agreement.
Any Excess Prepayment Interest Shortfall allocated to the Mortgage Loans for any Distribution Date will, to the extent of the Non-VRR Percentage thereof, be allocated on that Distribution Date among each class of Non-VRR Certificates, pro rata in accordance with their respective Interest Accrual Amounts for that Distribution Date, with the remaining portion thereof being deemed allocated to the VRR Interest.
“Excess Prepayment Interest Shortfall” means, with respect to any Distribution Date, with respect to the Mortgage Loans, the aggregate of any Prepayment Interest Shortfalls resulting from any principal prepayments made on the Mortgage Loans to be included in the Available Funds for such Distribution Date that are not covered by the master servicer’s Compensating Interest Payment for such Distribution Date and the portion of the compensating interest payments allocable to any Non-Serviced Mortgage Loan to the extent received from the related Non-Serviced Master Servicer.
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Subordination; Allocation of Realized Losses
The rights of holders of the Subordinate Certificates to receive the Non-VRR Percentage of distributions of amounts collected or advanced on the Mortgage Loans will be subordinated, to the extent described in this prospectus, to the rights of holders of the Senior Certificates. In particular, the rights of the holders of the Subordinate Certificates to receive distributions of interest and principal, as applicable, will be subordinated to such rights of the holders of the Senior Certificates.
This subordination will be effected in two ways: (i) by the preferential right of the holders of a class of certificates to receive on any Distribution Date the amounts of interest and/or principal distributable to that class prior to any distribution being made on such Distribution Date in respect of any classes of certificates subordinate to that class (as described above under “—Distributions—Priority of Distributions”) and (ii) by the allocation of Realized Losses to classes of certificates that are subordinate to more senior classes, as described below.
No other form of credit support will be available for the benefit of the Offered Certificates.
Prior
to the Crossover Date, allocation of principal that is allocable to the Principal Balance Certificates on any Distribution Date
will be made as described under “—Distributions—Priority of Distributions” above. On or after the
Crossover Date, allocation of principal will be made to each class of Senior Principal Balance Certificates that are still outstanding,
pro rata, based upon their respective Certificate Balances, until their respective Certificate Balances have been reduced
to zero. See
“—Distributions—Priority of Distributions” above.
Allocation to the Senior Principal Balance Certificates, for so long as they are outstanding, of the entire Principal Distribution Amount for each Distribution Date will have the effect of reducing the aggregate Certificate Balance of the Senior Principal Balance Certificates at a proportionately faster rate than the rate at which the aggregate Stated Principal Balance of the pool of Mortgage Loans will decline. Therefore, as principal is distributed to the holders of the Senior Principal Balance Certificates, the percentage interest in the issuing entity evidenced by the Senior Principal Balance Certificates will be decreased (with a corresponding increase in the percentage interest in the issuing entity evidenced by the Subordinate Certificates), thereby increasing, relative to their respective Certificate Balances, the subordination afforded to the Senior Principal Balance Certificates by the Subordinate Certificates.
Following retirement of the Senior Principal Balance Certificates, the successive allocation on each Distribution Date of the remaining Principal Distribution Amount to the Class A-M, Class B, Class C, Class D, Class E, Class F, Class G and Class H certificates, in that order, for so long as they are outstanding, will provide a similar, but diminishing benefit to those certificates (other than to Class H certificates) as to the relative amount of subordination afforded by the outstanding classes of certificates with later sequential designations.
On each Distribution Date, immediately following the distributions to be made to the Certificateholders on that date, the certificate administrator will be required to calculate the Realized Loss and the VRR Realized Loss for such Distribution Date.
The “Realized Loss” with respect to the Mortgage Loans, with respect to any Distribution Date, is the amount, if any, by which (i) the aggregate Certificate Balance of the Principal Balance Certificates, after giving effect to distributions of principal on such Distribution Date, exceeds (ii) the product of (A) the Non-VRR Percentage and (B) the aggregate Stated Principal Balance of the Mortgage Loans in the Mortgage Pool (for purposes of this calculation, the aggregate Stated Principal Balance will not be reduced by the amount of principal payments received on the Mortgage Loans that were used to reimburse the master servicer or the trustee from general collections of principal on the Mortgage Loans for Workout-Delayed Reimbursement Amounts, to the extent those amounts are not otherwise determined to be Nonrecoverable Advances), including any REO Loans (but in each case, excluding any Companion Loan), as of the end of the last day of the related Collection Period. The certificate administrator will be required to allocate any Realized Losses among the respective classes of Principal Balance Certificates in the following order, until the Certificate Balance of each such class is reduced to zero:
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first, to the Class H certificates;
second, to the Class G certificates;
third, to the Class F certificates;
fourth, to the Class E certificates;
fifth, to the Class D certificates;
sixth, to the Class C certificates;
seventh, to the Class B certificates; and
eighth, to the Class A-M certificates.
Following the reduction of the Certificate Balances of all classes of Subordinate Certificates to zero, the certificate administrator will be required to allocate Realized Losses among the Senior Principal Balance Certificates, pro rata, based upon their respective Certificate Balances, until their respective Certificate Balances have been reduced to zero.
Realized Losses will not be allocated to the VRR Interest, the Class S certificates or the Class R certificates and will not be directly allocated to the Class X Certificates. However, the Notional Amounts of the classes of Class X Certificates will be reduced if the Certificate Balances of the related classes of Principal Balance Certificates are reduced by such Realized Losses. VRR Realized Losses, rather than Realized Losses, will be allocated to the VRR Interest. See “Credit Risk Retention—The VRR Interest—Material Terms of the VRR Interest—Allocation of VRR Realized Losses”.
In general, Realized Losses and VRR Realized Losses could result from the occurrence of: (1) losses and other shortfalls on or in respect of the Mortgage Loans, including as a result of defaults and delinquencies on the related Mortgage Loans, Nonrecoverable Advances made in respect of the Mortgage Loans, the payment to the special servicer of any compensation as described in “Pooling and Servicing Agreement—Servicing and Other Compensation and Payment of Expenses”, and the payment of interest on Advances and certain servicing expenses; and (2) certain unanticipated, non-Mortgage Loan specific expenses of the issuing entity, including certain reimbursements to the certificate administrator or trustee as described under “Transaction Parties—The Certificate Administrator” and “—The Trustee”, and certain federal, state and local taxes, and certain tax-related expenses, payable out of the issuing entity, as described under “Material Federal Income Tax Considerations”.
A class of certificates will be considered outstanding until its Certificate Balance or Notional Amount, as applicable, is reduced to zero, except that the Class S certificates will be considered outstanding so long as holders of such certificates are entitled to receive Excess Interest. However, notwithstanding a reduction of its Certificate Balance to zero, reimbursements of any previously allocated Realized Losses and VRR Realized Losses, as applicable, are required thereafter to be made to a class of Principal Balance Certificates and the VRR Interest, as applicable, in accordance with the payment priorities set forth in “—Distributions—Priority of Distributions” and “Credit Risk Retention—The VRR Interest” above.
Reports to Certificateholders; Certain Available Information
Certificate Administrator Reports
On each Distribution Date, the certificate administrator will be required to prepare and make available to each Certificateholder of record on the certificate administrator’s website a Distribution Date statement, based in part on the information delivered to it by the master servicer or special servicer, providing all information required under Regulation AB and in the form of Annex B relating to distributions made on that date for the relevant class and the recent status of the Mortgage Loans. The certificate administrator will include on each Distribution Date statement a statement that each Certificateholder may access such
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notices via the certificate administrator’s website and that each Certificateholder may register to receive electronic mail notifications when such notices are posted thereon.
In addition, the certificate administrator will include (to the extent it receives such information) (i) the identity of any Mortgage Loan permitting additional secured debt, identifying (A) the amount of any additional secured debt incurred during the related Collection Period, (B) the total debt service coverage ratio calculated on the basis of the Mortgage Loan and such additional secured debt and (C) the aggregate loan-to-value ratio calculated on the basis of the Mortgage Loan and the additional secured debt in each applicable Form 10-D filed on behalf of the issuing entity and (ii) the beginning and ending account balances for each of the Securitization Accounts (for the applicable period) in each Form 10-D filed on behalf of the issuing entity.
Within a reasonable period of time after the end of each calendar year, the certificate administrator is required to furnish to each person or entity who at any time during the calendar year was a holder of a certificate, a statement containing information (i) the amount of the distribution on each Distribution Date in reduction of the Certificate Balance of the certificates, and (ii) the amount of the distribution on each Distribution Date of the applicable Interest Accrual Amount, in each case, as to the applicable class, aggregated for the related calendar year or applicable partial year during which that person was a Certificateholder, together with any other information that the certificate administrator deems necessary or desirable, or that a Certificateholder or Certificate Owner reasonably requests, to enable Certificateholders to prepare their tax returns for that calendar year. This obligation of the certificate administrator will be deemed to have been satisfied to the extent that substantially comparable information will be provided by the certificate administrator pursuant to any requirements of the Code as from time to time are in force.
In addition, the certificate administrator will make available on its website (www.ctslink.com), to the extent received from the applicable person, on each Distribution Date to each Privileged Person the following reports (other than clause (1) below, the “CREFC® Reports”) prepared by the master servicer, the certificate administrator or the special servicer, as applicable, substantially in the form provided in the PSA, in the case of the Distribution Date statement (which form is subject to change) and as required under the PSA in the case of the CREFC® Reports and including substantially the following information:
| (1) | a report as of the close of business on the immediately preceding Determination Date, containing the information provided for in Annex B; |
| (2) | a Commercial Real Estate Finance Council (“CREFC®”) delinquent loan status report; |
| (3) | a CREFC® historical loan modification and corrected loan report; |
| (4) | a CREFC® advance recovery report; |
| (5) | a CREFC® total loan report; |
| (6) | a CREFC® operating statement analysis report; |
| (7) | a CREFC® comparative financial status report; |
| (8) | a CREFC® net operating income adjustment worksheet; |
| (9) | a CREFC® real estate owned status report; |
| (10) | a CREFC® servicer watch list; |
| (11) | a CREFC® loan level reserve and letter of credit report; |
| (12) | a CREFC® property file; |
| (13) | a CREFC® financial file; |
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| (14) | a CREFC® loan setup file; and |
| (15) | a CREFC® loan periodic update file. |
The master servicer or the special servicer, as applicable, may omit any information from these reports that the master servicer or the special servicer, as applicable, regards as confidential, so long as such information is not required to be disclosed pursuant to Item 1125 of Regulation AB. Subject to any potential liability for willful misconduct, bad faith or negligence as described under “Pooling and Servicing Agreement—Limitation on Liability; Indemnification”, none of the master servicer, the special servicer, the trustee or the certificate administrator will be responsible for the accuracy or completeness of any information supplied to it by a borrower, a mortgage loan seller or another party to the PSA or a party under a Non-Serviced PSA that is included in any reports, statements, materials or information prepared or provided by it. Some information will be made available to Certificateholders by electronic transmission as may be agreed upon between the depositor and the certificate administrator.
On or before each Master Servicer Remittance Date, the master servicer will deliver to the certificate administrator by electronic means:
| ● | a CREFC® property file; |
| ● | a CREFC® financial file; |
| ● | a CREFC® loan setup file (with respect to the first Master Servicer Remittance Date only); |
| ● | a CREFC® loan periodic update file; and |
| ● | a CREFC® Appraisal Reduction Amount template (if any Appraisal Reduction Amount has been calculated). |
No later than two (2) business days following each Distribution Date, the master servicer will deliver to the certificate administrator by electronic means a CREFC® Schedule AL File.
In addition, the master servicer (with respect to a Mortgage Loan that is not a Specially Serviced Loan) is required to prepare, or the special servicer (with respect to Specially Serviced Loans and REO Properties) is required to prepare and deliver to the master servicer, the following for each Mortgaged Property and REO Property:
| ● | Within 45 days after receipt of a quarterly operating statement, if any, commencing for the quarter ending June 30, 2022, a CREFC® operating statement analysis report (i) for Mortgage Loans secured by a single Mortgaged Property, prepared with respect to such Mortgaged Property and (ii) for Mortgage Loans secured by more than one Mortgaged Property, in the aggregate but only to the extent the related borrower is required by the Mortgage Loan documents to deliver and does deliver, or otherwise agrees to provide and does provide, that information, for the Mortgaged Property or REO Property as of the end of that calendar quarter (and the borrower provides sufficient information to report pursuant to CREFC® guidelines), provided, however, that any analysis or report with respect to the first calendar quarter of each year will not be required to the extent provided in the then current applicable CREFC® guidelines (it being understood that as of the date of this prospectus, the applicable CREFC® guidelines provide that such analysis or report with respect to the first calendar quarter (in each year) is not required) for a Mortgaged Property unless such Mortgaged Property is analyzed on a trailing 12 month basis, or if the related Serviced Mortgage Loan is on the CREFC® Servicer Watch List. |
| ● | Within 30 days after receipt by the special servicer (with respect to Specially Serviced Loans and REO Properties) or the master servicer (with respect to a Mortgage Loan that is not a Specially Serviced Loan) of any annual operating statements or rent rolls commencing for the calendar year ending December 31, 2022, a CREFC® net operating income adjustment worksheet, but only to the extent the related borrower is required by the mortgage to deliver and does deliver, or |
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otherwise agrees to provide and does provide, that information, presenting the computation made in accordance with the methodology described in the PSA to “normalize” the full year net operating income and debt service coverage numbers used by the master servicer to satisfy its reporting obligation described in clause (8) above.
Certificate Owners and any holder of a Serviced Companion Loan who are also Privileged Persons may also obtain access to any of the certificate administrator reports upon request and pursuant to the provisions of the PSA.
“Privileged Person” includes the depositor and its designees, the initial purchasers, the underwriters, the mortgage loan sellers, the master servicer, the special servicer, any Excluded Special Servicer, the trustee, the certificate administrator, any additional servicer designated by the master servicer or the special servicer, the operating advisor, any affiliate of the operating advisor designated by the operating advisor, the asset representations reviewer, any holder of a Companion Loan who provides an Investor Certification, any person (including the Directing Holder, a Risk Retention Consultation Party or a holder of the VRR Interest) who provides the certificate administrator with an Investor Certification and any nationally recognized statistical rating organization within the meaning of Section 3(a)(62) of the Exchange Act (“NRSRO”), including any Rating Agency, that delivers a NRSRO Certification to the certificate administrator, which Investor Certification and NRSRO Certification may be submitted electronically via the certificate administrator’s website; provided that in no event may a Borrower Party (other than a Borrower Party that is a Risk Retention Consultation Party or the special servicer) be entitled to receive (i) if such party is the Directing Holder or any Controlling Class Certificateholder (each such party, as applicable, an “Excluded Controlling Class Holder”), any Excluded Information via the certificate administrator’s website unless a loan-by-loan segregation is later performed by the certificate administrator, in which case such access will only be prohibited with respect to the related Excluded Controlling Class Loan and (ii) if such party is not the Directing Holder or any Controlling Class Certificateholder, any information other than the Distribution Date statement; provided, however, that, if the special servicer obtains knowledge that it is a Borrower Party, the special servicer will nevertheless be a Privileged Person; provided, further, however, that the special servicer will not directly or indirectly provide any information solely related to any Excluded Special Servicer Mortgage Loan (which may include any asset status reports, Final Asset Status Reports (or summaries thereof), and such other information as may be specified in the PSA pertaining to such Excluded Special Servicer Mortgage Loan) to the related Borrower Party, any of the special servicer’s employees or personnel or any of its affiliates involved in the management of any investment in the related Borrower Party or the related Mortgaged Property or, to its actual knowledge, any non-affiliate that holds a direct or indirect ownership interest in the related Borrower Party, and will maintain sufficient internal controls and appropriate policies and procedures in place in order to comply with those obligations; provided, further, however, that any Excluded Controlling Class Holder will be permitted to obtain, upon reasonable request in accordance with terms of the PSA, any Excluded Information relating to any Excluded Controlling Class Loan with respect to which such Excluded Controlling Class Holder is not a Borrower Party (if such Excluded Information is not otherwise available via the certificate administrator’s website) from the master servicer (with respect to non-Specially Serviced Loans) or the special servicer (with respect to Specially Serviced Loans), in each case, to the extent in the possession of the master servicer or the special servicer, as applicable.
“Risk Retention Consultation Party” will be each of (i) the party selected by DBNY (such party, the “VRR-A Risk Retention Consultation Party”) and (ii) the party selected by CREFI (such party, the “VRR-B Risk Retention Consultation Party”). The other parties to the PSA will be entitled to assume that the identity of any Risk Retention Consultation Party has not changed until such parties receive written notice of a replacement of such Risk Retention Consultation Party from DBNY (in the case of the VRR-A Risk Retention Consultation Party) or CREFI (in the case of the VRR-B Risk Retention Consultation Party). Notwithstanding the foregoing, no Risk Retention Consultation Party will have any consultation rights with respect to any related Excluded Loan. For the avoidance of doubt, there may be multiple Risk Retention Consultation Parties. The initial Risk Retention Consultation Parties with respect to the mortgage pool are expected to be DBNY and CREFI.
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“Borrower Party” means a borrower, a mortgagor, a manager of a Mortgaged Property, Restricted Mezzanine Holder or any Borrower Party Affiliate.
“Borrower Party Affiliate” means, with respect to a borrower, a mortgagor, a manager of a Mortgaged Property or a Restricted Mezzanine Holder, (a) any other person controlling or controlled by or under common control with such borrower, mortgagor, manager or Restricted Mezzanine Holder, as applicable, (b) solely with respect to the 10 largest Mortgage Loans by Stated Principal Balance, any other person owning, directly or indirectly, 25% or more of the beneficial interests in such borrower, mortgagor or manager, as applicable, or (c) any other person owning, directly or indirectly, 25% or more of the beneficial interests in such Restricted Mezzanine Holder. For the purposes of this definition, “control” when used with respect to any specified person means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
“Restricted Mezzanine Holder” means a holder of a related mezzanine loan that has been accelerated or as to which the mezzanine lender has initiated foreclosure or enforcement proceedings against the equity collateral pledged to secure such mezzanine loan.
“Excluded Controlling Class Loan” means a Mortgage Loan or Whole Loan with respect to which, as of any date of determination, the Directing Holder or any Controlling Class Certificateholder is a Borrower Party.
“Excluded Information” means, with respect to any Excluded Controlling Class Loan, any information solely related to such Excluded Controlling Class Loan and/or the related Mortgaged Properties, which may include any asset status reports, Final Asset Status Reports (or summaries thereof), and such other information as may be specified in the PSA pertaining to such Excluded Controlling Class Loan and/or the related Mortgaged Properties other than such information with respect to such Excluded Controlling Class Loan that is aggregated with information on other Mortgage Loans at a pool level.
“Excluded Loan” means (a) with respect to the Directing Holder, a Mortgage Loan or Whole Loan with respect to which, as of the applicable date of determination, the Directing Holder or (solely in the case of the Trust Directing Holder) the holder of the majority of the Controlling Class is a Borrower Party, or (b) with respect to any Risk Retention Consultation Party, a Mortgage Loan or Whole Loan with respect to which, as of the applicable date of determination, such Risk Retention Consultation Party or the person entitled to appoint the Risk Retention Consultation Party is a Borrower Party. For the avoidance of doubt, any Excluded Loan as to either the Trust Directing Holder or any holder of the majority of the Controlling Class is also an Excluded Controlling Class Loan.
“Investor Certification” means a certificate (which may be in electronic form), substantially in the form attached to the PSA or in the form of an electronic certification on the certificate administrator’s website (which may be a “click-through confirmation”), representing (i) that such person executing the certificate is a Certificateholder, the Directing Holder or a Risk Retention Consultation Party (in each case, to the extent such person is not a Certificateholder), a beneficial owner of a certificate, a Companion Loan Holder or a prospective purchaser of a certificate (or any investment advisor or manager or other representative of the foregoing), (ii) that either (a) such person is a Risk Retention Consultation Party or is a person who is not a Borrower Party, in which case such person will have access to all the reports and information made available to Certificateholders via the certificate administrator’s website under the PSA, or (b) such person is a Borrower Party, in which case (1) if such person is the Directing Holder, a Controlling Class Certificateholder or a Risk Retention Consultation Party, such person will have access to all the reports and information made available to Certificateholders via the certificate administrator’s website under the PSA other than any Excluded Information as set forth in the PSA or (2) if such person is not the Directing Holder, a Controlling Class Certificateholder or a Risk Retention Consultation Party, in which case such person will only receive access to the Distribution Date statements prepared by the certificate administrator, (iii) that such person has received a copy of the final prospectus and (iv) such person agrees to keep any Privileged Information confidential and will not violate any securities laws; provided, however, that any Excluded Controlling Class Holder (i) will be permitted to obtain, upon request in accordance with terms of PSA, any Excluded Information relating to any Excluded Controlling
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Class Loan with respect to which such Excluded Controlling Class Holder is not a Borrower Party (if such Excluded Information is not otherwise available via the certificate administrator’s website on account of it constituting Excluded Information) from the master servicer (with respect to non-Specially Serviced Loans) or the special servicer (with respect to Specially Serviced Loans), in each case, to the extent in the possession of the master servicer or the special servicer, as applicable and (ii) will be considered a Privileged Person for all other purposes, except with respect to its ability to obtain information with respect to any related Excluded Controlling Class Loan.
A “Certificateholder” is the person in whose name a certificate (including the VRR Interest) is registered in the certificate register or any beneficial owner thereof; provided, however, that solely for the purposes of giving any consent, approval, waiver or taking any action pursuant to the PSA, any certificate (including the VRR Interest) registered in the name of or beneficially owned by (i) the master servicer, the special servicer (including, for the avoidance of doubt, any Excluded Special Servicer), the trustee, the certificate administrator, the depositor, any mortgage loan seller or any affiliate of any of such persons or (ii) any Borrower Party, in each case will be deemed not to be outstanding (provided that notwithstanding the foregoing, any Controlling Class certificates owned by an Excluded Controlling Class Holder will not be deemed to be outstanding as to such Excluded Controlling Class Holder solely with respect to any related Excluded Controlling Class Loan; provided, further, that any Controlling Class certificates owned by the special servicer or an affiliate thereof will not be deemed to be outstanding as to the special servicer or such affiliate solely with respect to any related Excluded Special Servicer Mortgage Loan), and the Voting Rights to which it is entitled will not be taken into account in determining whether the requisite percentage of Voting Rights necessary to effect any such consent, approval, waiver or take any such action has been obtained; provided, however, that the foregoing restrictions will not apply in the case of the master servicer, the special servicer (including, for the avoidance of doubt, any Excluded Special Servicer), the trustee, the certificate administrator, the depositor, any mortgage loan seller or any affiliate of any of such persons unless such consent, approval or waiver sought from such party would in any way increase its compensation or limit its obligations in the named capacities under the PSA or waive a Servicer Termination Event or trigger an Asset Review with respect to a Mortgage Loan; provided, further, that so long as there is no Servicer Termination Event with respect to the master servicer or the special servicer, the master servicer and the special servicer or such affiliate of either will be entitled to exercise such Voting Rights with respect to any issue which could reasonably be believed to adversely affect such party’s compensation or increase its obligations or liabilities under the PSA; and provided, further, that such restrictions will not apply to (i) the exercise of the special servicer’s, the master servicer’s or any mortgage loan seller’s rights, if any, or any of their affiliates as a member of the Controlling Class or (ii) any affiliate of the depositor, the master servicer, the special servicer, the trustee or the certificate administrator that has provided an Investor Certification in which it has certified as to the existence of certain policies and procedures restricting the flow of information between it and the depositor, the master servicer, the special servicer, the trustee or the certificate administrator, as applicable.
“NRSRO Certification” means a certification (a) executed by an NRSRO or (b) provided electronically and executed by such NRSRO by means of a “click-through” confirmation on the 17g-5 Information Provider’s website in favor of the 17g-5 Information Provider that states that such NRSRO is a Rating Agency as such term is defined in the PSA or that such NRSRO has provided the depositor with the appropriate certifications pursuant to paragraph (e) of Rule 17g-5 under the Exchange Act (“Rule 17g-5”), that such NRSRO has access to the depositor’s 17g-5 website, and that such NRSRO will keep such information confidential except to the extent such information has been made available to the general public.
Certain information concerning the Mortgage Loans and the certificates, including the Distribution Date statements, CREFC® reports and supplemental notices with respect to such Distribution Date statements and CREFC® reports, may be provided by the certificate administrator at the direction of the depositor to certain market data providers, such as BlackRock Financial Management, Inc., Moody’s Analytics, Bloomberg Financial Markets, L.P., RealINSIGHT, CMBS.com, Inc., Trepp, LLC, Intex Solutions, Inc., Interactive Data Corporation, Markit LLC, Thomson Reuters Corporation and KBRA Analytics, LLC, pursuant to the terms of the PSA.
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Upon the reasonable request of any Certificateholder that has delivered an Investor Certification, the master servicer may provide (or forward electronically) at the expense of such Certificateholder copies of any appraisals, operating statements, rent rolls and financial statements obtained by the master servicer; provided that in connection with such request, the master servicer may require a written confirmation executed by the requesting person substantially in such form as may be reasonably acceptable to the master servicer, generally to the effect that such person is a Certificateholder or a beneficial holder of book-entry certificates (or an investment advisor for a Certificateholder or a beneficial holder of book-entry certificates) and a Privileged Person and will keep such information confidential and will use such information only for the purpose of analyzing asset performance and evaluating any continuing rights the Certificateholder may have under the PSA. Certificateholders will not, however, be given access to or be permitted to request copies of, any Mortgage Files or Diligence Files.
Information Available Electronically
The certificate administrator will make available to any Privileged Person via the certificate administrator’s website (and will make available to the general public this prospectus, Distribution Date statements, the PSA, the MLPAs and the SEC EDGAR filings referred to below):
| ● | the following “deal documents”: |
| ● | this prospectus; |
| ● | the PSA, each sub-servicing agreement delivered to the certificate administrator from and after the closing date, if any, and the MLPAs and any amendments and exhibits to those agreements; and |
| ● | the CREFC® loan setup file delivered to the certificate administrator by the master servicer; |
| ● | the following “SEC EDGAR filings”: |
| ● | any reports on Forms 10-D, 10-K, 8-K and ABS-EE that have been filed by the certificate administrator with respect to the issuing entity through the SEC’s Electronic Data Gathering and Retrieval (EDGAR) system; |
| ● | the following documents, which will be made available under a tab or heading designated “periodic reports”: |
| ● | the Distribution Date statements; |
| ● | the CREFC® bond level files; |
| ● | the CREFC® collateral summary files; |
| ● | the CREFC® Reports, other than the CREFC® loan setup file and the CREFC® special servicer loan file (provided that they are received by the certificate administrator); and |
| ● | any Operating Advisor Annual Reports; |
| ● | the following documents, which will be made available under a tab or heading designated “additional documents”: |
| ● | the summary of any Final Asset Status Report as provided by the special servicer; |
| ● | any property inspection reports, any environmental reports and appraisals delivered to the certificate administrator in electronic format; |
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| ● | the following documents, which will be made available under a tab or heading designated “special notices”: |
| ● | notice of any release based on an environmental release under the PSA; |
| ● | notice of any waiver, modification or amendment of any term of any Mortgage Loan; |
| ● | notice of final payment on the certificates; |
| ● | all notices of the occurrence of any Servicer Termination Event received by the certificate administrator; |
| ● | any notice of resignation or termination of the master servicer or special servicer; |
| ● | notice of resignation of the trustee or the certificate administrator, and notice of the acceptance of appointment by the successor trustee or the successor certificate administrator, as applicable; |
| ● | any notice of any request by requisite percentage of Certificateholders for a vote to terminate the special servicer, the operating advisor or the asset representations reviewer; |
| ● | any notice to Certificateholders of the operating advisor’s recommendation to replace the special servicer and the related report prepared by the operating advisor in connection with such recommendation; |
| ● | notice of resignation or termination of the operating advisor or the asset representations reviewer and notice of the acceptance of appointment by the successor operating advisor or the successor asset representations reviewer; |
| ● | notice of the certificate administrator’s determination that an Asset Review Trigger has occurred and a copy of any Asset Review Report Summary received by the certificate administrator; |
| ● | officer’s certificates supporting any determination that any Advance was (or, if made, would be) a Nonrecoverable Advance; |
| ● | any notice of the termination of the issuing entity; |
| ● | any notice that a Control Termination Event has occurred or is terminated or that a Consultation Termination Event has occurred; |
| ● | any notice of the occurrence of an Operating Advisor Termination Event; |
| ● | any notice of the occurrence of an Asset Representations Reviewer Termination Event; |
| ● | any Proposed Course of Action Notice; |
| ● | any assessment of compliance delivered to the certificate administrator; |
| ● | any accountants’ attestation reports delivered to the certificate administrator; |
| ● | any “special notices” requested by a Certificateholder to be posted on the certificate administrator’s website described under “—Certificateholder Communication” below; |
| ● | any notice or documents provided to the certificate administrator by the depositor or the master servicer directing the certificate administrator to post to the “special notices” tab; |
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| ● | the “Investor Q&A Forum”; |
| ● | solely to Certificateholders and Certificate Owners that are Privileged Persons, the “Investor Registry”; and |
| ● | the “U.S. Risk Retention Special Notices” tab. |
provided that with respect to a Control Termination Event or a Consultation Termination Event deemed to exist due solely to the existence of an Excluded Loan, the certificate administrator will only be required to make available such notice of the occurrence of a Control Termination Event or the notice of the occurrence of a Consultation Termination Event to the extent the certificate administrator has been notified of such Excluded Loan.
Notwithstanding the description set forth above, for purposes of obtaining information or access to the certificate administrator’s website, all Excluded Information will be made available under one separate tab or heading rather than under the headings described above in the preceding paragraph.
Notwithstanding the foregoing, if the Directing Holder or any Controlling Class Certificateholder, as applicable, is an Excluded Controlling Class Holder, such Excluded Controlling Class Holder is required to promptly notify each of the master servicer, the special servicer, the operating advisor, the trustee and the certificate administrator pursuant to the PSA and provide a new Investor Certification pursuant to the PSA and will not be entitled to access any Excluded Information (unless a loan-by-loan segregation is later performed by the certificate administrator in which case such access will only be prohibited with respect to the related Excluded Controlling Class Loan(s)) made available on the certificate administrator’s website for so long as it is an Excluded Controlling Class Holder. The PSA will require each Excluded Controlling Class Holder in such new Investor Certification to certify that it acknowledges and agrees that it is prohibited from accessing and reviewing (and it agrees not to access and review) any Excluded Information. In addition, if the Directing Holder or any Controlling Class Certificateholder is not an Excluded Controlling Class Holder, such person will certify and agree that they will not share any Excluded Information with any Excluded Controlling Class Holder.
Notwithstanding the foregoing, nothing set forth in the PSA will prohibit the Directing Holder or any Controlling Class Certificateholder from receiving, requesting or reviewing any Excluded Information relating to any Excluded Controlling Class Loan with respect to which the Directing Holder or such Controlling Class Certificateholder is not a Borrower Party and, if such Excluded Information is not available via the certificate administrator’s website, such Directing Holder or Controlling Class Certificateholder that is not a Borrower Party with respect to the related Excluded Controlling Class Loan will be permitted to obtain such information upon reasonable request in accordance with terms of the PSA and the master servicer and the special servicer, as applicable, may require and rely on such certifications prior to releasing any such information.
Any reports on Form 10-D filed by the certificate administrator will contain (i) the information required by Rule 15Ga-1(a) concerning all Mortgage Loans of the issuing entity that were the subject of a demand to repurchase or replace due to a breach of one or more representations and warranties, (ii) a reference to the most recent Form ABS-15G filed by the depositor and the mortgage loan sellers, if applicable, and the SEC’s assigned “Central Index Key” for each such filer, and (iii) incorporate by reference the Form ABS-EE filing for the related reporting period (which Form ABS-EE disclosures will be filed at the time of each filing of the applicable report on Form 10-D with respect to each Mortgage Loan that was part of the Mortgage Pool during any portion of the related reporting period).
The certificate administrator will not make any representation or warranty as to the accuracy or completeness of any report, document or other information made available on the certificate administrator’s website or its filing of such information pursuant to the PSA, including, but not limited to, filing via EDGAR, and will assume no responsibility for any such report, document or other information, other than with respect to such reports, documents or other information prepared by the certificate administrator. In addition, the certificate administrator may disclaim responsibility for any information distributed by it or filed by it, as applicable, for which it is not the original source.
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In connection with providing access to the certificate administrator’s website (other than with respect to access provided to the general public in accordance with the PSA), the certificate administrator may require registration and the acceptance of a disclaimer, including an agreement to keep certain nonpublic information made available on the website confidential, as required under the PSA. The certificate administrator will not be liable for the dissemination of information in accordance therewith.
The certificate administrator will make the “Investor Q&A Forum” available to Privileged Persons via the certificate administrator’s website under a tab or heading designated “Investor Q&A Forum”, where (i) Certificateholders and beneficial owners that are Privileged Persons may submit inquiries to (a) the certificate administrator relating to the Distribution Date statements, (b) the master servicer or the special servicer relating to servicing reports, the Mortgage Loans (excluding a Non-Serviced Mortgage Loan) or the related Mortgaged Properties or (c) the operating advisor relating to annual or other reports prepared by the operating advisor or actions by the special servicer referenced in such reports, and (ii) Privileged Persons may view previously submitted inquiries and related answers. The certificate administrator will forward such inquiries to the appropriate person and, in the case of an inquiry relating to a Non-Serviced Mortgage Loan, to the applicable party under the related Non-Serviced PSA. The certificate administrator, the master servicer, the special servicer or the operating advisor, as applicable, will be required to answer each inquiry, unless such party determines (i) the question is beyond the scope of the topics detailed above, (ii) that answering the inquiry would not be in the best interests of the issuing entity and/or the Certificateholders, (iii) that answering the inquiry would be in violation of applicable law, the PSA (including requirements in respect of non-disclosure of Privileged Information) or the Mortgage Loan documents, (iv) that answering the inquiry would materially increase the duties of, or result in significant additional cost or expense to, the certificate administrator, the master servicer, the special servicer or the operating advisor, as applicable, (v) that answering the inquiry would require the disclosure of Privileged Information (subject to the Privileged Information Exception), (vi) that answering the inquiry would or is reasonably expected to result in a waiver of an attorney-client privilege or the disclosure of attorney work product or (vii) that answering the inquiry is otherwise, for any reason, not advisable. In addition, no party will post or otherwise disclose any direct communications with the Directing Holder or a Risk Retention Consultation Party (in its capacity as a Risk Retention Consultation Party) as part of its responses to any inquiries. In the case of an inquiry relating to a Non-Serviced Mortgage Loan, the certificate administrator is required to make reasonable efforts to obtain an answer from the applicable party under the related Non-Serviced PSA; provided that the certificate administrator will not be responsible for the content of such answer, or any delay or failure to obtain such answer. The certificate administrator will be required to post the inquiries and related answers, if any, on the Investor Q&A Forum, subject to and in accordance with the PSA. The Investor Q&A Forum may not reflect questions, answers and other communications that are not submitted through the certificate administrator’s website. Answers posted on the Investor Q&A Forum will be attributable only to the respondent, and will not be deemed to be answers from any of the depositor, the underwriters or any of their respective affiliates. None of the underwriters, depositor, any of their respective affiliates or any other person will certify as to the accuracy of any of the information posted in the Investor Q&A Forum and no such person will have any responsibility or liability for the content of any such information.
The certificate administrator will make the “Investor Registry” available to any Certificateholder and beneficial owner that is a Privileged Person via the certificate administrator’s website. Certificateholders and beneficial owners may register on a voluntary basis for the “Investor Registry” and obtain contact information for any other Certificateholder or beneficial owner that has also registered, provided that they comply with certain requirements as provided for in the PSA.
The certificate administrator’s internet website will initially be located at “www.ctslink.com”. Access will be provided by the certificate administrator to such persons upon receipt by the certificate administrator from such person of an Investor Certification or NRSRO Certification in the form(s) attached to the PSA, which form(s) will also be located on and may be submitted electronically via the certificate administrator’s internet website. The parties to the PSA will not be required to provide that certification. In connection with providing access to the certificate administrator’s internet website, the certificate administrator may require registration and the acceptance of a disclaimer. The certificate administrator will not be liable for the dissemination of information in accordance with the terms of the PSA. The
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certificate administrator will make no representation or warranty as to the accuracy or completeness of such documents and will assume no responsibility for them. In addition, the certificate administrator may disclaim responsibility for any information distributed by the certificate administrator for which it is not the original source. Assistance in using the certificate administrator’s internet website can be obtained by calling the certificate administrator’s customer service desk at 866-846-4526.
The certificate administrator is responsible for the preparation of tax returns on behalf of the issuing entity and the preparation of Distribution Reports on Form 10-D (based on information included in each monthly Distribution Date statements and other information provided by other transaction parties) and Annual Reports on Form 10-K and certain other reports on Form 8-K that are required to be filed with the SEC on behalf of the issuing entity.
“17g-5 Information Provider” means the certificate administrator.
The PSA will require the master servicer, subject to certain restrictions set forth in the PSA, to provide certain of the reports or, in the case of the master servicer and the Controlling Class Certificateholder, access to the reports available as set forth above, as well as certain other information received by the master servicer, to any Privileged Person so identified by a Certificate Owner or an underwriter, that requests reports or information. However, the master servicer will be permitted to require payment of a sum sufficient to cover the reasonable costs and expenses of providing copies of these reports or information (which such amounts in any event are not reimbursable as additional trust fund expenses). Except as otherwise set forth in this paragraph, until the time definitive certificates are issued, notices and statements required to be mailed to holders of certificates will be available to Certificate Owners of certificates only to the extent they are forwarded by or otherwise available through DTC and its Participants. Conveyance of notices and other communications by DTC to Participants, and by Participants to Certificate Owners, will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Except as otherwise set forth in this paragraph, the master servicer, the special servicer, the trustee, the certificate administrator and the depositor are required to recognize as Certificateholders only those persons in whose names the certificates are registered on the books and records of the certificate registrar. The initial registered holder of the certificates (other than the VRR Interest) will be Cede & Co., as nominee for DTC.
Voting Rights
At all times during the term of the PSA, the voting rights for the certificates (the “Voting Rights”) will be allocated among the respective classes of Certificateholders as follows:
(1) 2% in the case of the Class X-A, Class X-B, Class X-D, Class X-F, Class X-G and Class X-H certificates, allocated pro rata, based upon their respective Notional Amounts as of the date of determination, and
(2) in the case of any Principal Balance Certificates and the VRR Interest, a percentage equal to the product of 98% and a fraction, the numerator of which is equal to the aggregate Certificate Balance (and solely in connection with certain votes relating to the replacement of the special servicer as described in this prospectus, taking into account any notional reduction in the Certificate Balance for Appraisal Reduction Amounts allocated to the certificates) of the class, in each case, determined as of the prior Distribution Date, and the denominator of which is equal to the aggregate Certificate Balance (and solely in connection with certain votes relating to the replacement of the special servicer as described in this prospectus, taking into account any notional reduction in the Certificate Balance for Appraisal Reduction Amounts allocated to the certificates) of the Principal Balance Certificates and the VRR Interest, each determined as of the prior Distribution Date.
The Voting Rights of any class of certificates are required to be allocated among Certificateholders of such class in proportion to their respective percentage interests.
Neither the Class S certificates nor Class R certificates will be entitled to any Voting Rights.
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Delivery, Form, Transfer and Denomination
| Denomination |
The Offered Certificates (other than the Class X Certificates) will be issued, maintained and transferred only in minimum denominations of $10,000, and in integral multiples of $1 in excess of $10,000. The Class X Certificates will be issued, maintained and transferred only in minimum denominations of authorized initial Notional Amounts of not less than $100,000 and in integral multiples of $1 in excess of $100,000.
Book-Entry Registration
The Offered Certificates will initially be represented by one or more global certificates for each such class registered in the name of a nominee of The Depository Trust Company (“DTC”). The depositor has been informed by DTC that DTC’s nominee will be Cede & Co. No holder of an Offered Certificate will be entitled to receive a certificate issued in fully registered, certificated form (each, a “Definitive Certificate”) representing its interest in such class, except under the limited circumstances described under “—Definitive Certificates” below. Unless and until Definitive Certificates are issued, all references to actions by holders of the Offered Certificates will refer to actions taken by DTC upon instructions received from holders of Offered Certificates through its participating organizations (together with Clearstream Banking, Luxembourg (“Clearstream”) and Euroclear Bank, as operator of the Euroclear System, in Europe (“Euroclear”) participating organizations, the “Participants”), and all references in this prospectus to payments, notices, reports, statements and other information to holders of Offered Certificates will refer to payments, notices, reports and statements to DTC or Cede & Co., as the registered holder of the Offered Certificates, for distribution to holders of Offered Certificates through its Participants in accordance with DTC procedures; provided, however, that to the extent that the party to the PSA responsible for distributing any report, statement or other information has been provided in writing with the name of the Certificate Owner of such an Offered Certificate (or the prospective transferee of such Certificate Owner), such report, statement or other information will be provided to such Certificate Owner (or prospective transferee).
Until Definitive Certificates are issued in respect of the Offered Certificates, interests in the Offered Certificates will be transferred on the book-entry records of DTC and its Participants. The certificate administrator will initially serve as certificate registrar for purposes of recording and otherwise providing for the registration of the Offered Certificates.
Holders of Offered Certificates may hold their certificates through DTC (in the United States) or Clearstream or Euroclear (in Europe) if they are Participants of such system, or indirectly through organizations that are participants in such systems. Clearstream and Euroclear will hold omnibus positions on behalf of the Clearstream Participants and the Euroclear Participants, respectively, through customers’ securities accounts in Clearstream’s and Euroclear’s names on the books of their respective depositaries (collectively, the “Depositaries”), which in turn will hold such positions in customers’ securities accounts in the Depositaries’ names on the books of DTC. DTC is a limited purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code and a “clearing agency” registered pursuant to Section 17A of the Exchange Act. DTC was created to hold securities for its Participants and to facilitate the clearance and settlement of securities transactions between Participants through electronic computerized book-entries, thereby eliminating the need for physical movement of certificates. Participants (“DTC Participants”) include securities brokers and dealers, banks, trust companies and clearing corporations. Indirect access to the DTC system also is available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (“Indirect Participants”).
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Transfers between DTC Participants will occur in accordance with DTC rules. Transfers between Clearstream Participants and Euroclear Participants will occur in accordance with the applicable rules and operating procedures of Clearstream and Euroclear.
Cross-market transfers between persons holding directly or indirectly through DTC, on the one hand, and directly through Clearstream Participants or Euroclear Participants, on the other, will be effected in DTC in accordance with DTC rules on behalf of the relevant European international clearing system by its Depositary; however, such cross-market transactions will require delivery of instructions to the relevant European international clearing system by the counterparty in such system in accordance with its rules and procedures and within its established deadlines (European time). The relevant European international clearing system will, if the transaction meets its settlement requirements, deliver instructions to its Depositary to take action to effect final settlement on its behalf by delivering or receiving securities in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Clearstream Participants and Euroclear Participants may not deliver instructions directly to the Depositaries.
Because of time-zone differences, credits of securities in Clearstream or Euroclear as a result of a transaction with a DTC Participant will be made during the subsequent securities settlement processing, dated the business day following the DTC settlement date, and such credits or any transactions in such securities settled during such processing will be reported to the relevant Clearstream Participant or Euroclear Participant on such business day. Cash received in Clearstream or Euroclear as a result of sales of securities by or through a Clearstream Participant or a Euroclear Participant to a DTC Participant will be received with value on the DTC settlement date but will be available in the relevant Clearstream or Euroclear cash account only as of the business day following settlement in DTC.
The holders of Offered Certificates that are not Participants or Indirect Participants but desire to purchase, sell or otherwise transfer ownership of, or other interests in, such Offered Certificates may do so only through Participants and Indirect Participants. In addition, holders of Offered Certificates in global form (“Certificate Owners”) will receive all distributions of principal and interest through the Participants who in turn will receive them from DTC. Under a book-entry format, holders of such Offered Certificates may experience some delay in their receipt of payments, since such payments will be forwarded by the certificate administrator to Cede & Co., as nominee for DTC. DTC will forward such payments to its Participants, which thereafter will forward them to Indirect Participants or the applicable Certificate Owners. Certificate Owners will not be recognized by the trustee, the certificate administrator, the certificate registrar, the operating advisor, the special servicer or the master servicer as holders of record of certificates and Certificate Owners will be permitted to receive information furnished to Certificateholders and to exercise the rights of Certificateholders only indirectly through DTC and its Participants and Indirect Participants, except that Certificate Owners will be entitled to receive or have access to notices and information and to exercise certain rights as holders of beneficial interests in the certificates through the certificate administrator and the trustee to the extent described in “Description of the Certificates—Reports to Certificateholders; Certain Available Information”, “—Certificateholder Communication” and “—List of Certificateholders” and “Pooling and Servicing Agreement—The Operating Advisor”, “—The Asset Representations Reviewer”, “—Replacement of the Special Servicer Without Cause”, “—Limitation on Rights of Certificateholders to Institute a Proceeding”, “—Termination; Retirement of Certificates” and “—Resignation and Removal of the Trustee and the Certificate Administrator”.
Under the rules, regulations and procedures creating and affecting DTC and its operations (the “DTC Rules”), DTC is required to make book-entry transfers of Offered Certificates in global form among Participants on whose behalf it acts with respect to such Offered Certificates and to receive and transmit distributions of principal of, and interest on, such Offered Certificates. Participants and Indirect Participants with which the Certificate Owners have accounts with respect to the Offered Certificates similarly are required to make book-entry transfers and receive and transmit such payments on behalf of their respective Certificate Owners. Accordingly, although the Certificate Owners will not possess the Offered Certificates, the DTC Rules provide a mechanism by which Certificate Owners will receive payments on Offered Certificates and will be able to transfer their interest.
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Because DTC can only act on behalf of Participants, who in turn act on behalf of Indirect Participants and certain banks, the ability of a holder of Offered Certificates in global form to pledge such Offered Certificates to persons or entities that do not participate in the DTC system, or to otherwise act with respect to such Offered Certificates, may be limited due to the lack of a physical certificate for such Offered Certificates.
DTC has advised the depositor that it will take any action permitted to be taken by a holder of an Offered Certificate under the PSA only at the direction of one or more Participants to whose accounts with DTC such certificate is credited. DTC may take conflicting actions with respect to other undivided interests to the extent that such actions are taken on behalf of Participants whose holdings include such undivided interests.
Clearstream is incorporated under the laws of Luxembourg and is a global securities settlement clearing house. Clearstream holds securities for its participating organizations (“Clearstream Participants”) and facilitates the clearance and settlement of securities transactions between Clearstream Participants through electronic book-entry changes in accounts of Clearstream Participants, thereby eliminating the need for physical movement of certificates. Transactions may be settled in Clearstream in numerous currencies, including United States dollars. Clearstream provides to its Clearstream Participants, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Clearstream interfaces with domestic markets in several countries. Clearstream is regulated as a bank by the Luxembourg Monetary Institute. Clearstream Participants are recognized financial institutions around the world, including underwriters, securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations and may include the underwriters. Indirect access to Clearstream is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Clearstream Participant, either directly or indirectly.
Euroclear was created in 1968 to hold securities for participants of the Euroclear system (“Euroclear Participants”) and to clear and settle transactions between Euroclear Participants through simultaneous electronic book-entry delivery against payment, thereby eliminating the need for physical movement of certificates and any risk from lack of simultaneous transfers of securities and cash. Transactions may now be settled in any of numerous currencies, including United States dollars. The Euroclear system includes various other services, including securities lending and borrowing and interfaces with domestic markets in several countries generally similar to the arrangements for cross-market transfers with DTC described above. Euroclear is operated by Euroclear Bank S.A./N.V. (the “Euroclear Operator”). All operations are conducted by the Euroclear Operator, and all Euroclear securities clearance accounts and Euroclear cash accounts are accounts with the Euroclear Operator. Euroclear Participants include banks (including central banks), securities brokers and dealers and other professional financial intermediaries and may include the underwriters. Indirect access to the Euroclear system is also available to other firms that clear through or maintain a custodial relationship with a Euroclear Participant, either directly or indirectly.
Securities clearance accounts and cash accounts with the Euroclear Operator are governed by the Terms and Conditions Governing Use of Euroclear and the related operating procedures of the Euroclear System and applicable Belgian law (collectively, the “Terms and Conditions”). The Terms and Conditions govern transfers of securities and cash within the Euroclear system, withdrawal of securities and cash from the Euroclear system, and receipts of payments with respect to securities in the Euroclear system. All securities in the Euroclear system are held on a fungible basis without attribution of specific certificates to specific securities clearance accounts. The Euroclear Operator acts under the Terms and Conditions only on behalf of Euroclear Participants and has no record of or relationship with persons holding through Euroclear Participants.
Although DTC, Euroclear and Clearstream have implemented the foregoing procedures in order to facilitate transfers of interests in book-entry securities among Participants of DTC, Euroclear and Clearstream, they are under no obligation to perform or to continue to comply with such procedures, and such procedures may be discontinued at any time. None of the depositor, the trustee, the certificate administrator, the master servicer, the special servicer or the underwriters will have any responsibility for
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the performance by DTC, Euroclear or Clearstream or their respective direct or indirect Participants of their respective obligations under the rules and procedures governing their operations.
Definitive Certificates
Owners of beneficial interests in book-entry certificates of any class will not be entitled to receive physical delivery of Definitive Certificates unless: (i) DTC advises the certificate registrar in writing that DTC is no longer willing or able to discharge properly its responsibilities as depository with respect to the book-entry certificates of such class or ceases to be a clearing agency, and the certificate administrator and the depositor are unable to locate a qualified successor within 90 days of such notice or (ii) the trustee has instituted or has been directed to institute any judicial proceeding to enforce the rights of the Certificateholders of such class and the trustee has been advised by counsel that in connection with such proceeding it is necessary or appropriate for the trustee to obtain possession of the certificates of such class.
The VRR Interest will be evidenced by one or more certificates and is expected to be held at all times in definitive form by the certificate administrator on behalf of the beneficial owners of the VRR Interest. Any request for release of any VRR Interest must be consented to by the Retaining Sponsor and may be subject to any additional requirements pursuant to the PSA.
Certificateholder Communication
Access to Certificateholders’ Names and Addresses
Upon the written request of any Certificateholder or Certificate Owner that has delivered an executed Investor Certification to the trustee or the certificate administrator (a “Certifying Certificateholder”), the certificate administrator (in its capacity as certificate registrar) will promptly furnish or cause to be furnished to such requesting party a list of the names and addresses of the certificateholders as of the most recent Record Date as they appear in the certificate register, at the expense of the requesting party.
Requests to Communicate
The PSA will require that the certificate administrator include on any Form 10–D any request received prior to the Distribution Date to which such Form 10-D relates (and on or after the Distribution Date preceding such Distribution Date) from a Certificateholder or Certificate Owner to communicate with other Certificateholders or Certificate Owners related to Certificateholders or Certificate Owners exercising their rights under the terms of the PSA. Any Form 10-D containing such disclosure regarding the request to communicate is required to include the following and no more than the following: (i) the name of the Certificateholder or Certificate Owner making the request, (ii) the date the request was received, (iii) a statement to the effect that the certificate administrator has received such request, stating that such Certificateholder or Certificate Owner is interested in communicating with other Certificateholders or Certificate Owners with regard to the possible exercise of rights under the PSA, and (iv) a description of the method other Certificateholders or Certificate Owners may use to contact the requesting Certificateholder or Certificate Owner.
Any Certificateholder or Certificate Owner wishing to communicate with other Certificateholders and Certificate Owners regarding the exercise of its rights under the terms of the PSA (such party, a “Requesting Investor”) should deliver a written request (a “Communication Request”) signed by an authorized representative of the Requesting Investor to the certificate administrator at the address below:
Computershare Trust Company, N.A.
9062 Old Annapolis Road
Columbia, Maryland 21045
Attention: Corporate Trust Administration Group – Benchmark 2022-B34
with a copy to:
trustadministrationgroup@wellsfargo.com
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Any Communication Request must contain the name of the Requesting Investor and the method other Certificateholders and Certificate Owners should use to contact the Requesting Investor, and, if the Requesting Investors is not the registered holder of a class of certificates, then the Communication Request must contain (i) a written certification from the Requesting Investor that it is a beneficial owner of a class of certificates, (ii) the name of the transaction, Benchmark 2022-B34 and (iii) one of the following forms of documentation evidencing its beneficial ownership in such class of certificates: (A) a trade confirmation, (B) an account statement, (C) a medallion stamp guaranteed letter from a broker or dealer stating the Requesting Investor is the beneficial owner, or (D) a document reasonably acceptable to the certificate administrator that is similar to any of the documents identified in clauses (A) through (C). The certificate administrator will not be permitted to require any information other than the foregoing in verifying a certificateholder’s or certificate owner’s identity in connection with a Communication Request. Requesting Investors will be responsible for their own expenses in making any Communication Request, but will not be required to bear any expenses of the certificate administrator.
List of Certificateholders
Upon the written request of any Certificateholder, which is required to include a copy of the communication the Certificateholder proposes to transmit, that has provided an Investor Certification, which request is made for purposes of communicating with other holders of certificates of the same series with respect to their rights under the PSA or the certificates, the certificate registrar or other specified person will, within 10 business days after receipt of such request afford such Certificateholder (at such Certificateholder’s sole cost and expense) access during normal business hours to the most recent list of Certificateholders related to the class of certificates.
DESCRIPTION OF THE MORTGAGE LOAN PURCHASE AGREEMENTS
| General |
On the Closing Date, the depositor will acquire the Mortgage Loans from each mortgage loan seller pursuant to a separate mortgage loan purchase agreement (each, a “MLPA”), between the applicable mortgage loan seller and the depositor. For purposes of the respective MLPAs pursuant to which GACC and CREFI are selling Mortgage Loans and the related discussion below, the 601 Lexington Avenue Mortgage Loan will constitute a “Mortgage Loan” under each such MLPA only to the extent of the portion thereof to be sold to the depositor by GACC or CREFI, as applicable.
Under the applicable MLPA, the depositor will require each mortgage loan seller to deliver (or cause to be delivered) to the certificate administrator, in its capacity as custodian, among other things, the following documents (except that the documents with respect to each Non-Serviced Whole Loan (other than the original promissory note) will be held by the custodian under the related Non-Serviced PSA) with respect to each Mortgage Loan sold by the mortgage loan seller (collectively, as to each Mortgage Loan, the “Mortgage File”):
(i) (A) the original Mortgage Note, bearing, or accompanied by, all prior or intervening endorsements, endorsed by the most recent endorsee prior to the trustee or, if none, by the originator, without recourse, either in blank and further showing a complete, unbroken chain of endorsement from the originator or to the order of the trustee; and (B) in the case of each related Serviced Companion Loan, a copy of the executed Mortgage Note for such Serviced Companion Loan;
(ii) (A) the original of the Mortgage or a certified copy thereof from the applicable recording office (or a copy thereof from the applicable recording office if (to the knowledge of the applicable mortgage loan seller or its third-party vendor, as certified by such party to the custodian in writing) it is not the practice of such office to provide certified copies, provided that the custodian may conclusively rely on any such certification by such mortgage loan seller or third-party vendor and will not be required to investigate whether any recording office cannot provide a certified copy) and, (B) if applicable, the originals or certified copies thereof from the applicable recording office
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(or copies thereof from the applicable recording office if (to the knowledge of the applicable mortgage loan seller or its third-party vendor, as certified by such party to the custodian in writing) it is not the practice of such office to provide certified copies, provided that the custodian may conclusively rely on any such certification by such mortgage loan seller or third-party vendor and will not be required to investigate whether any recording office cannot provide a certified copy) of any intervening assignments thereof showing a complete chain of assignment from the originator of the Mortgage Loan or Serviced Whole Loan to the most recent assignee of record thereof prior to the trustee, if any, in each case with evidence of recording indicated thereon;
(iii) an original or copy (if the related mortgage loan seller or its designee, rather than the custodian and its designee, is responsible for the recording thereof) of an assignment of mortgage, in recordable form (except for missing recording information and, if delivered in blank, except for the name of the assignee), executed by the most recent assignee of record thereof prior to the trustee or, if none, by the originator, either in blank or in favor of the trustee;
(iv) (A) an original or copy of any related security agreement (if such item is a document separate from the Mortgage) and, if applicable, the originals or copies of any intervening assignments thereof showing a complete chain of assignment from the originator of the related Mortgage Loan or Serviced Whole Loan to the most recent assignee thereof prior to the trustee, if any; and (B) an original assignment of any related security agreement (if such item is a document separate from the related Mortgage) executed by the most recent assignee thereof prior to the trustee or, if none, by the originator, either in blank or in favor of the trustee, which assignment may be included as part of the corresponding assignment of mortgage referred to in clause (iii) above;
(v) (A) stamped or certified copies of any UCC financing statements and continuation statements which were filed in order to perfect (and maintain the perfection of) any security interest held by the originator of the Mortgage Loan or Serviced Whole Loan (and each assignee of record prior to the trustee) in and to the personalty of the borrower at the Mortgaged Property (in each case with evidence of filing or recording thereon) and which were in the possession of the related mortgage loan seller (or its agent) at the time the Mortgage Files were delivered to the custodian, together with original UCC-3 assignments of financing statements showing a complete chain of assignment from the secured party named in such UCC-1 financing statement to the most recent assignee of record thereof prior to the trustee, if any, and (B) if any such security interest is perfected and the earlier UCC financing statements and continuation statements were in the possession of the related mortgage loan seller, an assignment of UCC financing statement by the most recent assignee of record prior to the trustee or, if none, by the originator, evidencing the transfer of such security interest, either in blank or in favor of the trustee; provided that other evidence of filing or recording reasonably acceptable to the trustee may be delivered in lieu of delivering such UCC financing statements including, without limitation, evidence of such filed or recorded UCC financing statement as shown on a written UCC search report from a reputable search firm, such as CSC/LexisNexis Document Solutions, Corporation Service Company, CT Corporation System and the like or printouts of on-line confirmations from such UCC filing or recording offices or authorized agents thereof;
(vi) the original or a copy of the loan agreement relating to such Mortgage Loan, if any;
(vii) the original or a copy of the lender’s title insurance policy issued in connection with the origination of the Mortgage Loan, together with all endorsements or riders (or copies thereof) that were issued with or subsequent to the issuance of such policy, insuring the priority of the Mortgage as a first lien on the Mortgaged Property, or a “marked up” commitment to insure marked as binding and countersigned by the related insurer or its authorized agent (which may be a pro forma or specimen title insurance policy which has been accepted or approved as binding in writing by the related title insurance company), or an agreement to provide the same pursuant to binding escrow instructions executed by an authorized representative of the title company;
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(viii) (A) the original or a copy of the related assignment of leases, rents and profits (if such item is a document separate from the Mortgage) and, if applicable, the originals or copies of any intervening assignments thereof showing a complete chain of assignment from the originator of the Mortgage Loan or Serviced Whole Loan to the most recent assignee of record thereof prior to the trustee, if any, in each case with evidence of recording thereon; and (B) an original or copy (if the related mortgage loan seller or its designee, rather than the custodian and its designee, is responsible for the recording thereof) of an assignment of any related assignment of leases, rents and profits (if such item is a document separate from the Mortgage), in recordable form (except for missing recording information and, if delivered in blank, except for the name of the assignee), executed by the most recent assignee of record thereof prior to the trustee or, if none, by the originator, either in blank or in favor of the trustee, which assignment may be included as part of the corresponding assignment of mortgage referred to in clause (iii) above;
(ix) the original or copy of any environmental indemnity agreements and copies of any environmental insurance policies pertaining to the related Mortgaged Property required in connection with origination of the related Mortgage Loan or Serviced Whole Loan and copies of environmental reports;
(x) copies of the currently effective management agreements, if any, for the Mortgaged Properties;
(xi) if the borrower has a leasehold interest in the related Mortgaged Property, the original or copy of the ground lease (or, with respect to a leasehold interest where the borrower is a lessee and that is a space lease or an air rights lease, the original of such space lease or air rights lease), and any related lessor estoppel or similar agreement or a copy thereof; if any;
(xii) if the related assignment of contracts is separate from the Mortgage, the original executed version of such assignment of contracts and the assignment thereof, if any, to the trustee;
(xiii) if any related lockbox agreement or cash collateral account agreement is separate from the Mortgage or loan agreement, a copy thereof; with respect to the reserve accounts, cash collateral accounts and lockbox accounts, if any, a stamped or certified copy of the UCC-1 financing statements, if any, submitted for filing with respect to the related mortgagee’s security interest in the reserve accounts, cash collateral accounts and lockbox accounts and all funds contained therein (and UCC-3 assignments of financing statements assigning such UCC-1 financing statements to the trustee);
(xiv) originals or copies of all assumption, modification, written assurance and substitution agreements, if any, with evidence of recording thereon if appropriate, in those instances where the terms or provisions of the Mortgage, the Mortgage Note or any related security document have been modified or the Mortgage Loan or Serviced Whole Loan has been assumed;
(xv) the original or a copy of any guaranty of the obligations of the borrower under the Mortgage Loan or Serviced Whole Loan together with, as applicable, (A) the original or copies of any intervening assignments of such guaranty showing a complete chain of assignment from the originator of the Mortgage Loan or Serviced Whole Loan to the most recent assignee thereof prior to the trustee, if any, and (B) an original assignment of such guaranty executed by the most recent assignee thereof prior to the trustee or, if none, by the originator;
(xvi) the original or a copy of the power of attorney (with evidence of recording thereon, if appropriate) granted by the related borrower if the Mortgage, Mortgage Note or other document or instrument referred to above was signed on behalf of the borrower pursuant to such power of attorney;
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(xvii) with respect to each Whole Loan, a copy of the related Intercreditor Agreement and, if applicable, a copy of any pooling and servicing agreement relating to a Serviced Companion Loan;
(xviii) with respect to hospitality properties, a copy of the franchise agreement, if any, an original or copy of the comfort letter, if any, and if, pursuant to the terms of such comfort letter, the general assignment of the Mortgage Loan is not sufficient to transfer or assign the benefits of such comfort letter to the Trust, a copy of the notice to the franchisor of the transfer of such Mortgage Loan and/or a copy of the request for the issuance of a new comfort letter in favor of the Trust (in each case, as and to the extent required pursuant to the terms of such comfort letter), with the original of any replacement comfort letter to be included in the Mortgage File following receipt thereof by the master servicer;
(xix) the original (or copy, if the original is held by the master servicer or applicable master servicer under the applicable Non-Serviced PSA) of any letter of credit held by the lender as beneficiary or assigned as security for such Mortgage Loan or Serviced Whole Loan;
(xx) the appropriate assignment or amendment documentation related to the assignment to the Trust of any letter of credit securing such Mortgage Loan or Serviced Whole Loan (or copy thereof, if the original is held by the master servicer or applicable master servicer under the applicable Non-Serviced PSA) which entitles the master servicer on behalf of the issuing entity and the Companion Loan Holders (with respect to any Serviced Whole Loan) to draw thereon;
(xxi) with respect to any Mortgage Loan with related mezzanine debt or other subordinate debt (other than a Companion Loan), a copy of the related co-lender agreement, subordination agreement or other intercreditor agreement; and
(xxii) the STK Chicago REMIC Declaration;
provided that with respect to (A) any Mortgage Loan which is a Non-Serviced Mortgage Loan on the Closing Date, the foregoing documents (other than the documents described in clause (i) above) will be delivered to and held by the custodian under the related Non-Serviced PSA on or prior to the Closing Date, and any assignments in favor of the trustee will be in favor of the trustee under the related Non-Serviced PSA and (B) any Servicing Shift Mortgage Loan, the foregoing documents will be delivered to the custodian on or prior to the Closing Date and such documents (other than the documents described in clause (i) above) will be transferred to the custodian related to the applicable securitization on or about the related Servicing Shift Securitization Date, and any assignments in favor of the trustee will be in favor of the trustee under the related Non-Serviced PSA.
Notwithstanding anything to the contrary contained herein, with respect to the 601 Lexington Avenue Mortgage Loan, the obligation of each of the applicable mortgage loan sellers to deliver mortgage note(s) as part of the related Mortgage File will be limited to delivery of only the mortgage notes held by such party. In addition, each mortgage loan seller will be required to deliver the Diligence Files for each of its Mortgage Loans to the depositor by uploading such Diligence Files to the designated Intralinks website, and the depositor will deliver to the certificate administrator an electronic copy of such Diligence Files to be posted to the secure data room.
“Diligence File” means with respect to each Mortgage Loan or Companion Loan, if applicable, collectively the following documents in electronic format:
(a) A copy of each of the following documents:
(i) the Mortgage Note, endorsed on its face or by allonge attached to the Mortgage Note, without recourse, to the order of the trustee or in blank and further showing a complete, unbroken chain of endorsement from the originator (or, if the original Mortgage Note has been lost, an affidavit to such effect from the applicable mortgage loan seller or another prior holder, together
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with a copy of the Mortgage Note and an indemnity properly assigned and endorsed to the trustee);
(ii) the Mortgage, together with an original or copy of any intervening assignments of the Mortgage, in each case with evidence of recording indicated thereon or certified to have been submitted for recording;
(iii) assignment of the Mortgage in favor of the trustee or in blank and (subject to the completion of certain missing recording information and, if applicable, the assignee’s name) in recordable form (or, if the related mortgage loan seller is responsible for the recordation of that assignment, a copy of such assignment to be sent for recordation);
(iv) any related assignment of leases and of any intervening assignments (if such item is a document separate from the Mortgage), with evidence of recording indicated thereon or certified to have been submitted for recording;
(v) an assignment of any related assignment of leases (if such item is a document separate from the Mortgage) in favor of the trustee or in blank and (subject to the completion of certain missing recording information and, if applicable, the assignee’s name) in recordable form (or, if the related mortgage loan seller is responsible for the recordation of that assignment, a copy of such assignment to be sent for recordation);
(vi) the assignment of all unrecorded documents relating to the Mortgage Loan or a Serviced Whole Loan, if not already assigned pursuant to items (iii) or (v) above;
(vii) all modification, consolidation, assumption, written assurance and substitution agreements in those instances in which the terms or provisions of the Mortgage or Mortgage Note have been modified or the Mortgage Loan has been assumed or consolidated;
(viii) the policy or certificate of lender’s title insurance issued on the date of the origination of such Mortgage Loan, or, if such policy has not been issued or located, an irrevocable, binding commitment (which may be a marked version of the policy that has been executed by an authorized representative of the title company or an agreement to provide the same pursuant to binding escrow instructions executed by an authorized representative of the title company) to issue such title insurance policy;
(ix) any UCC financing statements, related amendments and continuation statements in the possession of the applicable mortgage loan seller;
(x) an original assignment in favor of the trustee of any financing statement executed and filed in favor of the applicable mortgage loan seller in the relevant jurisdiction (or, if the related mortgage loan seller is responsible for the filing of that assignment, a copy of such assignment to be sent for filing);
(xi) any intercreditor agreement relating to permitted debt of the mortgagor, including any intercreditor agreement relating to a Serviced Whole Loan;
(xii) any loan agreement, escrow agreement, security agreement or letter of credit relating to a Mortgage Loan or a Serviced Whole Loan;
(xiii) any ground lease, ground lessor estoppel, indemnity or guaranty relating to a Mortgage Loan or a Serviced Whole Loan;
(xiv) any property management agreement relating to a Mortgage Loan or a Serviced Whole Loan;
(xv) any franchise agreements and comfort letters or similar agreements relating to a Mortgage Loan or Serviced Whole Loan and, with respect to any franchise agreement, comfort
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letter or similar agreement, any assignment of such agreements or any notice to the franchisor of the transfer of a Mortgage Loan or Serviced Whole Loan and a request for confirmation that the issuing entity is a beneficiary of such comfort letter or other agreement, or for the issuance of a new comfort letter in favor of the issuing entity, as the case may be;
(xvi) any lockbox or cash management agreement relating to a Mortgage Loan or a Serviced Whole Loan;
(xvii) any related mezzanine intercreditor agreement;
(xviii) all related environmental reports;
(xix) all related environmental insurance policies;
(b) a copy of any engineering reports or property condition reports;
(c) other than with respect to a hotel property (except with respect to tenanted commercial space within a hotel property), copies of a rent roll;
(d) for any office, retail, industrial or warehouse property, a copy of all leases and estoppels and subordination and non-disturbance agreements delivered to the related mortgage loan seller;
(e) copies of all legal opinions (excluding attorney client communications between the related mortgage loan seller, and its counsel that are privileged communications or constitute legal or other due diligence analyses), if any, delivered in connection with the closing of the related Mortgage Loan;
(f) copies of all mortgagor’s certificates of hazard insurance and/or hazard insurance policies or other applicable insurance policies (to the extent not previously included as part of this definition), if any, delivered in connection with the origination of the related Mortgage Loan;
(g) a copy of the appraisal for the related Mortgaged Property(ies);
(h) for any Mortgage Loan that the related Mortgaged Property is leased to a single tenant, a copy of the lease;
(i) a copy of the applicable mortgage loan seller’s asset summary;
(j) copies of all surveys for the related Mortgaged Property or Mortgaged Properties;
(k) copies of any zoning reports;
(l) copies of financial statements of the related mortgagor;
(m) copies of operating statements for the related Mortgaged Property or Mortgaged Properties;
(n) copies of all UCC searches;
(o) copies of all litigation searches;
(p) copies of all bankruptcy searches;
(q) a copy of the origination settlement statement;
(r) a copy of the insurance consultant report;
(s) copies of the organizational documents of the related mortgagor and any guarantor;
(t) copies of the escrow statements;
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(u) a copy of any closure letter (environmental);
(v) a copy of any environmental remediation agreement for the related Mortgaged Property or Mortgaged Properties; and
(w) a copy of the payment history with respect to such Mortgage Loan prior to the Closing Date;
provided that with respect to any Mortgage Loan which is a Non-Serviced Mortgage Loan on the Closing Date, any assignments in favor of the trustee will be in favor of the trustee under the related Non-Serviced PSA; in each case, to the extent that the originator received such documents in connection with the origination of such Mortgage Loan. In the event any of the items identified above were not included in connection with the origination of such Mortgage Loan, the Diligence File will be required to include a statement to that effect; provided that the mortgage loan seller will not be required to deliver information that is proprietary to the related originator or mortgage loan seller or any draft documents or privileged or internal communications. The mortgage loan seller may, without any obligation to do so, include such other documents or information as part of the Diligence File that such mortgage loan seller believes should be included to enable the asset representations reviewer to perform the Asset Review on such Mortgage Loan; provided that such documents or information are clearly labeled and identified.
Each MLPA will contain certain representations and warranties of the applicable mortgage loan seller with respect to each Mortgage Loan sold by that mortgage loan seller. Those representations and warranties of GACC and CREFI are set forth in Annex D-1, and will be made as of the Closing Date, or as of another date specifically provided in the representation and warranty, subject to certain exceptions to such representations and warranties as set forth in Annex D-2 and Annex D-3, respectively. Those representations and warranties of JPMCB are set forth in Annex E-1, and will be made as of the Closing Date, or as of another date specifically provided in the representation and warranty, subject to certain exceptions to such representations and warranties as set forth in Annex E-2. Those representations and warranties of GSMC are set forth in Annex F-1, and will be made as of the Closing Date, or as of another date specifically provided in the representation and warranty, subject to certain exceptions to such representations and warranties as set forth in Annex F-2. If any of the documents required to be delivered by the related mortgage loan seller and included in the Mortgage File for any Mortgage Loan is missing from the Mortgage File or defective or if there is a breach of a representation or warranty relating to any Mortgage Loan, and such omission, breach or defect materially and adversely affects the value of the related Mortgage Loan, the value of the related Mortgaged Property or the interests of the trustee or any Certificateholder in the Mortgage Loan or Mortgaged Property or causes the Mortgage Loan to be other than a “qualified mortgage” within the meaning of Code Section 860G(a)(3), but without regard to the rule of Treasury regulations Section 1.860G-2(f)(2) that causes a defective Mortgage Loan to be treated as a qualified mortgage (a “Material Defect”), the applicable mortgage loan seller will be required to, no later than 90 days following:
(x) such mortgage loan seller’s receipt of notice of the Material Defect from any party to the PSA (a “Breach Notice”), except in the case of the following clause (y); or
(y) in the case of such Material Defect that would cause the Mortgage Loan not to be a “qualified mortgage” within the meaning of Code Section 860G(a)(3), but without regard to the rule of Treasury regulations Section 1.860G-2(f)(2) that causes a defective Mortgage Loan to be treated as a qualified mortgage, the discovery by any party to the PSA of the such Material Defect; provided that the mortgage loan seller has received notice in accordance with the terms of the PSA,
(1) cure such Material Defect in all material respects, at its own expense,
(2) repurchase the affected Mortgage Loan (or, in the case of the 601 Lexington Avenue Mortgage Loan, the applicable portion thereof) or REO Loan at the Purchase Price, or
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(3) substitute a Qualified Substitute Mortgage Loan (other than with respect to the Whole Loans, as applicable, for which no substitution will be permitted) for such affected Mortgage Loan, and pay a shortfall amount in connection with such substitution, provided that no such substitution may occur on or after the second anniversary of the Closing Date;
provided, however, that the applicable mortgage loan seller will generally have an additional 90-day period to cure such Material Defect (or, failing such cure, to repurchase the affected Mortgage Loan and the related REO Loan (or, in the case of the 601 Lexington Avenue Mortgage Loan, the applicable portion thereof) or, if applicable, substitute a Qualified Substitute Mortgage Loan (other than with respect to the related Whole Loans, for which no substitution will be permitted)), if such Material Defect is capable of being cured, the mortgage loan seller is diligently proceeding toward that cure, and has delivered to the master servicer, the special servicer, the certificate administrator (who will promptly deliver a copy of such officer’s certificate to the 17g-5 Information Provider), the trustee, the operating advisor, the asset representations reviewer and, prior to the occurrence of a Consultation Termination Event, the Directing Holder, an officer’s certificate that describes the reasons that a cure was not effected within the initial 90-day period. Notwithstanding the foregoing, there will be no such 90-day extension, if such Material Defect would cause the related Mortgage Loan not to be a “qualified mortgage” within the meaning of Code Section 860G(a)(3), but without regard to the rule of Treasury regulations Section 1.860G-2(f)(2) that causes a defective Mortgage Loan to be treated as a qualified mortgage.
No delay in either the discovery of a Material Defect or in providing notice of such Material Defect will relieve the applicable mortgage loan seller of its obligation to repurchase the related Mortgage Loan unless (i) the mortgage loan seller did not otherwise discover or have knowledge of such Material Defect, (ii) such delay is the result of the failure by a party to the PSA to promptly provide a Breach Notice as required by the terms of the PSA after such party has actual knowledge of such defect or breach (knowledge will not be deemed to exist by reason of the custodian’s exception report) and such delay precludes the mortgage loan seller from curing such Material Defect and (iii) such Material Defect did not relate to a Mortgage Loan not being a “qualified mortgage” within the meaning of Code Section 860G(a)(3), but without regard to the rule of Treasury regulations Section 1.860G-2(f)(2) that causes a defective obligation to be treated as a qualified mortgage. Notwithstanding the foregoing, if a Mortgage Loan is not secured by a Mortgaged Property that is, in whole or in part, a hotel, restaurant (operated by a borrower), healthcare facility, nursing home, assisted living facility, theater or fitness center (operated by a borrower), then the failure to deliver copies of the UCC financing statements with respect to such Mortgage Loan will not be a Material Defect. With respect to each Non-Serviced Mortgage Loan, each mortgage loan seller agrees that any document defect as such term is defined in the related controlling Non-Serviced PSA (other than a defect related to the promissory note for the related Non-Serviced Companion Loan) will constitute a document defect under the related MLPA.
If there is a Material Defect with respect to one or more Mortgaged Properties with respect to a Mortgage Loan, the applicable mortgage loan seller will not be obligated to repurchase the Mortgage Loan (or, in the case of the 601 Lexington Avenue Mortgage Loan, the applicable portion thereof) if (i) the affected Mortgaged Property may be released pursuant to the terms of any partial release provisions in the related Mortgage Loan documents (and such Mortgaged Property is, in fact, released), (ii) the remaining Mortgaged Property(ies) satisfy the requirements, if any, set forth in the Mortgage Loan documents and the applicable mortgage loan seller provides an opinion of counsel to the effect that such release would not cause an adverse REMIC event to occur and (iii) each applicable Rating Agency has provided a Rating Agency Confirmation.
Notwithstanding the foregoing, in lieu of a mortgage loan seller repurchasing, substituting or curing such Material Defect, to the extent that the mortgage loan seller and the special servicer (for so long as no Control Termination Event is continuing and only with respect to any Mortgage Loan that is not an applicable Excluded Loan or any Servicing Shift Mortgage Loan, with the consent of the Directing Holder) are able to agree upon a cash payment payable by the mortgage loan seller to the issuing entity that would be deemed sufficient to compensate the issuing entity for such Material Defect (a “Loss of Value Payment”), the mortgage loan seller may elect, in its sole discretion, to pay such Loss of Value Payment. In connection with any such determination with respect to any non-Specially Serviced Loan, the master
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servicer will promptly provide the special servicer, but in any event within the time frame and in the manner provided in the PSA, with the servicing file and other such information to the extent set forth in the PSA in order to permit the special servicer to calculate the Loss of Value Payment as set forth in the PSA. Upon its making such payment, the mortgage loan seller will be deemed to have cured such Material Defect in all respects. A Loss of Value Payment may not be made with respect to any such Material Defect that would cause the applicable Mortgage Loan not to be a “qualified mortgage” within the meaning of Code Section 860G(a)(3), but without regard to the rule of Treasury regulations Section 1.860G-2(f)(2) that causes a defective Mortgage Loan to be treated as a qualified mortgage.
In the case of a Material Defect with respect to the 601 Lexington Avenue Mortgage Loan, each of GACC and CREFI will be responsible for any remedies solely in respect of the note(s) sold by the related mortgage loan seller as if each note evidencing the 601 Lexington Avenue Mortgage Loan was a separate Mortgage Loan.
With respect to any Mortgage Loan (or related REO Loan) (including, to the extent required pursuant to the final sentence of this paragraph, any related Companion Loan) a, “Purchase Price” equals to the sum of (1) the outstanding principal balance of such Mortgage Loan (or related REO Loan) (including, to the extent required pursuant to the final sentence of this paragraph, any related Companion Loan), as of the date of purchase, (2) all accrued and unpaid interest on the Mortgage Loan (or any related REO Loan) (including, to the extent required pursuant to the final sentence of this paragraph, any related Companion Loan) at the related Mortgage Rate in effect from time to time (excluding any portion of such interest that represents default interest or Excess Interest on the ARD Loan), to, but not including, the due date immediately preceding or coinciding with the Determination Date for the Collection Period of purchase, (3) all related unreimbursed Servicing Advances plus accrued and unpaid interest on all related Advances at the Reimbursement Rate, Special Servicing Fees (whether paid or unpaid), Workout Fees, Liquidation Fees (to the extent set forth in clause (5) below) and any other additional trust fund expenses in respect of such Mortgage Loan and the related REO Loan, if any, (4) solely in the case of a repurchase or substitution by a mortgage loan seller, any unpaid Asset Representations Reviewer Asset Review Fee related to such Mortgage Loan and all reasonable out-of-pocket expenses reasonably incurred or to be incurred by the master servicer, the special servicer, the depositor, the certificate administrator or the trustee in respect of the omission, breach or defect giving rise to the repurchase or substitution obligation, including any expenses arising out of the enforcement of the repurchase or substitution obligation, including, without limitation, legal fees and expenses and any additional trust fund expenses relating to such Mortgage Loan or related REO Loan; provided, however, that such out-of-pocket expenses will not include expenses incurred by investors in instituting an Asset Review Vote Election, in taking part in an Asset Review Vote Election or in utilizing the dispute resolution provisions described below under “—Dispute Resolution Provisions” and (5) Liquidation Fees, if any, payable with respect to the affected Mortgage Loan (or related REO Loan) (including, to the extent required pursuant to the final sentence of this paragraph, any related Companion Loan) (which will not include any Liquidation Fees if such affected Mortgage Loan is repurchased prior to the expiration of the additional 90-day period immediately following the initial 90-day period). For purposes of this definition, (i) the “Purchase Price” in respect of a Serviced Companion Loan that is purchased by the related mortgage loan seller will be the purchase price paid by the related mortgage loan seller under the related pooling and servicing agreement governing the securitization that includes such Serviced Companion Loan, or the applicable servicing agreement, and (ii) with respect to a sale of an REO Property securing a Serviced Whole Loan, the term Mortgage Loan or REO Loan will be construed to include any related Companion Loan. With respect to the 601 Lexington Avenue Mortgage Loan, the Purchase Price that would be payable by each of the applicable mortgage loan sellers for its related promissory note(s) will be equal to its respective percentage interest in such Mortgage Loan as of the Closing Date multiplied by the total Purchase Price for such Mortgage Loan.
A “Qualified Substitute Mortgage Loan” is a substitute mortgage loan (other than with respect to the Whole Loans, for which no substitution will be permitted) replacing a Mortgage Loan with respect to which a Material Defect exists that must, on the date of substitution:
(a) have an outstanding principal balance, after application of all scheduled payments of principal and interest due during or prior to the month of substitution, whether or not received, not in excess of
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the Stated Principal Balance of the removed Mortgage Loan as of the due date in the calendar month during which the substitution occurs;
(b) have a fixed Mortgage Rate not less than the Mortgage Rate of the removed Mortgage Loan (determined without regard to any prior modification, waiver or amendment of the terms of the removed Mortgage Loan);
(c) have the same due date and a grace period no longer than that of the removed Mortgage Loan;
(d) accrue interest on the same basis as the removed Mortgage Loan (for example, on the basis of a 360-day year and the actual number of days elapsed);
(e) have a remaining term to stated maturity not greater than, and not more than five years less than, the remaining term to stated maturity of the removed Mortgage Loan;
(f) have a then-current loan-to-value ratio equal to or less than the lesser of (i) the loan-to-value ratio for the removed Mortgage Loan as of the Closing Date and (ii) 75%, in each case using a “value” for the Mortgaged Property as determined using an appraisal conducted by a member of the Appraisal Institute (“MAI”) prepared in accordance with the requirements of the FIRREA;
(g) comply (except in a manner that would not be adverse to the interests of the Certificateholders) as of the date of substitution in all material respects with all of the representations and warranties set forth in the related MLPA;
(h) have an environmental report that indicates no material adverse environmental conditions with respect to the related Mortgaged Property and that will be delivered as a part of the related servicing file;
(i) have a then-current debt service coverage ratio at least equal to the greater of (i) the original debt service coverage ratio of the removed Mortgage Loan as of the Closing Date and (ii) 1.25x;
(j) constitute a “qualified replacement mortgage” within the meaning of Code Section 860G(a)(4) as evidenced by an opinion of counsel (provided at the applicable mortgage loan seller’s expense);
(k) not have a maturity date or an amortization period that extends to a date that is after the date two years prior to the Rated Final Distribution Date;
(l) have comparable prepayment restrictions to those of the removed Mortgage Loan;
(m) not be substituted for a removed Mortgage Loan unless the trustee and the certificate administrator have received a Rating Agency Confirmation from each of the Rating Agencies (the cost, if any, of obtaining such Rating Agency Confirmation to be paid by the applicable mortgage loan seller);
(n) have been approved (i), for so long as no Control Termination Event is continuing, by the Directing Holder, and (ii) during any such time that the master servicer is the Enforcing Servicer, by the special servicer;
(o) prohibit defeasance within two years of the Closing Date;
(p) not be substituted for a removed Mortgage Loan if it would result in the termination of the REMIC status of any Trust REMIC or the imposition of tax on any Trust REMIC other than a tax on income expressly permitted or contemplated to be received by the terms of the PSA as determined by an opinion of counsel to be paid by the applicable mortgage loan seller;
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(q) have an engineering report that indicates no material adverse property condition or deferred maintenance with respect to the related Mortgaged Property with respect to the related Mortgaged Property that will be delivered as a part of the related servicing file; and
(r) be current in the payment of all scheduled payments of principal and interest then due.
In the event that more than one Mortgage Loan is substituted for a removed Mortgage Loan or Mortgage Loans, then (x) the amounts described in clause (a) are required to be determined on the basis of aggregate principal balances and (y) each such proposed Qualified Substitute Mortgage Loan must individually satisfy each of the requirements specified in clauses (b) through (r) of the preceding sentence, except (z) the rates described in clause (b) above and the remaining term to stated maturity referred to in clause (e) above are required to be determined on a weighted average basis, provided that no individual Mortgage Rate (net of the Servicing Fee Rate, the Certificate Administrator/Trustee Fee Rate, the Operating Advisor Fee Rate and the CREFC® Intellectual Property Royalty License Fee Rate) may be lower than the highest fixed Pass-Through Rate (not based on or subject to a cap equal to or based on the WAC Rate) of any class of Principal Balance Certificates having a principal balance then-outstanding. When a Qualified Substitute Mortgage Loan is substituted for a removed Mortgage Loan, the applicable mortgage loan seller will be required to certify that the Mortgage Loan meets all of the requirements of the above definition and send the certification to the trustee, the certificate administrator, the operating advisor and the asset representations reviewer and, prior to the occurrence of a Consultation Termination Event, the Directing Holder.
The foregoing repurchase or substitution obligation or the obligation to pay the Loss of Value Payment will constitute the sole remedy available to the Certificateholders and the trustee under the PSA for any uncured breach of any mortgage loan seller’s representations and warranties regarding the Mortgage Loans or any uncured document defect; provided, however, that if any breach pertains to a representation or warranty that the related Mortgage Loan documents or any particular Mortgage Loan document requires the related borrower to bear the costs and expenses associated with any particular action or matter under such Mortgage Loan document(s), then the applicable mortgage loan seller will be required to cure such breach within the applicable cure period (as the same may be extended) by reimbursing the issuing entity (by wire transfer of immediately available funds) for the reasonable amount of any such costs and expenses incurred by parties to the PSA or the issuing entity that are incurred as a result of such breach and have not been reimbursed by the related borrower and the amount of any fees and expenses of the asset representations reviewer attributable to the Asset Review of such Mortgage Loan; provided, further, that in the event any such costs and expenses exceed $10,000, the applicable mortgage loan seller will have the option to either repurchase or substitute for the related Mortgage Loan as provided above or pay such costs and expenses. The applicable mortgage loan seller will remit the amount of these costs and expenses and upon its making such remittance, the applicable mortgage loan seller will be deemed to have cured the breach in all respects. The applicable mortgage loan seller will be the sole warranting party in respect of the Mortgage Loans sold by that mortgage loan seller to the depositor, and none of its affiliates and no other person will be obligated to repurchase or replace any affected Mortgage Loan or make a Loss of Value Payment in connection with a breach of any representation and warranty or in connection with a document defect if the applicable mortgage loan seller defaults on its obligation to do so.
As stated above, with respect to a Material Defect related to the 601 Lexington Avenue Mortgage Loan (9.3%), each of GACC and CREFI will only be a mortgage loan seller with respect to, and will only be obligated to take the remedial actions described above with respect to, its percentage interest in such Mortgage Loan that it sold to the depositor. It is possible that under certain circumstances only one of the applicable mortgage loan sellers will repurchase, or otherwise comply with any repurchase obligations with respect to, its interest in such Mortgage Loan if there is a Material Defect. If for any reason, one of those mortgage loan sellers repurchases its interest in such Mortgage Loan and the other mortgage loan seller does not, (i) the non-repurchased portion of the Mortgage Loan will be deemed to constitute a “Mortgage Loan” under the PSA, the repurchasing mortgage loan seller’s interest in such Mortgage Loan will be deemed to constitute a “Non-Serviced Pari Passu Companion Loan” with respect such Mortgage Loan, (ii) the related Whole Loan will continue to be serviced and administered under the related Non-
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Serviced PSA and the related Intercreditor Agreement, (iii) all amounts applied in respect of interest, principal and yield maintenance premiums in respect of the related Whole Loan from time to time will be allocated pursuant to the related Intercreditor Agreement between the issuing entity, the repurchasing mortgage loan seller and the other related Companion Loan Holders and (iv) the repurchasing mortgage loan seller will be entitled to receive remittances of allocated collections monthly to the same extent as any other related Companion Loan Holder.
Dispute Resolution Provisions
The mortgage loan seller will be subject to the dispute resolution provisions described under “Pooling and Servicing Agreement—Dispute Resolution Provisions” to the extent those provisions are triggered with respect to any mortgage loan sold to the depositor by the mortgage loan seller and will be obligated under the MLPA to comply with all applicable provisions and to take part in any mediation or arbitration proceedings that may result.
Asset Review Obligations
The mortgage loan seller will be obligated to perform its obligations described under “Pooling and Servicing Agreement—The Asset Representations Reviewer—Asset Review” relating to any Asset Reviews performed by the asset representations reviewer, and the mortgage loan seller will have the rights described under that heading.
POOLING AND SERVICING AGREEMENT
| General |
The servicing and administration of each Serviced Mortgage Loan, any related Serviced Companion Loans and any related REO Properties (including any interest of the holder of any Companion Loan in the REO Property acquired with respect to any Serviced Whole Loan) will be governed by the PSA and the related Intercreditor Agreement.
The Non-Serviced Mortgage Loans, the related Non-Serviced Companion Loan and any related REO Properties (including the issuing entity’s interest in REO Property acquired with respect to a Non-Serviced Whole Loan) will be serviced by the Non-Serviced Master Servicer and the Non-Serviced Special Servicer under the related Non-Serviced PSA in accordance with such Non-Serviced PSA and the related Intercreditor Agreement.
The following summaries describe certain provisions of the PSA relating to the servicing and administration of the Mortgage Loans (other than the Non-Serviced Mortgage Loans), the related Serviced Companion Loans and any related REO Properties. Unless otherwise specifically stated and except where the context otherwise indicates (such as with respect to P&I Advances), discussions in this section or in any other section of this prospectus regarding the servicing and administration of the Mortgage Loans should be read to include the servicing and administration of the related Serviced Companion Loans but not to include the Non-Serviced Mortgage Loans, the related Non-Serviced Companion Loans and any related REO Property. In the case of the Serviced Whole Loans, certain provisions of the related Intercreditor Agreement are described under “Description of the Mortgage Pool—The Whole Loans—The Serviced Pari Passu Whole Loans” and “—The Non-Serviced AB Whole Loans”.
Certain provisions of the Non-Serviced PSAs relating to the servicing and administration of the related Non-Serviced Mortgage Loan, the related Non-Serviced Companion Loan and the related REO Properties and the related Intercreditor Agreement are summarized under “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced Pari Passu Whole Loans”, “—The Non-Serviced AB Whole Loans” and “—Servicing of the Non-Serviced Mortgage Loans” below.
As to particular servicing matters, the discussion under this heading “Pooling and Servicing Agreement” is applicable with respect to any Servicing Shift Whole Loans only while the PSA governs the
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servicing of the related Servicing Shift Whole Loan. On and after the related Servicing Shift Securitization Date, a Servicing Shift Whole Loan will be serviced pursuant to the related Servicing Shift PSA, and the provisions of the related Servicing Shift PSA may be different than the terms of the PSA, although the related Servicing Shift Whole Loan will still need to be serviced in compliance with the requirements of the related Intercreditor Agreement, as described in “Description of the Mortgage Pool—The Whole Loans”.
In general, (i) the master servicer will be responsible for the servicing and administration of the Mortgage Loans (other than the Non-Serviced Mortgage Loans) and any related Serviced Companion Loans that are non-Specially Serviced Loans (except for Major Decisions as to which the processing and/or consent or other involvement of the special servicer is required), and (ii) the special servicer will be responsible for the servicing and administration of Specially Serviced Loans and REO Properties and, unless the master servicer and the special servicer mutually agree that the master servicer will process such request (other than with respect to any COVID Modification which will be processed by the special servicer), the special servicer will review, evaluate and/or provide or withhold consent or process Major Decisions for all Mortgage Loans (other than with respect to the Non-Serviced Mortgage Loan) and any related Serviced Companion Loans when such Mortgage Loans and Serviced Companion Loans are non-Specially Serviced Loans.
The PSA requires the master servicer or the special servicer, as applicable, to make reasonable efforts to collect all payments called for under the terms and provisions of the Mortgage Loans (other than any Non-Serviced Mortgage Loan) and the Serviced Companion Loans and to follow the Servicing Standard with respect to such collection procedures. Consistent with the above, the master servicer or the special servicer may, in its discretion, waive any late payment fee or default interest it is entitled to receive in connection with any delinquent Periodic Payment or balloon payment with respect to any Mortgage Loan or Serviced Companion Loan it is servicing.
Assignment of the Mortgage Loans
The depositor will purchase the Mortgage Loans to be included in the issuing entity on or before the Closing Date from each of the mortgage loan sellers pursuant to a separate MLPAs. See “Transaction Parties—The Sponsors and Mortgage Loan Sellers” and “Description of the Mortgage Loan Purchase Agreements”.
On the Closing Date, the depositor will sell, transfer or otherwise convey, assign or cause the assignment of the Mortgage Loans, without recourse, together with the depositor’s rights and remedies against the mortgage loan sellers under the MLPAs, to the trustee for the benefit of the holders of the certificates. On or prior to the Closing Date, the depositor will require each mortgage loan seller to deliver to the certificate administrator, in its capacity as custodian, the Mortgage Notes and certain other documents and instruments with respect to each Serviced Mortgage Loan and any related Serviced Companion Loan. The custodian will hold such documents in the name of the issuing entity for the benefit of the holders of the certificates. The custodian is obligated to review certain documents for each Mortgage Loan within 60 days of the Closing Date and report any missing documents or certain types of document defects to the parties to the PSA and the Directing Holder (for so long as no Consultation Termination Event is continuing) and the related mortgage loan seller.
In addition, pursuant to the related MLPA, each mortgage loan seller will be required to deliver (or cause to be delivered) an electronic copy of the Diligence Files for each of its Mortgage Loans to (or as instructed by) the depositor within 60 days following the Closing Date. The depositor will then be required to deliver to the certificate administrator an electronic copy of such Diligence Files to be posted to the secure data room.
Pursuant to the PSA, the depositor will assign to the trustee for the benefit of Certificateholders the representations and warranties made by the mortgage loan sellers to the depositor in the MLPAs and any rights and remedies that the depositor has against the mortgage loan sellers under the MLPAs with respect to any Material Defect. See “—Enforcement of Mortgage Loan Seller’s Obligations Under the MLPA” below and “Description of the Mortgage Loan Purchase Agreements”.
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Servicing Standard
The master servicer and the special servicer will each be required to diligently service and administer the Mortgage Loans (excluding the Non-Serviced Mortgage Loans), any related Serviced Companion Loans and the related REO Properties (other than any REO Property related to a Non-Serviced Mortgage Loan), for which it is responsible in accordance with applicable law, the terms of the PSA, the Mortgage Loan documents, and the related Intercreditor Agreements and, to the extent consistent with the foregoing, in accordance with the higher of the following standards of care:
(1) the same manner in which, and with the same care, skill, prudence and diligence with which the master servicer or the special servicer, as the case may be, services and administers similar mortgage loans for other third-party portfolios, and
(2) the same care, skill, prudence and diligence with which the master servicer or special servicer, as the case may be, services and administers similar mortgage loans owned by the master servicer or the special servicer,
as the case may be, with a view to; (A) the timely recovery of all payments of principal and interest under the Mortgage Loans or Serviced Whole Loans or (B) in the case of a Specially Serviced Loan or an REO Property, the maximization of timely recovery of principal and interest on a net present value basis on the Mortgage Loans and any related Serviced Companion Loans, and the best interests of the issuing entity and the Certificateholders (as a collective whole as if such Certificateholders constituted a single lender) (and, in the case of any Serviced Whole Loan, the best interests of the issuing entity, the Certificateholders and the holder(s) of the related Companion Loan(s) (as a collective whole as if such Certificateholders and the holder(s) of the related Companion Loan(s) constituted a single lender, taking into account the subordinate nature of any Subordinate Companion Loan), taking into account the pari passu or subordinate nature of the related Companion Loan(s)) as determined by the master servicer or the special servicer, as the case may be, in its reasonable judgment, in either case giving due consideration to the customary and usual standards of practice of prudent, institutional commercial, multifamily and manufactured housing community mortgage loan servicers, but without regard to any conflict of interest arising from:
(A) any relationship that the master servicer or the special servicer, as the case may be, or any of their respective affiliates, as the case may be, may have with any of the underlying borrowers, the sponsors, the mortgage loan sellers, the originators, any party to the PSA or any affiliate of the foregoing;
(B) the ownership of any certificate (or any interest in any Companion Loan, mezzanine loan or subordinate debt relating to a Mortgage Loan) by the master servicer or special servicer, as the case may be, or any of their respective affiliates;
(C) the obligation, if any, of the master servicer to make advances;
(D) the right of the master servicer or the special servicer, as the case may be, or any of its affiliates to receive compensation or reimbursement of costs under the PSA generally or with respect to any particular transaction;
(E) the ownership, servicing or management for others of any other mortgage loans, subordinate debt, mezzanine loans or properties not covered by the PSA or held by the issuing entity by the master servicer or special servicer, as the case may be, or any of its affiliates;
(F) any debt that the master servicer or the special servicer, as the case may be, or any of its affiliates, has extended to any underlying borrower or an affiliate of any borrower (including, without limitation, any mezzanine financing);
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(G) any option to purchase any Mortgage Loan or the related Companion Loan(s) the master servicer or special servicer, as the case may be, or any of its affiliates, may have; and
(H) any obligation of the master servicer, the special servicer or one of their respective affiliates, to repurchase or substitute for a Mortgage Loan as a mortgage loan seller (if the master servicer or the special servicer or one of their respective affiliates is a mortgage loan seller) (the foregoing, collectively referred to as the “Servicing Standard”).
All net present value calculations and determinations made under the PSA with respect to any Mortgage Loan, Mortgaged Property or REO Property (including for purposes of the definition of “Servicing Standard” set forth above) will be made in accordance with the Mortgage Loan documents or, in the event the Mortgage Loan documents are silent, by using a discount rate (i) for principal and interest payments on the Mortgage Loan or Serviced Companion Loan(s) or sale of a Defaulted Loan, the highest of (1) the rate determined by the master servicer or special servicer, as applicable, that approximates the market rate that would be obtainable by the borrowers on similar non-defaulted debt of the borrowers as of such date of determination, (2) the Mortgage Rate and (3) the yield on 10-year U.S. treasuries as of such date of determination and (ii) for all other cash flows, including property cash flow, the “discount rate” set forth in the most recent appraisal (or updated appraisal) of the related Mortgaged Property.
In the case of a Non-Serviced Mortgage Loan, the master servicer and special servicer will be required to act in accordance with the Servicing Standard with respect to any action required to be taken regarding such Non-Serviced Mortgage Loan pursuant to their respective obligations under the PSA.
| Subservicing |
The master servicer and the special servicer may delegate and/or assign some or all of their respective servicing obligations and duties with respect to some or all of the Mortgage Loans (other than the Non-Serviced Mortgage Loans) and the Serviced Companion Loans to one or more third-party sub-servicers provided that the master servicer and the special servicer, as applicable, will not thereby be relieved of any of those obligations or duties under the PSA and will remain responsible for the acts or omissions of any such sub-servicers. A sub-servicer may be an affiliate of the depositor, the master servicer or the special servicer. Notwithstanding the foregoing, the special servicer may not enter into any sub-servicing agreement which provides for the performance by third parties of any or all of its obligations under the PSA without, with respect to any Mortgage Loan so long as no Control Termination Event is continuing, the consent of the Directing Holder, except to the extent necessary for the special servicer to comply with applicable regulatory requirements.
Each sub-servicing agreement between the master servicer or special servicer and a sub-servicer (a “Sub-Servicing Agreement”) will generally be required to provide that (i) if for any reason the master servicer or special servicer, as applicable, is no longer acting in that capacity (including, without limitation, by reason of a Servicer Termination Event), the trustee or any successor master servicer or special servicer, as applicable, may assume or terminate such party’s rights and obligations under such Sub-Servicing Agreement and (ii) the sub-servicer will be in default under such Sub-Servicing Agreement and such Sub-Servicing Agreement will be terminated (following the expiration of any applicable grace period) if the sub-servicer fails (A) to deliver by the due date any Exchange Act reporting items required to be delivered to the master servicer pursuant to the PSA or such Sub-Servicing Agreement or to the master servicer under any other pooling and servicing agreement that the depositor is a party to, (B) to perform in any material respect any of its covenants or obligations contained in such Sub-Servicing Agreement regarding creating, obtaining or delivering any Exchange Act reporting items required in order for any party to the PSA to perform its obligations under the PSA or under the Exchange Act reporting requirements of any other pooling and servicing agreement that the depositor is a party to or (C) to perform other covenants and obligations set forth in such Sub-Servicing Agreement in accordance with the terms of such Sub-Servicing Agreement. No sub-servicer will be permitted under any Sub-Servicing Agreement to make material servicing decisions, such as loan modifications or determinations as to the manner or timing of enforcing remedies under the Mortgage Loan documents, without the consent of the
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master servicer or special servicer, as applicable. The master servicer’s consent may also be required for certain other servicing decisions as provided in the related Sub-Servicing Agreement.
Generally, the master servicer will be solely liable for all fees owed by it to any sub-servicer retained by the master servicer, without regard to whether the master servicer’s compensation pursuant to the PSA is sufficient to pay those fees. Each sub-servicer will be required to be reimbursed by the master servicer for certain expenditures which such sub-servicer makes, generally to the same extent the master servicer would be reimbursed under the PSA.
| Advances |
P&I Advances
On the business day immediately preceding each Distribution Date (the “Master Servicer Remittance Date”), except as otherwise described below, the master servicer will be obligated, unless determined to be non-recoverable as described below, to make advances (each, a “P&I Advance”) out of its own funds or, subject to the replacement of those funds as provided in the PSA, certain funds held in the Collection Account that are not required to be part of the Available Funds for that Distribution Date, in an amount equal to (but subject to reduction as described below) the aggregate of:
(1) all Periodic Payments (other than any balloon payments) (net of any applicable Servicing Fees (other than, in the case of any Non-Serviced Mortgage Loan, the servicing fee rate pursuant to the applicable pooling and servicing agreement)) that were due on the Mortgage Loans and any REO Loan (other than any portion of an REO Loan related to any other Companion Loan) during the related Collection Period and not received as of the business day preceding the Master Servicer Remittance Date; and
(2) in the case of each Mortgage Loan delinquent in respect of its balloon payment as of the Master Servicer Remittance Date (including any REO Loan (other than any portion of an REO Loan related to any other Companion Loan) as to which the balloon payment would have been past due), an amount equal to its Assumed Scheduled Payment.
The master servicer’s obligations to make P&I Advances in respect of any Mortgage Loan (including the Non-Serviced Mortgage Loans) or REO Loan (other than any portion of a REO Loan related to any other Companion Loan) will continue, except if a determination as to non-recoverability is made, through and up to (but not including) the Distribution Date on which liquidation of the Mortgage Loan or disposition of the REO Property, as the case may be, occurs. However, no interest will accrue on any P&I Advance made with respect to a Mortgage Loan unless the related Periodic Payment is received after the related Due Date has passed and any applicable grace period has expired or if the related Periodic Payment is received after the Determination Date but on or prior to the Master Servicer Remittance Date. To the extent that the master servicer fails to make a P&I Advance that it is required to make under the PSA, the trustee will be required to make the required P&I Advance in accordance with the terms of the PSA.
If an Appraisal Reduction Amount has been assessed with respect to any Mortgage Loan (or, in the case of any Non-Serviced Whole Loan, an appraisal reduction has been assessed in accordance with the related Non-Serviced PSA and the master servicer has notice of such Appraisal Reduction Amount), then the interest portion of any P&I Advance in respect of that Mortgage Loan, as applicable, for the related Distribution Date will be reduced (there will be no reduction in the principal portion, if any, of such P&I Advance) to equal the product of (x) the amount of the interest portion of the P&I Advance for that Mortgage Loan for the related Distribution Date without regard to this sentence, and (y) a fraction, expressed as a percentage, the numerator of which is equal to the Stated Principal Balance of that Mortgage Loan immediately prior to the related Distribution Date, net of the related Appraisal Reduction Amount (or, in the case of any Whole Loan, the portion of such Appraisal Reduction Amount allocated to the related Mortgage Loan), if any, and the denominator of which is equal to the Stated Principal Balance of that Mortgage Loan immediately prior to the related Distribution Date.
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Neither the master servicer nor the trustee will be required to make a P&I Advance for a balloon payment, default interest, late payment charges, yield maintenance charges or prepayment premiums or Excess Interest or with respect to any Companion Loan.
Advances are intended to maintain a regular flow of scheduled interest and principal payments to holders of the class or classes of certificates entitled thereto, and are not credit support for the certificates and will not act to guarantee or insure against losses on the mortgage loans or otherwise.
With respect to any Non-Serviced Whole Loan, if any servicer under the Non-Serviced PSA determines that a P&I Advance with respect to the related Non-Serviced Companion Loan, if made, would be non-recoverable, such determination will not be binding on the master servicer and the trustee as it relates to any proposed P&I Advance with respect to the related Non-Serviced Mortgage Loan, but the master servicer and the trustee may conclusively rely upon any such determination. Similarly, with respect to any Non-Serviced Mortgage Loan, if the master servicer or special servicer determines that any P&I Advance with respect to such Non-Serviced Mortgage Loan, if made, would be non-recoverable, such determination will not be binding on the related master servicer and related trustee under the related Non-Serviced PSA as such determination relates to any proposed P&I Advance with respect to any related Non-Serviced Companion Loan (unless the related Non-Serviced PSA provides otherwise).
For the avoidance of doubt, the master servicer or the trustee, as the case may be will make P&I Advances on the basis of the original terms of any Mortgage Loan, including Mortgage Loans subject to forbearance agreements or other temporary deferrals or payment accommodations, unless (a) the terms of the Mortgage Loan have been permanently modified to reduce or forgive a monetary obligation or (b) such P&I Advance has been determined to be a Nonrecoverable Advance.
Servicing Advances
In addition to P&I Advances, except as otherwise described under “—Recovery of Advances” below and except in certain limited circumstances described below, the master servicer will also be obligated (subject to the limitations described in this prospectus), to make advances (“Servicing Advances” and, collectively with P&I Advances, “Advances”) in connection with the servicing and administration of the Serviced Mortgage Loans and any related Serviced Companion Loans, as applicable, in connection with the servicing and administration of any Mortgaged Property or REO Property, in order to pay delinquent real estate taxes, assessments and hazard insurance premiums and to cover other similar costs and expenses necessary to preserve the priority of or enforce the related Mortgage Loan documents or to protect, lease, manage and maintain the related Mortgaged Property. To the extent that the master servicer fails to make a Servicing Advance that it is required to make under the PSA and the trustee has received notice or otherwise has actual knowledge of this failure, the trustee will be required to make the required Servicing Advance in accordance with the terms of the PSA.
However, neither the master servicer nor the trustee will make any Servicing Advance in connection with the exercise of any cure rights or purchase rights granted to the holder of a Serviced Companion Loan under the related Intercreditor Agreement or the PSA.
The special servicer will have no obligation to make any Servicing Advances, but may make a Servicing Advance on an urgent or emergency basis in its discretion. No Servicing Advances will be made with respect to any Serviced Whole Loan if the related Mortgage Loan is no longer held by the issuing entity or if such Serviced Whole Loan is no longer serviced under the PSA and no Servicing Advances will be made for any Non-Serviced Whole Loan under the PSA. Any requirement of the master servicer or the trustee to make an Advance in the PSA is intended solely to provide liquidity for the benefit of the Certificateholders and not as credit support or otherwise to impose on any such person the risk of loss with respect to one or more Mortgage Loans or the related Companion Loan.
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The master servicer will also be obligated to make Servicing Advances with respect to Serviced Whole Loans. With respect to any Non-Serviced Whole Loan, the applicable servicer under the related Non-Serviced PSA will be obligated to make servicing advances with respect to such Non-Serviced Whole Loan. See “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced Pari Passu Whole Loans”, “—The Non-Serviced AB Whole Loans” and “—Servicing of the Non-Serviced Mortgage Loans” below.
Nonrecoverable Advances
Notwithstanding the foregoing, no party to the PSA will be obligated to make any Advance that it determines in its reasonable judgment would, if made, be non-recoverable (including recovery of interest on the Advance) out of Related Proceeds (a “Nonrecoverable Advance”). In addition, the special servicer may, at its option make a determination in accordance with the Servicing Standard that any P&I Advance or Servicing Advance, if made or previously made, would be a Nonrecoverable Advance, and if it makes such a determination, must deliver to the master servicer, the Directing Holder (for so long as no Consultation Termination Event is continuing) (and, with respect to a Serviced Mortgage Loan, to any master servicer or special servicer under the PSA governing any securitization trust into which the related Pari Passu Companion Loan is deposited, and, with respect to any Non-Serviced Mortgage Loan, the related master servicer under the related Non-Serviced PSA), the certificate administrator, the trustee, the operating advisor and the 17g-5 Information Provider notice of such determination, which determination may be conclusively relied upon by, and will be binding upon, the master servicer and the trustee. The special servicer will have no such obligation to make an affirmative determination that any P&I Advance or Servicing Advance is, or would be, recoverable, and in the absence of a determination by the special servicer that such an Advance is non-recoverable, each such decision will remain with the master servicer or the trustee, as applicable. If the special servicer makes a determination that only a portion, and not all, of any previously made or proposed P&I Advance or Servicing Advance is non-recoverable, the master servicer and the trustee will have the right to make its own subsequent determination that any remaining portion of any such previously made or proposed P&I Advance or Servicing Advance is non-recoverable.
In making such non-recoverability determination, each person will be entitled to consider (among other things): (a) the obligations of the borrower under the terms of the related Mortgage Loan or Companion Loan, as applicable, as it may have been modified, (b) the related Mortgaged Properties in their “as-is” or then-current conditions and occupancies, as modified by such party’s assumptions regarding the possibility and effects of future adverse change with respect to such Mortgaged Properties, (c) estimated future expenses, (d) estimated timing of recoveries, and will be entitled to give due regard to the existence of any Nonrecoverable Advances which, at the time of such consideration, the recovery of which are being deferred or delayed by the master servicer or the trustee, as applicable, in light of the fact that Related Proceeds are a source of recovery not only for the Advance under consideration but also a potential source of recovery for such delayed or deferred Advance, and (e) with respect to a Non-Serviced Whole Loan, any non-recoverability determination of the other master servicer or other trustee under the related Non-Serviced PSA relating to a principal and interest advance for a Non-Serviced Companion Loan. In addition, any such person may update or change its recoverability determinations (but not reverse any other person’s determination or prohibit any such other authorized person from making a determination, that an Advance is non-recoverable) at any time and may obtain at the expense of the issuing entity any analysis, appraisals or market value estimates or other information for such purposes. Absent bad faith, any non-recoverability determination described in this paragraph will be conclusive and binding on the Certificateholders, and may be conclusively relied upon by, and will be binding upon, the master servicer and the trustee. The master servicer and the trustee will be entitled to rely conclusively on any non-recoverability determination of the special servicer. Nonrecoverable Advances will represent a portion of the losses to be borne by the Certificateholders.
Recovery of Advances
The master servicer, the special servicer or the trustee, as applicable, will be entitled to recover (a) any Servicing Advance made out of its own funds from any amounts collected in respect of a Mortgage Loan (or, consistent with the related Intercreditor Agreement, a Serviced Whole Loan) as to which such
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Servicing Advance was made, and (b) any P&I Advance made out of its own funds from any amounts collected in respect of a Mortgage Loan as to which such P&I Advance was made, whether in the form of late payments, insurance and condemnation proceeds, liquidation proceeds or otherwise from the related Mortgage Loan (“Related Proceeds”). Each of the master servicer and the trustee will be entitled to recover any Advance by it that it subsequently determines to be a Nonrecoverable Advance out of general collections relating to the Mortgage Loans on deposit in the Collection Account (first from principal collections and then from any other collections). Amounts payable in respect of each Serviced Companion Loan pursuant to the related Intercreditor Agreement will not be available for distributions on the certificates or for the reimbursement of Nonrecoverable Advances that are P&I Advances of principal or interest with respect to the related Mortgage Loan, but will be available, in accordance with the PSA and related Intercreditor Agreement, for the reimbursement of any Servicing Advances with respect to the related Serviced Whole Loan. With respect to a Servicing Advance on a Serviced Whole Loan, the master servicer or the trustee, as applicable, will be entitled to reimbursement first, out of amounts allocable to any Subordinate Companion Loan(s), then, from amounts that would have been allocable to the holder of the related Mortgage Loan and any related Serviced Pari Passu Companion Loan, on a pro rata basis (based on each such loan’s outstanding principal balance), and then, if the Servicing Advance is a Nonrecoverable Advance, from general collections of the issuing entity; provided that the master servicer will be required, after receiving payment from amounts on deposit in the Collection Account, if any, to (i) promptly notify the holder of the related Companion Loan and (ii) use commercially reasonable efforts to exercise on behalf of the issuing entity the rights of the issuing entity under the related Intercreditor Agreement to obtain reimbursement for a pro rata portion of such amount allocable to the related Companion Loans from the holders of such Companion Loans.
If the funds in the Collection Account relating to the Mortgage Loans allocable to principal on the Mortgage Loans are insufficient to fully reimburse the party entitled to reimbursement, then such party as an accommodation may elect, on a monthly basis, at its sole option and discretion to defer reimbursement of the portion that exceeds such amount allocable to principal (in which case interest will continue to accrue on the unreimbursed portion of the advance) for a time as required to reimburse the excess portion from principal for a consecutive period up to 12 months (provided that any such deferral exceeding 6 months will require, other than during the continuance of any Control Termination Event, the consent of the Directing Holder) and any election to so defer will be deemed to be in accordance with the Servicing Standard; provided that no such deferral may occur at any time to the extent that amounts otherwise distributable as principal are available for such reimbursement.
In connection with a potential election by the master servicer or the trustee to refrain from the reimbursement of all or a portion of a particular Nonrecoverable Advance during the one month collection period ending on the related Determination Date for any Distribution Date, the master servicer or the trustee will be authorized to wait for principal collections on the Mortgage Loans to be received until the end of such collection period before making its determination of whether to refrain from the reimbursement of all or a portion of a particular Nonrecoverable Advance; provided, however, that if at any time the master servicer or the trustee, as applicable, elects, in its sole discretion, not to refrain from obtaining such reimbursement or otherwise determines that the reimbursement of a Nonrecoverable Advance during a one month collection period will exceed the full amount of the principal portion of general collections deposited in the Collection Account for such Distribution Date, then the master servicer or the trustee, as applicable, will be required to use reasonable efforts to give the 17g-5 Information Provider 15 days’ notice of such determination for posting on the 17g-5 Information Provider’s website, unless extraordinary circumstances make such notice impractical, and thereafter will be required to deliver copies of such notice to the 17g-5 Information Provider as soon as practical. Notwithstanding the foregoing, failure to give such notice will in no way affect the master servicer’s or the trustee’s election whether to refrain from obtaining such reimbursement.
Each of the master servicer and the trustee will be entitled to recover any Advance that is outstanding at the time that a Mortgage Loan is modified but is not repaid in full by the borrower in connection with such modification but becomes an obligation of the borrower to pay such amounts in the future (such Advance, together with interest on that Advance, a “Workout-Delayed Reimbursement Amount”) out of principal collections on the Mortgage Loans in the Collection Account.
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Any amount that constitutes all or a portion of any Workout-Delayed Reimbursement Amount may in the future be determined to constitute a Nonrecoverable Advance and thereafter will be recoverable as any other Nonrecoverable Advance.
In connection with its recovery of any Advance, each of the master servicer, the special servicer and the trustee will be entitled to be paid, out of any amounts relating to the Mortgage Loans then on deposit in the Collection Account, interest at the Prime Rate, compounded annually (the “Reimbursement Rate”), accrued on the amount of the Advance from the date made to, but not including, the date of reimbursement. Neither the master servicer nor the trustee will be entitled to interest on P&I Advances that accrues before the related due date has passed and any applicable grace period has expired. The “Prime Rate” (and solely with respect to the master servicer and special servicer, subject to a floor rate of 2.0%) will be the prime rate, for any day, set forth in The Wall Street Journal, New York edition.
See “—Servicing of the Non-Serviced Mortgage Loans” and “Description of the Mortgage Pool—The Whole Loans” for reimbursements of servicing advances made in respect of each Non-Serviced Whole Loan under the related Non-Serviced PSA.
| Accounts |
The master servicer is required to establish and maintain, or cause to be established and maintained, one or more accounts and subaccounts (collectively, the “Collection Account”) in its own name on behalf of the trustee and for the benefit of the Certificateholders. The master servicer is required to deposit in the Collection Account within two Business Days following receipt of properly identified and available funds all payments and collections due after the Cut-off Date and other amounts received or advanced with respect to the Mortgage Loans (including, without limitation, all proceeds (the “Insurance and Condemnation Proceeds”) received under any hazard, title or other insurance policy that provides coverage with respect to a Mortgaged Property or the related Mortgage Loan or in connection with the full or partial condemnation of a Mortgaged Property (other than proceeds applied to the restoration of the Mortgaged Property or released to the related borrower in accordance with the Servicing Standard (or, if applicable, the special servicer) and/or the terms and conditions of the related Mortgage) and all other amounts received and retained in connection with the liquidation of any Mortgage Loan that is defaulted and any related defaulted Companion Loans or property acquired by foreclosure or otherwise) together with the net operating income (less reasonable reserves for future expenses) derived from the operation of any REO Properties. Notwithstanding the foregoing, the collections on the Whole Loans will be limited to the portion of such amounts that are payable to the holder of the related Mortgage Loan pursuant to the related Intercreditor Agreement.
The master servicer will also be required to establish and maintain a segregated custodial account (the “Serviced Whole Loan Custodial Account”) with respect to each Serviced Whole Loan, which may be a sub-account or ledger account of the Collection Account, and deposit amounts collected in respect of each Serviced Whole Loan in the related Serviced Whole Loan Custodial Account. The issuing entity will only be entitled to amounts on deposit in a Serviced Whole Loan Custodial Account to the extent these funds are not otherwise payable to the holder of a related Serviced Companion Loan or payable or reimbursable to any party to the PSA. Any amounts in a Serviced Whole Loan Custodial Account to which the issuing entity is entitled will be transferred on a monthly basis to the Collection Account.
With respect to each Distribution Date, the master servicer will be required to disburse from the Collection Account and remit to the certificate administrator for deposit into the Lower-Tier REMIC Distribution Account in respect of the related Mortgage Loans, to the extent of funds on deposit in the Collection Account, on the related Master Servicer Remittance Date, the Available Funds for such Distribution Date and any yield maintenance charges or prepayment premiums received as of the related Determination Date. The certificate administrator is required to establish and maintain various accounts, including a “Lower-Tier REMIC Distribution Account”, an “Upper-Tier REMIC Distribution Account” and an “Excess Interest Distribution Account”, each of which may be sub-accounts of a single account (collectively, the “Distribution Accounts”), in its own name on behalf of the trustee and for the benefit of the Certificateholders.
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On each Distribution Date, the certificate administrator is required to apply amounts on deposit in the Upper-Tier REMIC Distribution Account (which will include all funds that were remitted by the master servicer from the Collection Account), plus, among other things, any P&I Advances, less amounts, if any, distributable to the Class S and Class R certificates as set forth in the PSA, generally to make distributions of interest and principal from (i) Available Funds to the holders of the Non-VRR Certificates (other than the Class S certificates) and (ii) VRR Available Funds to the holders of the VRR Interest, as described under “Description of the Certificates—Distributions” and “Credit Risk Retention—The VRR Interest”.
The certificate administrator is also required to establish and maintain an account (the “Interest Reserve Account”) which may be a sub-account of the Distribution Account, in its own name on behalf of the trustee for the benefit of the Certificateholders. On the Master Servicer Remittance Date occurring each February and on any Master Servicer Remittance Date occurring in any January which occurs in a year that is not a leap year (in each case, unless the related Distribution Date is the final Distribution Date), the certificate administrator will be required to deposit amounts remitted by the master servicer or P&I Advances made on the related Mortgage Loans into the Interest Reserve Account during the related interest period, in respect of the Mortgage Loans that accrue interest on an Actual/360 Basis (collectively, the “Actual/360 Loans”), in an amount equal to one day’s interest at the Net Mortgage Rate for each such Actual/360 Loan on its Stated Principal Balance and as of the Distribution Date in the month preceding the month in which the Master Servicer Remittance Date occurs, to the extent a Periodic Payment or P&I Advance or other deposit is made in respect of the Mortgage Loans (all amounts so deposited in any consecutive January (if applicable) and February, “Withheld Amounts”). On the Master Servicer Remittance Date occurring each March (or February, if the related Distribution Date is the final Distribution Date), the certificate administrator will be required to withdraw from the Interest Reserve Account an amount equal to the Withheld Amounts from the preceding January (if applicable) and February, if any, and deposit that amount into the Lower-Tier REMIC Distribution Account.
The certificate administrator is also required to establish and maintain an account (the “Excess Interest Distribution Account”), which may be a sub-account of the Distribution Account, in the name of the trustee for the benefit of the holders of the Class S certificates and the VRR Interest. Prior to the applicable Distribution Date, the master servicer is required to remit to the certificate administrator for deposit into the Excess Interest Distribution Account an amount equal to the Excess Interest received by the master servicer on or prior to the related Determination Date.
The certificate administrator may be required to establish and maintain an account (the “Gain-on-Sale Reserve Account”), which may be a sub-account of the Distribution Account, in its own name on behalf of the trustee for the benefit of the Certificateholders. To the extent that any gains are realized on sales of Mortgaged Properties (or, with respect to any Whole Loan, the portion of such amounts that are payable on the related Mortgage Loan pursuant to the related Intercreditor Agreement), such gains will be deposited into the Gain-on-Sale Reserve Account. In connection with each Distribution Date, the certificate administrator will be required to determine if the Available Funds for such Distribution Date (determined without regard to the inclusion of any such gains therein) would be sufficient to pay all interest and principal due and owing to, and to reimburse all previously allocated Realized Losses reimbursable to, the holders of the Non-VRR Certificates on such Distribution Date. If the certificate administrator determines that such Available Funds (as so determined) would not be sufficient to make such payments and reimbursements, then the certificate administrator will be required to withdraw from the Gain-on-Sale Reserve Account and deposit in the Lower-Tier REMIC Distribution Account an amount (to be included in the Aggregate Available Funds for the related Distribution Date for allocation between the VRR Interest and the Non-VRR Certificates) equal to the lesser of (i) all amounts then on deposit in the Gain-on-Sale Reserve Account and (ii) the sum of (A) the amount of the applicable insufficiency and (B) the VRR Allocation Percentage of the amount described in the immediately preceding clause. In addition, holders of the Class R certificates will be entitled to distributions of amounts on deposit in the Gain-on-Sale Reserve Account that exceed amounts reasonably anticipated to be required to offset possible future Realized Losses and VRR Realized Losses, as determined by the special servicer from time to time, or that remain after all distributions with respect to the Non-VRR Certificates on the final Distribution Date.
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Other accounts to be established pursuant to the PSA are one or more segregated custodial accounts (the “REO Account”) for collections from REO Properties. Each REO Account will be maintained by the special servicer in its own name on behalf of the trustee and for the benefit of the Certificateholders.
The Collection Account, the Serviced Whole Loan Collection Account, the Distribution Account, the Interest Reserve Account, the Excess Interest Distribution Account, the Gain-on-Sale Reserve Account, and the REO Account are collectively referred to as the “Securitization Accounts” (but with respect to any Whole Loan, only to the extent of the issuing entity’s interest in the Whole Loan). Each of the foregoing accounts will be held at a depository institution or trust company meeting the requirements of the PSA.
Amounts on deposit in the foregoing accounts may be invested in certain United States government securities and other investments meeting the requirements of the PSA. Interest or other income earned on funds in the accounts maintained by the master servicer, the certificate administrator or the special servicer, as applicable, if any, will be payable to such person as additional compensation, and such person will be required to bear any losses resulting from their investment of such funds.
“Business Day” means any day other than (i) a Saturday or a Sunday, (ii) a day on which (a) banking institutions in New York or any of the jurisdictions in which any of the respective primary servicing or corporate offices of the master servicer or any special servicer, corporate trust offices of either the certificate administrator or the trustee or primary corporate office of any financial institution holding the collection account or other trust administration accounts are located, or (b) the New York Stock Exchange or the Federal Reserve System of the United States of America, are authorized or obligated by law or executive order to remain closed.
Withdrawals from the Collection Account
The master servicer may, from time to time, make withdrawals from the Collection Account (or the applicable subaccount of the Collection Account, exclusive of the Serviced Whole Loan Custodial Account that may be a subaccount of the Collection Account) for any of the following purposes, in each case only to the extent permitted under the PSA and with respect to the Serviced Whole Loan, subject to the terms of the related Intercreditor Agreement, without duplication (the order set forth below not constituting an order of priority for such withdrawals):
(i) to remit on each Master Servicer Remittance Date (A) to the certificate administrator for deposit into the Lower-Tier REMIC Distribution Account certain portions of the Available Funds and any prepayment premiums or yield maintenance charges attributable to the Mortgage Loans on the related Distribution Date, (B) to the certificate administrator for deposit into the Excess Interest Distribution Account an amount equal to the Excess Interest received during the applicable Collection Period, if any, or (C) to the certificate administrator for deposit into the Interest Reserve Account an amount required to be withheld as described above under “—Accounts”;
(ii) to pay or reimburse the master servicer, the special servicer and the trustee, as applicable, pursuant to the terms of the PSA for Advances made by any of them and interest on Advances (the master servicer’s, special servicer’s or the trustee’s respective right, as applicable, to reimbursement for items described in this clause (ii) being limited as described above under “—Advances”) (provided that with respect to each Serviced Whole Loan, such reimbursements are subject to the terms of the related Intercreditor Agreement);
(iii) to pay to the master servicer and the special servicer, as compensation, the aggregate unpaid servicing compensation;
(iv) to pay itself any Net Prepayment Interest Excess;
(v) to pay to the operating advisor the Operating Advisor Consulting Fee (but only to the extent actually received from the related borrower) or the Operating Advisor Fee;
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(vi) to pay to the asset representations reviewer the unpaid Asset Representations Reviewer Asset Review Fee (to the extent such fee is to be paid by the issuing entity);
(vii) to reimburse the trustee, the special servicer and the master servicer, as applicable, for any Nonrecoverable Advances or Workout-Delayed Reimbursement Amounts;
(viii) to reimburse the master servicer, the special servicer or the trustee, as applicable, for any unreimbursed expenses reasonably incurred with respect to each related Mortgage Loan that has been repurchased or substituted by such person pursuant to the PSA or otherwise;
(ix) to reimburse the master servicer or the special servicer for any unreimbursed expenses reasonably incurred by such person in connection with the enforcement of the applicable mortgage loan seller’s obligations under the applicable section of the related MLPA;
(x) to pay for any unpaid costs and expenses incurred by the issuing entity;
(xi) to pay the master servicer and the special servicer, as applicable, as additional servicing compensation, (A) interest and investment income earned in respect of amounts relating to the issuing entity held in the Collection Account and the companion loan distribution account (but only to the extent of the net investment earnings during the applicable one month period ending on the related Distribution Date) and (B) certain penalty charges and default interest;
(xii) to recoup any amounts deposited in the Collection Account in error;
(xiii) to the extent not reimbursed or paid pursuant to any of the above clauses, (A) to reimburse or pay the master servicer, the special servicer, the operating advisor, the asset representations reviewer, the depositor or any of their respective directors, officers, members, managers, employees and agents, unpaid additional expenses of the issuing entity and certain other unreimbursed expenses incurred by such person pursuant to and to the extent reimbursable under the PSA and to satisfy any indemnification obligations of the issuing entity under the PSA and (B) to reimburse or pay any party to the PSA any unpaid expenses specifically reimbursable from the Collection Account under the PSA;
(xiv) to pay for the cost of the opinions of counsel or the cost of obtaining any extension to the time in which the issuing entity is permitted to hold REO Property;
(xv) to pay any applicable federal, state or local taxes imposed on any Trust REMIC, or any of their assets or transactions, together with all incidental costs and expenses, to the extent that none of the master servicer, the special servicer, the certificate administrator or the trustee is liable under the PSA;
(xvi) to pay the CREFC® Intellectual Property Royalty License Fee;
(xvii) to reimburse the certificate administrator out of general collections on the Mortgage Loans and REO Properties for legal expenses incurred by and reimbursable to it by the issuing entity of any administrative or judicial proceedings related to an examination or audit by any governmental taxing authority;
(xviii) to pay the applicable mortgage loan seller or any other person, with respect to each Mortgage Loan, if any, previously purchased or replaced by such person pursuant to the PSA, all amounts received thereon subsequent to the date of purchase or replacement relating to periods after the date of purchase or replacement; and
(xix) to clear and terminate the Collection Account pursuant to a plan for termination and liquidation of the issuing entity.
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No amounts payable or reimbursable to the parties to the PSA out of general collections that do not specifically relate to a Serviced Whole Loan may be reimbursable from amounts that would otherwise be payable to the related Companion Loan.
Certain costs and expenses (such as a pro rata share of any related Servicing Advances) allocable to the Mortgage Loan that is part of a Serviced Whole Loan may be paid or reimbursed out of payments and other collections on the other Mortgage Loans, subject to the issuing entity’s right to reimbursement from future payments and other collections on the related Companion Loan or from general collections with respect to the securitization of the related Companion Loan. If the master servicer makes, with respect to any Serviced Whole Loan, any reimbursement or payment out of the Collection Account to cover the related Serviced Companion Loan’s share of any cost, expense, indemnity, Servicing Advance or interest on such Servicing Advance, or fee with respect to such Serviced Whole Loan, then the master servicer must use efforts consistent with the Servicing Standard to collect such amount out of collections on such Serviced Companion Loan or, if and to the extent permitted under the related Intercreditor Agreement, from the holder of the related Serviced Companion Loan.
The master servicer will also be entitled to make withdrawals, from time to time, from the Collection Account of amounts necessary for the payments or reimbursements required to be paid to the parties to the applicable Non-Serviced PSA, pursuant to the applicable Intercreditor Agreement and the applicable Non-Serviced PSA. See “—Servicing of the Non-Serviced Mortgage Loans” and “Description of the Mortgage Pool—The Whole Loans”.
If a P&I Advance is made with respect to any Serviced Mortgage Loan that is part of a Whole Loan, then that P&I Advance, together with interest on such P&I Advance, may only be reimbursed out of future payments and collections on that Mortgage Loan or, as and to the extent described under “—Advances” above, on other Mortgage Loans, but not out of payments or other collections on the related Serviced Companion Loan. Likewise, the Certificate Administrator/Trustee Fee and the Operating Advisor Fee that accrue with respect to any Serviced Mortgage Loan that is part of a Whole Loan and any other amounts payable to the operating advisor may only be paid out of payments and other collections on such Serviced Mortgage Loan and/or the Mortgage Pool generally, but not out of payments or other collections on the related Pari Passu Companion Loan.
Servicing and Other Compensation and Payment of Expenses
| General |
The master servicer, special servicer, certificate administrator, trustee, operating advisor and asset representations reviewer will be entitled to payment of certain fees as compensation for services performed under the PSA. Below is a summary of the fees payable to the master servicer, special servicer, certificate administrator, trustee, operating advisor and (under some circumstances) asset representations reviewer from amounts that the issuing entity is entitled to receive or amounts paid by certain third parties. In addition, CREFC® will be entitled to a license fee for use of their names and trademarks, including the CREFC® Investor Reporting Package. Certain additional fees and costs payable by the related borrowers are allocable to the master servicer, special servicer, trustee, and operating advisor, but such amounts are not payable from amounts that the issuing entity is entitled to receive.
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The amounts available for distribution on the certificates on any Distribution Date will generally be net of the following amounts:
Type/Recipient |
Amount |
Frequency |
Source of Payment | |||
| Fees | ||||||
| Master Servicing Fee/master servicer | The Stated Principal Balance of each Mortgage Loan, REO Loan or Serviced Companion Loan multiplied by the Servicing Fee Rate calculated on the same basis as interest accrues on the Mortgage Loan, REO Loan or Serviced Companion Loan. | Monthly | Payment of interest on the related Mortgage Loan, REO Loan or Serviced Companion Loan or if unpaid after final recovery on the related Mortgage Loan, out of general collections on deposit in the Collection Account with respect to the other Mortgage Loans. | |||
| Additional Master Servicing Compensation/master servicer | Prepayment interest excess (to the extent any excess exceeds the amount of any Prepayment Interest Shortfalls). | From time to time | Any actual prepayment interest excess. | |||
| Additional Master Servicing Compensation/master servicer | 100% of any amounts collected for checks returned for insufficient funds on accounts maintained by the master servicer. | From time to time | The related fees. | |||
| Additional Master Servicing Compensation/master servicer | All investment income earned on amounts on deposit in the Collection Account and certain custodial and reserve accounts and fees for insufficient funds on returned checks. | Monthly | The investment income. | |||
| Special Servicing Fee/special servicer | The Stated Principal Balance of each Specially Serviced Loan (including any related Serviced Companion Loan) and REO Loan multiplied by the Special Servicing Fee Rate calculated on the same basis as interest accrues on the Mortgage Loan, REO Loan or Serviced Companion Loan. | Monthly | First out of collections on the related Mortgage Loan and REO Loan and then from general collections in the collection account (and custodial account with respect to a Serviced Companion Loan, if applicable), subject to certain limitations. | |||
| Workout Fee/special servicer | 1.0% of each collection of principal and interest on each Corrected Loan (including any related Serviced Companion Loan), subject to a cap described under “—Special Servicing Compensation”. | Monthly | The related collection of principal or interest. |
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| Type/Recipient | Amount | Frequency | Source of Payment | |||
| Liquidation Fee/special servicer | 1.0% of each recovery of Liquidation Proceeds, net of certain expenses related to the liquidation and subject to a cap described under “—Special Servicing Compensation”. | Upon receipt of Liquidation Proceeds | The related Liquidation Proceeds. | |||
| Additional Servicing Compensation/master servicer and/or special servicer | All late payment fees and Net Default Interest, Modification Fees, assumption application fees, assumption, waiver consent and earnout fees, defeasance fees, review fees, processing fees, loan service transaction fees, demand fees, beneficiary statement charges and/or other similar items.(1) | From time to time | The related fees. | |||
| Solely payable to the special servicer, all interest or other income earned on deposits in any REO Account. | Monthly | The investment income. | ||||
| Additional Special Servicing Compensation/special servicer | 100% of any amounts collected for checks returned for insufficient funds on the REO Account. | From time to time | The related fees. | |||
| Certificate Administrator/Trustee Fee/certificate administrator/trustee | The Certificate Administrator/Trustee Fee Rate multiplied by the Stated Principal Balance of the Mortgage Loans and REO Loans calculated on the same basis as interest accrues on the Mortgage Loans and REO Loans. | Monthly | Payment of interest on the related Mortgage Loan or REO Loan. | |||
| Operating Advisor Fee/operating advisor | The Operating Advisor Fee Rate multiplied by the Stated Principal Balance of the Mortgage Loans and the REO Loans (including Non-Serviced Mortgage Loans, but excluding any Companion Loans) calculated on the same basis as interest accrued on the Mortgage Loans and REO Loans. | Monthly | Payment of interest on the related Mortgage Loan or REO Loan. |
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| Type/Recipient | Amount | Frequency | Source of Payment | |||
| Operating Advisor Consulting Fee/operating advisor | A fee in connection with each Major Decision for which the operating advisor has consulting rights equal to $10,000 or such lesser amount as the related borrower pays with respect to any Mortgage Loan or REO Loan. | From time to time | Paid by related borrower. | |||
| Asset Representations Reviewer Asset Review Fee/asset representations reviewer | A reasonable and customary hourly fee, plus any related costs and expenses; provided that such fee will not be greater than the Asset Representations Reviewer Fee Cap. | From time to time | Payable by the related mortgage loan seller in connection with each Asset Review; provided, however, that if the related mortgage loan seller (i) is insolvent or (ii) at any time after the outstanding Certificate Balances of the Control Eligible Certificates have been reduced to zero as a result of the allocation of Realized Losses to such certificates, fails to pay such amount within 90 days of written request by the asset representations reviewer, such fee will be paid by the trust. | |||
| CREFC® Intellectual Property Royalty License Fee | Amount of interest accrued during an Interest Accrual Period at the CREFC® Intellectual Property Royalty License Fee Rate on the same balance, in the same manner and for the same number of days as interest at the applicable Mortgage Rate accrued with respect to each Mortgage Loan during the related Interest Accrual Period. | Monthly | Payment of interest on the related Mortgage Loan. |
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| Type/Recipient | Amount | Frequency | Source of Payment | |||
Expenses
|
||||||
| Reimbursement of Servicing Advances/master servicer/trustee | To the extent of funds available, the amount of any Servicing Advances. | From time to time | Recoveries on the related Mortgage Loan or Serviced Companion Loan, or to the extent that the party making the advance determines it is nonrecoverable, from general collections in the Collection Account (and custodial account with respect to a Serviced Companion Loan, if applicable), subject to certain limitations. | |||
| Interest on Servicing Advances/master servicer/trustee | At Reimbursement Rate, compounded annually. | When Advance is reimbursed | First from late payment charges and default interest on the related Mortgage Loan or Serviced Companion Loan in excess of the regular interest rate, and then from general collections in the Collection Account (and custodial account with respect to a Serviced Companion Loan, if applicable), subject to certain limitations. | |||
| Reimbursement of P&I Advances/master servicer/trustee | To the extent of funds available, the amount of any P&I Advances. | From time to time | Recoveries on the related Mortgage Loan, or to the extent that the party making the advance determines it is nonrecoverable, from general collections in the Collection Account, subject to certain limitations. | |||
| Interest on P&I Advances/master servicer/trustee | At Reimbursement Rate, compounded annually. | When Advance is reimbursed | First from late payment charges and default interest on the related Mortgage Loan in excess of the regular interest rate, and then from general collections in the Collection Account from the Mortgage Loan but not any Serviced Companion Loan, subject to certain limitations. |
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| Type/Recipient | Amount | Frequency | Source of Payment | |||
| Expenses, including without limitation, indemnification expenses/trustee, certificate administrator, operating advisor, the asset representations reviewer, master servicer and special servicer | Amounts for which the trustee, the certificate administrator, the operating advisor, the asset representations reviewer, the master servicer and the special servicer are entitled to indemnification or reimbursement. | From time to time | General collections in the Collection Account (and custodial account with respect to a Serviced Companion Loan, if applicable), subject to certain limitations, or the Distribution Account. | |||
| Expenses of the issuing entity not Advanced (may include environmental remediation, appraisals, expenses of operating REO Property and any independent contractor hired to operate REO Property) | Based on third party charges. | From time to time | First from income on the related REO Property, if applicable, and then from general collections in the Collection Account (and custodial account with respect to a Serviced Companion Loan, if applicable), subject to certain limitations |
(1) Allocable between the master servicer and the special servicer as provided in the PSA.
Pursuant to the PSA, any successor master servicer or special servicer assuming the obligations of the master servicer or special servicer under the PSA generally will be entitled to the compensation to which the master servicer or the special servicer would have been entitled to receive after such successor becomes the master servicer or the special servicer, as applicable. If no successor master servicer or special servicer can be obtained to perform such obligations for such compensation, additional amounts payable to such successor master servicer or special servicer will be treated as Realized Losses and VRR Realized Losses. The PSA does not provide for any successor trustee to receive compensation in excess of that paid to its predecessor trustee.
“Net Default Interest” with respect to any Mortgage Loan and any Distribution Date, any default interest accrued on such Mortgage Loan during the preceding Collection Period, less amounts required to pay the master servicer, the special servicer or the trustee, as applicable, interest on the related Advances on the related Mortgage Loan at the Reimbursement Rate and to reimburse the issuing entity for certain additional expenses of the trust on the related Mortgage Loan (including Special Servicing Fees, Workout Fees and Liquidation Fees).
Master Servicing Compensation
Pursuant to the PSA, the master servicer will be entitled to withdraw the Master Servicing Fee for the Mortgage Loans from the Collection Account. The “Master Servicing Fee” will be payable monthly and will accrue at a rate per annum equal to 0.00125% (the “Master Servicing Fee Rate”) that is a component of the Servicing Fee Rate. The “Servicing Fee” will be payable monthly and will accrue at a percentage rate per annum (the “Servicing Fee Rate”) equal to the Administrative Cost Rate set forth on Annex A-1 under the heading “Administrative Cost Rate”, less the Certificate Administrator/Trustee Fee Rate, the Operating Advisor Fee Rate and the CREFC® Intellectual Property Royalty License Fee Rate, for each Mortgage Loan and will include the Master Servicing Fee and any fee for primary servicing functions payable to the master servicer or the applicable primary servicer. The Servicing Fee will be retained by the master servicer and any other primary servicer from payments and collections (including insurance proceeds, condemnation proceeds and liquidation proceeds) in respect of each Mortgage Loan, Serviced Companion Loan and any REO Loan or REO Property, and to the extent any Servicing Fee remains unpaid at the liquidation of the related Mortgage Loan, from general collections in the Collection Account.
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The master servicer will also be entitled to retain as additional servicing compensation with respect to the Mortgage Loans and any related Serviced Companion Loans that it is servicing (together with the Master Servicing Fee, “Servicing Compensation”), to the extent not prohibited by applicable law, the related Mortgage Loan documents and any related Intercreditor Agreement, (i) all investment income earned on amounts on deposit in the Collection Account with respect to the Mortgage Loans that it is servicing (and with respect to each Serviced Whole Loan, the related separate custodial account) and certain reserve accounts (to the extent consistent with the related Mortgage Loan documents); (ii) (a) 100% of any Modification Fees and consent fees (or similar fees) related to any consents, modifications, waivers, extensions or amendments of any Mortgage Loan (and the related Serviced Companion Loans) that are non-Specially Serviced Loans and that do not involve a Major Decision, (b) 50% of any Modification Fees and consent fees (or similar fees) related to any consents, modifications, waivers, extensions or amendments of any Mortgage Loan (and the related Serviced Companion Loans) that are non-Specially Serviced Loans that involve one or more Major Decisions (whether or not processed by the special servicer), provided, that the master servicer only will receive 25% of any Modification Fees in connection with a COVID Modification related to a non-Specially Serviced Loan, (c) 100% of any defeasance fees (provided that for the avoidance of doubt, any such defeasance fee will not include the special servicer’s portion of any Modification Fees or waiver fees in connection with a defeasance that the special servicer is entitled to under the PSA), (d) 100% of assumption fees or processing fees with respect to Mortgage Loans (and the related Serviced Companion Loans) which do not involve a Major Decision, (e) 50% of assumption fees with respect to Mortgage Loans (and the related Serviced Companion Loans) which involve a Major Decision (whether or not processed by the special servicer), (f) 100% of beneficiary statement charges to the extent such beneficiary statements are prepared by the master servicer (but not including prepayment premiums or yield maintenance charges) on all Mortgage Loans (and the related Serviced Companion Loans) that are non-Specially Serviced Loans, (g) 100% of assumption application fees with respect to Mortgage Loans (and the related Serviced Companion Loans) for which the master servicer is processing the underlying assumption related transaction (whether or not the consent of the special servicer is required), (h) 0% of any such fee with respect to Specially Serviced Loans, and (i) 100% of loan service transaction fees on any Mortgage Loan that is a non-Specially Serviced Loan; (iii) Net Prepayment Interest Excess, if any; (iv) 100% of charges for checks returned for insufficient funds (with respect to any Mortgage Loan or Specially Serviced Loan on accounts maintained by the master servicer); and (v) Net Default Interest and any late payment fees that accrued during a Collection Period on any Mortgage Loan (and the related Serviced Companion Loans, if applicable) that is a non-Specially Serviced Loan to the extent collected by the issuing entity and remaining after application thereof to reimburse interest on Advances with respect to such Mortgage Loan and to reimburse the issuing entity for certain expenses (including Special Servicing Fees, Liquidation Fees and Workout Fees) of the issuing entity relating to such Mortgage Loan. If a Mortgage Loan is a Specially Serviced Loan, the special servicer will be entitled to the full amount of any and all Modification Fees, or assumption fees or any other fees, as described below under “—Special Servicing Compensation”.
Notwithstanding anything to the contrary, the master servicer and the special servicer will each be entitled to charge reasonable review fees in connection with any borrower request.
With
respect to any of the fees as to which both the master servicer and the special servicer are entitled to receive a portion thereof,
the master servicer and the special servicer will each have the right in their sole discretion, but not any obligation, to reduce
or elect not to charge its respective portion of such fee; provided that (A) neither the master servicer nor the special
servicer will have the right to reduce or elect not to charge the portion of any such fee due to the other and (B) to the
extent either the master servicer or the special servicer exercises its right to reduce or elect not to charge its respective
portion in any such fee, the party that reduced or elected not to charge its respective portion of such fee will not have any
right to share in any part of the other party’s portion of such fee. If the master servicer decides not to charge any fee,
the special servicer will nevertheless be entitled to charge its portion of the related fee to which the special servicer would
have been entitled if the master servicer had charged a fee and the master servicer will not be entitled to any of such fee charged
by the special servicer. If the special servicer decides not to charge any fee, the master servicer will nevertheless be entitled
to charge its
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portion of the related fee to which the master servicer would have been entitled if the special servicer had charged a fee and
the special servicer will not be entitled to any of such fee charged by the master servicer.
If the master servicer resigns or is terminated as the master servicer, then it will be entitled to retain the related excess servicing strip, except to the extent that any portion of such excess servicing strip is needed to compensate any replacement master servicer for assuming the duties of the master servicer, as the master servicer under the PSA. In the event that the master servicer resigns or is terminated as a primary servicer, it will be entitled to retain its primary servicing fee with respect to those underlying mortgage loans for which it is primary servicer, except to the extent that any such portion of such primary servicing fee is needed to compensate any replacement primary servicer for assuming the duties of the master servicer as a primary servicer under the PSA. The initial master servicer will be entitled to transfer any such excess servicing strip and/or primary servicing fees that may be retained by it in connection with its resignation or termination.
In connection with the Prepayment Interest Shortfall amount, the master servicer will be obligated to reduce its Servicing Compensation as provided under “Description of the Certificates—Prepayment Interest Shortfalls”.
The master servicer will pay all of its overhead expenses incurred in connection with its responsibilities under the PSA (subject to reimbursement to the extent and as described in the PSA).
Special Servicing Compensation
Pursuant to the PSA, the special servicer will be entitled to certain fees for the Mortgage Loans that it is special servicing including the Special Servicing Fee, the Workout Fee and the Liquidation Fee. The special servicer will not be entitled to retain any portion of the Excess Interest paid on any ARD Loan.
The “Special Servicing Fee” will accrue with respect to each Specially Serviced Loan and REO Loan at the Special Servicing Fee Rate calculated on the basis of the Stated Principal Balance of such Specially Serviced Loan or REO Loan, as applicable, with a minimum monthly fee of $3,500.
The “Special Servicing Fee Rate” means a rate equal to 0.25% per annum.
A “Workout Fee” will in general be payable with respect to each Corrected Loan and will be payable by the issuing entity out of each collection of interest and principal (including scheduled payments, prepayments (provided that a repurchase or substitution by a mortgage loan seller of a Mortgage Loan due to a Material Defect will not be considered a prepayment for purposes of this definition), balloon payments and payments at maturity, but excluding late payment charges, default interest and Excess Interest) received on the related Specially Serviced Loan that becomes a Corrected Loan, for so long as it remains a Corrected Loan, in an amount equal to the lesser of (1) 1.0% of each such collection of interest and principal and (2) $1,000,000 in the aggregate with respect to any particular workout of a Specially Serviced Loan; provided that no Workout Fee will be payable by the issuing entity with respect to any Corrected Loan if and to the extent that the Corrected Loan became a Specially Serviced Loan under clause (iii) of the definition of “Specially Serviced Loan” and no event of default actually occurs, unless the Mortgage Loan or Serviced Companion Loan is modified by the special servicer in accordance with the terms of the PSA or the Mortgage Loan subsequently qualifies as a Specially Serviced Loan for a reason other than under clause (iii) of the definition of “Specially Serviced Loan”; provided, further, that if a Mortgage Loan or Serviced Companion Loan becomes a Specially Serviced Loan only because of an event described in clause (i) of the definition of “Specially Serviced Loan” and the related collection of principal and interest is received within 4 months following the related maturity date as a result of the related Mortgage Loan or Serviced Companion Loan being refinanced or otherwise repaid in full, the special servicer will not be entitled to collect a Workout Fee out of the proceeds received in connection with such workout if such fee would reduce the amount available for distributions to Certificateholders, but the special servicer may collect from the related borrower and retain (x) a workout fee, (y) such other fees as are provided for in the related Mortgage Loan documents and (z) other appropriate fees in connection with such workout; provided, further, however, that in the event the Workout Fee collected over the
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course of such workout calculated at 1.0% is less than $25,000, then the special servicer will be entitled to an amount from the final payment on the related Corrected Loan (including any related Serviced Companion Loan) that would result in the total Workout Fees payable to the special servicer in respect of that Corrected Loan (including any related Serviced Companion Loan) to be $25,000. In addition, notwithstanding the foregoing, the total amount of Workout Fees payable by the issuing entity with respect to such Corrected Loan and with respect to any particular workout (assuming, for the purposes of this calculation, that such Corrected Loan continues to perform throughout its term in accordance with the terms of the related workout) will be reduced by the amount of any and all related Offsetting Modification Fees received by the special servicer as additional servicing compensation relating to that Corrected Loan; provided that the special servicer will be entitled to collect such Workout Fees from the issuing entity until such time it has been fully paid such reduced amount. In addition, the Workout Fee will be subject to the cap described below.
The Workout Fee with respect to any such Corrected Loan will cease to be payable if such Corrected Loan again becomes a Specially Serviced Loan or if the related Mortgaged Property later becomes an REO Property; provided that a new Workout Fee will become payable if and when such Mortgage Loan or Serviced Whole Loan again becomes a Corrected Loan.
If the special servicer is terminated (other than for cause) or resigns with respect to any or all of its servicing duties, it will retain the right to receive any and all Workout Fees payable with respect to each Corrected Loan during the period that it had responsibility for servicing such Specially Serviced Loan when it became a Corrected Loan (or for any Specially Serviced Loan that had not yet become a Corrected Loan because as of the time that the special servicer is terminated the borrower has not made three consecutive monthly debt service payments and subsequently the Specially Serviced Loan becomes a Corrected Loan) at the time of such termination or resignation (and the successor special servicer will not be entitled to any portion of such Workout Fees), in each case until the Workout Fee for any such Corrected Loan ceases to be payable in accordance with the preceding paragraph.
A “Liquidation Fee” will be payable by the issuing entity to the special servicer, except as otherwise described below, with respect to (i) each Specially Serviced Loan or REO Loan, (ii) each Mortgage Loan repurchased by a mortgage loan seller or other applicable party or that is subject to a Loss of Value Payment or (iii) each defaulted mortgage loan that is a Non-Serviced Mortgage Loan sold by the special servicer in accordance with the PSA, in each case, as to which the special servicer obtains a full, partial or discounted payoff from the related borrower, a loan purchaser or which is repurchased by the related mortgage loan seller outside the applicable cure period, as applicable, and, except as otherwise described below, with respect to any Specially Serviced Loan or REO Property as to which the special servicer recovered any proceeds (“Liquidation Proceeds”). The Liquidation Fee will be payable from the related payment or proceeds in an amount equal to the lesser of (1) 1.0% of such payment or proceeds (exclusive of any portion of such amount that represents penalty charges) (or, if such rate would result in an aggregate Liquidation Fee of less than $25,000, then such higher rate as would result in an aggregate Liquidation Fee equal to $25,000) and (2) $1,000,000; provided that the total amount of a Liquidation Fee payable by the issuing entity with respect to any Specially Serviced Loan, REO Loan or Mortgage Loan in connection with any particular liquidation (or partial liquidation) will be reduced by the amount of any and all related Offsetting Modification Fees received by the special servicer as additional servicing compensation relating to that Specially Serviced Loan, REO Loan or Mortgage Loan. In addition, the Liquidation Fee will be subject to the cap described below.
Notwithstanding anything to the contrary described above, no Liquidation Fee will be payable based on, or out of, Liquidation Proceeds received in connection with:
| ● | the purchase of any Defaulted Loan by the special servicer, the Directing Holder or any of their respective affiliates (except in the case of the Directing Holder (or its affiliate), if such purchase occurs more than 90 days after the transfer of the Defaulted Loan to special servicing), |
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| ● | the purchase of all of the Mortgage Loans and all property acquired in respect of any Mortgage Loan by the Sole Certificateholder, the Certificateholder owning a majority of the percentage interest of the then Controlling Class, the special servicer or the master servicer in connection with the termination of the issuing entity, |
| ● | a repurchase or replacement of a Mortgage Loan by a mortgage loan seller due to a breach of a representation or warranty or a document defect in the mortgage file prior to the expiration of certain cure periods (including any applicable extension thereof) set forth in the PSA, |
| ● | with respect to (A) an AB Whole Loan, the purchase of such AB Whole Loan by the holders of a Subordinate Companion Loan or (B) any Mortgage Loan that is subject to mezzanine indebtedness, the purchase of such Mortgage Loan by the holder of the related mezzanine loan, in each case described in clause (A) or (B) above, within 90 days after the first time that such holder’s option to purchase such Mortgage Loan becomes exercisable, |
| ● | with respect to a Serviced Companion Loan that is subject to another securitization, (A) a repurchase or replacement of such Serviced Companion Loan by the applicable mortgage loan seller due to a breach of a representation or warranty or a document defect under the related Non-Serviced PSA for the trust that owns such Serviced Companion Loan prior to the expiration of the cure period (including any applicable extension thereof) set forth therein, or (B) a purchase of the Serviced Companion Loan pursuant to a clean-up call or similar liquidation under the related Non-Serviced PSA for the trust that owns such Serviced Companion Loan, |
| ● | the purchase of the related Mortgage Loan by the related Companion Loan Holder pursuant to the related intercreditor agreement or co-lender agreement within 90 days after the first time that such holder’s option to purchase such Mortgage Loan becomes exercisable, |
| ● | a Loss of Value Payment by a mortgage loan seller, if such payment is made prior to the expiration of certain cure periods (including any applicable extension thereof) set forth in the PSA; provided that, with respect to a Serviced Companion Loan and any related Loss of Value Payment made after such periods, a Liquidation Fee will only be payable to the special servicer the extent that (i) the special servicer is enforcing the related mortgage loan seller’s obligations under the applicable MLPA with respect to such Serviced Companion Loan and (ii) the related Liquidation Fee is not otherwise required to be paid to the special servicer engaged with respect to such Serviced Companion Loan securitization trust or otherwise prohibited from being paid to the special servicer (in each case, under the related pooling and servicing agreement governing the securitization trust that includes such Serviced Companion Loan), and |
| ● | if a Mortgage Loan or Serviced Whole Loan becomes a Specially Serviced Loan only because of an event described in clause (i) of the definition of “Specially Serviced Loan” as a result of a payment default at maturity and the related Liquidation Proceeds are received within 3 months following the related maturity date as a result of the related Mortgage Loan or Serviced Whole Loan being refinanced or otherwise repaid in full (provided that the special servicer may collect from the related borrower and retain (x) a liquidation fee, (y) such other fees as are provided for in the related Mortgage Loan documents and (z) other appropriate fees in connection with such liquidation). |
If, however, Liquidation Proceeds are received with respect to any Specially Serviced Loan as to which the special servicer is properly entitled to a Workout Fee, such Workout Fee will be payable based on and out of the portion of such Liquidation Proceeds that constitute principal and/or interest. The special servicer, however, will only be entitled to receive a Liquidation Fee or a Workout Fee, but not both, with respect to Liquidation Proceeds received on any Mortgage Loan or Specially Serviced Loan.
If the special servicer is terminated or resigns, and prior to or subsequent to such resignation or termination, either (A) a Specially Serviced Loan was liquidated or is modified pursuant to an action plan submitted by the initial special servicer and approved (or deemed approved) by the Directing Holder or
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the special servicer has determined to grant a forbearance, or (B) a Specially Serviced Loan being monitored by the special servicer subsequently became a Corrected Loan, then in either such event the special servicer (and not the successor special servicer) will be paid the related Workout Fee or Liquidation Fee, as applicable.
The total amount of Workout Fees and Liquidation Fees that are payable by the issuing entity with respect to each Mortgage Loan, Serviced Whole Loan or REO Loan throughout the period such Mortgage Loan or the Mortgage Loan relating to such Serviced Whole Loan (or REO Loan) is an asset of the issuing entity will be subject to an aggregate cap of $1,000,000. For the purposes of determining whether any such cap has been reached with respect to a special servicer and a Mortgage Loan, Serviced Whole Loan or REO Loan, only the Workout Fees and Liquidation Fees paid to such special servicer with respect to such Mortgage Loan, Serviced Whole Loan or REO Loan will be taken into account, and any Workout Fees or Liquidation Fees for any other Mortgage Loans, Serviced Whole Loans or REO Loans will not be taken into account (and any Workout Fees or Liquidation Fees paid to a predecessor or successor special servicer will also not be taken into account).
In addition, the special servicer will also be entitled to retain, as additional servicing compensation:
| ● | 100% of any Modification Fees and consent fees (or similar fees) related to Specially Serviced Loans and 100% of any Modification Fees in connection with a COVID Modification related to a Specially Serviced Loan (or 75% of any Modification Fees in connection with a COVID Modification for non-Specially Serviced Loans) |
| ● | 50% of any Modification Fees (other than Modification Fees related to a COVID Modification) and consent fees (or similar fees) related to any consents, modifications, waivers, extensions or amendments of any Mortgage Loans (and the related Serviced Companion Loans) that are non-Specially Serviced Loans that involve one or more Major Decisions (whether or not processed by the special servicer), |
| ● | 100% of any assumption fees or processing fees on Specially Serviced Loans, |
| ● | 50% of assumption fees or processing fees with respect to Mortgage Loans (and the related Serviced Companion Loans) that are non-Specially Serviced Loans that involve a Major Decision (whether or not processed by the special servicer), |
| ● | 100% of assumption application fees received with respect to the Mortgage Loans (and the related Serviced Companion Loans) for which the special servicer is processing the underlying assumption related transaction, |
| ● | 100% of beneficiary statement charges to the extent such beneficiary statements are prepared by the special servicer (but not including prepayment premiums or yield maintenance charges), |
| ● | any interest or other income earned on deposits in the REO Accounts and 100% of charges for checks returned for insufficient funds on the REO Account, and |
| ● | Net Default Interest and any late payment fees that accrued during a Collection Period on any Specially Serviced Loan to the extent collected by the issuing entity and remaining after application thereof during such Collection Period to reimburse interest on Advances with respect to such Specially Serviced Loan and to reimburse the issuing entity for certain expenses (including Special Servicing Fees, Liquidation Fees and Workout Fees) of the issuing entity with respect to such Specially Serviced Loan; provided, however, that with respect to a Mortgage Loan that has a related Serviced Companion Loan, Net Default Interest and late payment fees will be allocated as provided in and subject to the terms of the related intercreditor agreement and the applicable pooling and servicing agreement. |
“Modification Fees” means, with respect to any Mortgage Loan or Serviced Companion Loan, any and all fees with respect to a modification, restructure, extension, waiver or amendment that modifies,
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restructures, extends, amends or waives any term of the related Mortgage Loan documents (as evidenced by a signed writing) agreed to by the master servicer or the special servicer (other than all assumption fees, consent fees, assumption application fees, defeasance fees, loan service transaction fees and similar fees). For each modification, restructure, extension, waiver or amendment in connection with the working out of a Specially Serviced Loan, the Modification Fees collected from the related borrower will be subject to a cap of 1% of the outstanding principal balance of such Mortgage Loan or Serviced Companion Loan on the closing date of the related modification, restructure, extension, waiver or amendment (prior to giving effect to such modification, restructure, extension, waiver or amendment); provided that no aggregate cap exists in connection with the amount of Modification Fees which may be collected from the borrower with respect to any Specially Serviced Loan or REO Loan.
“Sole Certificateholder” is any Certificateholder (or Certificateholders, provided that they act in unanimity) holding 100% of the then-outstanding certificates (including certificates with Certificate Balances that have been actually or notionally reduced by any Realized Losses or VRR Realized Losses, as applicable, or Appraisal Reduction Amounts, but excluding the Class S and Class R certificates) or an assignment of the Voting Rights thereof; provided that the Certificate Balances or the Notional Amounts of the Class X-A, Class X-B and Class X-D certificates and the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4, Class A-5, Class A-M, Class B, Class C, Class D and Class E certificates have been reduced to zero.
“Offsetting Modification Fees” means, with respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan), Serviced Whole Loan or REO Loan and with respect to any Workout Fee or Liquidation Fee payable by the issuing entity, any and all Modification Fees collected by the special servicer as additional servicing compensation, but only to the extent that (1) such Modification Fees were earned and collected by the special servicer (A) in connection with the workout or liquidation (including partial liquidation) of a Specially Serviced Loan or REO Loan as to which the subject Workout Fee or Liquidation Fee became payable or (B) in connection with any workout of a Specially Serviced Loan that closed within the prior 18 months (determined as of the closing day of the workout or liquidation as to which the subject Workout Fee or Liquidation Fee became payable) and (2) such Modification Fees were earned in connection with a modification, restructure, extension, waiver or amendment of such Mortgage Loan, Serviced Whole Loan or REO Loan at a time when such Mortgage Loan, Serviced Whole Loan or REO Loan was a Specially Serviced Loan.
The PSA will provide that the special servicer and its affiliates will be prohibited from receiving or retaining any compensation or any other remuneration (including, without limitation, in the form of commissions, brokerage fees, rebates, or as a result of any other fee-sharing arrangement) from any person (including, without limitation, the issuing entity, any borrower, any manager, any guarantor or indemnitor in respect of a Mortgage Loan or Whole Loan and any purchaser of any Mortgage Loan, Serviced Companion Loan or REO Property) in connection with the disposition, workout or foreclosure of any Mortgage Loan (or Serviced Whole Loan, if applicable), the management or disposition of any REO Property, or the performance of any other special servicing duties under the PSA, other than Permitted Special Servicer/Affiliate Fees and compensation and other remuneration expressly provided for in the PSA.
“Permitted Special Servicer/Affiliate Fee” means any commercially reasonable treasury management fees, banking fees, property condition report fees, customary title agent fees and insurance commissions and fees received or retained by the special servicer or any of its affiliates in connection with any services performed by such party with respect to any Mortgage Loan, Serviced Whole Loan or REO Property.
Disclosable Special Servicer Fees
The PSA will provide that, with respect to each Collection Period, the special servicer must deliver or cause to be delivered to the master servicer within 2 business days following the Determination Date, and the master servicer will deliver, to the extent it has received, to the certificate administrator, without charge and on the same day as the master servicer is required to deliver the CREFC® Investor Reporting Package for such Distribution Date, an electronic report which discloses and contains an itemized listing
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of any Disclosable Special Servicer Fees received by the special servicer or any of its affiliates during the related Collection Period. Such report may omit any such information that has previously been delivered to the certificate administrator by the master servicer or the special servicer. No such report will be due in any month during which no Disclosable Special Servicer Fees were received.
“Disclosable Special Servicer Fee” means, with respect to any Serviced Mortgage Loan and any related Serviced Companion Loan or REO Property, any compensation and other remuneration (including, without limitation, in the form of commissions, brokerage fees, rebates, and as a result of any other fee-sharing arrangement) received or retained by the special servicer or any of its affiliates that is paid by any person (including, without limitation, the issuing entity, any borrower, any manager, any guarantor or indemnitor in respect of a Serviced Mortgage Loan and any related Serviced Companion Loan and any purchaser of any Serviced Mortgage Loan and any related Serviced Companion Loan or REO Property) in connection with the disposition, workout or foreclosure of any Serviced Mortgage Loan and any related Serviced Companion Loan, if applicable, the management or disposition of any REO Property, and the performance by the special servicer or any such affiliate of any other special servicing duties under the PSA; provided that any compensation and other remuneration that the master servicer or the certificate administrator is permitted to receive or retain pursuant to the terms of the PSA in connection with its respective duties in such capacity as master servicer or certificate administrator under the PSA will not be Disclosable Special Servicer Fees.
Certificate Administrator and Trustee Compensation
As compensation for the performance of its routine duties, the trustee and certificate administrator will be paid a fee (collectively, the “Certificate Administrator/Trustee Fee”). The Certificate Administrator/Trustee Fee will be payable monthly from amounts received in respect of interest on each Mortgage Loan and REO Loan (prior to application of such interest payments to make payments on the certificates) and will accrue at a rate (the “Certificate Administrator/Trustee Fee Rate”), equal to 0.00869% per annum, and will be computed on the same accrual basis as interest accrues on the related Mortgage Loan and REO Loan and based on the Stated Principal Balance of the related Mortgage Loan or REO Loan as of the Due Date in the immediately preceding Collection Period. The Certificate Administrator/Trustee Fee will be paid to the certificate administrator and the certificate administrator will be required to remit to the trustee the trustee fee in accordance with the terms of the PSA from the Certificate Administrator/Trustee Fee. In addition, the trustee and certificate administrator will each be entitled to recover from the issuing entity all reasonable unanticipated expenses and disbursements incurred or made by such party in accordance with any of the provisions of the PSA, but not including routine expenses incurred in the ordinary course of performing its duties as trustee or certificate administrator, as applicable, under the PSA, and not including any expense, disbursement or advance as may arise from its willful misconduct, negligence, fraud or bad faith.
Operating Advisor Compensation
An operating advisor fee (the “Operating Advisor Fee”) will be payable to the operating advisor monthly from amounts received with respect to each Mortgage Loan and REO Loan (including Non-Serviced Mortgage Loans, but excluding any Companion Loans) and will accrue at a rate equal to the applicable Operating Advisor Fee Rate with respect to each such Mortgage Loan or REO Loan on the Stated Principal Balance of the related Mortgage Loan or REO Loan and will be calculated on the same interest accrual basis as the related Mortgage Loan or REO Loan and prorated for any partial periods.
The “Operating Advisor Fee Rate” for each Interest Accrual Period is a per annum rate equal to 0.00198% with respect to each such Mortgage Loan and REO Loan (including Non-Serviced Mortgage Loans but excluding any Companion Loans).
An Operating Advisor Consulting Fee will be payable to the operating advisor with respect to each Major Decision on which the operating advisor has consultation rights. The “Operating Advisor Consulting Fee” will be a fee for each such Major Decision equal to $10,000 (or, such lesser amount as the related
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borrower pays) with respect to any Mortgage Loan; provided that the operating advisor may in its sole discretion reduce the Operating Advisor Consulting Fee with respect to any Major Decision.
Each of the Operating Advisor Fee and the Operating Advisor Consulting Fee will be payable from funds on deposit in the Collection Account out of amounts otherwise available to make distributions on the certificates, but with respect to the Operating Advisor Consulting Fee only to the extent that such fee is actually received from the related borrower. If the operating advisor has consultation rights with respect to a Major Decision, the PSA will require the master servicer or the special servicer processing the Major Decision to use reasonable efforts consistent with the Servicing Standard to collect the applicable Operating Advisor Consulting Fee from the related borrower in connection with such Major Decision, but only to the extent not prohibited by the related loan documents; but in no event may take any enforcement action with respect to the collection of such Operating Advisor Consulting Fee other than requests for collection. The master servicer or the special servicer, as applicable, will each be permitted to waive or reduce the amount of any such Operating Advisor Consulting Fee payable by the related borrower if it determines that such full or partial waiver is in accordance with the Servicing Standard; provided that the master servicer or the special servicer, as applicable, will be required to consult on a non-binding basis with the operating advisor prior to any such waiver or reduction.
In addition to the Operating Advisor Fee and the Operating Advisor Consulting Fee, the operating advisor will be entitled to reimbursement of Operating Advisor Expenses in accordance with the terms of the PSA. “Operating Advisor Expenses” for each Distribution Date will equal any unreimbursed indemnification amounts or additional trust fund expenses payable to the operating advisor pursuant to the PSA (other than the Operating Advisor Fee and the Operating Advisor Consulting Fee).
Similar fees and/or fee provisions to those described above will be (or are expected to be) payable to the applicable operating advisor (if any) under each Non-Serviced PSA with respect to the related Non-Serviced Mortgage Loan, although there may be differences in the calculations of such fees.
Asset Representations Reviewer Compensation
With respect to each Delinquent Loan that is subject to an Asset Review, the asset representations reviewer will be entitled to a fee that is a reasonable and customary hourly fee charged by the asset representations reviewer for similar consulting assignments at the time of such review and any related costs and expenses; provided that the total payment to the asset representations reviewer will not be greater than the Asset Representations Reviewer Fee Cap (the “Asset Representations Reviewer Asset Review Fee”).
With respect to an individual Asset Review Trigger and the Mortgage Loans that are Delinquent Loans and are subject to an Asset Review (the “Subject Loans”), the “Asset Representations Reviewer Fee Cap” will equal the sum of: (i) $19,000 multiplied by the number of Subject Loans, plus (ii) $1,900 per Mortgaged Property relating to the Subject Loans in excess of one Mortgaged Property per Subject Loan, plus (iii) $2,500 per Mortgaged Property relating to a Subject Loan subject to a ground lease, plus (iv) $1,400 per Mortgaged Property relating to a Subject Loan subject to a franchise agreement, hotel management agreement or hotel license agreement, subject, in the case of each of clauses (i) through (iv), to adjustments on the basis of the year-end Consumer Price Index for All Urban Consumers, or other similar index if the Consumer Price Index for All Urban Consumers is no longer calculated, for the year of the Closing Date and for the year of the occurrence of the Asset Review.
Similar fees and/or fee provisions to those described above will be (or are expected to be) payable to the applicable asset representations reviewer (if any) under each Non-Serviced PSA with respect to the related Non-Serviced Mortgage Loan, although there may be differences in the calculations of such fees.
The related mortgage loan seller with respect to each Delinquent Loan that is subject to an Asset Review will be required to pay the portion of the Asset Representations Reviewer Asset Review Fee attributable to the Delinquent Loan contributed by it, as allocated on the basis of the hourly charges and costs and expenses incurred with respect to its related Delinquent Loans; provided that if the total charge for the asset representations reviewer on an hourly fee plus costs and expenses basis would exceed the
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Asset Representations Reviewer Fee Cap, each mortgage loan seller’s required payment will be reduced pro rata according to its proportion of the total charges until the aggregate amount owed by all mortgage loan sellers is equal to the Asset Representations Reviewer Fee Cap; provided, however, that if the related mortgage loan seller (i) is insolvent or (ii) at any time after the outstanding Certificate Balances of the Control Eligible Certificates have been reduced to zero as a result of the allocation of Realized Losses to such certificates, fails to pay such amount within 90 days of written request by the asset representations reviewer following its completion of the applicable Asset Review, such fee will be paid by the trust following delivery by the asset representations reviewer of evidence reasonably satisfactory to the master servicer or the special servicer, as applicable, of such insolvency or failure to pay such amount; provided, further, that notwithstanding any payment of such fee by the issuing entity to the asset representations reviewer, such fee will remain an obligation of the related mortgage loan seller and the master servicer or the special servicer, as applicable, will be required, to the extent consistent with the Servicing Standard, to pursue remedies against such mortgage loan seller in order to seek recovery of such amounts from such mortgage loan seller or its insolvency estate. The Asset Representations Reviewer Asset Review Fee with respect to a Delinquent Loan is required to be included in the Purchase Price for any Mortgage Loan that was the subject of a completed Asset Review and that is repurchased by the related mortgage loan seller.
CREFC® Intellectual Property Royalty License Fee
CREFC® Intellectual Property Royalty License Fee will be paid to CREFC® on a monthly basis.
“CREFC® Intellectual Property Royalty License Fee” with respect to each Mortgage Loan and REO Loan (other than the portion of an REO Loan related to any other Serviced Companion Loan) and for any Distribution Date is the amount accrued during the related Interest Accrual Period at the CREFC® Intellectual Property Royalty License Fee Rate on the Stated Principal Balance of such Mortgage Loan or REO Loan as of the close of business on the Distribution Date in such Interest Accrual Period; provided that such amounts will be computed for the same period and on the same interest accrual basis respecting which any related interest payment due or deemed due on the related Mortgage Loan or REO Loan is computed and will be prorated for partial periods. The CREFC® Intellectual Property Royalty License Fee is a fee payable to CREFC® for a license to use the CREFC® Investor Reporting Package in connection with the servicing and administration, including delivery of periodic reports to the Certificateholders, of the issuing entity pursuant to the PSA. No CREFC® Intellectual Property Royalty License Fee will be paid on any Companion Loan.
“CREFC® Intellectual Property Royalty License Fee Rate” with respect to each Mortgage Loan is a rate equal to 0.00050% per annum.
Appraisal Reduction Amounts
After an Appraisal Reduction Event has occurred with respect to a Serviced Mortgage Loan and any related Serviced Companion Loan, an Appraisal Reduction Amount is required to be calculated. An “Appraisal Reduction Event” will occur on the earliest of:
(i) the date on which such Mortgage Loan or Serviced Whole Loan becomes a Modified Mortgage Loan (as defined below),
(ii) the 120th day following the occurrence of any uncured delinquency in Periodic Payments with respect to such Mortgage Loan or Serviced Whole Loan,
(iii) (x) the 30th day following the date on which the related borrower has filed a bankruptcy petition, (y) the 30th day following the date on which a receiver is appointed and continues in such capacity in respect of a Mortgaged Property securing such Mortgage Loan or Serviced Whole Loan or (z) the 60th day following the related borrower becomes the subject of involuntary bankruptcy proceedings and such proceedings are not dismissed in respect of a Mortgaged Property securing such Mortgage Loan or Serviced Whole Loan,
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(iv) the date on which the Mortgaged Property securing such Mortgage Loan or Serviced Whole Loan becomes an REO Property, and
(v) a payment default has occurred with respect to the related balloon payment; provided, however, that if (A) the related borrower is diligently seeking a refinancing or sale of the related Mortgaged Property or Mortgaged Properties and delivers, on or prior to the related maturity date or extended maturity date, a statement to that effect, and delivers, within 30 days following the related maturity date or extended maturity date, a refinancing commitment, letter of intent or otherwise binding application for refinancing from an acceptable lender or a signed purchase agreement reasonably acceptable to the master servicer (who will be required to promptly deliver a copy to the special servicer, the operating advisor and the Directing Holder (but only for so long as no Consultation Termination Event is continuing)), (B) the related borrower continues to make its Assumed Scheduled Payment, and (C) no other Appraisal Reduction Event has occurred with respect to that Mortgage Loan or Serviced Companion Loan, then an Appraisal Reduction Event will not occur until the earlier of (1) 120 days beyond the related maturity date or extended maturity date and (2) the termination of the refinancing commitment, letter of intent, otherwise binding application for refinancing or signed purchase agreement.
A “Modified Mortgage Loan” is any Specially Serviced Loan which has been modified by the special servicer in a manner that: (a) reduces or delays the amount or timing of any payment of principal or interest due thereon (other than, or in addition to, bringing current Periodic Payments with respect to such Mortgage Loan or Serviced Companion Loan), including any reduction in the Periodic Payment; (b) except as expressly contemplated by the related mortgage, results in a release of the lien of the mortgage on any material portion of the related Mortgaged Property without a corresponding principal prepayment in an amount not less than the fair market value (as-is) of the property to be released; or (c) in the reasonable good faith judgment of the special servicer, otherwise materially impairs the value of the security for such Mortgage Loan or Serviced Companion Loan or reduces the likelihood of timely payment of amounts due thereon.
No Appraisal Reduction Event may occur at any time when the Certificate Balances of all classes of Subordinate Certificates have been reduced to zero.
Notwithstanding anything to the contrary in the definition of Appraisal Reduction Event, no event, circumstance or action that has occurred or will occur with respect to a COVID Modified Loan (other than an event described in clauses (iii) or (iv) of the definition of Appraisal Reduction Event) or the entry into of a COVID Modification Agreement will constitute an Appraisal Reduction Event, but only if, and for so long as, the related borrower and each related obligor is in compliance with the terms of the related COVID Modification Agreement. For the avoidance of doubt, in the event a borrower fails to comply with the terms of a COVID Modification Agreement (as determined by the Special Servicer in accordance with the Servicing Standard), a determination as to whether any applicable event specified in the preceding sentence constitutes an Appraisal Reduction Event will be made as though the COVID Modification never occurred; provided, however, if, pursuant to this sentence, an Appraisal Reduction Event is determined to occur prior to the date of such borrower’s failure, then such Appraisal Reduction Event will be deemed to occur on the date of such borrower’s failure.
The “COVID-19 Emergency” means the national emergency concerning the novel coronavirus disease (COVID-19) outbreak declared by the President on March 13, 2020 under the National Emergencies Act (50 U.S.C. 1601 et seq.).
A “COVID Modification” means a modification of, or forbearance or waiver in respect of, a Mortgage Loan that satisfies each of the following conditions:
(i) prior to the modification or forbearance or waiver, the related borrower certified to the Special Servicer that it is seeking limited relief from the terms of the related Mortgage Loan documents because it is experiencing a financial hardship due, directly or indirectly, to the COVID-19 Emergency;
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(ii) the related modification or forbearance or waiver provides for (a) the temporary forbearance, waiver or deferral with respect to payment obligations or operating covenants, (b) the temporary alternative use of funds on deposit in any reserve account or escrow account for any purpose other than the explicit purpose provided for in the related Mortgage Loan documents, or (c) such other modifications, forbearance or waiver that is related or incidental to clause (a) or clause (b) as may be reasonably determined by the special servicer in accordance with the Servicing Standard to address a financial hardship due, directly or indirectly, to the COVID-19 Emergency;
(iii) the related COVID Modification Agreement is entered into no later than the date the COVID-19 Emergency is declared to be over or otherwise ends;
(iv) if a default or event of default existed under the Mortgage Loan prior to the modification or forbearance or waiver, the related COVID Modification Agreement provides that such default or event of default is cured or deemed no longer outstanding;
(v) any COVID Modification Agreement (a) does not defer more than 3 monthly debt service payments under the Mortgage Loan, and (b) requires that any payments deferred in accordance with clause (ii)(a) above or reserve or escrow amounts used for alternate purposes in accordance with clause (ii)(b) above are repaid or restored in full within 24 months of the date of the first COVID Modification Agreement with respect to such Mortgage Loan; and
(vi) the related COVID Modification Agreement may (but will not be required to) provide that (a) the Mortgage Loan will be full recourse to the borrower (and that such recourse obligation is a guaranteed obligation under the related borrower sponsor guaranty) if the certification described in clause (i) is false or misleading, and/or (b) that a cash trap or sweep event will be deemed to have occurred under the terms of the Mortgage Loan documents.
A “COVID Modification Agreement” means the agreement or agreements pursuant to which a COVID Modification is effected.
A “COVID Modified Loan” means a Serviced Mortgage Loan and, if applicable, any related Serviced Companion Loan, that is subject to a COVID Modification.
The “Appraisal Reduction Amount” for any Distribution Date and for any Serviced Mortgage Loan and any related Serviced Companion Loan as to which any Appraisal Reduction Event has occurred, will be an amount, calculated by the master servicer (and, prior to the occurrence of a Consultation Termination Event, in consultation with the Directing Holder and, during the continuance of a Control Termination Event, in consultation with the operating advisor), as of the first Determination Date that is at least 10 business days following the later of (i) the date the master servicer receives from the special servicer the related appraisal or the special servicer’s Small Loan Appraisal Estimate and (ii) the occurrence of such Appraisal Reduction Event equal to the excess of:
(a) the Stated Principal Balance of that Mortgage Loan or the Stated Principal Balance of the applicable Serviced Whole Loan, as the case may be, over
(b) the excess of:
(i) the sum of:
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| ● | 90% of the appraised value of the related Mortgaged Property as determined (A) by one or more MAI appraisals obtained by the special servicer with respect to that Mortgage Loan or Serviced Whole Loan with an outstanding principal balance equal to or in excess of $2,000,000 (the costs of which will be paid by the master servicer as a Servicing Advance), minus such downward adjustments as the special servicer may make (without implying any obligation to do so) based upon its review of the appraisals and any other information it deems relevant, or (B) by an internal valuation performed by the special servicer with respect to any Mortgage Loan or Serviced Whole Loan with an outstanding principal balance less than $2,000,000; |
| ● | all escrows, letters of credit and reserves in respect of that Mortgage Loan or Serviced Whole Loan as of the date of calculation; and |
| ● | all insurance and casualty proceeds and condemnation awards that constitute collateral for the related Mortgage Loan or Serviced Whole Loan; over |
(ii) the sum as of the Due Date occurring in the month of the date of determination of:
| ● | to the extent not previously advanced by the master servicer or the trustee, all unpaid interest due on that Mortgage Loan or Serviced Whole Loan at a per annum rate equal to the Mortgage Rate (and any accrued and unpaid interest on any Subordinate Companion Loan); |
| ● | all P&I Advances on the related Mortgage Loan and all Servicing Advances on the related Mortgage Loan or Serviced Whole Loan not reimbursed from the proceeds of such Mortgage Loan or Serviced Whole Loan and interest on those Advances at the Reimbursement Rate in respect of that Mortgage Loan or Serviced Whole Loan; |
| ● | all currently due and unpaid real estate taxes and assessments, insurance premiums and ground rents, unpaid Special Servicing Fees and all other amounts due and unpaid (including any capitalized interest whether or not then due and payable) with respect to such Mortgage Loan, Serviced Whole Loan (which tax, premiums, ground rents and other amounts have not been the subject of an Advance by the master servicer or the trustee, as applicable); and |
| ● | any other unpaid additional expenses of the issuing entity in respect of such Mortgage Loan or Serviced Whole Loan. |
Each Serviced Whole Loan will be treated as a single Mortgage Loan for purposes of calculating an Appraisal Reduction Amount with respect to the Mortgage Loan and Companion Loan, as applicable, that comprise such Serviced Whole Loan. Any Appraisal Reduction Amount in respect of any Serviced Whole Loan with a Pari Passu Companion Loan will be allocated in accordance with the related Intercreditor Agreement or, if no allocation is specified in the related Intercreditor Agreement, then, pro rata, between the related Serviced Mortgage Loan and any related Serviced Pari Passu Companion Loan based upon their respective Stated Principal Balances.
The special servicer will be required to, with respect to a Mortgage Loan having a Stated Principal Balance of $2,000,000 or higher, order and use efforts consistent with the Servicing Standard to obtain an appraisal, and with respect to a Mortgage Loan having a Stated Principal Balance of less than $2,000,000, conduct a valuation (such valuation, a “Small Loan Appraisal Estimate”) or order and use efforts consistent with the Servicing Standard to obtain an appraisal, within 60 days of the occurrence of an Appraisal Reduction Event (other than with respect to a Non-Serviced Whole Loan). On the first Determination Date occurring on or after the tenth business day following the later of (i) the date the master servicer receives from the special servicer the related appraisal or the special servicer’s Small Loan Appraisal Estimate and (ii) the occurrence of such Appraisal Reduction Event, the master servicer will be required to calculate and report to the special servicer, the trustee, the certificate administrator, the operating advisor and, prior to the occurrence of any Consultation Termination Event, the Directing
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Holder (for so long as no Consultation Termination Event is continuing), the Appraisal Reduction Amount, taking into account the results of such appraisal or valuation and receipt of information reasonably requested by the master servicer from the special servicer, to the extent such information is in the possession of the special servicer, necessary to calculate the Appraisal Reduction Amount. Such report will also be forwarded by the master servicer, to the extent the related Serviced Companion Loan has been included in a securitization transaction, to the master servicer of such securitization into which the related Serviced Companion Loan has been sold, or to the holder of any related Serviced Companion Loan by the master servicer.
In the event that the special servicer has not received any required MAI appraisal within 60 days after the Appraisal Reduction Event, the Appraisal Reduction Amount will be deemed to be an amount equal to 25% of the current Stated Principal Balance of the related Mortgage Loan (or Serviced Whole Loan) until an MAI appraisal is received by the special servicer. The Appraisal Reduction Amount is calculated as of the first Determination Date that is at least ten business days after the later of (i) the special servicer’s delivery of such MAI appraisal or Small Loan Appraisal Estimate to the master servicer and (ii) the occurrence of such Appraisal Reduction Event. The special servicer, upon reasonable request, will be required to deliver to the master servicer any information in the special servicer’s possession reasonably required to determine, redetermine, calculate or recalculate any Appraisal Reduction Amount.
Other than with respect to a Non-Serviced Mortgage Loan, contemporaneously with the earliest of (i) the effective date of any modification of the maturity date or extended maturity date, Mortgage Rate, principal balance or amortization terms of any Mortgage Loan or Serviced Whole Loan or any other term thereof, any extension of the maturity date or extended maturity date of a Mortgage Loan or Serviced Whole Loan or consent to the release of any Mortgaged Property or REO Property from the lien of the related Mortgage other than pursuant to the terms of the Mortgage Loan or Serviced Whole Loan; (ii) the occurrence of an Appraisal Reduction Event; (iii) a default in the payment of a balloon payment for which an extension has not been granted; or (iv) the date on which the special servicer, consistent with the Servicing Standard, requests an Updated Appraisal, the special servicer will be required to use commercially reasonable efforts to obtain an Updated Appraisal (or a letter update for an existing appraisal which is less than two years old) of the Mortgaged Property or REO Property, as the case may be, from an independent MAI appraiser (an “Updated Appraisal”) or a Small Loan Appraisal Estimate, as applicable, in each case within 60 days of such request, provided that, the special servicer will not be required to obtain an Updated Appraisal or Small Loan Appraisal Estimate of any Mortgaged Property with respect to which there exists an appraisal or Small Loan Appraisal Estimate which is less than 9 months old.
For so long as a Mortgage Loan or Serviced Whole Loan is a Specially Serviced Loan, the special servicer is required within 30 days of the end of each 9-month period following the related Appraisal Reduction Event to use commercially reasonable efforts to order an appraisal (which may be an update of a prior appraisal), the cost of which will be paid by the master servicer as a Servicing Advance (or to the extent it would be a Nonrecoverable Advance, an expense of the issuing entity paid out of the Collection Account), or to conduct an internal valuation, as applicable. Based upon the appraisal or valuation and receipt of information reasonably requested by the master servicer from the special servicer, to the extent such information is in the possession of the special servicer, necessary to calculate the Appraisal Reduction Amount, the master servicer is required to determine or redetermine, as applicable, and report to the special servicer, the trustee, the certificate administrator, the operating advisor and, for so long as no Consultation Termination Event is continuing, the Directing Holder, the calculated or recalculated amount of the Appraisal Reduction Amount with respect to the Mortgage Loan or Serviced Whole Loan, as applicable. Such report will also be forwarded to the holder of any related Companion Loan by the master servicer. With respect to any Mortgage Loan, for so long as no Consultation Termination Event is continuing, the special servicer will consult with the Directing Holder, with respect to any appraisal, valuation or downward adjustment in connection with an Appraisal Reduction Amount. Notwithstanding the foregoing, the special servicer will not be required to obtain an appraisal or valuation with respect to a Mortgage Loan or Serviced Whole Loan that is the subject of an Appraisal Reduction Event to the extent the special servicer has obtained an appraisal or valuation with respect to the related Mortgaged Property within the 9-month period prior to the occurrence of the Appraisal Reduction Event. Instead, the master
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servicer may use the prior appraisal or valuation in calculating any Appraisal Reduction Amount with respect to the Mortgage Loan or Serviced Whole Loan.
Each Non-Serviced Mortgage Loan is subject to the provisions in the related Non-Serviced PSA relating to appraisal reductions that are similar, but not necessarily identical, to the provisions described above. The existence of an appraisal reduction under the related Non-Serviced PSA in respect of any Non-Serviced Mortgage Loan will proportionately reduce the master servicer’s or the trustee’s, as the case may be, obligation to make P&I Advances on a Non-Serviced Mortgage Loan and will generally have the effect of reducing the amount otherwise available for distributions to the Certificateholders. Pursuant to the related Non-Serviced PSA, each Non-Serviced Mortgage Loan will be treated together with each related Non-Serviced Companion Loan as a single Mortgage Loan for purposes of calculating an appraisal reduction amount with respect to the loans that comprise such Non-Serviced Whole Loan. Any appraisal reduction calculated with respect to any Non-Serviced Whole Loan will generally be allocated first, to any Subordinate Companion Loan and then, to the related Non-Serviced Mortgage Loan and the Non-Serviced Companion Loan, on a pro rata basis based upon their respective outstanding principal balances.
If any Serviced Mortgage Loan and any related Serviced Companion Loan previously subject to an Appraisal Reduction Amount that becomes a Corrected Loan, and with respect to which no other Appraisal Reduction Event is continuing, the Appraisal Reduction Amount and the related Appraisal Reduction Event will cease to exist.
As a result of calculating one or more Appraisal Reduction Amounts (and, in the case of any Whole Loan, to the extent allocated in the related Mortgage Loan), the amount of any required P&I Advance will be reduced, which will have the effect of reducing the amount of interest available to the VRR Interest (to the extent of the VRR Percentage of the reduction in such P&I Advance), on the one hand, and to the most subordinate class of certificates then-outstanding (i.e., first, to the Class H certificates, second, to the Class G certificates, third, to the Class F certificates, fourth, to the Class E certificates, fifth, to the Class D certificates, sixth, to the Class C certificates, seventh, to the Class B certificates, eighth, to the Class A-M certificates, and finally, pro rata based on their respective interest entitlements, to the Senior Certificates to the extent of the Non-VRR Percentage of the reduction in such P&I Advance), on the other hand. See “Pooling and Servicing Agreement—Advances”.
As of the first Determination Date following a Serviced Mortgage Loan becoming an AB Modified Loan, the master servicer will be required to calculate whether a Collateral Deficiency Amount exists with respect to such AB Modified Loan, taking into account the most recent appraisal obtained by the special servicer with respect to such Mortgage Loan, and all other information relevant to a Collateral Deficiency Amount determination. Upon obtaining knowledge or receipt of notice by the master servicer that a Non-Serviced Mortgage Loan has become an AB Modified Loan, the master servicer will be required to (i) promptly request from the related Non-Serviced Master Servicer, Non-Serviced Special Servicer and Non-Serviced Trustee the most recent appraisal with respect to such AB Modified Loan, in addition to all other information reasonably required by the master servicer to calculate whether a Collateral Deficiency Amount exists with respect to such AB Modified Loan, and (ii) as of the first Determination Date following receipt by the master servicer of the appraisal and any other information set forth in the immediately preceding clause (i) that the master servicer reasonably expects to receive, calculate whether a Collateral Deficiency Amount exists with respect to such AB Modified Loan, taking into account the most recent appraisal obtained by the Non-Serviced Special Servicer with respect to such Non-Serviced Mortgage Loan, and all other information relevant to a Collateral Deficiency Amount determination. Upon obtaining knowledge or receipt of notice by any other party to the PSA that a Non-Serviced Mortgage Loan has become an AB Modified Loan, such party will be required to promptly notify the master servicer thereof. The special servicer, upon reasonable prior written request, will provide the master servicer with information in its possession that is reasonably required to calculate or recalculate any Collateral Deficiency Amount. None of the special servicer, the trustee or the certificate administrator will calculate or verify any Collateral Deficiency Amount.
A “Cumulative Appraisal Reduction Amount” as of any date of determination, is equal to the sum of (i) all Appraisal Reduction Amounts then in effect, and (ii) with respect to any AB Modified Loan, any
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Collateral Deficiency Amount then in effect. The certificate administrator will be entitled to conclusively rely on the master servicer’s calculation or determination of any Cumulative Appraisal Reduction Amount.
“AB Modified Loan” means any Corrected Loan (1) that became a Corrected Loan (which includes for purposes of this definition any Non-Serviced Mortgage Loan that became a “corrected loan” (or any term substantially similar thereto) pursuant to the related Non-Serviced PSA) due to a modification thereto that resulted in the creation of an A/B note structure (or similar structure) and as to which the new junior note(s) did not previously exist or the principal amount of the new junior note(s) was previously part of either an A note held by the issuing entity or the original unmodified Mortgage Loan and (2) as to which an Appraisal Reduction Amount is not in effect.
“Collateral Deficiency Amount” means, with respect to any AB Modified Loan as of any date of determination, the excess of (i) the Stated Principal Balance of such AB Modified Loan (taking into account the related junior note(s) included therein), over (ii) the sum of (in the case of a Whole Loan, solely to the extent allocable to the subject Mortgage Loan) (x) the most recent Appraised Value for the related Mortgaged Property or Mortgaged Properties, plus (y) solely to the extent not reflected or taken into account in such Appraised Value and to the extent on deposit with, or otherwise under the control of, the lender as of the date of such determination, any capital or additional collateral contributed by the related borrower at the time the Mortgage Loan became (and as part of the modification related to) such AB Modified Loan for the benefit of the related Mortgaged Property or Mortgaged Properties (provided that in the case of a Non-Serviced Mortgage Loan, the amounts set forth in this clause (y) will be taken into account solely to the extent relevant information is received by the master servicer), plus (z) any other escrows or reserves (in addition to any amounts set forth in the immediately preceding clause (y)) held by the lender in respect of such AB Modified Loan as of the date of such determination. The certificate administrator will be entitled to conclusively rely on the master servicer’s calculation or determination of any Collateral Deficiency Amount.
For purposes of determining the Non-Reduced Certificates, the Controlling Class and whether a Control Termination Event is continuing, the VRR Percentage of any Appraisal Reduction Amounts will be allocated to the VRR Interest to notionally reduce (to not less than zero) the Certificate Balance thereof, and the Non-VRR Percentage of any Appraisal Reduction Amounts will be allocated to each class of Principal Balance Certificates in reverse sequential order to notionally reduce the Certificate Balance thereof until the related Certificate Balance of each such class is reduced to zero (i.e., first, to the Class H certificates, second, to the Class G certificates, third, to the Class F certificates, fourth, to the Class E certificates, fifth, to the Class D certificates, sixth, to the Class C certificates, seventh, to the Class B certificates, eighth, to the Class A-M certificates, and finally, pro rata based on their respective interest entitlements, to the Senior Certificates). In addition, for purposes of determining the Controlling Class and whether a Control Termination Event is continuing, the Non-VRR Percentage of Collateral Deficiency Amounts allocated to a related AB Modified Loan will be allocated to each class of Control Eligible Certificates in reverse sequential order to notionally reduce the Certificate Balance thereof until the related Certificate Balance of each such class is reduced to zero (i.e., first, to the Class H certificates, and second, to the Class G certificates). For the avoidance of doubt, for purposes of determining the Controlling Class and whether a Control Termination Event is continuing, any class of Control Eligible Certificates will be allocated the Non-VRR Percentage of both applicable Appraisal Reduction Amounts and applicable Collateral Deficiency Amounts, as described in this paragraph.
With respect to (i) any Appraisal Reduction Amount calculated for purposes of determining the Non-Reduced Certificates and (ii) any Appraisal Reduction Amount or Collateral Deficiency Amount calculated for purposes of determining the Controlling Class or whether a Control Termination Event is continuing, the appraised value of the related Mortgaged Property will be determined on an “as-is” basis. The master servicer will be required to promptly notify the certificate administrator and the special servicer of (i) any Appraisal Reduction Amount, (ii) any Collateral Deficiency Amount, and (iii) any resulting Cumulative Appraisal Reduction Amount, and the certificate administrator will be required to promptly post notice of
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such Appraisal Reduction Amount, Collateral Deficiency Amount and/or Cumulative Appraisal Reduction Amount, as applicable, to the certificate administrator’s website.
Any class of Control Eligible Certificates, the Certificate Balance of which (taking into account the application of any Appraisal Reduction Amounts or Collateral Deficiency Amounts to notionally reduce the Certificate Balance of such class) has been reduced to less than 25% of its initial Certificate Balance, is referred to as an “Appraised-Out Class”. The holders of the majority (by Certificate Balance) of an Appraised-Out Class will have the right, at their sole expense, to require the special servicer to order a supplemental appraisal of any Mortgage Loan (or Serviced Whole Loan) for which an Appraisal Reduction Event has occurred or as to which there exists a Collateral Deficiency Amount (such holders, the “Requesting Holders”). The special servicer will use its reasonable efforts to obtain an appraisal prepared on an “as-is” basis by an MAI appraiser reasonably acceptable to the special servicer within 60 days from receipt of the Requesting Holders’ written request. Upon receipt of such supplemental appraisal the special servicer will send the appraisal to the master servicer and the master servicer will recalculate such Appraisal Reduction Amount or Collateral Deficiency Amount, as applicable, based upon such supplemental appraisal and receipt of information reasonably requested by the master servicer from the special servicer, to the extent such information is in the possession of the special servicer, to make such recalculation. If required by any such recalculation, the applicable Appraised-Out Class will be reinstated as the Controlling Class and each other Appraised-Out Class will, if applicable, have its related Certificate Balance notionally restored to the extent required by such recalculation of the Appraisal Reduction Amount or Collateral Deficiency Amount, if applicable.
In addition, the Requesting Holders of any Appraised-Out Class will have the right, at their sole expense, to require the special servicer to order an additional appraisal of any Serviced Mortgage Loan for which an Appraisal Reduction Event has occurred or as to which there exists a Collateral Deficiency Amount if an event has occurred at, or with regard to, the related Mortgaged Property or Mortgaged Properties that would have a material effect on its appraised value, and the special servicer is required to use reasonable efforts to obtain an appraisal from an MAI appraiser reasonably acceptable to the special servicer within 60 days from receipt of the Requesting Holders’ written request; provided that the special servicer will not be required to obtain such appraisal if it determines in accordance with the Servicing Standard that no events at, or with regard to, the related Mortgaged Property or Mortgaged Properties have occurred that would have a material effect on the Appraised Value of the related Mortgaged Property or Mortgaged Properties. The right of the holders of an Appraised-Out Class to require the special servicer to order an additional appraisal as described in this paragraph will be limited to no more frequently than once in any 9-month period with respect to any Mortgage Loan.
Any Appraised-Out Class for which the Requesting Holders are challenging the master servicer’s Appraisal Reduction Amount or Collateral Deficiency Amount determination may not exercise any direction, control, consent and/or similar rights of the Controlling Class until such time, if any, as such class is reinstated as the Controlling Class. The rights of the Controlling Class will be exercised by the next most senior Control Eligible Certificates, if any, during such period.
With respect to each Non-Serviced Mortgage Loan, the related directing holder will be subject to provisions similar to those described above. See “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced Pari Passu Whole Loans”, “—The Non-Serviced AB Whole Loans” and “—Servicing of the Non-Serviced Mortgage Loans” below. With respect to an AB Whole Loan, the holder of the related Subordinate Companion Loan may in certain circumstances post collateral to avoid a change of control as described in “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced AB Whole Loans”.
Maintenance of Insurance
In the case of each Serviced Mortgage Loan and any related Serviced Companion Loan, as applicable (but excluding any Serviced Mortgage Loan as to which the related Mortgaged Property has become an REO Property), the master servicer will be required to use commercially reasonable efforts consistent with the Servicing Standard to cause the related borrower to maintain the following insurance
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coverage (including identifying the extent to which such borrower is maintaining insurance coverage and, if such borrower does not so maintain, the master servicer will be required to itself cause to be maintained) for the related Mortgaged Property: (a) except where the Mortgage Loan documents permit a borrower to rely on self-insurance provided by a tenant, a fire and casualty extended coverage insurance policy that does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of the full replacement cost of the improvements securing the Mortgage Loan or Serviced Whole Loan, as applicable, or the Stated Principal Balance of the Mortgage Loan or the Serviced Whole Loan, as applicable, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, and (b) all other insurance coverage as is required (including, but not limited to, coverage for acts of terrorism), subject to applicable law, under the related Mortgage Loan documents.
Notwithstanding the foregoing,
(i) the master servicer will not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless the trustee has an insurable interest and such insurance policy was (x) in effect at the time of the origination of such Mortgage Loan or the Serviced Whole Loan, as applicable, or (y) required by the related Mortgage Loan documents and is available at commercially reasonable rates; provided that the master servicer will be required to require the related borrower to maintain such insurance in the amount, in the case of clause (x), maintained at origination, and in the case of clause (y), required by such Mortgage Loan or Serviced Whole Loan, in each case, to the extent such amounts are available at commercially reasonable rates and to the extent the trustee has an insurable interest;
(ii) if and to the extent that any Mortgage Loan document grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related borrower is to obtain the requisite insurance coverage, the master servicer must (to the extent consistent with the Servicing Standard) require the related borrower to obtain the requisite insurance coverage from qualified insurers that meet the required ratings set forth in the PSA;
(iii) the master servicer will have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to enforce those insurance requirements against any borrower; provided that this will not limit the master servicer’s obligation to obtain and maintain a force-placed insurance policy as set forth in the PSA;
(iv) except as provided below, in no event will the master servicer be required to cause the borrower to maintain, or itself obtain, insurance coverage to the extent that the failure of such borrower to maintain insurance coverage is an Acceptable Insurance Default (as determined by the special servicer subject to the discussion under “—The Directing Holder” and “—The Operating Advisor” below);
(v) to the extent the master servicer itself is required to maintain insurance that the borrower does not maintain, the master servicer will not be required to maintain insurance other than what is available on a force-placed basis at commercially reasonable rates, and only to the extent the issuing entity as lender has an insurable interest thereon; and
(vi) any explicit terrorism insurance requirements contained in the related Mortgage Loan documents are required to be enforced by the master servicer in accordance with the Servicing Standard (unless the master servicer or the special servicer, as applicable, with the consent of, if no Control Termination Event is continuing, the Directing Holder, and after consultation with the Risk Retention Consultation Parties and the Operating Advisor in accordance with the PSA, has consented to a waiver (including a waiver to permit the master servicer to accept insurance that does not comply with specific requirements contained in the Mortgage Loan documents) in writing of that provision in accordance with the Servicing Standard); provided that the master servicer will be required to promptly notify the special servicer, or the special servicer will be required to promptly notify the master servicer, as applicable, in writing of such waiver.
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With respect to each REO Property, the special servicer will generally be required to use reasonable efforts, consistent with the Servicing Standard, to maintain with an insurer meeting certain criteria set forth in the PSA (subject to the right of the special servicer to direct the master servicer to make a Servicing Advance for the costs associated with coverage that the special servicer determines to maintain, in which case the master servicer will be required to make that Servicing Advance (subject to the recoverability determination and Servicing Advance procedures described above under “—Advances”)) to the extent reasonably available at commercially reasonable rates and to the extent the trustee has an insurable interest (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of the full replacement value of the Mortgaged Property or the Stated Principal Balance of the Serviced Mortgage Loan, REO Loan or Serviced Whole Loan, as applicable (or such greater amount of coverage required by the related Mortgage Loan documents (unless such amount is not available or, if no Control Termination Event is continuing, the Directing Holder has consented to a lower amount)), but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1,000,000 per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least 12 months. However, the special servicer will not be required in any event to maintain or obtain insurance coverage described in this paragraph beyond what is reasonably available at commercially reasonable rates and consistent with the Servicing Standard, and in no case will any such insurance be an expense of the special servicer.
If either (x) the master servicer or the special servicer obtains and maintains, or causes to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans (other than any Non-Serviced Mortgage Loan) and the Serviced Whole Loans and the REO Properties, as applicable, as to which it is the master servicer or the special servicer, as the case may be, then, to the extent such policy (i) is obtained from an insurer meeting certain criteria set forth in the PSA, and (ii) provides protection equivalent to the individual policies otherwise required or (y) the master servicer or special servicer, as applicable, meeting the ratings requirements of the Rating Agencies set forth in the PSA, and the master servicer or the special servicer self-insures for its obligation to maintain the individual policies otherwise required, then the master servicer or special servicer, as the case may be, will conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the master servicer or the special servicer, as the case may be, that maintains such policy will be required, if there has not been maintained on any Mortgaged Property securing a Serviced Mortgage Loan or REO Property thereunder a hazard insurance policy complying with the requirements described above, and there has been one or more losses that would have been covered by such an individual policy, to promptly deposit into the Collection Account (or, with respect to a Serviced Whole Loan, the related separate custodial account), from its own funds, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan or the related Serviced Whole Loan (or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard).
With respect to the payment of insurance premiums and delinquent tax assessments, in the event that the master servicer determines that a Servicing Advance of such amounts would be non-recoverable, that master servicer will be required to notify the trustee, the certificate administrator and the special servicer of such determination. Upon receipt of such notice, the master servicer (with respect to any Mortgage Loan or Serviced Whole Loan that is not a Specially Serviced Loan) and the special servicer (with respect to any Specially Serviced Loan or REO Property) will be required to determine (with the reasonable assistance of the master servicer) whether or not payment of such amount (i) is necessary to preserve the related Mortgaged Property and (ii) would be in the best interests of the Certificateholders (and in the case of a Serviced Companion Loan, the holder of the related Serviced Companion Loan, as a collective whole as if such Certificateholders and Serviced Companion Loan holder constituted a single lender). If the master servicer or the special servicer determines that such payment (i) is necessary to
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preserve the related Mortgaged Property and (ii) would be in the best interests of the Certificateholders and, in the case of any Serviced Companion Loan, the related Serviced Companion Loan Holders, the special servicer (in the case of a determination by the special servicer) will be required to direct the master servicer to make such payment, who will then be required to make such payment from the Collection Account (or, with respect to a Serviced Whole Loan, the related custodial account) to the extent of available funds.
No pool insurance policy, special hazard insurance policy, bankruptcy bond, repurchase bond or certificate guarantee insurance will be maintained with respect to the Mortgage Loans or any Serviced Whole Loan, nor will any Mortgage Loan be subject to Federal Housing Administration insurance.
“Acceptable Insurance Default” means, with respect to any Serviced Mortgage Loan and any related Serviced Companion Loan, any default arising by reason of the failure of the related borrower to maintain standard extended coverage casualty insurance or other insurance that covers acts of terrorism, as to which the master servicer or the special servicer, as applicable, has determined, in accordance with the Servicing Standard (and (i) unless a Control Termination Event is continuing, with the consent of the Directing Holder (or, if a Control Termination Event is continuing, but no Consultation Termination Event is continuing, after consulting with the Directing Holder) and (ii) with respect to any Specially Serviced Loan, after non-binding consultation with the Risk Retention Consultation Parties in accordance with the PSA (but, in either case, other than with respect to any Mortgage Loan that is an Excluded Loan as to any such party)), that either:
(x) such insurance is not available at commercially reasonable rates and the subject hazards are not at the time commonly insured against for properties similar to the Mortgaged Property and located in or around the geographic region in which such Mortgaged Property is located (but only by reference to such insurance that has been obtained by such owners at current market rates), or
(y) such insurance is not available at any rate;
provided that the Directing Holder and the Risk Retention Consultation Parties, as applicable, will not have more than 30 days to respond to the master servicer’s or the special servicer’s, as applicable, request for such consent or consultation, as applicable; provided, further, that upon the master servicer’s or the special servicer’s, as applicable, determination, consistent with the Servicing Standard, that exigent circumstances do not allow the master servicer or the special servicer, as applicable, to consult with the Directing Holder, or the Risk Retention Consultation Parties, as applicable, the master servicer or the special servicer, as applicable, will not be required to do so.
In addition, the master servicer and special servicer will be entitled to rely on insurance consultants (which will be a trust fund expense) in determining whether any insurance is available at commercially reasonable rates.
During the period that the master servicer or the special servicer is evaluating the availability of such insurance, or waiting for a response from the Directing Holder or to consult with a Risk Retention Consultation Party, neither the master servicer nor the special servicer will be liable for any loss related to its failure to require the borrower to maintain such insurance and neither will be in default of its obligations as a result of such failure unless the master servicer or the special servicer is required to take any immediate action pursuant to the Servicing Standard and other servicing requirements under the PSA as described under “—The Directing Holder—Control Termination Event and Consultation Termination Event” and “—Servicing Override”.
Modifications, Waivers and Amendments
The PSA will permit (a) as to Mortgage Loans that are non-Specially Serviced Loans and actions that do not involve Major Decisions, the master servicer, or (b)(i) with respect to any Specially Serviced Loan or (ii) as to Major Decisions irrespective of whether such Mortgage Loan is a Specially Serviced Loan, the special servicer, in each case subject to the rights of the Directing Holder and, after consultation with the operating advisor to the extent described under “—The Operating Advisor”, to modify, waive, amend,
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consent or take such other action with respect to any term of any Serviced Mortgage Loan and any related Serviced Companion Loan if such modification, waiver, amendment, consent or other action (c)(i) is consistent with the Servicing Standard and (ii) would not constitute a “significant modification” of such Mortgage Loan or Serviced Companion Loan pursuant to Treasury regulations Section 1.860G-2(b) and would not otherwise (A) cause any Trust REMIC to fail to qualify as a REMIC or (B) result in the imposition of a tax upon any Trust REMIC or the issuing entity (including but not limited to the tax on “prohibited transactions” as defined in Code Section 860F(a)(2) and the tax on contributions to a REMIC set forth in Code Section 860G(d), but not including the tax on “net income from foreclosure property” under Code Section 860G(c)).
Notwithstanding the foregoing, the master servicer and special servicer may mutually agree as provided in the PSA that the master servicer will process any of the foregoing matters that are Major Decisions (other than COVID Modifications) with respect to any non-Specially Serviced Loan. If the master servicer and the special servicer mutually agree that the master servicer will process any Major Decision with respect to a non-Specially Serviced Loan, the master servicer must obtain the consent (or deemed consent) of the special servicer as provided below.
In connection with (i) the release of a Mortgaged Property or any portion of a Mortgaged Property from the lien of the related Mortgage or (ii) the taking of a Mortgaged Property (other than a Mortgaged Property securing the Non-Serviced Whole Loan) or any portion of a Mortgaged Property by exercise of the power of eminent domain or condemnation, if the related Mortgage Loan documents require the master servicer or the special servicer, as applicable, to calculate (or to approve the calculation of the related borrower of) the loan to value ratio of the remaining Mortgaged Property or Mortgaged Properties or the fair market value of the real property constituting the remaining Mortgaged Property or Mortgaged Properties, for purposes of REMIC qualification of the related Mortgage Loan, then such calculation will exclude the value of personal property and going concern value, if any.
In no event, however, may the master servicer or the special servicer extend the maturity of any Mortgage Loan, Serviced Whole Loan or Specially Serviced Loan to a date occurring later than the earlier of (A) five years prior to the Rated Final Distribution Date and (B) if the Mortgage Loan, Serviced Whole Loan or Specially Serviced Loan is secured solely or primarily by a ground lease (or, with respect to a leasehold interest where the borrower is the lessee and that is a space lease or an air rights lease, such space lease or air rights lease), the date 20 years prior to the expiration of the term of such ground lease (or, with respect to a leasehold interest where the borrower is the lessee and that is a space lease or an air rights lease, such space lease or air rights lease)(or 10 years prior to the expiration of such lease if the master servicer or the special servicer, as applicable, gives due consideration to the remaining term of the ground lease (or, with respect to a leasehold interest where the borrower is the lessee and that is a space lease or an air rights lease, such space lease or air rights lease) and such extension is in the best interest of the Certificateholders and if a Serviced Companion Loan is involved, the holder of the related Serviced Companion Loan (as a collective whole as if such Certificateholders and Serviced Companion Loan holder constituted a single lender) and, if no Control Termination Event has occurred and is continuing, with the consent of the Directing Holder).
In addition, neither the master servicer nor the special servicer may permit any borrower to add or substitute any collateral for an outstanding Serviced Mortgage Loan and any related Serviced Companion Loan, which collateral constitutes real property, unless the master servicer or the special servicer, as applicable, receives a Rating Agency Confirmation.
The special servicer will process (unless the special servicer and the master servicer mutually agree that the master servicer will process, as further described below) and consent to or refuse consent to, as applicable, all Major Decisions. The special servicer will also be required to obtain the consent of the Directing Holder, and will be required to consult with the operating advisor, in connection with any Major Decision to the extent described under “—The Directing Holder” and “—The Operating Advisor”.
Upon receiving a request for any matter described in this section that constitutes a Major Decision with respect to a Serviced Mortgage Loan that is not a Specially Serviced Loan, the master servicer will be required to forward such request to the special servicer and, unless the master servicer and the
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special servicer mutually agree that the master servicer will process such request, the special servicer will be required to process such request and the master servicer will have no further obligation with respect to such request or the Major Decision other than providing the special servicer with any reasonably requested information or documentation. In addition, the master servicer will be required to provide the special servicer with any notice that it receives relating to a default by the borrower under a ground lease where the collateral for the Mortgage Loan is the ground lease, and the special servicer will determine in accordance with the Servicing Standard whether to cure any borrower defaults relating to ground leases.
When the master servicer and the special servicer have mutually agreed that the master servicer will process a Major Decision, the special servicer’s consent will be required if the master servicer is recommending approval with respect to any non-Specially Serviced Loan (other than a Non-Serviced Mortgage Loan), and the master servicer will be required to forward to the special servicer the written request from the borrower for modification, waiver, amendment or other action or consent that is a Major Decision, accompanied by the master servicer’s recommendation and analysis and any and all information in the master servicer’s possession that the special servicer may reasonably request to grant or withhold such consent. When the special servicer’s consent is required under the PSA, such consent will be deemed given 15 business days (or, in connection with an Acceptable Insurance Default, 90 days) after receipt (unless earlier objected to) by the special servicer from the master servicer of the master servicer’s written analysis and recommendation with respect to such proposed Major Decision together with such other information reasonably requested by the special servicer and reasonably available to the master servicer.
Borrowers may request payment forbearance because of COVID-19 related financial hardship. The special servicer will be allowed to grant a forbearance on a Mortgage Loan related to the global COVID-19 emergency only if (i) prior to October 1, 2021 (or prior to a later date provided by the IRS in any future guidance), the period of forbearance granted, when added to any prior periods of forbearance granted before or after the issuing entity acquired such Mortgage Loan (whether or not such prior grants of forbearance were covered by Revenue Procedure 2020-26 (as extended by Revenue Procedure 2021-12 and any future guidance)), does not exceed six months (or such longer period of time as may be allowed by future guidance that is binding on federal income tax authorities) or the applicable forbearance program pursuant to which the related forbearance was granted is otherwise identical or similar to those described in Section 2.07 of Revenue Procedure 2020-26 and such forbearance is covered by Revenue Procedure 2020-26 (as extended by Revenue Procedure 2021-12 and any future guidance), (ii) such forbearance is permitted under the PSA and the requirements under the applicable provision are satisfied or (iii) an opinion of counsel is delivered to the effect that such forbearance will not result in an adverse REMIC event. See the discussion of Revenue Procedure 2020-26 under the caption “Tax Matters and Changes in Tax Law May Adversely Impact the Mortgage Loans or Your Investment.”
The master servicer or the special servicer, as applicable, is required to notify the trustee, the certificate administrator, the Directing Holder (other than during the period when a Consultation Termination Event is continuing), the operating advisor (only if a Control Termination Event is continuing), the depositor and the 17g-5 Information Provider (who will promptly post such notice to the 17g-5 Information Provider’s website), in writing, of any modification, waiver, material consent or amendment of any term of any Serviced Mortgage Loan and any related Serviced Companion Loan processed by such servicer and the date of the modification and deliver a copy to the custodian for deposit in the related mortgage file, an original counterpart of the agreement relating to such modification, waiver, material consent or amendment, promptly (and in any event within 10 business days) following the execution of the agreement.
Any fees or other charges charged by the special servicer in connection with processing any COVID Modification or related COVID Modification Agreement with respect to any COVID Modified Loan (in the aggregate with any other COVID Modification or COVID Modification Agreement with respect to such COVID Modified Loan) may not exceed an amount equal to $45,000 (plus reasonable and customary attorney’s fees and expenses, out of pocket third party fees and expenses and filing fees) and may only be borne by the borrower, not the issuing entity. For the avoidance of doubt, in the event of a borrower default under a COVID Modification Agreement, the fee cap will only apply to the initial processing of
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such COVID Modification Agreement, and, in such event, the Special Servicer will be entitled to all fees that would be payable to it pursuant to the terms of the PSA with respect to further servicing actions with respect to the related Mortgage Loan or Whole Loan, as applicable. With respect to any COVID Modification, the Master Servicer will be entitled to 25% of any related fees.
Any modification, extension, waiver or amendment of the payment terms of a Mortgage Loan or Serviced Whole Loan will be required to be structured so as to be consistent with the allocation and payment priorities in the related Mortgage Loan documents and intercreditor agreement, if any, such that neither the issuing entity as holder of the Mortgage Loan nor a holder of any related Serviced Companion Loan gains a priority over the other such holder that is not reflected in the related Mortgage Loan documents and intercreditor agreement. Neither the master servicer nor the special servicer may enter into any modification, waiver, amendment, work-out, consent or approval with respect to any Mortgage Loan or Whole Loan, restructure any Mortgage Loan or Whole Loan, or restructure any borrower equity (in each case, including, without limitation, by way of the application of credits, discounts, forgiveness or otherwise) in a manner that would have the effect of placing amounts payable as compensation, or otherwise reimbursable, to the master servicer or special servicer in a higher priority than that which is provided in the allocation and payment priorities described under “Description of the Certificates—Distributions—Application Priority of Mortgage Loan Collections or Whole Loan Collections” or in the related Intercreditor Agreement (if any).
Any modification, waiver or amendment with respect to a Serviced Whole Loan may be subject to the consent of one or more holders of a related Serviced Companion Loan and the special servicer as described under “Description of the Mortgage Pool—The Whole Loans”.
See also “—The Directing Holder” and “—The Operating Advisor” for a description of the Directing Holder’s and the operating advisor’s rights with respect to modifications, waivers and amendments and reviewing and approving the Asset Status Report.
Mortgage Loans with “Due-on-Sale” and “Due-on-Encumbrance” Provisions
The master servicer (with respect to each non-Specially Serviced Loan, to the extent such action is not a Major Decision) and the special servicer (with respect to each Specially Serviced Loan and, to the extent such action is a Major Decision, each non-Specially Serviced Loan) will be required to determine, in a manner consistent with the Servicing Standard, whether (a) to exercise any right it may have with respect to a Mortgage Loan and any related Companion Loan containing a “due-on-sale” clause (1) to accelerate the payments on that Mortgage Loan and any related Companion Loan, as applicable, or (2) to withhold its consent to any sale or transfer, consistent with the Servicing Standard or (b) to waive its right to exercise such rights; provided, however, (i) that with respect to such waiver of rights that is a Major Decision, prior to the occurrence and continuance of any Control Termination Event and other than with respect to an Excluded Loan as to the Directing Holder, the master servicer or the special servicer, as applicable, has obtained the prior written consent (or deemed consent) of the Directing Holder (or after the occurrence and continuance of a Control Termination Event, but prior to a Consultation Termination Event and other than with respect to an Excluded Loan as to the Directing Holder or a Risk Retention Consultation Party, as applicable, upon consultation with the Directing Holder and the applicable Risk Retention Consultation Party), and (ii) the master servicer or the special servicer, as applicable, has received a Rating Agency Confirmation from S&P, Fitch and DBRS Morningstar (and, if the applicable Mortgage Loan is part of a Serviced Whole Loan, a Rating Agency Confirmation with respect to any commercial mortgage pass-through certificates backed by any related Serviced Companion Loan) with respect to any Mortgage Loan that (A) represents more than 5% of the aggregate Stated Principal Balance of the Mortgage Loans then outstanding and has a Stated Principal Balance of at least $10,000,000, (B) has a Stated Principal Balance that is more than $35,000,000, (C) represents one of the 10 largest Mortgage Loans based on Stated Principal Balance and has a Stated Principal Balance of at least $10,000,000 or (D) is a Mortgage Loan as to which the related Serviced Companion Loan represents one of the 10 largest mortgage loans in the related other securitization (provided that the master servicer or special servicer, as applicable, will be entitled to reasonably rely upon the written notification provided by the master servicer, special servicer, trustee or certificate administrator of such
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other securitization as to whether such Serviced Companion Loan is one of the 10 largest mortgage loans in such other securitization).
To the extent not precluded by the Mortgage Loan documents, the master servicer or the special servicer, as applicable, may not approve an assumption or substitution without requiring the related borrower to pay any fees owed to the Rating Agencies associated with the approval of such assumption or substitution. However, in the event that the related borrower is required but fails to pay such fees, such fees will be an expense of the issuing entity; provided that in the case of a Serviced Whole Loan the master servicer, will be required, after receiving payment from amounts on deposit in the Collection Account, if any, to (i) promptly notify the holder of the related Pari Passu Companion Loan and (ii) use commercially reasonable efforts to exercise on behalf of the issuing entity the rights of the issuing entity under the related Intercreditor Agreement to obtain reimbursement for a pro rata portion of such amount allocable to such Pari Passu Companion Loans from the holders of such Pari Passu Companion Loans. No assumption agreement may contain any terms that are different from any term of any Mortgage or related Note, except pursuant to the provisions described under “—Modifications, Waivers and Amendments” above and “—Realization Upon Mortgage Loans” below.
With respect to a Serviced Mortgage Loan and any related Serviced Companion Loan with a “due-on-encumbrance” clause, the master servicer (with respect to each non-Specially Serviced Loan, to the extent such action is not a Major Decision) and the special servicer (with respect to each Specially Serviced Loan and, to the extent such action is a Major Decision, each non-Specially Serviced Loan) will be required to determine, in a manner consistent with the Servicing Standard, whether (a) to exercise any right it may have with respect to a Mortgage Loan containing a “due-on-encumbrance” clause (1) to accelerate the payments thereon, or (2) to withhold its consent to the creation of any additional lien or other encumbrance, consistent with the Servicing Standard or (b) to waive its right to exercise such rights, provided, however, that (i) with respect to such waiver of rights that is a Major Decision, prior to the occurrence and continuance of a Control Termination Event and other than with respect to an Excluded Loan as to the Directing Holder, the master servicer or the special servicer, as applicable, has obtained the consent of the Directing Holder (or after the occurrence and continuance of a Control Termination Event, but prior to a Consultation Termination Event and other than with respect to an Excluded Loan as to the Directing Holder or a Risk Retention Consultation Party, as applicable, has consulted with the Directing Holder and the applicable Risk Retention Consultation Party) and (ii) the master servicer or the special servicer, as applicable, has received a Rating Agency Confirmation from S&P, Fitch and DBRS Morningstar (and, if the applicable Mortgage Loan is part of a Serviced Whole Loan, a Rating Agency Confirmation with respect to any commercial mortgage pass-through certificates backed by any related Serviced Companion Loan) with respect to any Mortgage Loan that (A) represents more than 2% of the aggregate Stated Principal Balance of the Mortgage Loans then outstanding, (B) has a Stated Principal Balance that is more than $35,000,000, (C) represents one of the 10 largest Mortgage Loans based on Stated Principal Balance, (D) has an aggregate loan-to-value ratio (including any existing and proposed additional debt) that is equal to or greater than 85%, (E) has an aggregate debt service coverage ratio (in each case, determined based upon the aggregate of the Stated Principal Balance of the related Mortgage Loan, any existing additional debt and the principal amount of the proposed additional lien) that is less than 1.20x, or (F) is a Mortgage Loan as to which the related Serviced Companion Loan represents one of the ten largest mortgage loans in the related other securitization (provided that the special servicer will be entitled to reasonably rely upon the written notification provided by the master servicer, special servicer, trustee or certificate administrator of the applicable other securitization as to whether such Serviced Companion Loan is one of the 10 largest mortgage loans in such other securitization); provided that with respect to clauses (A), (C), (D), (E) and (F), such Mortgage Loan must also have a Stated Principal Balance of at least $10,000,000 for the requirement of a Rating Agency Confirmation to apply. Neither the master servicer nor the special servicer will be responsible for enforcing a “due-on-sale” or a “due-on-encumbrance” clause with respect to any Non-Serviced Mortgage Loan.
To the extent not precluded by the Mortgage Loan documents, the master servicer or the special servicer, as applicable, may not approve the creation of any lien or other encumbrance without requiring the related borrower to pay any fees owed to the Rating Agencies associated with the approval of such lien or encumbrance. However, in the event that the related borrower is required but fails to pay such
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fees, such fees will be an expense of the issuing entity; provided that in the case of a Serviced Whole Loan the master servicer or the special servicer, as applicable, will be required, after receiving payment from amounts on deposit in the Collection Account, if any, to (i) promptly notify the holder of the related Pari Passu Companion Loan and (ii) use commercially reasonable efforts to exercise on behalf of the issuing entity the rights of the issuing entity under the related Intercreditor Agreement to obtain reimbursement for a pro rata portion of such amount allocable to such Pari Passu Companion Loans from the holders of such Pari Passu Companion Loans. Neither the master servicer nor the special servicer will be responsible for enforcing a “due-on-sale” or a “due-on-encumbrance” clause with respect to any Non-Serviced Mortgage Loan.
Inspections
The master servicer will be required to perform (at its own expense) or cause to be performed (at its own expense), physical inspections of each Mortgaged Property relating to a Mortgage Loan (other than a Mortgaged Property securing a Non-Serviced Mortgage Loan, which is subject to inspection pursuant to the related Non-Serviced PSA, and other than a Specially Serviced Loan) with a Stated Principal Balance of (A) $2,000,000 or more at least once every 12 months (commencing in 2023) and (B) less than $2,000,000 at least once every 24 months, in each case commencing in the calendar year 2022 unless a physical inspection has been performed by the special servicer within the previous 12 months and the master servicer has no knowledge of a material change in the Mortgaged Property since such physical inspection; provided, further, however, that if any scheduled payment becomes more than 60 days delinquent on the related Mortgage Loan, the special servicer is required to inspect or cause to be inspected the related Mortgaged Property as soon as practicable after the Mortgage Loan becomes a Specially Serviced Loan and annually thereafter for so long as the Mortgage Loan remains a Specially Serviced Loan (the cost of which inspection, to the extent not paid by the related borrower, will be reimbursed first from default interest and late charges on the related Mortgage Loan (but with respect to a Serviced Whole Loan, only amounts available for such purpose under the related Intercreditor Agreement) and then from the Collection Account as an expense of the issuing entity, and in the case of a Serviced Whole Loan, as an expense of the holders of the related Mortgage Loan and Serviced Pari Passu Companion Loan, pro rata and pari passu, to the extent provided in the related Intercreditor Agreement). The special servicer or the master servicer, as applicable, will be required to prepare or cause to be prepared a written report of the inspection describing, among other things, the condition of and any damage to the Mortgaged Property to the extent evident from the inspection and specifying the existence of any vacancies in the Mortgaged Property of which it has knowledge and deems material, of any sale, transfer or abandonment of the Mortgaged Property of which it has knowledge or that is evident from the inspection, of any adverse change in the condition of the Mortgaged Property of which the preparer of such report has knowledge or that is evident from the inspection, and that the preparer of such report deems material, or of any material waste committed on the Mortgaged Property to the extent evident from the inspection.
Copies of the inspection reports referred to above that are delivered to the certificate administrator will be posted to the certificate administrator’s website for review by Privileged Persons pursuant to the PSA. See “Description of the Certificates—Reports to Certificateholders; Certain Available Information”.
Collection of Operating Information
With respect to each Mortgage Loan that requires the borrower to deliver operating statements, the special servicer or the master servicer, as applicable, is also required to use reasonable efforts to collect and review the annual operating statements beginning with calendar year end 2022 of the related Mortgaged Property. Most of the Mortgage Loan documents obligate the related borrower to deliver annual property operating statements. However, we cannot assure you that any operating statements required to be delivered will in fact be delivered, nor is the special servicer or the master servicer likely to have any practical means of compelling the delivery in the case of an otherwise performing Mortgage Loan.
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Special Servicing Transfer Event
The Serviced Mortgage Loans and any related Serviced Companion Loan and any related REO Properties will be serviced by the special servicer under the PSA in the event that the servicing responsibilities of the master servicer are transferred to the special servicer as described below. Such Serviced Mortgage Loan and any related Serviced Companion Loan (including those loans that have become REO Properties) serviced by the special servicer are referred to in this prospectus collectively as the “Specially Serviced Loans”. The master servicer will be required to transfer its servicing responsibilities to the special servicer with respect to any Mortgage Loan (including any related Companion Loan) for which the master servicer is responsible for servicing:
(i) either (x) with respect to any Mortgage Loan or Serviced Companion Loan, other than a balloon loan, a payment default has occurred on such Mortgage Loan or Serviced Companion Loan at its maturity date or, if the maturity date of such Mortgage Loan or Serviced Companion Loan has been extended in accordance with the PSA, a payment default occurs on such Mortgage Loan or Serviced Companion Loan at its extended maturity date or (y) with respect to a balloon loan, a payment default has occurred with respect to the related balloon payment; provided that if (A) the related borrower is diligently seeking a refinancing or sale of the related Mortgaged Property or Mortgaged Properties and delivers, on or before the related maturity date or extended maturity date, a statement to that effect, and delivers, on or before the related maturity date or extended maturity date, a refinancing commitment, letter of intent or otherwise binding application for refinancing from an acceptable lender or a signed purchase agreement reasonably acceptable to the master servicer (who will be required to promptly deliver a copy to the special servicer, the operating advisor (if a Control Termination Event has occurred and is continuing) and the Directing Holder (but only for so long as no Consultation Termination Event has occurred and is continuing)), (B) the related borrower continues to make its Assumed Scheduled Payment, and (C) no other Servicing Transfer Event has occurred with respect to that Mortgage Loan or Serviced Companion Loan, then a Servicing Transfer Event will not occur until the earlier of (1) 120 days beyond the related maturity date or extended maturity date and (2) the termination of the refinancing commitment, letter of intent, otherwise binding application for refinancing or signed purchase agreement;
(ii) any Periodic Payment (other than a balloon payment or any other payment due under clause (i)(x) above in this definition) or any amount due on a monthly basis as an escrow payment or reserve funds, is 60 days or more delinquent;
(iii) the master servicer or the special servicer (and, in the case of a determination by the special servicer, for so long as no Control Termination Event has occurred and is continuing, with the consent of the Directing Holder) determines in its reasonable business judgment, exercised in accordance with the Servicing Standard, that (x) a default consisting of a failure to make a payment of principal or interest is reasonably foreseeable or there is a significant risk of such default or (y) any other default that is likely to impair the use or marketability of the related Mortgaged Property or the value of the Mortgaged Property as security for the Mortgage Loan or, if applicable, Serviced Companion Loan, is reasonably foreseeable or there is a significant risk of such default, which monetary or other default, in either case, would likely continue unremedied beyond the applicable grace period (or, if no grace period is specified, for a period of 60 days) and is not likely to be cured by the related borrower within 60 days or, except as provided in clause (i)(y) above, in the case of a balloon payment, for at least 30 days; provided that the special servicer will not be permitted to make such judgment at any time that the special servicer is affiliated with the Directing Holder;
(iv) the related borrower has become the subject of a decree or order of a court or agency or supervisory authority having jurisdiction in the premises in an involuntary case under any present or future federal or state bankruptcy, insolvency or similar law, or the appointment of a conservator, receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs;
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(v) the related borrower consents to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings of or relating to such borrower of or relating to all or substantially all of its property;
(vi) the related borrower (a) admits in writing its inability to pay its debts generally as they become due, or (b) files a petition to take advantage of any applicable insolvency or reorganization statute, makes an assignment for the benefit of its creditors, or voluntarily suspends payment of its obligations;
(vii) a default, of which the master servicer or the special servicer has notice (other than a failure by such related borrower to pay principal or interest) and that in the opinion of the master servicer or the special servicer materially and adversely affects the interests of the Certificateholders or any holder of a Serviced Companion Loan, if applicable, occurs and remains unremedied for the applicable grace period specified in the Mortgage Loan documents for such Mortgage Loan or Serviced Companion Loan (or if no grace period is specified for those defaults which are capable of cure, 60 days); or
(viii) the master servicer or special servicer receives notice of the foreclosure or proposed foreclosure of any lien on the related Mortgaged Property (each of clause (i) through (viii), a “Servicing Transfer Event”).
However, the master servicer will be required to continue to (x) receive payments on the Mortgage Loans (and any related Serviced Companion Loan)(including amounts collected by the special servicer), (y) make certain calculations with respect to the Mortgage Loans and any related Serviced Companion Loan and (z) make remittances and prepare certain reports to the Certificateholders with respect to the Mortgage Loans and any related Serviced Companion Loan. Additionally, the master servicer will continue to receive the Servicing Fee in respect of the Mortgage Loans (and any related Serviced Companion Loan) and any related REO Property at the Servicing Fee Rate.
Notwithstanding anything to the contrary in the definition of Servicing Transfer Event, no event, circumstance or action that has occurred or will occur with respect to a COVID Modified Loan (other than an event described in clauses (i)(y), (iv), (v), (vi)(b) or (viii) of the definition of “Servicing Transfer Event”) will constitute a Servicing Transfer Event under the PSA, but only if, and for so long as, the related borrower is in compliance with the terms of the related COVID Modification Agreement. For the avoidance of doubt, in the event a borrower fails to comply with the terms of a COVID Modification Agreement (as determined by the Special Servicer in accordance with the Servicing Standard), a determination as to whether any applicable event specified in the preceding sentence constitutes a Servicing Transfer Event or causes such Mortgage Loan or Serviced Whole Loan to be characterized as a Specially Serviced Loan will be made as though the COVID Modification never occurred; provided, however, if, pursuant to this sentence, a Servicing Transfer Event is determined to occur prior to the date of such borrower’s failure, then such Servicing Transfer Event will be deemed to occur on the date of such borrower’s failure.
If the related Mortgaged Property is acquired in respect of any Mortgage Loan (and any related Serviced Companion Loan) (upon acquisition, an “REO Property”) whether through foreclosure, deed-in-lieu of foreclosure or otherwise, the special servicer will continue to be responsible for its operation and management. If any Serviced Companion Loan becomes specially serviced, then the related Mortgage Loan will also become a Specially Serviced Loan. If any Mortgage Loan becomes a Specially Serviced Loan, then the related Serviced Companion Loan will also become a Specially Serviced Loan. The master servicer will have no responsibility for the performance by the special servicer of its duties under the PSA. Any Mortgage Loan (excluding any Non-Serviced Mortgage Loan), that is or becomes a cross-collateralized Mortgage Loan and is cross-collateralized with a Specially Serviced Loan will become a Specially Serviced Loan.
A Mortgage Loan or Serviced Whole Loan will cease to be a Specially Serviced Loan (each, a “Corrected Loan”) (A) with respect to the circumstances described in clauses (i) and (ii) above, when the borrower thereunder has brought the Mortgage Loan or Serviced Companion Loan current and thereafter made three consecutive full and timely Periodic Payments, including pursuant to any workout of the
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Mortgage Loan or Serviced Companion Loan, (B) with respect to the circumstances described in clause (iii), (iv), (v), (vi) and (viii) above, when such circumstances cease to exist in the good faith judgment of the special servicer or (C) with respect to the circumstances described in clause (vii) above, when such default is cured (as determined by the special servicer in accordance with the Servicing Standard) or waived by the special servicer; provided that, in each case, at that time no circumstance exists (as described above) that would cause the Mortgage Loan or Serviced Companion Loan to continue to be characterized as a Specially Serviced Loan. If any Specially Serviced Loan becomes a Corrected Loan, the special servicer will be required to transfer servicing of such Corrected Loan to the master servicer.
Asset Status Report
The special servicer will be required to prepare a report (an “Asset Status Report”) for each Serviced Mortgage Loan and, if applicable, any related Serviced Companion Loan that becomes a Specially Serviced Loan not later than 60 days after the servicing of such Serviced Mortgage Loan is transferred to the special servicer (the “Initial Delivery Date”) and will be required to amend, update or create a new Asset Status Report to the extent that during the course of the resolution of such Specially Serviced Loan material changes in the circumstances and/or strategy reflected in any current Final Asset Status Report are necessary to reflect the then current circumstances and recommendation as to how the Specially Serviced Loan might be returned to performing status or otherwise liquidated in accordance with the Servicing Standard (each such report a “Subsequent Asset Status Report”). Each Asset Status Report will be required to be delivered in electronic form to:
| ● | the Directing Holder (but (i) only for so long as no Consultation Termination Event is continuing, and (ii) not with respect to any applicable Excluded Loan); |
| ● | each Risk Retention Consultation Party (but not with respect to any applicable Excluded Loan); |
| ● | with respect to any related Serviced Companion Loan, to the extent the related Serviced Companion Loan has been included in a securitization transaction, to the master servicer of such securitization into which the related Serviced Companion Loan has been sold or to the holder of the related Serviced Companion Loan; |
| ● | the operating advisor (but, other than with respect to an Excluded Loan applicable to the Directing Holder, only during the continuance of a Control Termination Event); |
| ● | the master servicer; and |
| ● | the 17g-5 Information Provider, which will be required to post such report to the 17g-5 Information Provider’s website. |
A summary of each Asset Status Report will be provided to the certificate administrator and the trustee.
An Asset Status Report prepared for each Specially Serviced Loan will be required to include, among other things, the following information:
| ● | summary of the status of such Specially Serviced Loan and any negotiations with the related borrower; |
| ● | a discussion of the legal and environmental considerations reasonably known to the special servicer, consistent with the Servicing Standard, that are applicable to the exercise of remedies and to the enforcement of any related guaranties or other collateral for the related Specially Serviced Loan and whether outside legal counsel has been retained; |
| ● | the most current rent roll and income or operating statement available for the related Mortgaged Property; |
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| ● | (A) the special servicer’s recommendations on how such Specially Serviced Loan might be returned to performing status (including the modification of a monetary term, and any workout, restructure or debt forgiveness) and returned to the master servicer for regular servicing or foreclosed or otherwise realized upon (including any proposed sale of a Defaulted Loan or REO Property), (B) a description of any such proposed or taken actions, and (C) the alternative courses of action that were or are being considered by the special servicer in connection with the proposed or taken actions; |
| ● | the status of any foreclosure actions or other proceedings undertaken with respect to the Specially Serviced Loan, any proposed workouts and the status of any negotiations with respect to such workouts, and an assessment of the likelihood of additional defaults under the related Mortgage Loan or Serviced Whole Loan; |
| ● | a description of any amendment, modification or waiver of a material term of any ground lease (or any space lease or air rights lease, if applicable) or franchise agreement; |
| ● | the decision that the special servicer made, or intends or proposes to make, including a narrative analysis setting forth the special servicer’s rationale for its proposed decision, including its rejection of the alternatives; |
| ● | an analysis of whether or not taking such proposed action is reasonably likely to produce a greater recovery on a present value basis than not taking such action, setting forth (x) the basis on which the special servicer made such determination and (y) the net present value calculation and all related assumptions; |
| ● | the appraised value of the related Mortgaged Properties (and a copy of the last obtained appraisal of such Mortgaged Property) together with a description of any adjustments to the valuation of such Mortgaged Property made by the special servicer together with an explanation of those adjustments; and |
| ● | such other information as the special servicer deems relevant in light of the Servicing Standard. |
With respect to any Mortgage Loan other than an applicable Excluded Loan, if no Control Termination Event is continuing, the Directing Holder will have the right to disapprove the Asset Status Report prepared by the special servicer with respect to a Specially Serviced Loan within 10 business days after receipt of the Asset Status Report. If the Directing Holder does not disapprove an Asset Status Report within 10 business days or if the special servicer makes a determination, in accordance with the Servicing Standard, that the disapproval by the Directing Holder (communicated to the special servicer within such 10-business day period, as applicable) is not in the best interest of all the Certificateholders (as a collective whole) (or, with respect to a Serviced Whole Loan, the best interest of the Certificateholders and the holders of the related Companion Loan, as a collective whole (taking into account the pari passu or subordinate nature of such Companion Loan)), the special servicer will be required to implement the recommended action as outlined in the Asset Status Report. For so long as no Control Termination Event is continuing, if the Directing Holder disapproves the Asset Status Report within such 10-business day period, as applicable, and the special servicer has not made the affirmative determination described above, the special servicer will be required to revise the Asset Status Report as soon as practicable thereafter, but in no event later than 30 days after the disapproval. The special servicer will be required to continue to revise the Asset Status Report until the Directing Holder fails to disapprove the revised Asset Status Report or until the special servicer makes a determination, in accordance with the Servicing Standard, that the disapproval is not in the best interests of the Certificateholders (taken as a collective whole) (or, with respect to a Serviced Whole Loan, the best interest of the Certificateholders and the holders of the related Companion Loan, as a collective whole (taking into account the pari passu or subordinate nature of such Companion Loan)); provided that, if the Directing Holder has not approved the Asset Status Report for a period of 60 business days following the first submission of an Asset Status Report, the special servicer will follow the Directing Holder’s direction, if such direction is consistent with the Servicing Standard; provided, however, that if the Directing Holder’s direction would cause the special
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servicer to violate the Servicing Standard, the special servicer may act upon the most recently submitted form of Asset Status Report. The procedures described in this paragraph are collectively referred to as the “Directing Holder Asset Status Report Review Process”.
Prior to a Control Termination Event, the special servicer will be required to promptly deliver each Final Asset Status Report to the operating advisor following the completion of the Directing Holder Asset Status Report Review Process.
While a Control Termination Event is continuing, the special servicer will be required to promptly deliver each Asset Status Report prepared in connection with a Specially Serviced Loan to the operating advisor (and, with respect to any Mortgage Loan that is not an Excluded Loan and only for so long as no Consultation Termination Event is continuing, the Directing Holder). The operating advisor will be required to provide comments to the special servicer in respect of each Asset Status Report, if any, within 10 business days following the later of (i) receipt of such Asset Status Report or (ii) receipt of such related additional information reasonably requested by the operating advisor, and propose possible alternative courses of action to the extent it determines such alternatives to be in the best interest of the Certificateholders (including any Certificateholders that are holders of the Control Eligible Certificates), as a collective whole (or, with respect to a Serviced Whole Loan, the best interest of the Certificateholders and the holders of the related Companion Loan, as a collective whole (taking into account the pari passu or subordinate nature of such Companion Loan)). The special servicer will be obligated (on a non-binding basis) to consider such alternative courses of action and any other feedback provided by the operating advisor (and, with respect to any Mortgage Loan that is not an applicable Excluded Loan and only for so long as no Consultation Termination Event is continuing, the Directing Holder) in connection with the special servicer’s preparation of any Asset Status Report that is provided while a Control Termination Event is continuing. The special servicer may revise the Asset Status Report as it deems necessary to take into account any input and/or comments from the operating advisor (and, with respect to any Mortgage Loan that is not an applicable Excluded Loan and only for so long as no Consultation Termination Event is continuing, the Directing Holder), to the extent the special servicer determines that the operating advisor’s and/or Directing Holder’s input and/or recommendations are not inconsistent with the Servicing Standard and in the best interest of the Certificateholders as a collective whole (or, with respect to a Serviced Whole Loan, the best interest of the Certificateholders and the holders of the related Companion Loan, as a collective whole (taking into account the pari passu or subordinate nature of such Companion Loan)). If the special servicer determines to revise any Asset Status Report to take into account any input and/or comments from the operating advisor or the Directing Holder, the special servicer will be required to promptly deliver to the operating advisor and the Directing Holder the revised Asset Status Report (until a Final Asset Status Report is issued). The procedures described in this paragraph are collectively referred to as the “ASR Consultation Process”. For additional information, see “—The Operating Advisor—Duties of the Operating Advisor While A Control Termination Event Is Continuing”.
The special servicer will not be required to take or to refrain from taking any action because of an objection or comment by the operating advisor or, during the continuance of a Control Termination Event, the Directing Holder, or a recommendation of the operating advisor or, during the continuance of a Control Termination Event, the Directing Holder.
During the continuance of a Control Termination Event but so long as no Consultation Termination Event is continuing, the Directing Holder (except with respect to any applicable Excluded Loan) and the operating advisor will be entitled to consult with the special servicer (on a non-binding basis) (in person or remotely via electronic, telephonic or other mutually agreeable communication) and propose alternative courses of action and provide other feedback in respect of any Asset Status Report. During the continuance of a Consultation Termination Event (and at any time with respect to any applicable Excluded Loan), the Directing Holder will have no right to any draft Asset Status Report and no right to consult with the special servicer with respect to Asset Status Reports and the special servicer will only be obligated to consult with the operating advisor with respect to any Asset Status Report as described above. The special servicer may choose to revise the Asset Status Report as it deems reasonably necessary in accordance with the Servicing Standard to take into account any input and/or
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recommendations of the operating advisor or the Directing Holder during the applicable periods described above, but is under no obligation to follow any particular recommendation of the operating advisor or the Directing Holder. The special servicer will be required to implement the Final Asset Status Report.
In addition, in the case of any Servicing Shift Whole Loan, only the related Loan-Specific Directing Holder (without regard to whether a Control Termination Event or a Consultation Termination Event is continuing) may exercise the rights of the Trust Directing Holder described in this “—Asset Status Report” section, and neither the Trust Directing Holder nor the operating advisor will have any of the above described consent or (in the case of the operating advisor) consultation rights, as applicable, unless permitted under the related Intercreditor Agreement.
With respect to each Non-Serviced Mortgage Loan, the directing holder under the related Non-Serviced PSA will have approval and consultation rights with respect to any asset status report prepared by the related Non-Serviced Special Servicer with respect to such Non-Serviced Whole Loan under the related Non-Serviced PSA that are similar to the approval and consultation rights of the Directing Holder with respect to the Mortgage Loans and the Serviced Whole Loans. See “—Servicing of the Non-Serviced Mortgage Loans”.
A “Final Asset Status Report” means, with respect to any Specially Serviced Loan, the Asset Status Report (together with such other data or supporting information provided by the special servicer to the Directing Holder that does not include any communication (other than the related Asset Status Report) between the special servicer and the Directing Holder with respect to such Specially Serviced Loan) required to be delivered by the special servicer by the Initial Delivery Date and any Subsequent Asset Status Report, in each case, in the form fully approved or deemed approved, if applicable, by the Directing Holder pursuant to the Directing Holder Asset Status Report Review Process or following completion of the ASR Consultation Process, as applicable. For the avoidance of doubt, the special servicer may issue more than one Final Asset Status Report with respect to any Specially Serviced Loan in accordance with the procedures described above. Each Final Asset Status Report will be labeled or otherwise identified or communicated as being final by the special servicer.
Realization Upon Mortgage Loans
If a payment default or material non-monetary default on a Serviced Mortgage Loan has occurred, then, pursuant to the PSA, the special servicer, on behalf of the trustee, may, in accordance with the terms and provisions of the PSA, at any time institute foreclosure proceedings, exercise any power of sale contained in the related Mortgage, obtain a deed in lieu of foreclosure, or otherwise acquire title to the related Mortgaged Property, by operation of law or otherwise. The special servicer is not permitted, however, to cause the trustee to acquire title to any Mortgaged Property, have a receiver of rents appointed with respect to any Mortgaged Property or take any other action with respect to any Mortgaged Property that would cause the trustee, for the benefit of the Certificateholders, or any other specified person to be considered to hold title to, to be a “mortgagee-in-possession” of, or to be an “owner” or an “operator” of such Mortgaged Property within the meaning of certain federal environmental laws, unless the special servicer has determined in accordance with the Servicing Standard, based on an updated environmental assessment report prepared by a person who regularly conducts environmental audits and performed within six months prior to any such acquisition of title or other action (which report will be an expense of the issuing entity subject to the terms of the PSA) that:
(a) such Mortgaged Property is in compliance with applicable environmental laws or, if not, after consultation with an environmental consultant, that it would be in the best economic interest of the Certificateholders (and with respect to any Serviced Whole Loan, the Serviced Companion Loan Holders), as a collective whole as if such Certificateholders and, if applicable, Serviced Companion Loan Holders constituted a single lender, to take such actions as are necessary to bring such Mortgaged Property in compliance with such laws, and
(b) there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any currently effective federal, state or
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local law or regulation, or that, if any such hazardous materials are present for which such action could be required, after consultation with an environmental consultant, it would be in the best economic interest of the Certificateholders (and with respect to any Serviced Whole Loan, the Serviced Companion Loan Holders), as a collective whole as if such Certificateholders and, if applicable, Serviced Companion Loan Holders constituted a single lender, to take such actions with respect to the affected Mortgaged Property.
Such requirement precludes enforcement of the security for the related Mortgage Loan until a satisfactory environmental site assessment is obtained (or until any required remedial action is taken), but will decrease the likelihood that the issuing entity will become liable for a material adverse environmental condition at the Mortgaged Property. However, we cannot assure you that the requirements of the PSA will effectively insulate the issuing entity from potential liability for a materially adverse environmental condition at any Mortgaged Property.
If title to any Mortgaged Property is acquired by the issuing entity (directly or through a single member limited liability company established for the purpose), the special servicer will be required to sell the Mortgaged Property prior to the close of the third calendar year beginning after the year of acquisition, unless (1) the special servicer has applied for, and the IRS grants (or has not denied) a qualifying extension of time to sell the property or (2) the special servicer, the certificate administrator and the trustee receive an opinion of independent counsel to the effect that the holding of the property by the Lower-Tier REMIC or the STK Chicago Loan REMIC longer than the above-referenced three year period will not result in the imposition of a tax on any Trust REMIC or cause any Trust REMIC to fail to qualify as a REMIC under the Code at any time that any certificate is outstanding. Subject to the foregoing and any other tax-related limitations, pursuant to the PSA, the special servicer will generally be required to attempt to sell any Mortgaged Property so acquired in accordance with the Servicing Standard. The special servicer will also be required to administer any Mortgaged Property acquired by the issuing entity in a manner which does not cause such Mortgaged Property to fail to qualify as “foreclosure property” within the meaning of Code Section 860G(a)(8) at all times, and that the sale of the property does not result in the receipt by the issuing entity of any income from nonpermitted assets as described in Code Section 860F(a)(2)(B). If the Lower-Tier REMIC or the STK Chicago Loan REMIC acquires title to any REO Property, the special servicer, on behalf of the Lower-Tier REMIC or the STK Chicago Loan REMIC, respectively, will retain, at the expense of the issuing entity, an independent contractor to manage and operate the property. The independent contractor generally will be permitted to perform construction (including renovation) on a foreclosed property only if the construction was more than 10% completed at the time default on the related Mortgage Loan became imminent. The retention of an independent contractor, however, will not relieve the special servicer of its obligation to manage the Mortgaged Property as required under the PSA.
In general, the special servicer will be obligated to cause any Mortgaged Property acquired as an REO Property to be operated and managed in a manner that would, in its reasonable judgment and in accordance with the Servicing Standard, maximize the issuing entity’s net after-tax proceeds from such property. Generally, none of the Trust REMICs will be taxable on income received with respect to a Mortgaged Property acquired by the issuing entity to the extent that it constitutes “rents from real property”, within the meaning of Code Section 856(d) and Treasury regulations under the Code. Rents from real property include fixed rents and rents based on the gross receipts or sales of a tenant but do not include the portion of any rental based on the net income or profit of any tenant or sub-tenant. No determination has been made whether rent on any of the Mortgaged Properties meets this requirement. Rents from real property include charges for services customarily furnished or rendered in connection with the rental of real property, whether or not the charges are separately stated. Services furnished to the tenants of a particular building will be considered as customary if, in the geographic market in which the building is located, tenants in buildings which are of similar class are customarily provided with the service. No determination has been made whether the services furnished to the tenants of the Mortgaged Properties are “customary” within the meaning of applicable regulations. It is therefore possible that a portion of the rental income with respect to a Mortgaged Property owned by the issuing entity would not constitute rents from real property, or that none of such income would qualify if a separate charge is not stated for such non-customary services or they are not performed by an independent contractor. Rents
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from real property also do not include income from the operation of a trade or business on the Mortgaged Property, such as a hospitality property, or rental income attributable to personal property leased in connection with a lease of real property if the rent attributable to personal property exceeds 15% of the total net rent for the taxable year. Any of the foregoing types of income may instead constitute “net income from foreclosure property”, which would be taxable to the Lower-Tier REMIC or the STK Chicago Loan REMIC at the federal corporate rate and may also be subject to state or local taxes. The PSA provides that the special servicer will be permitted to cause the Lower-Tier REMIC or the STK Chicago Loan REMIC to earn “net income from foreclosure property” that is subject to tax if it determines that the net after-tax benefit to Certificateholders is greater than another method of operating or net leasing the Mortgaged Property. Because these sources of income, if they exist, are already in place with respect to the Mortgaged Properties, it is generally viewed as beneficial to Certificateholders to permit the issuing entity to continue to earn them if it acquires a Mortgaged Property, even at the cost of this tax. These taxes would be chargeable against the related income for purposes of determining the proceeds available for distribution to holders of certificates. See “Material Federal Income Tax Considerations—Taxes That May Be Imposed on a REMIC—Prohibited Transactions”.
Under the PSA, the special servicer is required to establish and maintain one or more REO Accounts, to be held on behalf of the trustee for the benefit of the Certificateholders and with respect to a Serviced Whole Loan, the Serviced Companion Loan Holder, for the retention of revenues and insurance proceeds derived from each REO Property. The special servicer is required to use the funds in the REO Account to pay for the proper operation, management, maintenance and disposition of any REO Property, but only to the extent of amounts on deposit in the REO Account relate to such REO Property. To the extent that amounts in the REO Account in respect of any REO Property are insufficient to make such payments, the master servicer is required to make a Servicing Advance, unless it determines such Servicing Advance would be nonrecoverable. On the later of the date that is (x) on or prior to each Determination Date or (y) 2 business days after such amounts are received and properly identified and determined to be available, the special servicer is required to remit to the master servicer for deposit all amounts received in respect of each REO Property during such Collection Period, net of any amounts withdrawn to make any permitted disbursements, to the Collection Account; provided that the special servicer may retain in the REO Account permitted reserves.
Sale of Defaulted Loans and REO Properties
If the special servicer determines in accordance with the Servicing Standard that it would be in the best economic interests of the Certificateholders or, in the case of a Serviced Whole Loan, Certificateholders and any holder of the related Serviced Pari Passu Companion Loan (as a collective whole as if such Certificateholders and Serviced Companion Loan Holder constituted a single lender) to attempt to sell a Defaulted Loan (other than a Non-Serviced Mortgage Loan) and any related Serviced Pari Passu Companion Loan as described below, the special servicer will be required to use reasonable efforts to solicit offers for each Defaulted Loan on behalf of the Certificateholders and the holder of any related Serviced Pari Passu Companion Loan in such manner as will be reasonably likely to realize a fair price. In the case of certain Non-Serviced Mortgage Loans, under certain limited circumstances permitted under the related Intercreditor Agreement, to the extent that such Non-Serviced Mortgage Loan is not sold together with the related Non-Serviced Companion Loan by the special servicer for the related Non-Serviced Whole Loan, the special servicer will be entitled to sell (with the consent of the Directing Holder if no Control Termination Event is continuing and after consulting on a non-binding basis with the applicable Risk Retention Consultation Party in accordance with the PSA, in each case, with respect to any Non-Serviced Mortgage Loan other than an Excluded Loan as to such party) such Non-Serviced Mortgage Loan if it determines in accordance with the Servicing Standard that such action would be in the best interests of the Certificateholders (and will be entitled to a Liquidation Fee in connection with such sale). Subject to the qualifications described in this section, the special servicer is required to accept the first cash offer received from any person that constitutes a fair price for the Defaulted Loan. If multiple offers are received during the period designated by the special servicer for receipt of offers, the special servicer is required to select the highest offer. The special servicer is required to give the trustee, the certificate administrator, the master servicer, the operating advisor and (other than in respect of any applicable Excluded Loan) the Directing Holder and each Risk Retention Consultation Party not less than
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10 business days’ prior written notice of its intention to sell any such Defaulted Loan. Neither the trustee nor any of its affiliates may make an offer for or purchase any Defaulted Loan. “Defaulted Loan” means a Serviced Mortgage Loan and any related Serviced Companion Loan (i) that is delinquent at least 60 days in respect of its Periodic Payments or more than 120 days delinquent in respect of its balloon payment (or such shorter period as provided in the refinancing commitment or letter of intent, otherwise binding commitment for refinancing or signed purchase agreement, or such date as such commitment, letter of intent, otherwise binding commitment for refinancing or signed purchase agreement terminates) if any, in either case such delinquency to be determined without giving effect to any grace period permitted by the related Mortgage or Mortgage Note and without regard to any acceleration of payments under the related Mortgage and Mortgage Note or (ii) as to which the master servicer or special servicer has, by written notice to the related borrower, accelerated the maturity of the indebtedness evidenced by the related Mortgage Note.
The special servicer will be required to determine whether any cash offer constitutes a fair price for any Defaulted Loan if the highest offeror is a person other than an Interested Person. In determining whether any offer from a person other than an Interested Person constitutes a fair price for any Defaulted Loan, the special servicer will be required to take into account (in addition to the results of any appraisal, updated appraisal or narrative appraisal that it may have obtained pursuant to the PSA within the prior 9 months), among other factors, the period and amount of the occupancy level and physical condition of the related Mortgaged Property and the state of the local economy.
If the highest offeror is an Interested Person (provided that the trustee may not be a offeror), then the trustee will be required to determine whether the cash offer constitutes a fair price; provided that no offer from an Interested Person will constitute a fair price unless (i) the offer is the highest offer received, and (ii) if the offer is less than the applicable Purchase Price, then at least two other offers are received from independent third parties. In determining whether any offer received from an Interested Person represents a fair price for any such Defaulted Loan, the trustee will be supplied with and will be required to rely on the most recent appraisal or updated appraisal conducted in accordance with the PSA within the preceding 9-month period or, in the absence of any such appraisal, on a new appraisal. Except as provided in the following paragraph, the cost of any appraisal will be covered by, and will be reimbursable as, a Servicing Advance.
Notwithstanding anything contained in the preceding paragraph to the contrary, if the trustee is required to determine whether a cash offer by an Interested Person constitutes a fair price, the trustee may (at its option and at the expense of the Interested Person) designate an independent third party expert in real estate or commercial mortgage loan matters with at least 5 years’ experience in valuing or investing in loans similar to the subject Mortgage Loan or Serviced Whole Loan, as the case may be, that has been selected with reasonable care by the trustee to determine if such cash offer constitutes a fair price for such Mortgage Loan or Serviced Whole Loan. If the trustee designates such a third party to make such determination, the trustee will be entitled to rely conclusively upon such third party’s determination. The reasonable costs of all appraisals, inspection reports and broker opinions of value incurred by any such third party pursuant to this paragraph will be covered by, and will be paid in advance of any such determination by the Interested Person; provided that the trustee will not engage a third party expert whose fees exceed a commercially reasonable amount as determined by the trustee.
The special servicer is required to use reasonable efforts to solicit offers for each REO Property on behalf of the Certificateholders and the related Serviced Companion Loan Holder(s) (if applicable) and to sell each REO Property in the same manner as with respect to a Defaulted Loan.
Notwithstanding any of the foregoing paragraphs, the special servicer will not be required to accept the highest cash offer for a Defaulted Loan or REO Property if the special servicer determines (in consultation with the Directing Holder (other than with respect to any applicable Excluded Loan, unless a Consultation Termination Event exists), each Risk Retention Consultation Party (other than with respect to any applicable Excluded Loan) (which consultation will be non-binding) and, in the case of a Serviced Whole Loan or an REO Property related to a Serviced Whole Loan, the related Companion Loan Holder(s)), in accordance with the Servicing Standard, that rejection of such offer would be in the best interests of the Certificateholders and, in the case of a sale of a Serviced Whole Loan or an REO
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Property related to a Serviced Whole Loan, the related Companion Loan Holder(s) (as a collective whole as if such Certificateholders and, if applicable, the related Companion Loan Holder(s) constituted a single lender), and the special servicer may accept a lower offer (from any person other than itself or an affiliate) if it determines, in its reasonable and good faith judgment, that acceptance of such offer would be in the best interests of the Certificateholders and, in the case of a Serviced Whole Loan or an REO Property related to a Serviced Whole Loan, the related Companion Loan Holder(s) (as a collective whole as if such Certificateholders and, if applicable, the related Companion Loan Holder(s) constituted a single lender).
An “Interested Person” is the depositor, the master servicer, the special servicer, the operating advisor, the asset representations reviewer, the Excluded Special Servicer, if any, the certificate administrator, the trustee, the Directing Holder, any Risk Retention Consultation Party, any sponsor, any borrower, any holder of a related mezzanine loan, any manager of a Mortgaged Property, any independent contractor engaged by the special servicer or any known affiliate of any of the preceding entities, and, with respect to a Whole Loan if it is a Defaulted Loan, the depositor, the master servicer, the special servicer (or any independent contractor engaged by such special servicer), or the trustee for the securitization of a Companion Loan, and each related Companion Loan Holder or its representative, any holder of a related mezzanine loan, or any known affiliate of any such party described above.
With respect to each Serviced Whole Loan, pursuant to the terms of the related Intercreditor Agreement(s), if such Serviced Whole Loan becomes a Defaulted Loan, and if the special servicer determines to sell the related Mortgage Loan in accordance with the discussion in this “—Sale of Defaulted Loans and REO Properties” section, then the special servicer will be required to sell the related Pari Passu Companion Loan together with such Mortgage Loan as one whole loan. The special servicer will not be permitted to sell the related Mortgage Loan together with the related Pari Passu Companion Loan if such Serviced Whole Loan becomes a Defaulted Loan without the consent of the holder of the related Pari Passu Companion Loan, unless the special servicer complies with certain notice and delivery requirements set forth in the PSA. See “Description of the Mortgage Pool—The Whole Loans—The Serviced Pari Passu Whole Loans”.
In addition, with respect to each Non-Serviced Mortgage Loan, if such Mortgage Loan has become a defaulted Mortgage Loan under the related Non-Serviced PSA, the Non-Serviced Special Servicer will generally have the right to sell such Mortgage Loan together with the related Companion Loan as notes evidencing one whole loan. The issuing entity, as the holder of the Non-Serviced Mortgage Loans, will have the right to consent to such sale if the required notices and information regarding such sale are not provided to the special servicer in accordance with the related Intercreditor Agreement. The Directing Holder will be entitled to exercise such consent right for so long as no Control Termination Event is continuing, and if a Control Termination Event is continuing, the special servicer will exercise such consent rights. See “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced Pari Passu Whole Loans”, “—The Non-Serviced AB Whole Loans” and “—Servicing of the Non-Serviced Mortgage Loans” below.
In addition, with respect to any Servicing Shift Mortgage Loan, if the related Servicing Shift Mortgage Loan becomes a Defaulted Loan, the special servicer (or, on or after the related Servicing Shift Securitization Date, the related special servicer under the related Servicing Shift PSA) will be required to sell such Mortgage Loan together with the related Companion Loan(s) as notes evidencing one whole loan, in accordance with the provisions of the related Intercreditor Agreement and the PSA or the related Servicing Shift PSA, as the case may be.
To the extent that Liquidation Proceeds collected with respect to any Mortgage Loan are less than the sum of (1) the outstanding principal balance of the Mortgage Loan, (2) interest accrued on the Mortgage Loan and (3) the aggregate amount of outstanding reimbursable expenses (including any (i) unpaid servicing compensation, (ii) unreimbursed Servicing Advances, (iii) accrued and unpaid interest on all Advances and (iv) additional expenses of the issuing entity) incurred with respect to the Mortgage Loan, the issuing entity will realize a loss in the amount of the shortfall. The trustee, the master servicer and/or the special servicer will be entitled to reimbursement out of the Liquidation Proceeds recovered on any Mortgage Loan, prior to the distribution of those Liquidation Proceeds to Certificateholders, of any and all amounts that represent unpaid servicing compensation in respect of the related Mortgage Loan, certain
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unreimbursed expenses incurred with respect to the Mortgage Loan and any unreimbursed Advances (including interest on Advances) made with respect to the Mortgage Loan. In addition, amounts otherwise distributable on the certificates will be further reduced by interest payable to the master servicer, the special servicer or trustee on these Advances.
The Directing Holder
General
Subject to the rights of the holder of the related Companion Loan under the related Intercreditor Agreement as described under “—Rights of Holders of Companion Loans” below, for so long as no Control Termination Event is continuing, the Directing Holder will be entitled to advise (1) the special servicer, with respect to all Specially Serviced Loans (other than any Excluded Loan applicable to the Directing Holder) as to all Major Decisions, and (2) the special servicer, with respect to non-Specially Serviced Loans (other than any Excluded Loan applicable to the Directing Holder), as to all matters for which the master servicer must obtain the consent or deemed consent of the special servicer (e.g., the Major Decisions) and will have the right to replace the special servicer with or without cause, and have certain other rights under the PSA, each as described below. With respect to any Mortgage Loan (other than any Excluded Loan applicable to the Directing Holder), during the continuance of a Control Termination Event, the Directing Holder will have certain consultation rights only, and during the continuance of a Consultation Termination Event, the Directing Holder will not have any consent or consultation rights, as further described below.
The “Trust Directing Holder” will be, with respect to each Serviced Mortgage Loan, the Controlling Class Certificateholder (or its representative) selected by more than 50% of the Controlling Class Certificateholders, by Certificate Balance, as determined by the certificate registrar from time to time; provided, however, that:
(i) absent that selection, or
(ii) until a Trust Directing Holder is so selected, or
(iii) upon receipt of a notice from a majority of the Controlling Class Certificateholders, by Certificate Balance, that a Trust Directing Holder is no longer designated, the Controlling Class Certificateholder that represents that it owns the largest aggregate Certificate Balance of the Controlling Class (or its representative) will be the Trust Directing Holder; provided, however, that in the case of this clause (3), in the event no one holder represents that it owns the largest aggregate Certificate Balance of the Controlling Class, then there will be no Trust Directing Holder until appointed in accordance with the terms of the PSA.
The initial Trust Directing Holder is expected to be Eightfold Real Estate Capital Fund V, L.P. or its affiliate.
The certificate administrator and the other parties to the PSA will be entitled to assume that the identity of the Trust Directing Holder has not changed until such parties receive written notice of a replacement of the Trust Directing Holder from a party holding the requisite interest in the Controlling Class, or the resignation of the then-current Trust Directing Holder.
The “Directing Holder” means:
(1) with respect to any Mortgage Loan (other than any Non-Serviced Mortgage Loan, any applicable Excluded Loan or any Servicing Shift Mortgage Loan) or Serviced Whole Loan (other than any applicable Excluded Loan or any Servicing Shift Whole Loan), the Trust Directing Holder; and
(2) with respect to any Servicing Shift Mortgage Loan (prior to the related Servicing Shift Securitization Date), the related Loan-Specific Directing Holder.
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The “Loan-Specific Directing Holder” means, with respect to any Servicing Shift Whole Loan, the “controlling holder”, the “directing certificateholder”, the “directing holder”, “directing lender” or any analogous concept under the related Intercreditor Agreement. Prior to the applicable Servicing Shift Securitization Date, the “Loan-Specific Directing Holder” with respect to the related Servicing Shift Whole Loan will initially be the holder of the related Controlling Companion Loan, which is (i) GS Bank with respect to the Shearer’s Industrial Portfolio Whole Loan. On and after the related Servicing Shift Securitization Date, there will be no Loan-Specific Directing Holder under the PSA with respect to the related Servicing Shift Whole Loan.
A “Controlling Class Certificateholder” is each holder (or Certificate Owner, if applicable) of a certificate of the Controlling Class as determined by the certificate registrar from time to time, upon request by any party to the PSA.
The “Controlling Class” will be, as of any time of determination, the most subordinate class of Control Eligible Certificates then-outstanding that has an aggregate Certificate Balance (as notionally reduced by any Cumulative Appraisal Reduction Amounts allocable to such class) at least equal to 25% of the initial Certificate Balance of that class; provided that if, at any time, the Certificate Balances of all Control Eligible Certificates, as notionally reduced by any Appraisal Reduction Amounts (but without regard to any Collateral Deficiency Amount) allocable to such classes, have been reduced to zero, the Controlling Class will be the most subordinate class of Control Eligible Certificates that has a principal balance greater than zero; provided, further, that if at any time the Certificate Balance of the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4, Class A-5, Class A-M, Class B, Class C, Class D, Class E and Class F certificates have been reduced to zero as a result of the allocation of principal payments on the Mortgage Loans, then the “Controlling Class” will be the most subordinate class of Control Eligible Certificates that has an aggregate Certificate Balance greater than zero without regard to the application of Appraisal Reduction Amounts (or any Collateral Deficiency Amount) to notionally reduce the Certificate Balance of such Class.
The “Control Eligible Certificates” will be any of the Class G or Class H certificates.
The Controlling Class as of the Closing Date will be the Class H certificates.
The master servicer, the special servicer, the trustee or the operating advisor, may from time to time request that the certificate administrator provide the name of the then-current Trust Directing Holder for any applicable Mortgage Loan or Serviced Whole Loan. Upon such request, the certificate administrator will be required to promptly (but in no event more than 5 Business Days following such request) provide the name of the then-current Trust Directing Holder to the master servicer, the special servicer, the trustee or the operating advisor, but only to the extent the certificate administrator has actual knowledge of the identity of the then-current Trust Directing Holder; provided, that if the certificate administrator does not have actual knowledge of the identity of the then-current Trust Directing Holder, then the certificate administrator will be required to promptly (but in no event more than 5 Business Days following such request) (i) determine which Class is the Controlling Class, and (ii) request from the Controlling Class Certificateholders, the identity of the Trust Directing Holder. Any expenses incurred in connection with obtaining such information will be at the expense of the requesting party, except that if (i) such expenses arise in connection with an event as to which the Trust Directing Holder has review, consent or consultation rights with respect to an action taken by, or report prepared by, the requesting party pursuant to the PSA or in connection with a request made by the operating advisor in connection with its obligation under the PSA to deliver a copy of its Operating Advisor Annual Report to the Trust Directing Holder and (ii) the requesting party has not been notified of the identity of the Trust Directing Holder or reasonably believes that the identity of the Trust Directing Holder has changed, then such expenses will be at the expense of the Trust. The master servicer, the special servicer, the trustee and the operating advisor, will be entitled to conclusively rely on any such information so provided.
To the extent the master servicer or the special servicer has written notice of any change in the identity of a Trust Directing Holder or the list of Certificateholders (or Certificate Owner(s), if applicable) of the Controlling Class, then the master servicer or the special servicer, as applicable, will be required to promptly notify the trustee, the certificate administrator, the operating advisor, the master servicer and the
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special servicer thereof, who may rely conclusively on such notice from the master servicer or the special servicer, as applicable.
In the event that no Directing Holder has been appointed or identified to the master servicer or the special servicer, as applicable, and the master servicer or special servicer, as applicable, has attempted to obtain such information from the certificate administrator and no such entity has been identified to the master servicer or the special servicer, as applicable, then until such time as the new Directing Holder is identified, the master servicer or the special servicer, as applicable, will have no duty to consult with, provide notice to, or seek the approval or consent of any such Directing Holder as the case may be.
Major Decisions
Except as otherwise described under “—Servicing Override” below and subject to the rights of the holder of any related Companion Loan under the related Intercreditor Agreement as described under “—Rights of Holders of Companion Loans” below, for so long as no Control Termination Event is continuing, neither the master servicer nor the special servicer will be permitted to take any of the following actions, and the special servicer will not be permitted to consent to the master servicer’s taking any of the following actions that are Major Decisions, in each case as to which the Directing Holder has objected in writing within 10 business days (or, in connection with an Acceptable Insurance Default, 30 days) after receipt of a written recommendation and analysis together with such other information reasonably requested by the Directing Holder, and in the possession of the master servicer or the special servicer, as applicable, in order to grant or withhold such consent, which report may, in the sole discretion of the special servicer or the master servicer, take the form of an Asset Status Report (the “Major Decision Reporting Package”) (provided that if such written objection has not been received by the master servicer or the special servicer, as applicable, within such 10 business day (or 30-day) period, the Directing Holder will be deemed to have approved such action)(each of the following, a “Major Decision”):
With respect to each Serviced Mortgage Loan and Serviced Whole Loan:
(a) (i) any modification, consent to a modification or waiver of any monetary term (other than late fees and default interest) or material non-monetary term (including, without limitation, a COVID Modification, the timing of payments and acceptance of discounted payoffs) of a Serviced Mortgage Loan and any related Serviced Companion Loan, (ii) any extension of the maturity date of any Serviced Mortgage Loan and any related Serviced Companion Loan or (iii) any modification, waiver, consent or amendment of a Serviced Mortgage Loan and any related Serviced Companion Loan in connection with a defeasance if such proposed modification, waiver, consent or amendment is with respect to a (A) a waiver of a Mortgage Loan event of default (but excluding non-monetary events of default other than defaults relating to transfers of interest in the borrower or the existing collateral or material modifications of the existing collateral), (B) a modification of the type of defeasance collateral required under the Mortgage Loan documents other than direct, non-callable obligations of the United States would be permitted or (C) a modification that would permit a principal prepayment instead of defeasance if the applicable Mortgage Loan documents do not otherwise permit such principal prepayment;
(b) (i) any property management company changes for which the lender is required to consent or approve under the Mortgage Loan documents with respect to a Mortgage Loan (other than a Non-Serviced Mortgage Loan) or Serviced Whole Loan with a Stated Principal Balance greater than $2,500,000 or (ii) changes to the identity of the franchisor, change in flag or action of substantially similar import for which the lender is required to consent or approve under the Mortgage Loan documents;
(c) any determination of an Acceptable Insurance Default;
(d) any modification, consent to a modification or waiver of any material term of any intercreditor or similar agreement related to a Mortgage Loan, or any action to enforce rights with respect to the Mortgage Loan;
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(e) any sale of a Defaulted Mortgage Loan (that is not a Non-Serviced Mortgage Loan), an REO Property (in each case, other than in connection with the termination of the issuing entity as described under “Pooling and Servicing Agreement—Termination; Retirement of Certificates”) or a Defaulted Mortgage Loan that is a Non-Serviced Mortgage Loan that the special servicer is permitted to sell in accordance with the PSA, in each case for less than the applicable Purchase Price;
(f) any determination to bring an REO Property into compliance with applicable environmental laws or to otherwise address hazardous material located at an REO Property;
(g) requests for property releases or substitutions, other than (i) grants of easements or rights of way that do not materially affect the use or value of a Mortgaged Property or the borrower’s ability to make any payments with respect to a Serviced Mortgage Loan and any related Serviced Companion Loan, (ii) release of non-material parcels of a Mortgaged Property (including, without limitation, any such releases (A) to which the related Mortgage Loan documents expressly require the mortgagee thereunder to make such releases upon the satisfaction of certain conditions (and the conditions to the release that are set forth in the related Mortgage Loan documents do not include the approval of the lender or the exercise of lender discretion (other than confirming the satisfaction of such conditions to the release set forth in the related Mortgage Loan documents that do not include any approval or exercise of lender discretion)) and such release is made as required by the related Mortgage Loan documents or (B) that are related to any condemnation action that is pending, or threatened in writing, and would affect a non-material portion of the Mortgaged Property), or (iii) the release of collateral securing any Mortgage Loan in connection with a defeasance of such collateral;
(h) any waiver of a “due-on-sale” or “due-on-encumbrance” clause with respect to a Serviced Mortgage Loan and any related Serviced Companion Loan or any consent to such a waiver or consent to a transfer of the Mortgaged Property or direct or indirect interests in the related borrower (including any interests in any applicable mezzanine borrower) or consent to the incurrence of additional debt, other than any such transfer or incurrence of debt as may be effected without the consent of the lender under the related loan agreement;
(i) releases of any material amount from any escrow accounts, reserve accounts or letters of credit, in each case, held as performance escrows (or reserves) or earn-out escrows (or reserves), including with respect to certain Mortgage Loans identified on a schedule to the PSA, other than those required pursuant to the specific terms of the related Serviced Mortgage Loan and any related Serviced Companion Loan and for which there is no lender discretion;
(j) any acceptance of an assumption agreement or any other agreement permitting a transfer of interests in the related borrower or guarantor releasing such borrower or guarantor from liability under a Serviced Mortgage Loan and any related Serviced Companion Loan other than pursuant to the specific terms of such Serviced Mortgage Loan and any related Serviced Companion Loan and for which there is no lender discretion;
(k) any exercise of a material remedy with respect to a Serviced Mortgage Loan and any related Serviced Companion Loan following a default or event of default of such Mortgage Loan or Serviced Whole Loan;
(l) any proposed or actual foreclosure upon or comparable conversion (which may include acquisition of an REO Property) of the ownership of properties securing such of the Mortgage Loans (other than a Non-Serviced Mortgage Loan) or Serviced Whole Loan as come into and continue in default;
(m) any consent to incurrence of additional debt by a borrower or mezzanine debt by a direct or indirect parent of a borrower, to the extent the lender’s approval is required under the related Mortgage Loan documents;
(n) determining whether to cure any default by a borrower under a ground lease or permit any ground lease modification, amendment or subordination, non-disturbance and attornment agreement
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or entry into a new ground lease and grant approvals, including granting of subordination, non-disturbance and attornment agreements and consents involving leasing activities (to the extent lender approval is required under the related Mortgage Loan documents) if (1) such lease involves a ground lease or lease of an outparcel, (2) such lease affects an area equal to or greater than the lesser of (i) 30,000 square feet and (ii) 30% of the net rentable area of the related Mortgaged Property, or (3) such transaction is not a routine leasing matter for a customary lease of space for parking, office, retail, warehouse, industrial and/or manufacturing purposes; and
(o) approving waivers regarding the receipt of financial statements (other than immaterial timing waivers);
provided that if the master servicer or the special servicer determines that immediate action is necessary to protect the interests of the Certificateholders and, with respect to any applicable Serviced Whole Loan, the holders of any related Serviced Companion Loan (as a collective whole as if such Certificateholders and Serviced Companion Loan holders constituted a single lender) and the master servicer or the special servicer, as applicable, has made a reasonable effort to contact the Directing Holder, the master servicer or the special servicer, as applicable, may take any such action without waiting for the Directing Holder’s response.
Subject to the terms and conditions of this section, including, without limitation, the proviso set forth at the conclusion of the immediately preceding paragraph, (a) the special servicer will process all requests for any matter that constitutes a “Major Decision” unless the master servicer and the special servicer mutually agree that the master servicer will process such request (other than with respect to any COVID Modification which will be processed by the special servicer), and (b) the master servicer will process all requests for any matter that is not a Major Decision with respect to any non-Specially Serviced Mortgage Loans (other than a Non-Serviced Mortgage Loan) without any obligation to obtain the consent of or consult with any other person. Upon receiving a request for any matter that constitutes a Major Decision, unless the master servicer and the special servicer mutually agree that the master servicer will process such request, the master servicer will be required to forward such request to the special servicer and the special servicer will be required to process such request and the master servicer will have no further obligation with respect to such request or the related Major Decision.
During the continuance of a Control Termination Event, the special servicer will be required to provide each Major Decision Reporting Package to the operating advisor simultaneously with the special servicer’s written request for the operating advisor’s input regarding the related Major Decision (which written request and Major Decision Reporting Package may be delivered in one notice), as set forth under “—Control Termination Event and Consultation Termination Event” below. During the continuance of a Control Termination Event, with respect to any particular Major Decision and/or related Major Decision Reporting Package or any Asset Status Report required to be delivered by the special servicer to the operating advisor, the special servicer will be required to make available to the operating advisor a servicing officer with the relevant knowledge regarding the applicable Mortgage Loan and such Major Decision and/or Asset Status Report in order to address reasonable questions that the operating advisor may have relating to, among other things, such Major Decision and/or Asset Status Report.
In addition, (i) for so long as no Consultation Termination Event is continuing, with respect to any Specially Serviced Loan (other than any applicable Excluded Loan), and (ii) during the continuance of a Consultation Termination Event, with respect to any Serviced Mortgage Loan (other than any applicable Excluded Loan), upon request of a Risk Retention Consultation Party, the master servicer and the special servicer will also be required to consult with such Risk Retention Consultation Party in connection with any Major Decision that it is processing (and such other matters that are subject to consultation rights of such Risk Retention Consultation Party pursuant to the PSA) and to consider alternative actions recommended by such Risk Retention Consultation Party in respect of such Major Decision; provided that such consultation is on a non-binding basis. In the event the master servicer or the special servicer, as applicable, receives no response from a Risk Retention Consultation Party within 10 days following the later of (i) the master servicer’s or the special servicer’s, as applicable, written request for input on any requested consultation and (ii) delivery of all such additional information reasonably requested by such Risk Retention Consultation Party related to the subject matter of such consultation, the master servicer
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or the special servicer, as applicable, will not be obligated to consult with such Risk Retention Consultation Party on the specific matter; provided, however, that the failure of such Risk Retention Consultation Party to respond will not relieve the master servicer or the special servicer, as applicable, from using reasonable efforts to consult with such Risk Retention Consultation Party on any future matters with respect to the applicable Mortgage Loan or Serviced Whole Loan or any other Mortgage Loan.
With respect to any borrower request or other action on a non-Specially Serviced Loan that is not a Major Decision, the master servicer will not be required to obtain the consent of or consult with the special servicer or the Directing Holder.
Asset Status Report
For so long as no Control Termination Event is continuing (but not with respect to any Excluded Loan), the Directing Holder will have the right to disapprove the Asset Status Report prepared by the special servicer with respect to a Specially Serviced Loan. For so long as no Consultation Termination Event is continuing, the Directing Holder will have no right to consult with the special servicer with respect to the Asset Status Reports. See “—Asset Status Report” above.
Replacement of the Special Servicer
For so long as no Control Termination Event is continuing, the Directing Holder will have the right to replace the special servicer with or without cause as described under “—Replacement of the Special Servicer Without Cause” and “—Termination of the Master Servicer and the Special Servicer for Cause—Servicer Termination Events” below.
Control Termination Event and Consultation Termination Event
If a Control Termination Event is continuing, but for so long as no Consultation Termination Event is continuing, neither the master servicer nor the special servicer, as applicable, will be required to obtain the consent of the Directing Holder with respect to any of the Major Decisions or Asset Status Reports, but will be required to consult with the Directing Holder in connection with any Major Decision that it is processing or, in the case of the special servicer, any Asset Status Report (or any other matter for which the consent of the Directing Holder would have been required or for which the Directing Holder would have the right to direct the master servicer or the special servicer if no Control Termination Event was continuing) and to consider alternative actions recommended by the Directing Holder in respect of such Major Decision or Asset Status Report (or such other matter). Such consultation will not be binding on the master servicer or the special servicer. In the event the master servicer or the special servicer, as applicable receives no response from the Directing Holder within 10 Business Days following its written request for input (which request is required to include the related Major Decision Reporting Package) on any required consultation, the master servicer or the special servicer, as applicable, will not be obligated to consult with the Directing Holder on the specific matter; provided, however, that the failure of the Directing Holder to respond will not relieve the master servicer or the special servicer, as applicable, from using reasonable efforts to consult with the Directing Holder on any future matters with respect to the applicable Mortgage Loan or Serviced Whole Loan or any other Mortgage Loan. With respect to any Excluded Special Servicer Mortgage Loan (that is not also an Excluded Loan), if any, the Directing Holder (for so long as no Control Termination Event is continuing) will be required to select an Excluded Special Servicer with respect to such Excluded Special Servicer Mortgage Loan. During the continuance of a Control Termination Event or if at any time the applicable Excluded Special Servicer Mortgage Loan is also an applicable Excluded Loan, the resigning special servicer will be required to use reasonable efforts to select the related Excluded Special Servicer.
In addition, if a Control Termination Event is continuing, the special servicer will also be required to consult with the operating advisor in connection with any Major Decision as to which it has delivered to the operating advisor a Major Decision Reporting Package (and such other matters that are subject to consultation rights of the operating advisor pursuant to the PSA) and to consider alternative actions recommended by the operating advisor in respect of such Major Decision; provided that such consultation
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is on a non-binding basis. In the event the special servicer receives no response from the operating advisor within 10 days following the later of (i) its written request for input on any required consultation (which request is required to include the related Major Decision Reporting Package) and (ii) delivery of all such additional information reasonably requested by the operating advisor, related to the subject matter of such consultation, the special servicer will not be obligated to consult with the operating advisor on the specific matter; provided, however, that the failure of the operating advisor to respond will not relieve the special servicer from using reasonable efforts to consult with the operating advisor on any future matters with respect to the applicable Mortgage Loan or Serviced Whole Loan or any other Mortgage Loan. Notwithstanding anything to the contrary contained in this prospectus, with respect to any Excluded Loan related to the Directing Holder, the special servicer or the related Excluded Special Servicer, as applicable, will be required to consult with the operating advisor, on a non-binding basis, in connection with the related transactions involving proposed Major Decisions that it is processing or for which it must give its consent and consider alternative actions recommended by the operating advisor, in respect thereof, in accordance with the procedures set forth in the PSA for consulting with the operating advisor.
If a Consultation Termination Event is continuing, no class of certificates will act as the Controlling Class, and the Directing Holder will have no consultation or consent rights under the PSA and will have no right to receive any notices, reports or information (other than notices, reports or information required to be delivered to all Certificateholders) or any other rights as Directing Holder under the PSA. The special servicer will nonetheless be required to consult with only the operating advisor in connection with Major Decisions it is processing or for which it must give its consent, asset status reports and other material special servicing actions to the extent set forth in the PSA, and no Controlling Class Certificateholder will be recognized or have any right to approve or be consulted with respect to asset status reports or material special servicer actions.
A “Control Termination Event” will occur and be continuing with respect to any Mortgage Loan (other than any Servicing Shift Mortgage Loan) or Serviced Whole Loan (other than any Servicing Shift Whole Loan), when one or more of the following is true: (i) the Class G certificates have a Certificate Balance (taking into account the application of any Cumulative Appraisal Reduction Amounts to notionally reduce the Certificate Balance of such class) being reduced to less than 25% of the initial Certificate Balance of that class or (ii) such Mortgage Loan or Whole Loan is an applicable Excluded Loan;
provided, further, that a Control Termination Event will not be deemed to be continuing in the event the Certificate Balances of all classes of Principal Balance Certificates other than the Control Eligible Certificates have been reduced to zero; provided, further, that no Control Termination Event may occur with respect to the Loan-Specific Directing Holder related to any Servicing Shift Whole Loan and the term “Control Termination Event” will not be applicable to the Loan-Specific Directing Holder related to such Servicing Shift Whole Loan. With respect to Excluded Loans related to the Directing Holder, a Control Termination Event will be deemed to exist.
A “Consultation Termination Event” will occur and be continuing with respect to any Mortgage Loan (other than any Servicing Shift Mortgage Loan) or any Serviced Whole Loan (other than any Servicing Shift Whole Loan), when one or more of the following is true: (i) there is no class of Control Eligible Certificates that has a then-outstanding Certificate Balance (without regard to the application of any Cumulative Appraisal Reduction Amounts) equal to at least 25% of the initial Certificate Balance of that class or (ii) such Mortgage Loan or Whole Loan is an applicable Excluded Loan;
provided, further, that a Consultation Termination Event will not be deemed to be continuing in the event the Certificate Balances of all classes of Principal Balance Certificates other than the Control Eligible Certificates have been reduced to zero; provided, further, that no Consultation Termination Event may occur with respect to the Loan-Specific Directing Holder related to any Servicing Shift Whole Loan and the term “Consultation Termination Event” will not be applicable to the Loan-Specific Directing Holder related to such Servicing Shift Whole Loan. With respect to Excluded Loans related to the Directing Holder, a Consultation Termination Event will be deemed to exist.
For a description of certain restrictions on any modification, waiver or amendment to the Mortgage Loan documents, see “—Modifications, Waivers and Amendments” above.
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Servicing Override
If the master servicer or the special servicer, as applicable, determines that immediate action with respect to any Major Decision (or any other matter requiring consent of the Directing Holder, for so long as no Control Termination Event in the PSA is continuing (or any matter requiring consultation with the Directing Holder, any Risk Retention Consultation Party or the operating advisor)) is necessary to protect the interests of the Certificateholders (and, with respect to a Serviced Whole Loan, the interest of the Certificateholders and the holders of the related Serviced Companion Loan(s)), as a collective whole (taking into account the subordinate or pari passu nature of any Companion Loan(s)), the master servicer or the special servicer, as the case may be, may take any such action without waiting for the Directing Holder’s response (or without waiting to consult with the Directing Holder or the operating advisor, as the case may be); provided that the special servicer or master servicer, as applicable provides the Directing Holder (or the operating advisor, if applicable) with prompt written notice following such action including a reasonably detailed explanation of the basis for such action.
In addition, neither the master servicer nor the special servicer (i) will be required to take or refrain from taking any action pursuant to instructions or objections from the Directing Holder or (ii) may follow any advice or consultation provided by the Directing Holder or the holder of a Pari Passu Companion Loan (or its representative) that would (1) cause it to violate any applicable law, the related Mortgage Loan documents, any related Intercreditor Agreement, the PSA, including the Servicing Standard, or the REMIC provisions of the Code, (2) expose the master servicer, the special servicer, the certificate administrator, the operating advisor, the asset representations reviewer, the issuing entity or the trustee to liability, (3) materially expand the scope of responsibilities of the master servicer or the special servicer, as applicable, under the PSA or (4) cause the master servicer or the special servicer, as applicable, to act, or fail to act, in a manner which in the reasonable judgment of the master servicer or the special servicer, as applicable, is not in the best interests of the Certificateholders.
Rights of Holders of Companion Loans
With respect to each Non-Serviced Whole Loan, the Directing Holder will not be entitled to exercise the rights described above, but such rights, or rights similar to those rights, will be exercisable by the directing holder (or equivalent entity) under the related Non-Serviced PSA (in the case of a Non-Serviced Whole Loan). The issuing entity, as the holder of the Non-Serviced Mortgage Loans and the Servicing Shift Mortgage Loans, has consultation rights with respect to certain major decisions relating to the Non-Serviced Whole Loans or the Servicing Shift Whole Loans, as applicable, and, for so long as no Control Termination Event is continuing, the Directing Holder will be entitled to exercise such consultation rights of the issuing entity pursuant to the terms of the related Intercreditor Agreement. In addition, so for long as no Control Termination Event is continuing, the Directing Holder may have certain consent rights in connection with a sale of a Non-Serviced Whole Loan or a Servicing Shift Whole Loan, as applicable, that has become a defaulted loan under the related Non-Serviced PSA and under certain circumstances described under “—Sale of Defaulted Loans and REO Properties”. See also “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced Pari Passu Whole Loans”, “—The Non-Serviced AB Whole Loans” and “—Servicing of the Non-Serviced Mortgage Loans” below.
With respect to a Serviced Pari Passu Mortgage Loan that is subject to a Pari Passu Companion Loan, the holder of the Pari Passu Companion Loan has consultation rights with respect to certain major decisions. See “Description of the Mortgage Pool—The Whole Loans—The Serviced Pari Passu Whole Loans”.
Each Certificateholder will acknowledge and agree, by its acceptance of its certificates, that each Loan-Specific Directing Holder and the holders of the Non-Serviced Companion Loan(s) or a Companion Loan that is part of a Servicing Shift Whole Loan or their respective designees (e.g. the related directing holder (or equivalent party) under the related Non-Serviced PSA) will have limitations on liability with respect to actions taken in connection with the related Mortgage Loan similar to the limitations of the Directing Holder described above pursuant to the terms of the related Intercreditor Agreement and the related Non-Serviced PSA. See “Description of the Mortgage Pool—The Whole Loans”.
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Limitation on Liability of Directing Holder
The Directing Holder will not be liable to the issuing entity or the Certificateholders for any action taken, or for refraining from the taking of any action or for errors in judgment. However, the Directing Holder will not be protected against any liability to the Controlling Class Certificateholders that would otherwise be imposed by reason of willful misconduct, bad faith or negligence in the performance of duties or by reason of reckless disregard of obligations or duties owed to the Controlling Class Certificateholders.
Each Certificateholder will acknowledge and agree, by its acceptance of its certificates, that the Directing Holder:
(a) may have special relationships and interests that conflict with those of holders of one or more classes of certificates;
(b) may act solely in the interests of the holders of the Controlling Class (or, in the case of a Whole Loan, in the interests of one or more Companion Loan Holders);
(c) does not have any liability or duties to the holders of any class of certificates other (in the case of the Trust Directing Holder) than the Controlling Class;
(d) may take actions that favor the interests of the holders of the Controlling Class (or, in the case of a Whole Loan, in the interests of one or more Companion Loan Holders) over the interests of the holders of one or more other classes of certificates; and
(e) will have no liability whatsoever to any Certificateholder (other than to a Controlling Class Certificateholder in the case of the Trust Directing Holder), the issuing entity, any Companion Loan Holder, any party to the PSA or any other person (including a borrower under a Mortgage Loan) for having so acted as set forth in (a) – (d) above, and no Certificateholder (other than a Controlling Class Certificateholder in the case of the Trust Directing Holder) or Companion Loan Holder may take any action whatsoever against the Directing Holder or any director, officer, employee, agent or principal of the Directing Holder for having so acted.
The taking of, or refraining from taking, any action by the master servicer or the special servicer in accordance with the direction of or approval of the Directing Holder, which does not violate the terms of any Mortgage Loan, any law or the accepted servicing practices or the provisions of the PSA or the related Intercreditor Agreement, will not result in any liability on the part of the master servicer or the special servicer.
The Operating Advisor
General
The operating advisor will act solely as a contracting party to the extent set forth in the PSA, and in accordance with the Operating Advisor Standard, and will have no fiduciary duty to any party. The operating advisor’s duties will be limited to its specific duties under the PSA, and the operating advisor will have no duty or liability to any particular class of certificates or any Certificateholder. The operating advisor is not the special servicer, the master servicer or a sub-servicer and will not be charged with changing the outcome on any decision with respect to a Mortgage Loan. By purchasing a certificate, potential investors acknowledge and agree that there could be a variety of activities or decisions made with respect to, or multiple strategies to resolve any Mortgage Loan and that the goal of the operating advisor’s participation is to provide additional input relating to the special servicer’s compliance with the Servicing Standard in making its determinations as to which strategy to execute.
Potential investors should note that the operating advisor is not an “advisor” for any purpose other than as specifically set forth in the PSA and is not an advisor to any person, including without limitation any Certificateholder. For the avoidance of doubt, the operating advisor is not an “investment adviser”
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within the meaning of the Investment Advisers Act of 1940, as amended or a broker or dealer with the meaning of the Securities Exchange Act of 1934, as amended. See “Risk Factors—Other Risks Relating to the Certificates—Your Lack of Control Over the Issuing Entity and the Mortgage Loans Can Impact Your Investment”.
Notwithstanding the foregoing, the operating advisor will generally have no obligations or consultation rights as operating advisor under the PSA for this transaction with respect to any Non-Serviced Whole Loan (each of which will be serviced pursuant to the related Non-Serviced PSA) or any related REO Properties. Meanwhile, the operating advisors or equivalent parties (if any) under the applicable Non-Serviced PSA have certain obligations and consultation rights with respect to the related Non-Serviced Whole Loan. Furthermore, the operating advisor will have no obligation or responsibility at any time to review or assess the actions of the master servicer for compliance with the Servicing Standard, and the operating advisor will not be required to consider such master servicer actions in connection with any annual report.
The special servicer is required to notify the operating advisor of whether any Asset Status Report delivered to the operating advisor is a Final Asset Status Report, which notification may be satisfied by (i) delivery of an Asset Status Report that is either signed by the Directing Holder or that otherwise includes an indication that such Asset Status Report is deemed approved due to the passage of any required consent or consultation time period or (ii) such other method as reasonably agreed to by the special servicer and the operating advisor.
Duties of the Operating Advisor While No Control Termination Event is Continuing
With respect to each Serviced Mortgage Loan and each Serviced Whole Loan, unless a Control Termination Event is continuing, the operating advisor’s obligations will be limited to the following and generally will not involve an assessment of specific actions of the special servicer:
(1) promptly reviewing information available to Privileged Persons on the certificate administrator’s website that is relevant to the operating advisor’s obligations under the PSA;
(2) promptly reviewing each Final Asset Status Report; and
(3) reviewing any Appraisal Reduction Amount and net present value calculations used in the special servicer’s determination of what course of action to take in connection with the workout or liquidation of a Specially Serviced Loan (after they have been finalized); provided, however, that the operating advisor may not opine on, or otherwise call into question, such Appraisal Reduction Amount calculations and/or net present value calculations (except that if the operating advisor discovers a mathematical error contained in such calculations, then the operating advisor will be required to notify the special servicer of such error).
Prior to the occurrence and continuance of a Control Termination Event, the operating advisor’s review will be limited to an after-the-action review of the reports and material described above (together with any additional information and material reviewed by the operating advisor), and, therefore, it will have no involvement with respect to the determination and execution of Major Decisions and other similar actions that the special servicer may perform under the PSA and will have no obligations at any time with respect to any Non-Serviced Mortgage Loan. In addition, the operating advisor’s review of the net present value calculations is limited to the mathematical accuracy of the calculations and the corresponding application of the non-discretionary portions of the applicable formulas, and as such, does not take into account the reasonableness of the discretionary portions of such formulas.
Duties of the Operating Advisor While A Control Termination Event is Continuing
With respect to each Serviced Mortgage Loan (other than any Servicing Shift Mortgage Loan in the case of clause (1) and clause (2) below) and each Serviced Whole Loan (other than any Servicing Shift Whole Loan in the case of clause (1) and clause (2) below), while a Control Termination Event is continuing, the operating advisor’s obligations will consist of the following:
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(1) the operating advisor will be required to consult (on a non-binding basis) with the special servicer in respect of the Asset Status Reports in accordance with the Operating Advisor Standard, as described under “—The Directing Holder—Asset Status Report” above;
(2) the operating advisor will be required to consult (on a non-binding basis) with the special servicer in accordance with the Operating Advisor Standard with respect to Major Decisions as described under “—The Directing Holder—Control Termination Event and Consultation Termination Event” above;
(3) the operating advisor will be required to prepare an annual report (if any Serviced Mortgage Loan and any related Serviced Companion Loan was a Specially Serviced Loan during the prior calendar year) generally in the form attached to this prospectus as Annex C to be provided to the depositor, the special servicer, the certificate administrator (and made available through the certificate administrator’s website) and the 17g-5 Information Provider (and made available through the 17g-5 Information Provider’s website) in accordance with the Operating Advisor Standard, as described below under “—Annual Report”; and
(4) the operating advisor will be required to promptly recalculate and verify the accuracy of the mathematical calculations and the corresponding application of the non-discretionary portion of the applicable formulas required to be utilized in connection with: (1) any Appraisal Reduction Amount or (2) net present value calculations used in the special servicer’s determination of what course of action to take in connection with the workout or liquidation of a Specially Serviced Loan prior to utilization by the special servicer.
In connection with the performance of the duties described in clause (4) above:
(1) after the calculation has been finalized but prior to the utilization by the special servicer, the master servicer or special servicer, as applicable, will be required to deliver the foregoing calculations together with information and support materials (including such additional information reasonably requested by the operating advisor to confirm the mathematical accuracy of such calculations, but not including any Privileged Information) to the operating advisor;
(2) if the operating advisor does not agree with the mathematical calculations or the application of the applicable non-discretionary portions of the formula required to be utilized for such calculation, the operating advisor and the master servicer or the special servicer, as applicable, will be required to consult with each other in order to resolve any material inaccuracy in the mathematical calculations or the application of the non-discretionary portions of the related formula in arriving at those mathematical calculations or any disagreement; and
(3) if the operating advisor and the master servicer or special servicer, as applicable, are not able to resolve such matters, the operating advisor will be required to promptly notify the certificate administrator and the certificate administrator will be required to examine the calculations and supporting materials provided by the master servicer, the special servicer or the operating advisor, as applicable and determine which calculation is to apply.
The “Operating Advisor Standard” means the requirement that the operating advisor must act solely on behalf of the issuing entity and in the best interest of, and for the benefit of, the Certificateholders and, with respect to any Serviced Whole Loan for the benefit of the holders of any related Companion Loan (as a collective whole as if such Certificateholders and Companion Loan Holders constituted a single lender, taking into account the pari passu nature of any related Pari Passu Companion Loan and the subordinate nature of any related Subordinate Companion Loan), and not to holders of any particular class of certificates (as determined by the operating advisor in the exercise of its good faith and reasonable judgment), and without regard to any conflict of interest arising from any relationship that the operating advisor or any of its affiliates may have with any of the underlying borrowers, property managers, any borrower sponsor or guarantor, any mortgage loan seller, the depositor, the master servicer, the special
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servicer, the asset representations reviewer, the Directing Holder, any Risk Retention Consultation Party, any Certificateholder or any of their respective affiliates. The operating advisor will perform its duties under the PSA in accordance with the Operating Advisor Standard.
Annual Report
During the continuance of a Control Termination Event, based on the operating advisor’s review of (i) any Assessment of Compliance, any Attestation Report, Asset Status Report and other information (other than any communication between the Directing Holder and the special servicer that would be Privileged Information) delivered to the operating advisor by the special servicer or made available to Privileged Persons that are posted on the certificate administrator’s website during the prior calendar year, including each Asset Status Report delivered to the Operating Advisor during the prior calendar year, the operating advisor will (if, at any time during the prior calendar year, any Serviced Mortgage Loan was a Specially Serviced Loan) prepare an annual report generally in the form attached to this prospectus as Annex C (the “Operating Advisor Annual Report”) to be provided to the depositor, the special servicer, the 17g-5 Information Provider (and made available through the 17g-5 Information Provider’s website) and the certificate administrator for the benefit of the Certificateholders (and made available through the certificate administrator’s website) within 120 days of the end of the prior calendar year for which a Control Termination Event was continuing as of December 31 and setting forth its assessment of the special servicer’s performance of its duties under the PSA during the prior calendar year on a “asset-level basis” with respect to the resolution or liquidation of any Specially Serviced Loans that the special servicer is responsible for servicing under the PSA; provided, however, that in the event the special servicer is replaced, the Operating Advisor Annual Report will only relate to the entity that was acting as special servicer as of December 31 in the prior calendar year and is continuing in such capacity through the date of such Operating Advisor Annual Report.
Only as used in connection with the Operating Advisor Annual Report, the term “asset-level basis” refers to the special servicer’s performance of its duties as they relate to the resolution and/or liquidation of Specially Serviced Loans taking into account the special servicer’s specific duties under the PSA as well as the extent to which those duties were performed in accordance with the Servicing Standard, with reasonable consideration by the operating advisor of any Assessment of Compliance, Attestation Report, Major Decision Reporting Package, Asset Status Report, Final Asset Status Report and any other information, in each case delivered to the operating advisor by the special servicer (other than any communications between the Directing Holder and the special servicer that would be Privileged Information) pursuant to the PSA. Notwithstanding the foregoing, no annual report will be required from the operating advisor with respect to the special servicer, if during the prior calendar year, no Final Asset Status Report was prepared by the special servicer in connection with a Specially Serviced Loan or REO Property.
The special servicer must be given an opportunity to review any Operating Advisor Annual Report at least 5 business days prior to such Operating Advisor Annual Report’s delivery to the certificate administrator and the 17g-5 Information Provider; provided that the operating advisor will have no obligation to adopt any comments to such Operating Advisor Annual Report that are provided by the special servicer.
In each Operating Advisor Annual Report, the operating advisor will identify any material deviations (i) from the Servicing Standard and (ii) from the special servicer’s obligations under the PSA with respect to the resolution or liquidation of Specially Serviced Loans or REO Properties that the special servicer is responsible for servicing under the PSA (other than with respect to any REO Property related to the Non-Serviced Mortgage Loan) based on the limited review required in the PSA. Each Operating Advisor Annual Report will be required to comply with the confidentiality requirements, subject to certain exceptions, each as described in this prospectus and as provided in the PSA regarding Privileged Information. In preparing the annual report, the operating advisor (i) will not be required to report on instances of non-compliance with, or deviations from, the Servicing Standard or the special servicer’s obligations under the PSA that the operating advisor determines, in accordance with the Operating
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Advisor Standard, to be immaterial and (ii) will not be required to provide or obtain a legal opinion, legal review or legal conclusion.
The ability to perform the duties of the operating advisor and the quality and the depth of any Operating Advisor Annual Report will be dependent upon the timely receipt of information prepared or made available by others and the accuracy and the completeness of such information. In addition, in no event will the operating advisor have the power to compel any transaction party to take, or refrain from taking, any action. It is possible that the lack of access to Privileged Information may limit or prohibit the operating advisor from performing its duties under the PSA, in which case any Operating Advisor Annual Report will describe any resulting limitations and the operating advisor will not be subject to liability arising from such limitations or prohibitions. The operating advisor will be entitled to conclusively rely on the accuracy and completeness of any information it is provided. If the operating advisor is prohibited or materially limited from obtaining Privileged Information and such prohibition or limitation prevents the operating advisor from performing its duties under the PSA, the operating advisor will not be subject to any liability arising from its lack of access to such Privileged Information.
Recommendation of the Replacement of the Special Servicer
During the continuance of a Control Termination Event, if the operating advisor determines that (i) the special servicer is not performing its duties as required under the PSA or is otherwise not acting in accordance with the Servicing Standard and (ii) the replacement of the special servicer would be in the best interest of the Certificateholders as a collective whole, then the operating advisor may recommend the replacement of the special servicer and deliver a report supporting such recommendation in the manner described in “—Replacement of the Special Servicer After Operating Advisor Recommendation and Certificateholder Vote”.
Eligibility of Operating Advisor
The operating advisor will be required to be an Eligible Operating Advisor at all times during the term of the PSA. “Eligible Operating Advisor” means an entity:
(i) that is a special servicer or operating advisor on a commercial mortgage-backed securities transaction rated by the Rating Agencies (including, in the case of the operating advisor, this transaction) but has not been special servicer or operating advisor on a transaction for which any Rating Agency has qualified, downgraded or withdrawn its rating or ratings of, one or more classes of certificates for such transaction citing servicing concerns with the special servicer or operating advisor as the sole or a material factor in such rating action;
(ii) that can and will make the representations and warranties of the operating advisor set forth in the PSA;
(iii) that is not (and is not affiliated with) the depositor, the trustee, the certificate administrator, the master servicer, the special servicer, a sponsor, any Borrower Party, the Directing Holder, any Risk Retention Consultation Party, or a depositor, a trustee, a certificate administrator, a master servicer or a special servicer with respect to the securitization of a Companion Loan, or any of their respective affiliates;
(iv) that has not been paid by the special servicer or successor special servicer any fees, compensation or other remuneration (x) in respect of its obligations under the PSA or (y) for the appointment or recommendation for replacement of a successor special servicer to become the special servicer; and
(v) that (x) has been regularly engaged in the business of analyzing and advising clients in commercial mortgage-backed securities matters and that has at least five years of experience in collateral analysis and loss projections, and (y) has at least five years of experience in commercial real estate asset management and experience in the workout and management of distressed commercial real estate assets.
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Other Obligations of Operating Advisor
At all times, subject to the Privileged Information Exception, the operating advisor and its affiliates will be obligated to keep confidential any information appropriately labeled as or which appears on its face to be “Privileged Information” received from the special servicer or Directing Holder in connection with the Directing Holder’s exercise of any rights under the PSA (including, without limitation, in connection with any Asset Status Report) or otherwise in connection with the transaction, except under the circumstances described below. As used in this prospectus, “Privileged Information” means (i) any correspondence between the Directing Holder or a Risk Retention Consultation Party and the special servicer related to any Specially Serviced Loan (other than any applicable Excluded Loan) or the exercise of the Directing Holder’s consent or consultation rights or a Risk Retention Consultation Party’s consultation rights under the PSA, (ii) any strategically sensitive information that the special servicer has reasonably determined could compromise the issuing entity’s position in any ongoing or future negotiations with the related borrower or other interested party and that is labeled or otherwise identified as Privileged Information by the special servicer, (iii) information subject to attorney-client privilege (and which the special servicer has labeled or otherwise communicated as being subject to privilege) and (iv) any Asset Status Report or Final Asset Status Report.
The operating advisor is required to keep all such labeled Privileged Information or information which on its face appears to be Privileged Information confidential and may not, without the prior written consent of the special servicer and either the Directing Holder (with respect to any Mortgage Loan other than a Non-Serviced Whole Loan and any applicable Excluded Loan and for so long as no Consultation Termination Event is continuing) or the Risk Retention Consultation Parties (with respect to any Mortgage Loan other than a Non-Serviced Whole Loan and any applicable Excluded Loan), as applicable, disclose such labeled Privileged Information to any person (including Certificateholders other than the Directing Holder), other than (1) to the extent expressly required by the PSA, to the other parties to the PSA with a notice indicating that such information is Privileged Information, (2) pursuant to a Privileged Information Exception, or (3) where necessary to support specific findings or conclusions concerning allegations of deviations from the Servicing Standard or the special servicer’s obligations under the PSA (i) in the Operating Advisor Annual Report or (ii) in connection with a recommendation by the operating advisor to replace the special servicer. Each party to the PSA that receives Privileged Information from the operating advisor with a notice stating that such information is Privileged Information may not disclose such Privileged Information to any person without the prior written consent of the special servicer and, unless a Consultation Termination Event is continuing, the Directing Holder (with respect to any Mortgage Loan other than a Non-Serviced Whole Loan and any applicable Excluded Loan) other than pursuant to a Privileged Information Exception. In addition and for the avoidance of doubt, while the operating advisor may serve in a similar capacity with respect to other securitizations that involve the same parties or borrower involved in this securitization, the knowledge of the employees performing operating advisor functions for such other securitizations are not imputed to employees of the operating advisor involved in this securitization.
“Privileged Information Exception” means, with respect to any Privileged Information, at any time (a) such Privileged Information becomes generally available and known to the public other than as a result of a disclosure directly or indirectly by the party restricted from disclosing such Privileged Information (the “Restricted Party”), (b) it is reasonable and necessary for the Restricted Party to disclose such Privileged Information in working with legal counsel, auditors, arbitration parties, taxing authorities or other governmental agencies, (c) such Privileged Information was already known to such Restricted Party and not otherwise subject to a confidentiality obligation and/or (d) the Restricted Party (in the case of the master servicer, the special servicer, the operating advisor, the asset representations reviewer, the certificate administrator and the trustee, based on the advice of legal counsel) is required by law, rule, regulation, order, judgment or decree to disclose such information.
Delegation of Operating Advisor’s Duties
The operating advisor will be permitted to delegate its duties to agents or subcontractors in accordance with the PSA; provided, however, the operating advisor will remain obligated and primarily
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liable for any actions required to be performed by it under the PSA without diminution of such obligation or liability or related obligation or liability by virtue of such delegation or arrangements or by virtue of indemnification from any person acting as its agents or subcontractor to the same extent and under the same terms and conditions as if the operating advisor alone were performing its obligations under the PSA.
Termination of the Operating Advisor With Cause
The following constitute operating advisor termination events under the PSA (each, an “Operating Advisor Termination Event”), whether any such event is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body:
(a) any failure by the operating advisor to observe or perform in any material respect any of its covenants or agreements or the material breach of any of its representations or warranties under the PSA, which failure continues unremedied for a period of 30 days after the date on which written notice of such failure, requiring the same to be remedied, is given to the operating advisor by any party to the PSA or to the operating advisor, the certificate administrator and the trustee by the holders of certificates having greater than 25% of the aggregate Voting Rights; provided that with respect to any such failure which is not curable within such 30 day period, the operating advisor will have an additional cure period of 30 days to effect such cure so long as it has commenced to cure such failure within the initial 30 day period and has provided the trustee and the certificate administrator with an officer’s certificate certifying that it has diligently pursued, and is continuing to pursue, such cure;
(b) any failure by the operating advisor to perform in accordance with the Operating Advisor Standard which failure continues unremedied for a period of 30 days after the date on which written notice of such failure, requiring the same to be remedied, is given in writing to the operating advisor by any party to the PSA;
(c) any failure by the operating advisor to be an Eligible Operating Advisor, which failure continues unremedied for a period of 30 days after the date on which written notice of such failure, requiring the same to be remedied, is given in writing to the operating advisor by any party to the PSA;
(d) a decree or order of a court or agency or supervisory authority having jurisdiction in the premises in an involuntary case under any present or future federal or state bankruptcy, insolvency or similar law for the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the winding up or liquidation of its affairs, has been entered against the operating advisor, and such decree or order has remained in force undischarged or unstayed for a period of 60 days;
(e) the operating advisor consents to the appointment of a conservator or receiver or liquidator or liquidation committee in any insolvency, readjustment of debt, marshaling of assets and liabilities, voluntary liquidation, or similar proceedings of or relating to the operating advisor or of or relating to all or substantially all of its property; or
(f) the operating advisor admits in writing its inability to pay its debts generally as they become due, files a petition to take advantage of any applicable insolvency or reorganization statute, makes an assignment for the benefit of its creditors, or voluntarily suspends payment of its obligations.
Upon receipt by the certificate administrator of notice of the occurrence of any Operating Advisor Termination Event, the certificate administrator will be required to promptly provide written notice to all Certificateholders electronically by posting such notice on its internet website and by mail, unless the certificate administrator has received notice that such Operating Advisor Termination Event has been remedied.
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Rights Upon Operating Advisor Termination Event
After the occurrence of an Operating Advisor Termination Event, either (i) the trustee may or (ii) upon the written direction of Certificateholders representing at least 25% of the Voting Rights of each class of certificates, the trustee will be required to, promptly terminate all of the rights and obligations of the operating advisor under the PSA (other than rights and obligations accrued prior to such termination (including accrued and unpaid compensation) and indemnification rights (arising out of events occurring prior to such termination)), by written notice to the operating advisor and appoint a replacement operating advisor that is an Eligible Operating Advisor; provided that no such termination will be effective until a successor operating advisor has been appointed and has assumed all of the obligations of the operating advisor under the PSA. The trustee may rely on a certification by the replacement operating advisor that it is an Eligible Operating Advisor. If the certificate administrator is unable to find a replacement operating advisor that is an Eligible Operating Advisor within 30 days of the termination of the operating advisor, the depositor will be permitted to find a replacement.
Upon any termination of the operating advisor and appointment of a successor operating advisor, the trustee will, as soon as possible, be required to give written notice of the termination and appointment to the special servicer, the master servicer, the certificate administrator, the depositor, the Directing Holder (only for so long as no Consultation Termination Event is continuing), any Companion Loan Holder, the Certificateholders, each Risk Retention Consultation Party and the 17g-5 Information Provider (and made available through the 17g-5 Information Provider’s website).
Waiver of Operating Advisor Termination Event
The holders of certificates representing at least 25% of the Voting Rights affected by any Operating Advisor Termination Event will be permitted to waive such Operating Advisor Termination Event within twenty (20) days of the receipt of notice from the certificate administrator of the occurrence of such Operating Advisor Termination Event. Upon any such waiver of an Operating Advisor Termination Event, such Operating Advisor Termination Event will cease to exist and will be deemed to have been remedied. Upon any such waiver of an Operating Advisor Termination Event by Certificateholders, the trustee and the certificate administrator will be entitled to recover all costs and expenses incurred by it in connection with enforcement action taken with respect to such Operating Advisor Termination Event prior to such waiver from the issuing entity.
Termination of the Operating Advisor Without Cause
Upon (i) the written direction of holders of certificates evidencing not less than 15% of the aggregate Voting Rights requesting a vote to terminate and replace the operating advisor with a proposed successor operating advisor that is an Eligible Operating Advisor and (ii) payment by such holders to the certificate administrator of the reasonable fees and expenses to be incurred by the certificate administrator in connection with administering such vote, the certificate administrator will be required to promptly provide written notice of such request to all Certificateholders and the operating advisor by posting such notice on its internet website and by mailing such notice to all Certificateholders and the operating advisor.
Upon the written direction of holders of more than 50% of the Voting Rights of the certificates that exercise their right to vote (provided that holders of at least 50% of the Voting Rights of the certificates exercise their right to vote), the trustee will be required to terminate all of the rights and obligations of the operating advisor under the PSA by written notice to the operating advisor (other than any rights or obligations that accrued prior to the date of such termination (including accrued and unpaid compensation) and other than indemnification rights arising out of events occurring prior to such termination).
The certificate administrator will be required to include on each Distribution Date statement a statement that each Certificateholder and beneficial owner of certificates may access such notices on the certificate administrator’s website and each Certificateholder and beneficial owner of certificates may register to receive email notifications when such notices are posted on the website. The certificate administrator will be entitled to reimbursement from the requesting Certificateholders for the reasonable
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expenses of posting such notices. In addition, in the event there are no classes of certificates outstanding other than the Control Eligible Certificates, the VRR Interest, the Class S certificates and the Class R certificates, then all of the rights and obligations of the operating advisor under the PSA will terminate without payment of any penalty or termination fee (other than any rights or obligations that accrued prior to the date of such termination (including accrued and unpaid compensation) and other than indemnification rights arising out of events occurring prior to such termination). If the operating advisor is terminated pursuant to the foregoing sentence, then no replacement operating advisor will be appointed.
Resignation of the Operating Advisor
The operating advisor may resign upon 30 days’ prior written notice to the depositor, the master servicer, the special servicer, the trustee, the certificate administrator, the asset representations reviewer, each Risk Retention Consultation Party and the Directing Holder, if the operating advisor has secured a replacement operating advisor that is an Eligible Operating Advisor and such replacement operating advisor has accepted its appointment as the replacement operating advisor. If no successor operating advisor has been so appointed and accepted the appointment within 30 days after the notice of resignation, the resigning operating advisor may petition any court of competent jurisdiction for the appointment of a successor operating advisor that is an Eligible Operating Advisor. The resigning operating advisor must pay all costs and expenses associated with the transfer of its duties.
Operating Advisor Compensation
Certain fees will be payable to the operating advisor, and the operating advisor will be entitled to be reimbursed for certain expenses, as described under “Transaction Parties—The Operating Advisor and Asset Representations Reviewer”.
In the event the operating advisor resigns or is terminated for any reason, it will remain entitled to any accrued and unpaid fees and reimbursement of operating advisor expenses and any rights to indemnification provided under the PSA with respect to the period for which it acted as operating advisor.
The operating advisor will be entitled to reimbursement of certain expenses incurred by the operating advisor in the event that the operating advisor is terminated without cause. See “—Termination of the Operating Advisor Without Cause” above.
The Asset Representations Reviewer
Asset Review
Asset Review Trigger
On or prior to each Distribution Date, based on either the CREFC® delinquent loan status report or the CREFC® loan periodic update file delivered by the master servicer for such Distribution Date, the certificate administrator will be required to determine if an Asset Review Trigger has occurred. If an Asset Review Trigger is determined to have occurred, the certificate administrator will be required to promptly provide notice to the asset representations reviewer, the master servicer, the special servicer, the Directing Holder and all Certificateholders by posting a notice of its determination on its internet website and by mailing such notice to the Certificateholders’ addresses appearing in the certificate register. On each Distribution Date after providing such notice to Certificateholders, the certificate administrator, based on information provided to it by the master servicer, will be required to determine whether (1) any additional Mortgage Loan has become a Delinquent Loan, (2) any Mortgage Loan has ceased to be a Delinquent Loan and (3) an Asset Review Trigger has ceased to exist, and, if there is an occurrence of any of the events or circumstances identified in clauses (1), (2) or (3), deliver such information in a written notice (which may be via email) within two (2) business days to the master servicer, the special servicer, the operating advisor, the asset representations reviewer and the Directing Holder.
An “Asset Review Trigger” will occur when either (1) Mortgage Loans with an aggregate outstanding principal balance of 25.0% or more of the aggregate outstanding principal balance of all of the Mortgage
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Loans (including any REO Loans (or a portion of any REO Loan in the case of a Whole Loan)) held by the issuing entity as of the end of the applicable Collection Period are Delinquent Loans or (2)(A) prior to and including the second anniversary of the Closing Date, at least 10 Mortgage Loans are Delinquent Loans as of the end of the applicable Collection Period and the outstanding principal balance of such Delinquent Loans in the aggregate constitutes at least 15.0% of the aggregate outstanding principal balance of all of the Mortgage Loans (including any REO Loans (or a portion of any REO Loan in the case of a Whole Loan)) held by the issuing entity as of the end of the applicable Collection Period, or (B) after the second anniversary of the Closing Date, at least 15 Mortgage Loans are Delinquent Loans as of the end of the applicable Collection Period and the outstanding principal balance of such Delinquent Loans in the aggregate constitutes at least 20.0% of the aggregate outstanding principal balance of all of the Mortgage Loans (including any REO Loans (or a portion of any REO Loan in the case of a Whole Loan)) held by the issuing entity as of the end of the applicable Collection Period. The PSA will require that the certificate administrator include in the Distribution Report on Form 10-D relating to the distribution period in which the Asset Review Trigger occurred a description of the events that caused the Asset Review Trigger to occur.
We believe this Asset Review Trigger is appropriate considering the unique characteristics of pools of Mortgage Loans underlying CMBS. See “Risk Factors—Risks Relating to the Mortgage Loans—Static Pool Data Would Not Be Indicative of the Performance of this Pool”. While we do not believe static pool information is relevant to CMBS transactions as a general matter, as a point of relative context, with respect to the 133 prior pools of commercial mortgage loans for which GACC (or its predecessors) was sponsor in a public offering of CMBS with a securitization closing date on or after January 1, 2006 (excluding 15 of such 133 pools with an outstanding aggregate pool balance that is equal to or less than 20% of the initial pool balance), the highest percentage of loans, based on the aggregate outstanding principal balance of delinquent mortgage loans in an individual CMBS transaction, that were delinquent at least 60 days at the end of any reporting period between January 1, 2017 and December 31, 2021 was approximately 92.484%; however, the average of the highest delinquency percentages based on the aggregate outstanding principal balance of delinquent mortgage loans in the reviewed transactions was approximately 16.953%; and the highest percentage of delinquent mortgage loans, based upon the number of mortgage loans in the reviewed transactions was approximately 17.241% and the average of the highest delinquency percentages based on the number of mortgage loans in the reviewed transactions was approximately 6.629%.
This pool of Mortgage Loans is not homogeneous or granular, and there are individual Mortgage Loans that each represent a significant percentage, by outstanding principal balance, of the Mortgage Pool. For example, the two largest Mortgage Loans in the Mortgage Pool represent approximately 18.6% of the Initial Pool Balance. Given this Mortgage Pool composition and the fact that CMBS pools as a general matter include a small relative number of larger mortgage loans, we believe it would not be appropriate for the delinquency of the two largest Mortgage Loans, in the case of this Mortgage Pool, to cause the Asset Review Trigger to be met, as that would not necessarily be indicative of the overall quality of the Mortgage Pool. On the other hand, a significant number of delinquent Mortgage Loans by loan count could indicate an issue with the quality of the Mortgage Pool. As a result, we believe it would be appropriate to have the alternative test as set forth in clause (2) of the definition of “Asset Review Trigger”, namely to have the Asset Review Trigger be met if Mortgage Loans representing a specified percentage of the Mortgage Loans (by loan count) are Delinquent Loans, assuming those mortgage loans still meet a minimum principal balance threshold. However, given the nature of commercial mortgage loans and the inherent risks of a delinquency based solely on market conditions, a static trigger based on the number of delinquent loans would reflect a lower relative risk of an Asset Review Trigger being triggered earlier in the transaction’s lifecycle for delinquencies that are based on issues unrelated to breaches or representations and warranties and would reflect a higher relative risk later in the transaction’s lifecycle. To address this, we believe the specified percentage should increase during the life of the transaction, as provided for in clause (2) of the definition of “Asset Review Trigger”. CMBS as an asset class has historically not had a large number of claims for, or repurchases based on, breaches of representations and warranties. While the Asset Review Trigger we have selected is less than this historical peak, we feel it remains at a level that avoids a trigger based on market variability while providing an appropriate threshold to capture delinquencies that may have resulted from an underlying
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deficiency in one or more mortgage loan seller’s Mortgage Loans that could be the basis for claims against those mortgage loan sellers based on breaches of the representations and warranties.
“Delinquent Loan” means a Mortgage Loan that is delinquent at least sixty days in respect of its Periodic Payments or balloon payment, if any, in either case such delinquency to be determined without giving effect to any grace period. For the avoidance of doubt, a delinquency that would have existed but for a COVID Modification will not constitute a delinquency for so long as the related borrower is complying with the terms of such COVID Modification.
Asset Review Vote
If Certificateholders evidencing not less than 5% of the Voting Rights deliver to the certificate administrator, within 90 days after the filing of the Form 10-D reporting the occurrence of an Asset Review Trigger, a written direction requesting a vote to commence an Asset Review (an “Asset Review Vote Election”), the certificate administrator will be required to promptly provide written notice of such direction to the asset representations reviewer and to all Certificateholders, and to conduct a solicitation of votes of Certificateholders to authorize an Asset Review. Upon the affirmative vote to authorize an Asset Review by Certificateholders evidencing at least a majority of an Asset Review Quorum within 150 days of the receipt of the Asset Review Vote Election (an “Affirmative Asset Review Vote”), the certificate administrator will be required to promptly provide written notice of such Affirmative Asset Review Vote to all parties to the PSA, the underwriters, the mortgage loan sellers, each Risk Retention Consultation Party, the Trust Directing Holder and the Certificateholders. In the event an Affirmative Asset Review Vote has not occurred within such 150-day period following the receipt of the Asset Review Vote Election, no Certificateholder may request a vote or cast a vote for an Asset Review and the asset representations reviewer will not be required to review any Delinquent Loan unless and until (A) an additional Mortgage Loan has become a Delinquent Loan after the expiration of such 150-day period, (B) an additional Asset Review Trigger has occurred as a result or otherwise is in effect, (C) the certificate administrator has timely received any Asset Review Vote Election after the occurrence of the events described in clauses (A) and (B) above and (D) an Affirmative Asset Review Vote has occurred within 150 days after the Asset Review Vote Election described in clause (C) above. After the occurrence of any Asset Review Vote Election or an Affirmative Asset Review Vote, no Certificateholder may make any additional Asset Review Vote Election except as described in the immediately preceding sentence. Any reasonable out-of-pocket expenses incurred by the certificate administrator in connection with administering such vote will be paid as an expense of the issuing entity from the Collection Account.
An “Asset Review Quorum” means, in connection with any solicitation of votes to authorize an Asset Review as described above, the holders of certificates evidencing at least 5% of the aggregate Voting Rights.
Review Materials
Upon receipt of notice from the certificate administrator of an Affirmative Asset Review Vote (the “Asset Review Notice”), the custodian (with respect to clauses (i) – (v) for all Mortgage Loans), the master servicer (with respect to clauses (vi) and (vii) for non-Specially Serviced Loans) and the special servicer (with respect to clauses (vi) and (vii) for Specially Serviced Loans), in each case to the extent in such party’s possession, will be required to promptly, but in no event later than 10 business days (except with respect to clause (vii)) after receipt of such notice from the certificate administrator, provide the following materials to the asset representations reviewer (collectively, with the Diligence Files, a copy of the prospectus, a copy of each related MLPA and a copy of the PSA, the “Review Materials”):
(i) a copy of an assignment of the Mortgage in favor of the related trustee, with evidence of recording thereon, for each Delinquent Loan that is subject to an Asset Review;
(ii) a copy of an assignment of any related assignment of leases (if such item is a document separate from the Mortgage) in favor of the related trustee, with evidence of recording thereon, related to each Delinquent Loan that is subject to an Asset Review;
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(iii) a copy of the assignment of all unrecorded documents relating to each Delinquent Loan that is subject to an Asset Review, if not already covered pursuant to items (i) or (ii) above;
(iv) a copy of all filed copies (bearing evidence of filing) or evidence of filing of any UCC financing statements related to each Delinquent Loan that is subject to an Asset Review;
(v) a copy of an assignment in favor of the related trustee of any financing statement executed and filed in the relevant jurisdiction related to each Delinquent Loan that is subject to an Asset Review;
(vi) a copy of any notice previously delivered by the master servicer or the special servicer, as applicable, of any alleged defect or breach with respect to any Delinquent Loan; and
(vii) any other related documents that were entered into or delivered in connection with the origination of such Mortgage Loan that are necessary in connection with the asset representations reviewer’s completion of any Asset Review and that are requested (in writing in accordance with the PSA) by the asset representations reviewer, in the time frames and as otherwise described below.
If, as part of an Asset Review of such Mortgage Loan, the asset representations reviewer determines that it is missing any documents that are required to be part of the Review Materials for such Mortgage Loan or which were entered into or delivered in connection with the origination of such Mortgage Loan that, in either case, are necessary to review and assess one or more documents comprising the Diligence File in connection with its completion of any Test, then the asset representations reviewer will promptly, but in no event later than 10 business days after receipt of the Review Materials identified in clauses (i) through (vi) above, notify (in writing in accordance with the PSA) the master servicer (with respect to non-Specially Serviced Loans) or the special servicer (with respect to Specially Serviced Loans), as applicable, of such missing documents, and provide a written request (in accordance with the PSA) that the master servicer or the special servicer, as applicable, promptly, but in no event later than 10 business days after receipt of such notification from the asset representations reviewer, deliver to the asset representations reviewer such missing documents to the extent in its possession. In the event any missing documents are not provided by the master servicer or special servicer, as applicable, within such 10 business day period, the asset representations reviewer will request such documents from the related mortgage loan seller. The mortgage loan seller will be required under the related MLPA to deliver such additional documents only to the extent in the possession of such party.
The asset representations reviewer may, but is under no obligation to, consider and rely upon information furnished to it by a person that is not a party to the PSA or the related mortgage loan seller, and will do so only if such information can be independently verified (without unreasonable effort or expense to the asset representations reviewer) and is determined by the asset representations reviewer in each case in its good faith and sole discretion to be relevant to the Asset Review (such information, “Unsolicited Information”).
Asset Review
Upon its receipt of the Asset Review Notice and access to the Diligence File posted to the secure data room with respect to a Delinquent Loan, the asset representations reviewer, as an independent contractor, is required to commence a review of the compliance of each Delinquent Loan with the representations and warranties related to that Delinquent Loan (such review, the “Asset Review”). An Asset Review of each Delinquent Loan will consist of the application of a set of pre-determined review procedures (the “Tests”) for each representation and warranty made by the related mortgage loan seller with respect to such Delinquent Loan; provided, however, that the asset representations reviewer may, but is under no obligation to, modify any Test and/or associated Review Materials if, and only to the extent, the asset representations reviewer determines pursuant to the Asset Review Standard that it is necessary to modify such Test and/or such associated Review Materials in order to facilitate its Asset Review in accordance with the Asset Review Standard. Once an Asset Review of a Mortgage Loan is completed, no further Asset Review will be required or performed on that Mortgage Loan notwithstanding
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that such Mortgage Loan may continue to be a Delinquent Loan or become a Delinquent Loan again at the time when a new Asset Review Trigger occurs and a new Affirmative Asset Review Vote is obtained subsequent to the occurrence of such Asset Review Trigger.
“Asset Review Standard” means the performance of the asset representations reviewer of its duties under the PSA in good faith subject to the express terms of the PSA. All determinations or assumptions made by the asset representations reviewer in connection with an Asset Review are required to be made in the asset representations reviewer’s good faith discretion and judgment based on the facts and circumstances known to it at the time of such determination or assumption.
No Certificateholder will have the right to change the scope of the asset representations reviewer’s review, and the asset representations reviewer will not be required to review any information other than (i) the Review Materials, and (ii) if applicable, Unsolicited Information.
The asset representations reviewer may, absent manifest error and subject to the Asset Review Standard, (i) assume, without independent investigation or verification, that the Review Materials are accurate and complete in all material respects and (ii) conclusively rely on such Review Materials.
If the asset representations reviewer determines that the Review Materials are insufficient to complete a Test and such missing documentation is not delivered to the asset representations reviewer by the applicable mortgage loan seller, the master servicer (with respect to non-Specially Serviced Loans) or the special servicer (with respect to Specially Serviced Loans) within 10 days upon request as described above, then the asset representations reviewer will list such missing documents in a preliminary report setting forth the preliminary results of the application of the Tests and the reasons why such missing documents are necessary to complete a Test and (if the asset representations reviewer has so concluded) that the absence of such documents will be deemed to be a failure of such Test. The asset representations reviewer will provide such preliminary report to the master servicer (with respect to non-Specially Serviced Loans) or the special servicer (with respect to Specially Serviced Loans) and the related mortgage loan seller no later than 60 days after the date on which access to the Diligence Files in the secure data room is made available to the asset representations reviewer by the certificate administrator. If the preliminary report indicates that any of the representations and warranties fails or is deemed to fail any Test, the mortgage loan seller will have 90 days (the “Cure/Contest Period”) to remedy or otherwise refute the failure. Any documents provided or explanations given to support a conclusion that the representation and warranty has not failed a Test or that any missing documents in the Review Materials are not required to complete a Test will be required to be promptly delivered by the related mortgage loan seller to the asset representations reviewer. For the avoidance of doubt, the asset representations reviewer will not be required to prepare a preliminary report in the event the asset representations reviewer determines that there is no Test failure with respect to the related Delinquent Loan.
The asset representations reviewer will be required, within the later of (x) 60 days after the date on which access to the Diligence Files in the secure data room is made available to the asset representations reviewer by the certificate administrator or (y) 10 days after the expiration of the Cure/Contest Period, to complete an Asset Review with respect to each Delinquent Loan and deliver (i) a report setting forth the asset representations reviewer’s findings and conclusions as to whether or not it has determined there is any evidence of a failure of any Test based on the Asset Review and a statement that the asset representations reviewer’s findings and conclusions set forth in such report were not influenced by any third party (an “Asset Review Report”) to each party to the PSA and the applicable mortgage loan seller for each Delinquent Loan and the Trust Directing Holder, and (ii) a summary of the asset representations reviewer’s conclusions included in such Asset Review Report (an “Asset Review Report Summary”) to the trustee, certificate administrator, master servicer and special servicer. The period of time by which the Asset Review Report must be completed and delivered may be extended by up to an additional 30 days, upon written notice to the parties to the PSA and the related mortgage loan seller, if the asset representations reviewer determines pursuant to the Asset Review Standard that such additional time is required due to the characteristics of the Mortgage Loans and/or the Mortgaged Property or Mortgaged Properties. In no event will the asset representations reviewer be required to determine whether any Test failure constitutes a Material Defect, or whether the issuing entity should
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enforce any rights it may have against the applicable mortgage loan seller, which, in each such case, will be the responsibility of the master servicer (with respect to non-Specially Serviced Loans) or the special servicer (with respect to Specially Serviced Loans). See “—Enforcement of Mortgage Loan Seller’s Obligations Under the MLPA” below. In addition, in the event that the asset representations reviewer does not receive any documentation that it requested from the master servicer (with respect to non-Specially Serviced Loans), the special servicer (with respect to Specially Serviced Loans) or the applicable mortgage loan seller in sufficient time to allow the asset representations reviewer to complete its Asset Review and deliver an Asset Review Report, the asset representations reviewer will be required to prepare the Asset Review Report solely based on the documentation received by the asset representations reviewer with respect to the related Delinquent Loan, and the asset representations reviewer will have no responsibility to independently obtain any such documentation from any party to the PSA or otherwise. The PSA will require that the certificate administrator (i) include the Asset Review Report Summary in the Distribution Report on Form 10–D relating to the distribution period in which such Asset Review Report Summary was received by the certificate administrator, and (ii) post such Asset Review Report Summary to the certificate administrator’s website not later than 2 business days after receipt of such Asset Review Report Summary from the asset representations reviewer.
Eligibility of Asset Representations Reviewer
The asset representations reviewer will be required to represent and warrant in the PSA that it is an Eligible Asset Representations Reviewer. The asset representations reviewer is required to at all times be an Eligible Asset Representations Reviewer. If the asset representations reviewer ceases to be an Eligible Asset Representations Reviewer, the asset representations reviewer is required to immediately notify the master servicer, the special servicer, the trustee, the operating advisor, the certificate administrator and the Trust Directing Holder of such disqualification and immediately resign, and the trustee will be required to use commercially reasonable efforts to appoint a successor asset representations reviewer. If the trustee is unable to find a successor asset representations reviewer within 30 days of the termination of the asset representations reviewer, the depositor will be permitted to find a replacement.
An “Eligible Asset Representations Reviewer” is an entity that (i) is the special servicer, operating advisor or asset representations reviewer on a transaction rated by any of Moody’s Investors Service, Inc., Fitch, DBRS Morningstar, KBRA or S&P and that has not been a special servicer, operating advisor or asset representations reviewer on a transaction for which Moody’s Investors Service, Inc., Fitch, DBRS Morningstar, KBRA or S&P has qualified, downgraded or withdrawn its rating or ratings of, one or more classes of certificates for such transaction citing servicing or other relevant concerns with the special servicer, the operating advisor or the asset representations reviewer, as applicable, as the sole or material factor in such rating action, (ii) can and will make the representations and warranties of the asset representations reviewer set forth in the PSA, (iii) is not (and is not affiliated with) any sponsor, any mortgage loan seller, any originator, the master servicer, the special servicer, the depositor, the certificate administrator, the trustee, the Trust Directing Holder, any Risk Retention Consultation Party or any of its affiliates, (iv) has not performed (and is not affiliated with any party hired to perform) any due diligence, loan underwriting, brokerage, borrower advisory or similar services with respect to any Mortgage Loan or any related Companion Loan prior to the Closing Date for or on behalf of any sponsor, any mortgage loan seller, any underwriter, any party to the PSA, any Risk Retention Consultation Party or the Trust Directing Holder or any of their respective affiliates, or have been paid any fees, compensation or other remuneration by any of them in connection with any such services and (v) does not directly or indirectly, through one or more affiliates or otherwise, own any interest in any certificates, any Mortgage Loan, any Companion Loan or any securities backed by a Companion Loan or otherwise have any financial interest in the securitization transaction to which the PSA relates, other than in fees from its role as asset representations reviewer (or as operating advisor, if applicable) and except as otherwise set forth in the PSA.
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Other Obligations of Asset Representations Reviewer
The asset representations reviewer and its affiliates are required to keep confidential any information appropriately labeled as “Privileged Information” received from any party to the PSA or any sponsor under the PSA (including, without limitation, in connection with the review of the Mortgage Loans) and not disclose such Privileged Information to any person (including Certificateholders), other than (1) to the extent expressly required by the PSA in an Asset Review Report or otherwise, to the other parties to the PSA with a notice indicating that such information is Privileged Information or (2) pursuant to a Privileged Information Exception. Each party to the PSA that receives Privileged Information from the asset representations reviewer with a notice stating that such information is Privileged Information may not disclose such Privileged Information to any person without the prior written consent of the special servicer other than pursuant to a Privileged Information Exception. In addition, the asset representations reviewer will be required to keep all documents and information received by the asset representations reviewer in connection with an Asset Review that are provided by the applicable mortgage loan seller, the master servicer and the special servicer confidential and will not be permitted to disclose such documents or information except (i) for purposes of complying with its duties and obligations under the PSA, (ii) if such documents or information become generally available and known to the public other than as a result of a disclosure directly or indirectly by the asset representations reviewer, (iii) if it is reasonable and necessary for the asset representations reviewer to disclose such documents or information in working with legal counsel, auditors, taxing authorities or other governmental agencies, (iv) if such documents or information was already known to the asset representations reviewer and not otherwise subject to a confidentiality obligation and/or (v) if the asset representations reviewer is required by law, rule, regulation, order, judgment or decree to disclose such document or information.
Neither the asset representations reviewer nor any of its affiliates may make any investment in any class of certificates; provided, however, that such prohibition will not apply to (i) riskless principal transactions effected by a broker-dealer affiliate of the asset representations reviewer or (ii) investments by an affiliate of the asset representations reviewer if the asset representations reviewer and such affiliate maintain policies and procedures that (A) segregate personnel involved in the activities of the asset representations reviewer under the PSA from personnel involved in such affiliate’s investment activities and (B) prevent such affiliate and its personnel from gaining access to information regarding the issuing entity and the asset representations reviewer and its personnel from gaining access to such affiliate’s information regarding its investment activities.
Delegation of Asset Representations Reviewer’s Duties
The asset representations reviewer may delegate its duties to agents or subcontractors in accordance with the PSA, however, the asset representations reviewer will remain obligated and primarily liable for any Asset Review required in accordance with the provisions of the PSA without diminution of such obligation or liability by virtue of such delegation or arrangements or by virtue of indemnification from any person acting as its agents or subcontractor to the same extent and under the same terms and conditions as if the asset representations reviewer alone were performing its obligations under the PSA.
Assignment of Asset Representations Reviewer’s Rights and Obligations
The asset representations reviewer may assign its rights and obligations under the PSA in connection with the sale or transfer of all or substantially all of its asset representations reviewer portfolio, provided that: (i) the purchaser or transferee accepting such assignment and delegation (A) is an Eligible Asset Representations Reviewer, organized and doing business under the laws of the United States of America, any state of the United States of America or the District of Columbia, authorized under such laws to perform the duties of the asset representations reviewer resulting from a merger, consolidation or succession that is permitted under the PSA, (B) executes and delivers to the trustee and the certificate administrator an agreement that contains an assumption by such person of the due and punctual performance and observance of each covenant and condition to be performed or observed by the asset representations reviewer under the PSA from and after the date of such agreement and (C) is not be a prohibited party under the PSA; (ii) the asset representations reviewer will not be released from its
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obligations under the PSA that arose prior to the effective date of such assignment and delegation; (iii) the rate at which the Asset Representations Reviewer Asset Review Fee (or any component thereof) is calculated may not exceed the rate then in effect and (iv) the resigning asset representations reviewer will be required to be responsible for the reasonable costs and expenses of each other party hereto and the Rating Agencies in connection with such transfer. Upon acceptance of such assignment and delegation, the purchaser or transferee will be required to provide notice to each party to the PSA and then will be the successor asset representations reviewer hereunder.
Asset Representations Reviewer Termination Events
The following constitute asset representations reviewer termination events under the PSA (each, an “Asset Representations Reviewer Termination Event”) whether any such event is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body:
(i) any failure by the asset representations reviewer to observe or perform in any material respect any of its covenants or agreements or the material breach of any of its representations or warranties under the PSA, which failure continues unremedied for a period of 30 days after the date on which written notice of such failure, requiring the same to be remedied, is given to the asset representations reviewer by the trustee or to the asset representations reviewer and the trustee by the holders of certificates evidencing at least 25% of the Voting Rights; provided that if such failure is capable of being cured and the asset representations reviewer is diligently pursuing such cure, such 30 day period will be extended by an additional 30 days;
(ii) any failure by the asset representations reviewer to perform its obligations set forth in the PSA in accordance with the Asset Review Standard in any material respect, which failure continues unremedied for a period of 30 days after the date written notice of such failure, requiring the same to be remedied, is given to the asset representations reviewer by any party to the PSA;
(iii) any failure by the asset representations reviewer to be an Eligible Asset Representations Reviewer, which failure continues unremedied for a period of 30 days after the date written notice of such failure, requiring the same to be remedied, is given to the asset representations reviewer by any party to the PSA;
(iv) a decree or order of a court or agency or supervisory authority having jurisdiction in the premises in an involuntary case under any present or future federal or state bankruptcy, insolvency or similar law for the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, has been entered against the asset representations reviewer, and such decree or order has remained in force undischarged or unstayed for a period of 60 days;
(v) the asset representations reviewer consents to the appointment of a conservator or receiver or liquidator or liquidation committee in any insolvency, readjustment of debt, marshaling of assets and liabilities, voluntary liquidation, or similar proceedings of or relating to the asset representations reviewer or of or relating to all or substantially all of its property; or
(vi) the asset representations reviewer admits in writing its inability to pay its debts generally as they become due, files a petition to take advantage of any applicable insolvency or reorganization statute, makes an assignment for the benefit of its creditors, or voluntarily suspends payment of its obligations.
Upon receipt by the certificate administrator of written notice (which will be simultaneously delivered to the asset representations reviewer) of the occurrence of any Asset Representations Reviewer Termination Event, the certificate administrator will be required to promptly provide written notice to all Certificateholders electronically by posting such notice on its internet website and by mail, unless the
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certificate administrator has received notice that such Asset Representations Reviewer Termination Event has been remedied.
Rights Upon Asset Representations Reviewer Termination Event
If an Asset Representations Reviewer Termination Event occurs, and in each and every such case, so long as such Asset Representations Reviewer Termination Event has not been remedied, then either the trustee (i) may or (ii) upon the written direction of Certificateholders evidencing at least 25% of the Voting Rights will be required to, terminate all of the rights and obligations of the asset representations reviewer under the PSA, other than rights and obligations accrued prior to such termination and other than indemnification rights (arising out of events occurring prior to such termination), by written notice to the asset representations reviewer. The asset representations reviewer is required to bear all reasonable costs and expenses of each other party to the PSA in connection with its termination for cause.
Termination of the Asset Representations Reviewer Without Cause
Upon (i) the written direction of Certificateholders evidencing not less than 25% of the Voting Rights requesting a vote to terminate and replace the asset representations reviewer with a proposed successor asset representations reviewer that is an Eligible Asset Representations Reviewer, and (ii) payment by such holders to the certificate administrator of the reasonable fees and expenses to be incurred by the certificate administrator in connection with administering such vote, the certificate administrator will promptly provide notice to all Certificateholders and the asset representations reviewer of such request by posting such notice on its internet website, and by mailing to all Certificateholders and the asset representations reviewer. Upon the written direction of Certificateholders evidencing at least 75% of a Certificateholder Quorum, the trustee will terminate all of the rights and obligations of the asset representations reviewer under the PSA (other than any rights or obligations that accrued prior to the date of such termination and other than indemnification rights (arising out of events occurring prior to such termination)) by written notice to the asset representations reviewer, and the proposed successor asset representations reviewer will be appointed.
In the event that holders of the certificates evidencing at least 75% of a Certificateholder Quorum elect to remove the asset representations reviewer without cause and appoint a successor, the successor asset representations reviewer will be responsible for all expenses necessary to effect the transfer of responsibilities from its predecessor.
Resignation of Asset Representations Reviewer
The asset representations reviewer may at any time resign by giving written notice to the other parties to the PSA. In addition, the asset representations reviewer will at all times be, and will be required to resign if it fails to be, an Eligible Asset Representations Reviewer by giving written notice to the other parties. Upon such notice of resignation, the depositor is required to promptly appoint a successor asset representations reviewer that is an Eligible Asset Representations Reviewer. No resignation of the asset representations reviewer will be effective until a successor asset representations reviewer that is an Eligible Asset Representations Reviewer has been appointed and accepted the appointment. If no successor asset representations reviewer has been so appointed and accepted the appointment within 30 days after the notice of resignation, the resigning asset representations reviewer may petition any court of competent jurisdiction for the appointment of a successor asset representations reviewer that is an Eligible Asset Representations Reviewer. The resigning asset representations reviewer must pay all costs and expenses associated with the transfer of its duties.
Asset Representations Reviewer Compensation
Certain fees will be payable to the asset representations reviewer, and the asset representations reviewer will be entitled to be reimbursed for certain expenses, as described under “—Servicing and Other Compensation and Payment of Expenses”.
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Limitation on Liability of the Risk Retention Consultation Parties
The Risk Retention Consultation Parties in their capacity as Risk Retention Consultation Parties will not be liable to the issuing entity or the Certificateholders for any action taken, or for refraining from the taking of any action, or for errors in judgment.
Each Certificateholder will acknowledge and agree, by its acceptance of its certificates, that a Risk Retention Consultation Party:
(1) may have special relationships and interests that conflict with those of holders of one or more classes of certificates other than the holder of the VRR Interest related to a Risk Retention Consultation Party;
(2) may act solely in the interests of the applicable holder of the VRR Interest;
(3) does not have any liability or duties to the holders of any class of classes of certificates other than the holder of the VRR Interest related to a Risk Retention Consultation Party;
(4) may take actions that favor the interests of the holders of one or more classes of certificates including the VRR Interest over the interests of the holders of one or more other classes of certificates; and
(5) will have no liability whatsoever for having so acted as set forth in (1) – (4) above, and no Certificateholder (other than the holder of the VRR Interest related to a Risk Retention Consultation Party) may take any action whatsoever against the applicable Risk Retention Consultation Party or any director, officer, employee, agent or principal of the applicable Risk Retention Consultation Party for having so acted.
The taking of, or refraining from taking, any action by the master servicer or the special servicer in accordance with the recommendation of a Risk Retention Consultation Party, which does not violate the terms of any Mortgage Loan, any law, the Servicing Standard or the provisions of the PSA or the related Intercreditor Agreement, will not result in any liability on the part of the master servicer or special servicer.
Replacement of the Special Servicer Without Cause
Except as limited by certain conditions described below and subject to the rights of the holder of any related Companion Loan under the related Intercreditor Agreement, the special servicer may generally be replaced, for so long as no Control Termination Event is continuing, at any time and without cause, by the Directing Holder so long as, among other things, the Directing Holder appoints a replacement special servicer that meets the requirements of the PSA, including that the trustee and the certificate administrator receive a Rating Agency Confirmation from each Rating Agency and a comparable confirmation from each NRSRO that has been engaged to rate any securities backed, in whole or in part, by a Pari Passu Companion Loan and that such replacement special servicer may not be the asset representations reviewer or any of its affiliates. The reasonable fees of any such termination incurred by the Trust Directing Holder will be paid by the Controlling Class Certificateholders, and in the case of any Loan-Specific Directing Holder, by such Loan-Specific Directing Holder.
Notwithstanding anything to the contrary described in this section, prior to the related Servicing Shift Securitization Date, no one except for the Loan-Specific Directing Holder will be permitted to replace the special servicer with respect to each Servicing Shift Whole Loan.
During the continuance of a Control Termination Event that relates to any Mortgage Loan, upon (i) the written direction of holders of Principal Balance Certificates and the VRR Interest evidencing not less than 25% of the Voting Rights (taking into account the application of any Appraisal Reduction Amounts to notionally reduce the Certificate Balances) of the Principal Balance Certificates and the VRR Interest requesting a vote to replace the special servicer (other than with respect to any Servicing Shift Whole
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Loan) with a new special servicer, (ii) payment by such holders to the certificate administrator of the reasonable fees and expenses (including any legal fees and expenses and any Rating Agency fees and expenses) to be incurred by the certificate administrator in connection with administering such vote (which fees and expenses will not be additional trust fund expenses), and (iii) delivery by such holders to the certificate administrator and the trustee of Rating Agency Confirmation from each Rating Agency and a comparable confirmation from each NRSRO that has been engaged to rate any securities backed, in whole or in part, by a Pari Passu Companion Loan (such Rating Agency Confirmation will be obtained at the expense of those holders of certificates requesting such vote), the certificate administrator will be required to promptly post notice of such request on the certificate administrator’s website and concurrently provide written notice of such request by mail and conduct the solicitation of votes of all certificates in such regard, which such vote must occur within 180 days of the posting of such notice. Upon the written direction of (i) holders of Principal Balance Certificates and VRR Interest evidencing at least 66-2/3% of a Certificateholder Quorum or (ii) holders of Principal Balance Certificates and VRR Interest evidencing more than 50% of the aggregate Voting Rights of each Class of Non-Reduced Certificates on an aggregate basis, the trustee will be required to terminate all of the rights and obligations of the special servicer under the PSA and appoint the successor special servicer (which must be a Qualified Replacement Special Servicer) designated by such Certificateholders (other than with respect to any Servicing Shift Whole Loan); provided that such successor special servicer is a Qualified Replacement Special Servicer, subject to indemnification, right to outstanding fees, reimbursement of Advances and other rights set forth in the PSA, which survive such termination.
A “Certificateholder Quorum” means, in connection with any solicitation of votes in connection with the replacement of the special servicer or the asset representations reviewer described above, the holders of certificates evidencing at least 50% of the aggregate Voting Rights (taking into account the application of any Appraisal Reduction Amounts to notionally reduce the Certificate Balances of the certificates, except in the case of the termination of the asset representations reviewer) of all Principal Balance Certificates and the VRR Interest on an aggregate basis.
“Non-Reduced Certificates” means, as of any date of determination, any class of Principal Balance Certificates and VRR Interest then-outstanding for which (a)(1) the initial Certificate Balance of such class of certificates minus (2) the sum (without duplication) of (x) the aggregate payments of principal (whether as principal prepayments or otherwise) distributed to the Certificateholders of such class of certificates as of such date of determination, (y) any Appraisal Reduction Amounts allocated to such class of certificates and (z) any Realized Losses or VRR Realized Losses, as applicable, previously allocated to such class of certificates, is equal to or greater than (b) 25% of the remainder of (1) the initial Certificate Balance of such class of certificates less (2) any payments of principal (whether as principal prepayments or otherwise) previously distributed to the Certificateholders of such class of certificates as of such date of determination.
A “Qualified Replacement Special Servicer” is a replacement special servicer that (i) satisfies all of the eligibility requirements applicable to special servicers in the PSA, (ii) is not the operating advisor, the asset representations reviewer or an affiliate of the operating advisor or the asset representations reviewer, (iii) is not obligated to pay the operating advisor (x) any fees or otherwise compensate the operating advisor in respect of its obligations under the PSA, or (y) for the appointment of the successor special servicer or the recommendation by the operating advisor for the replacement special servicer to become the special servicer, (iv) is not entitled to receive any compensation from the operating advisor other than compensation that is not material and is unrelated to the operating advisor’s recommendation that such party be appointed as the replacement special servicer, (v) is not entitled to receive any fee from the operating advisor for its appointment as successor special servicer, in each case, unless expressly approved by 100% of the Certificateholders, (vi) currently has a special servicer rating of at least “CSS3” from Fitch, (vii) is included on S&P’s Select Servicer List as a U.S. Commercial Mortgage Special Servicer, and (viii) is currently acting as a special servicer in a transaction rated by DBRS Morningstar and has not been publicly cited by DBRS Morningstar as having servicing concerns as the sole or a material factor in any qualification, downgrade or withdrawal of the ratings (or placement on “watch status” in contemplation of a ratings downgrade or withdrawal) of securities in a transaction serviced by the applicable servicer prior to the time of determination.
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In any case, the trustee will notify the outgoing special servicer promptly of the effective date of its termination. Any replacement special servicer recommended by the operating advisor must be a Qualified Replacement Special Servicer.
Notwithstanding the foregoing, if the special servicer obtains knowledge that it is a Borrower Party with respect to any Serviced Mortgage Loan and any related Serviced Companion Loan (any such Serviced Mortgage Loan and any related Serviced Companion Loan, a “Excluded Special Servicer Mortgage Loan”), the special servicer will be required to resign as special servicer of that Excluded Special Servicer Mortgage Loan.
In the event the special servicer is required to resign as special servicer with respect to any Excluded Special Servicer Mortgage Loan because it obtains knowledge that it is a Borrower Party other than during the continuance of a Consultation Termination Event, then (i) if the Excluded Special Servicer Mortgage Loan is not also an Excluded Loan, the Trust Directing Holder will be entitled to appoint (and replace with or without cause) a successor special servicer that is not a Borrower Party in accordance with the terms of the PSA (the “Excluded Special Servicer”) for the Excluded Special Servicer Mortgage Loan, (ii) if the Excluded Special Servicer Mortgage Loan is also an Excluded Loan, the largest Controlling Class Certificateholder (by Certificate Balance) that is not an Excluded Controlling Class Holder will be entitled to appoint (and replace with or without cause) the Excluded Special Servicer for the Excluded Special Servicer Mortgage Loan, and (iii) if there is no Controlling Class Certificateholder that is not an Excluded Controlling Class Holder, the resigning special servicer will be required to use reasonable efforts to appoint the Excluded Special Servicer for the Excluded Special Servicer Mortgage Loan. In the event the special servicer is required to resign as special servicer with respect to any Excluded Special Servicer Mortgage Loan because it obtains knowledge that it is a Borrower Party and either (i) a Consultation Termination Event is continuing or (ii) there is no Controlling Class Certificateholder that is not an Excluded Controlling Class Holder, then the resigning special servicer will be required to use reasonable efforts to appoint the Excluded Special Servicer for the Excluded Special Servicer Mortgage Loan. The special servicer will not have any liability with respect to the actions or inactions of the applicable Excluded Special Servicer or with respect to the identity of the applicable Excluded Special Servicer.
If at any time a special servicer is no longer a Borrower Party with respect to an Excluded Special Servicer Mortgage Loan, (1) the related Excluded Special Servicer will be required to resign, (2) the related Mortgage Loan will no longer be an Excluded Special Servicer Mortgage Loan, (3) such special servicer will become the special servicer again for the such related Mortgage Loan and (4) such special servicer will be entitled all special servicing compensation with respect to such Mortgage Loan earned during such time on and after such Mortgage Loan is no longer an Excluded Special Servicer Mortgage Loan.
The Excluded Special Servicer will be required to perform all of the obligations of the special servicer for the related Excluded Special Servicer Mortgage Loan and will be entitled to all special servicing compensation with respect to such Excluded Special Servicer Mortgage Loan earned during such time as the related Mortgage Loan is an Excluded Special Servicer Mortgage Loan (provided that the special servicer will remain entitled to all other special servicing compensation with respect all Mortgage Loans and Serviced Whole Loan which are not Excluded Special Servicer Mortgage Loans).
No appointment of a special servicer will be effective until the depositor has filed any required Exchange Act filings related to the removal and replacement of the special servicer.
With respect to each Non-Serviced Whole Loan, the related Non-Serviced Special Servicer may be removed, and a successor special servicer appointed at any time by the directing holder or analogous party appointed under the related Non-Serviced PSA (and not by the Trust Directing Holder) to the extent set forth in the related Non-Serviced PSA and the related Intercreditor Agreement for such Non-Serviced Whole Loan. See “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced Pari Passu Whole Loans”, “—The Non-Serviced AB Whole Loans” and “—Servicing of the Non-Serviced Mortgage Loans” below.
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Replacement of the Special Servicer After Operating Advisor Recommendation and Certificateholder Vote
If, during the continuance of a Control Termination Event, the operating advisor determines, in its sole discretion exercised in good faith, that (1) the special servicer is not performing its duties as required under the PSA or is otherwise not acting in accordance with the Servicing Standard and (2) the replacement of the special servicer would be in the best interests of the Certificateholders as a collective whole, then the operating advisor will have the right to recommend the replacement of the special servicer. In such event, the operating advisor will be required to deliver to the trustee and the certificate administrator, with a copy to the special servicer, a written report detailing the reasons supporting its recommendation (along with relevant information justifying its recommendation) and recommending a suggested replacement special servicer (which must be a Qualified Replacement Special Servicer). The certificate administrator will be required to notify each Certificateholder of the recommendation and post the related report on the certificate administrator’s internet website, and to conduct the solicitation of votes with respect to such recommendation. Approval by the Certificateholders of such Qualified Replacement Special Servicer will not preclude the Directing Holder from appointing a replacement, so long as such replacement is a Qualified Replacement Special Servicer and is not the originally replaced special servicer or its affiliate.
The operating advisor’s recommendation to replace the special servicer must be confirmed within 180 days after the notice is posted to the certificate administrator’s website by an affirmative vote of Certificateholders evidencing at least a majority of a quorum of Certificateholders (which, for this purpose, is the Certificateholders that (i) evidence at least 20% of the Voting Rights (taking into account the application of any Appraisal Reduction Amounts to notionally reduce the respective Certificate Balances) of all Principal Balance Certificates and the VRR Interest on an aggregate basis and (ii) consist of at least three (3) Certificateholders or Certificate Owners that are not affiliated with each other).
In the event the holders of such Voting Rights elect to remove and replace the special servicer (which requisite affirmative votes must be received within 180 days of the posting of the notice of the operating advisor’s recommendation to replace the special servicer to the certificate administrator’s website), the certificate administrator will be required to receive a Rating Agency Confirmation from each of the Rating Agencies and a comparable confirmation from each NRSRO that has been engaged to rate any securities backed, in whole or in part, by a Serviced Companion Loan at that time. In the event the certificate administrator receives a Rating Agency Confirmation from each of the Rating Agencies (and the successor special servicer agrees to be bound by the terms of the PSA), the trustee will then be required to terminate all of the rights and obligations of the special servicer under the PSA and to appoint the successor special servicer approved by such Certificateholders, provided that such successor special servicer is a Qualified Replacement Special Servicer, subject to the terminated special servicer’s rights to indemnification, payment of outstanding fees, reimbursement of Advances and other rights set forth in the PSA that survive termination. The reasonable out-of-pocket costs and expenses (including reasonable legal fees and expenses of outside counsel) associated with obtaining such Rating Agency Confirmations and administering the vote of the applicable holders of the certificates and the operating advisor’s identification of a Qualified Replacement Special Servicer will be an additional trust fund expense.
In any case, the trustee will notify the outgoing special servicer promptly of the effective date of its termination. Any replacement special servicer recommended by the operating advisor must be a Qualified Replacement Special Servicer.
In the event the special servicer is terminated as a result of the recommendation of the operating advisor described in this “—Replacement of the Special Servicer After Operating Advisor Recommendation and Certificateholder Vote”, the Directing Holder may not subsequently reappoint as special servicer such terminated special servicer or any affiliate of such terminated special servicer.
No appointment of the special servicer will be effective until the depositor or the depositor for the securitization of a Companion Loan has filed any required Exchange Act filings related to the removal and replacement of the special servicer.
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With respect to any Non-Serviced Whole Loan, the related Non-Serviced Special Servicer may be removed, and a successor special servicer appointed at any time by the related directing holder or analogous party appointed under the related Non-Serviced PSA (and not by the Directing Holder) to the extent set forth in the related Non-Serviced PSA and the related Intercreditor Agreement for such Non-Serviced Whole Loans. See “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced Pari Passu Whole Loans”, “—The Non-Serviced AB Whole Loans” and “—Servicing of the Non-Serviced Mortgage Loans” below.
Termination of the Master Servicer and the Special Servicer for Cause
Servicer Termination Events
A “Servicer Termination Event” under the PSA with respect to the master servicer or the special servicer, as the case may be, will include, without limitation:
(a) with respect to the master servicer only, any failure by the master servicer (i) to make a required deposit to the Collection Account or to the separate custodial account for any Serviced Whole Loan on the day such deposit was first required to be made, which failure is not remedied within two business days, (ii) to deposit into, or remit to the certificate administrator for deposit into, the Distribution Account any amount required to be so deposited or remitted (including any required P&I Advance, unless the master servicer determines that such P&I Advance would be non-recoverable), which failure is not remedied by 11:00 a.m. (New York City time) on the relevant Distribution Date (provided, however, that to the extent the master servicer does not timely make such remittances to the certificate administrator, the master servicer will be required to pay the certificate administrator for the account of the certificate administrator interest on any amount not timely remitted at the Reimbursement Rate from and including the applicable required remittance date to, but not including, the date such remittance is actually made) or (iii) to remit to any holder of a Serviced Companion Loan, as and when required by the PSA or the related intercreditor agreement, any amount required to be so remitted which failure continues for two business days;
(b) with respect to the special servicer only, any failure by the special servicer to deposit into the REO Account on the day such deposit is required to be made and such failure continues unremedied for one business day, or to remit to the master servicer for deposit in the Collection Account (or, in the case of a Serviced Whole Loan, the related custodial account) any such remittance required to be made, under the PSA; provided, however, that the failure of the special servicer to remit such remittance to the master servicer will not be a Servicer Termination Event if such failure is remedied within two business days and if the special servicer has compensated the master servicer for any loss of income (at the Reimbursement Rate) on such amount suffered by the master servicer due to and caused by the late remittance of the special servicer and reimbursed the issuing entity for any resulting advance interest due to the master servicer;
(c) any failure by the master servicer or the special servicer duly to observe or perform in any material respect any of its other covenants or obligations under the PSA, which failure continues unremedied for 30 days (or 15 days in the case of the master servicer’s failure to make a Servicing Advance or 45 days in the case of failure to pay the premium for any insurance policy required to be force placed by the master servicer or the special servicer, as the case may be, pursuant to the PSA or in any event such reasonable shorter period of time as is necessary to avoid the commencement of foreclosure proceedings for any lien relating to unpaid real estate taxes or assessments or a lapse in any required insurance coverage) after written notice of the failure has been given to the master servicer or the special servicer, as the case may be, by any other party to the PSA, by the certificateholders of any class issued by the issuing entity, evidencing percentage interest aggregating not less than 25% of such class or by such holder of a Serviced Companion Loan, if affected; provided that, if such failure is capable of being cured and the master servicer or the special servicer, as applicable, is diligently pursuing that cure, that 15-, 30- or 45-day period, as applicable, will be extended an additional 30 days;
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(d) any breach on the part of the master servicer or the special servicer of any representation or warranty in the PSA which materially and adversely affects the interests of any Certificateholders or holder of a Serviced Companion Loan and which continues unremedied for a period of 30 days after the date on which notice of that breach, requiring the same to be remedied, is given to the master servicer or the special servicer, as the case may be, by any other party to the PSA, or to the master servicer, the special servicer, the depositor and the trustee by the holders of certificates of any class issued by the issuing entity, evidencing percentage interests aggregating not less than 25% of such class or by such holder of a Serviced Companion Loan, if affected; provided that, if such breach is capable of being cured and the master servicer or special servicer, as applicable, is diligently pursuing that cure, that 30-day period will be extended an additional 30 days;
(e) certain events of insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings in respect of or relating to the master servicer or the special servicer, as applicable, and certain actions by or on behalf of the master servicer or the special servicer indicating its insolvency or inability to pay its obligations;
(f) the master servicer or the special servicer is no longer rated at least “CMS3” or “CSS3”, respectively, by Fitch and such master servicer or special servicer is not reinstated to at least that rating within 60 days of the delisting;
(g) the master servicer or the special servicer, as applicable, is removed from S&P’s Select Servicer List as a U.S. Commercial Mortgage Master Servicer or a U.S. Commercial Mortgage Special Servicer, as applicable, and is not restored to such status on such list within sixty (60) days
(h) DBRS Morningstar (or, in the case of serviced companion loan securities, any companion loan rating agency) (i) has qualified, downgraded or withdrawn its rating or ratings of one or more classes of certificates or one or more classes of serviced companion loan securities, or (ii) has placed one or more classes of certificates or one or more classes of serviced companion loan securities on “watch status” in contemplation of a ratings downgrade or withdrawal (and in the case of clause (i) and (ii), such action has not been withdrawn by DBRS Morningstar (or, in the case of serviced companion loan securities, any companion loan rating agency) within 60 days of such event) and, in the case of either of clauses (i) or (ii), publicly citing servicing concerns with the master servicer or the special servicer, as the case may be, as the sole or a material factor in such rating action; or
(i) so long as the issuing entity is subject to Exchange Act reporting requirements, any failure by the master servicer or special servicer, as applicable, to deliver to the trustee and the certificate administrator (i) an annual certification regarding such servicer’s compliance with the terms of the PSA, as well as an assessment of compliance with certain servicing criteria and an accountant’s attestation report with respect to such assessment by the time required under the PSA after any applicable grace period or (ii) any Exchange Act reporting items that a primary servicer, sub-servicer or servicing function participant (such entity, the “Sub-Servicing Entity”) retained by the master servicer or special servicer, as applicable (but excluding any Sub-Servicing Entity which the master servicer or special servicer has been directed to retain by a sponsor or mortgage loan seller) is required to deliver (any Sub-Servicing Entity will be terminated if it defaults in accordance with the provision of this clause (i)).
Rights Upon Servicer Termination Event
If a Servicer Termination Event with respect to the master servicer or the special servicer, as applicable, is continuing, then the trustee may, and at the written direction of (1) the holders of certificates evidencing at least 25% of the aggregate Voting Rights in the case of the master servicer (2) in the case of the special servicer, for so long as no Control Termination Event has occurred and is continuing, the Directing Holder, (3) the Depositor (with respect to clause (h) of the definition of “Servicer Termination Event”), the trustee will be required to terminate all of the rights (other than certain rights to indemnification, compensation and (in certain limited circumstances) the excess servicing strip as provided in the PSA) and obligations of the master servicer as master servicer or the special servicer as special servicer, as the case may be, under the PSA. In the case of a Servicer Termination Event
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pursuant to clause (f), (g) or (h) of the definition thereof, the certificate administrator will be required to notify Certificateholders and Serviced Companion Loan Holders of such Servicer Termination Event and request whether such Certificateholders and, if applicable, the Serviced Companion Loan Holders favor such termination. Notwithstanding the foregoing, upon any termination of the master servicer or the special servicer, as applicable, under the PSA, the master servicer or the special servicer, as applicable, will continue to be entitled to rights in respect of indemnification and to receive all accrued and unpaid servicing compensation through the date of termination plus reimbursement for all Advances and interest thereon as provided in the PSA.
Notwithstanding the foregoing, (a) if a Servicer Termination Event with respect to the master servicer affects a Serviced Companion Loan or the holder thereof and the master servicer is not otherwise terminated or (b) if a nationally recognized statistical rating organization (“NRSRO”), as that term is defined in Section 3(a)(62) of the Exchange Act, engaged to rate any class of certificates backed, wholly or partially, by any Serviced Companion Loan qualifies, downgrades or withdraws its rating of such class of certificates, publicly citing servicing concerns with the master servicer as the sole or a material factor in such rating action, then the holder of such Serviced Companion Loan will be entitled to request that the trustee direct the master servicer to appoint a sub-servicer (or if the related Serviced Whole Loan is currently being sub-serviced, then the trustee may direct the master servicer to replace such sub-servicer with a new sub-servicer but only if such original sub-servicer is in default (beyond any applicable cure periods) under the related sub-servicing agreement) that will be responsible for servicing the related Serviced Whole Loan; provided that the trustee will be required to direct the master servicer to obtain a Rating Agency Confirmation (including a Rating Agency Confirmation with respect to any companion loan securities)(at the expense of the requesting party) with respect to the appointment of such sub-servicer.
Notwithstanding the foregoing, (a) if a Servicer Termination Event with respect to the special servicer affects a Serviced Companion Loan and the special servicer is not otherwise terminated or (b) if an NRSRO engaged to rate any class of certificates backed, wholly or partially, by any Serviced Companion Loan qualifies, downgrades or withdraws its rating of such class of certificates, publicly citing servicing concerns with the special servicer as the sole or a material factor in such rating action, then the holder of such Serviced Companion Loan will be entitled to direct that the trustee terminate the special servicer with respect to the related Serviced Whole Loan only, but no other Mortgage Loan.
On and after the date of termination following a Servicer Termination Event by the master servicer or the special servicer, the trustee will succeed to all authority and power of the master servicer or the special servicer, as applicable, under the PSA (and any sub-servicing agreements) and generally will be entitled to the compensation arrangements to which the master servicer or the special servicer, as applicable, would have been entitled. If the trustee is unwilling or unable so to act, or holders of certificates evidencing at least (i) 25% of the aggregate Voting Rights in the case of the master servicer and (ii) 25% of the aggregate Voting Rights in the case of the special servicer(or, for so long as no Control Termination Event is continuing, the Directing Holder) so request, or, with respect to a Serviced Whole Loan, if an affected Serviced Companion Loan noteholder so requests, or if the trustee is not an “approved” servicer by any of the rating agencies for mortgage pools similar to the one held by the issuing entity, the trustee must appoint, or petition a court of competent jurisdiction for the appointment of, a mortgage loan servicing institution that, for so long as no Control Termination Event is continuing, has been approved by the Directing Holder (which approval may not be unreasonably withheld in the case of the appointment of a successor master servicer) to act as successor to the master servicer or the special servicer, as applicable, under the PSA; provided that the trustee must obtain a Rating Agency Confirmation (including a Rating Agency Confirmation with respect to any companion loan securities). Pending such appointment, the trustee is obligated to act in such capacity unless the trustee is prohibited by law from so acting. The trustee and any such successor may agree upon the servicing compensation to be paid; provided that no such compensation may be in excess of that permitted to the terminated master servicer or special servicer, provided, further, that if no successor can be obtained to perform the obligations of the terminated master servicer or special servicer, additional amounts may be paid to such successor and such amounts in excess of that permitted the terminated master servicer or special servicer will be treated as Realized Losses and VRR Realized Losses. All reasonable costs and expenses of the trustee (including the cost of obtaining a Rating Agency Confirmation and any applicable
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indemnity) or the successor master servicer or successor special servicer incurred in connection with transferring the mortgage files to the successor master servicer or special servicer and amending the PSA to reflect such succession are required to be paid by the predecessor master servicer or the special servicer, as applicable, upon presentation of reasonable documentation of such costs and expenses. If the predecessor master servicer or special servicer (as the case may be) has not reimbursed the trustee or the successor master servicer or special servicer for such expenses within 90 days after the presentation of reasonable documentation, such expense is required to be reimbursed by the issuing entity; provided that the terminated master servicer or special servicer will not thereby be relieved of its liability for such expenses.
No Certificateholder will have any right under the PSA to institute any proceeding with respect to the PSA, the certificates or the Mortgage Loans, unless, with respect to the PSA, such holder previously has given to the trustee a written notice of a default under the PSA, and of the continuance thereof, and unless the holders of certificates of any class affected thereby evidencing percentage interests of at least 25% of such class, as applicable, have made written request of the trustee to institute such proceeding in its capacity as trustee under the PSA and have offered to the trustee such security or indemnity reasonably satisfactory to it as it may require against the costs, expenses and liabilities to be incurred therein or thereby, and the trustee, for 60 days after its receipt of such notice, request and offer of security or indemnity, failed or refused to institute such proceeding.
Neither the trustee nor the certificate administrator will have any obligation to make any investigation of matters arising under the PSA or to institute, conduct or defend any litigation under the PSA or in relation to it at the request, order or direction of any of the holders of certificates, unless holders of certificates entitled to greater than 25% of the percentage interest of each affected class direct the trustee to do so and such holders of certificates have offered to the trustee or the certificate administrator, as applicable security or indemnity reasonably satisfactory to the trustee or the certificate administrator, as applicable against the costs, expenses and liabilities which may be incurred in connection with such action.
Notwithstanding the foregoing discussion in this “—Rights Upon Servicer Termination Event” section, if the master servicer is terminated under the circumstances described above because of the occurrence of any of the events described in clause (f), (g) or (h) under “—Servicer Termination Events” above, the master servicer will have the right, at its expense, to sell its master servicing rights with respect to the Mortgage Loans to a successor master servicer in connection with whose appointment a Rating Agency Confirmation (including a Rating Agency Confirmation with respect to any companion loan securities) has been provided, in accordance with the terms set forth in the PSA, including that any successor master servicer fulfill the ratings requirements for successor master servicer set forth in the PSA.
In addition, the depositor may direct the trustee to terminate the master servicer upon 5 business days’ written notice if the master servicer fails to comply with certain of its Exchange Act reporting obligations under the PSA (subject to any applicable grace period).
Waiver of Servicer Termination Event
A Servicer Termination Event may be waived by the Certificateholders evidencing not less than 66-2/3% of the aggregate Voting Rights of the certificates (and each Serviced Companion Loan noteholder adversely affected by such Servicer Termination Event), except (a) a Servicer Termination Event under clause (h) of the definition of “Servicer Termination Events” may be waived only with the consent of the Depositor and each affected depositor under a Non-Serviced PSA and (b) a default in making any required deposits to or payments from the Collection Account, any Serviced Whole Loan Custodial Account or the Lower-Tier REMIC Distribution Account or in remitting payments as received, in each case in accordance with the PSA.
Resignation of the Master Servicer and Special Servicer
The PSA permits the master servicer and the special servicer to resign from their respective obligations only upon (a) the appointment of, and the acceptance of the appointment by, a successor and
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receipt by the certificate administrator and the trustee of a Rating Agency Confirmation from each of the Rating Agencies and confirmation of the applicable rating agencies that such action will not result in the downgrade, withdrawal or qualification of its then-current ratings of any securities related to a Serviced Companion Loan (provided that such rating agency confirmation may be considered satisfied in the same manner as any Rating Agency Confirmation required under the PSA may be considered satisfied with respect to the certificates as described in this prospectus); and, as to the special servicer only, for so long as no Control Termination Event is continuing, the approval of such successor by the Directing Holder, which approval in each case will not be unreasonably withheld or delayed or (b) a determination that their respective obligations are no longer permissible with respect to the master servicer or the special servicer, as the case may be, under applicable law or are in material conflict by reason of applicable law with any other activities carried on by it. In the event that the master servicer or special servicer resigns as a result of the determination that their respective obligations are no longer permissible under applicable law or are in material conflict by reason of applicable law with any other activities carried on by it, the trustee will then succeed to all of the responsibilities, duties and liabilities of the resigning party as master servicer or special servicer, as the case may be, under the PSA and will be entitled to similar compensation arrangements. If the trustee is unwilling or unable to so act, it may appoint, or petition a court of competent jurisdiction to appoint, a loan servicing institution or other entity, subject to the trustee’s receipt of a Rating Agency Confirmation from each of the Rating Agencies.
No resignation will become effective until the trustee or other successor has assumed the obligations and duties of the resigning master servicer or special servicer, as the case may be, under the PSA. Further, the resigning master servicer or special servicer, as the case may be, must pay all costs and expenses associated with the transfer of its duties. Other than as described under “—Termination of the Master Servicer and the Special Servicer for Cause—Servicer Termination Events” above, in no event will the master servicer or the special servicer have the right to appoint any successor master servicer or special servicer if such master servicer or special servicer, as applicable, is terminated or removed pursuant to the PSA. In addition, the PSA will prohibit the appointment of the asset representations reviewer, the operating advisor or one of their respective affiliates as successor to the master servicer or the special servicer.
Limitation on Liability; Indemnification
The PSA will provide that none of the master servicer (including in its capacity as the paying agent for any Companion Loan), the special servicer, the depositor, the operating advisor, the asset representations reviewer or any partner, shareholder, member, manager, director, officer, employee or agent of any of them will be under any liability to the issuing entity, Certificateholders or holders of the related Companion Loan, or any third party beneficiary, as applicable, for any action taken, or not taken, in good faith pursuant to the PSA or for errors in judgment; provided, however, that none of the master servicer (including in its capacity as the paying agent for any Companion Loan), the special servicer, the depositor, the operating advisor, the asset representations reviewer or similar person will be protected against any breach of a representation or warranty made by such party, as applicable, in the PSA or any liability that would otherwise be imposed by reason of willful misconduct, bad faith or negligence in the performance of obligations or duties under the PSA or by reason of negligent disregard of such obligations and duties. The PSA will also provide that the master servicer (including in its capacity as the paying agent for any Companion Loan), the special servicer, the depositor, the operating advisor, the asset representations reviewer and their respective affiliates and any partner, shareholder, member, manager, director, officer, employee or agent of any of them will be entitled to indemnification by the issuing entity against any claims, losses, penalties, fines, forfeitures, reasonable legal fees and related costs, judgments, and other costs, liabilities, fees and expenses incurred in connection with any legal action or claim that relates to the PSA (including any such fees and costs relating to enforcing this indemnity), the Mortgage Loans, any related Companion Loan or the certificates; provided, however, that the indemnification will not extend to any loss, liability or expense incurred in connection with any breach of a representation or warranty made by such party, as applicable, in the PSA or incurred by reason of willful misconduct, bad faith or negligence in the performance of obligations or duties under the PSA, by reason of negligent disregard of such party’s obligations or duties, or in the case of the depositor and any of its partners, shareholders, directors, officers, members, managers, employees and agents, any
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violation by any of them of any state or federal securities law. In addition, absent actual fraud (as determined by a final non-appealable court order), neither the trustee nor the certificate administrator (including in its capacity as custodian) will be liable for special, punitive, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the trustee or the certificate administrator has been advised of the likelihood of such loss or damage and regardless of the form of action. The PSA will also provide that any related master servicer, depositor, special servicer, operating advisor (or the equivalent), asset representations reviewer, certificate administrator or trustee under the related Non-Serviced PSA with respect to a Non-Serviced Companion Loan and any partner, director, officer, shareholder, member, manager, employee or agent of any of them and each Non-Serviced Securitization Trust will be entitled to indemnification by the issuing entity and held harmless against the issuing entity’s pro rata share of any and all claims, losses, penalties, fines, forfeitures, legal fees and related costs, judgments and any other costs, liabilities, fees and expenses incurred in connection with servicing and administration of such Non-Serviced Mortgage Loan and the related non-serviced Mortgaged Property under the related Non-Serviced PSA or the PSA (as and to the same extent the securitization trust formed under the related Non-Serviced PSA is required to indemnify such parties in respect of other Mortgage Loans in the securitization trust formed under the related Non-Serviced PSA pursuant to the terms of the Non-Serviced PSA).
In addition, the PSA will provide that none of the master servicer (including in its capacity as the paying agent for any Companion Loans), the special servicer, the depositor or operating advisor will be under any obligation to appear in, prosecute or defend any legal action that (i) is not incidental to its respective responsibilities under the PSA or (ii) in its opinion, may expose it to any expense or liability not reimbursed by the issuing entity. However, each of the master servicer, the special servicer, the depositor and the operating advisor will be permitted, in the exercise of its discretion, to undertake any action that it may deem necessary or desirable with respect to the enforcement and/or protection of the rights and duties of the parties to the PSA and the interests of the Certificateholders (and, in the case of a Serviced Whole Loan, the rights of the Certificateholders and the holders of the related Serviced Companion Loan (as a collective whole), taking into account the subordinate or pari passu nature of such Serviced Companion Loan) under the PSA; provided, however, that if a Serviced Whole Loan and/or the holder of the related Companion Loan are involved, such expenses, costs and liabilities will be payable out of funds related to such Serviced Whole Loan in accordance with the related Intercreditor Agreement and will also be payable out of the other funds in the Collection Account if amounts on deposit with respect to such Serviced Whole Loan are insufficient therefor. If any such expenses, costs or liabilities relate to a Mortgage Loan or Companion Loan, then any subsequent recovery on that Mortgage Loan or Companion Loan, as applicable, will be used to reimburse the issuing entity for any amounts advanced for the payment of such expenses, costs or liabilities. In that event, the legal expenses and costs of the action, and any liability resulting from the action, will be expenses, costs and liabilities of the issuing entity, and the master servicer (including in its capacity as the paying agent for any Companion Loans), the special servicer, the depositor, the asset representations reviewer or the operating advisor, as the case may be, will be entitled to be reimbursed out of the Collection Account for the expenses.
Pursuant to the PSA, the master servicer and the special servicer will each be required to maintain a fidelity bond and errors and omissions policy or their equivalent that provides coverage against losses that may be sustained as a result of an officer’s or employee’s misappropriation of funds or errors and omissions, subject to certain limitations as to amount of coverage, deductible amounts, conditions, exclusions and exceptions permitted by the PSA. Notwithstanding the foregoing, the master servicer and the special servicer will be allowed to self-insure with respect to an errors and omission policy and a fidelity bond so long as certain conditions set forth in the PSA are met.
Any person into which the master servicer, the special servicer, the depositor, operating advisor, asset representations reviewer may be merged or consolidated, or any person resulting from any merger or consolidation to which the master servicer, the special servicer, the depositor, operating advisor or asset representations reviewer is a party, or any person succeeding to the business of the master servicer, the special servicer, the depositor, operating advisor or asset representations reviewer, will be the successor of the master servicer, the special servicer, the depositor, operating advisor or asset representations reviewer, as the case may be, under the PSA. The master servicer, the special servicer,
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the operating advisor and the asset representations reviewer may have other normal business relationships with the depositor or the depositor’s affiliates.
The trustee and the certificate administrator make no representations as to the validity or sufficiency of the PSA (other than as to it being a valid obligation of the trustee and the certificate administrator), the certificates, the Mortgage Loans, this prospectus (other than as to the accuracy of the information provided by the trustee and the certificate administrator as set forth above) or any related documents and will not be accountable for the use or application by or on behalf of the master servicer or the special servicer of any funds paid to the master servicer or any special servicer in respect of the certificates or the Mortgage Loans, or any funds deposited into or withdrawn from the Collection Account or any other account by or on behalf of the master servicer or any special servicer. The PSA provides that no provision of such agreement will be construed to relieve the trustee and the certificate administrator from liability for their own negligent action, their own negligent failure to act or their own willful misconduct or bad faith.
The PSA provides that neither the trustee nor the certificate administrator, as applicable, will be liable for an error of judgment made in good faith by a responsible officer of the trustee or the certificate administrator, unless it is proven that the trustee or the certificate administrator, as applicable, was negligent in ascertaining the pertinent facts. In addition, neither the trustee nor the certificate administrator, as applicable, will be liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with the direction of holders of certificates entitled to greater than 25% of the percentage interest of each affected class, or of the aggregate Voting Rights of the certificates, relating to the time, method and place of conducting any proceeding for any remedy available to the trustee and the certificate administrator, or exercising any trust or power conferred upon the trustee and the certificate administrator, under the PSA (unless a higher percentage of Voting Rights is required for such action).
The trustee and the certificate administrator and any director, officer, employee, representative or agent of the trustee and the certificate administrator, will be entitled to indemnification by the issuing entity, to the extent of amounts held in the Collection Account or the Lower-Tier REMIC Distribution Account from time to time, for any loss, liability, damages, claims or unanticipated expenses (including reasonable attorneys’ fees and expenses) arising out of or incurred by the trustee or the certificate administrator in connection with their participation in the transaction and any act or omission of the trustee or the certificate administrator relating to the exercise and performance of any of the powers and duties of the trustee and the certificate administrator (including in any capacities in which they serve, e.g., paying agent, REMIC administrator, authenticating agent, custodian, certificate registrar and 17g-5 Information Provider) under the PSA. However, the indemnification will not extend to any loss, liability or expense that constitutes a specific liability imposed on the trustee or the certificate administrator pursuant to the PSA, or to any loss, liability or expense incurred by reason of willful misconduct, bad faith or negligence on the part of the trustee or the certificate administrator in the performance of their obligations and duties under the PSA, or by reason of their negligent disregard of those obligations or duties, or as may arise from a breach of any representation or warranty of the trustee or the certificate administrator made in the PSA.
For the avoidance of doubt, with respect to any indemnification provisions in the PSA providing that the issuing entity or a party to the PSA is required to indemnify another party to the PSA for costs, fees and expenses, such costs, fees and expenses are intended to include costs (including, but not limited to, reasonable attorney’s fees and expenses) of the enforcement of such indemnity.
Enforcement of Mortgage Loan Seller’s Obligations Under the MLPA
In the event any party to the PSA receives a request or demand from a Requesting Investor to the effect that a Mortgage Loan should be repurchased or replaced due to a Material Defect, or if the depositor, the master servicer, the special servicer, the trustee, the certificate administrator or the operating advisor (solely in its capacity as operating advisor) determines that a Mortgage Loan should be repurchased or replaced due to a Material Defect, that party to the PSA will be required to promptly forward such request or demand to the master servicer and the special servicer, and the Enforcing Servicer will be required to promptly forward it to each other party to the PSA and the applicable
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mortgage loan seller. The Enforcing Servicer will be required to enforce the obligations of the mortgage loan sellers under the MLPAs pursuant to the terms of the PSA and the MLPAs. These obligations include (but are not limited to) obligations resulting from a Material Defect. Subject to the provisions of the applicable MLPA relating to the dispute resolutions as described under “Description of the Mortgage Loan Purchase Agreements—Dispute Resolution Provisions”, such enforcement, including, without limitation, the legal prosecution of claims, if any, will be required to be carried out in such form, to such extent and at such time as the master servicer or the special servicer, as applicable, would require were it, in its individual capacity, the owner of the affected Mortgage Loan.
Within 45 days after receipt of an Asset Review Report with respect to any Mortgage Loan, the master servicer (with respect to any non-Specially Serviced Loans) or the special servicer (with respect to Specially Serviced Loans) will be required to determine whether at that time, based on the Servicing Standard, whether there exists a Material Defect with respect to such Mortgage Loan. If the master servicer (with respect to non-Specially Serviced Loans) or the special servicer (with respect to Specially Serviced Loans) determines that a Material Defect exists, the Enforcing Servicer will be required to enforce the obligations of the applicable mortgage loan seller under the MLPA with respect to such Material Defect as discussed in the preceding paragraph. See “—The Asset Representations Reviewer—Asset Review” above.
Any costs incurred by the master servicer or the special servicer with respect to the enforcement of the obligations of a mortgage loan seller under the applicable MLPA will be deemed to be Servicing Advances, to the extent not recovered from the mortgage loan seller or the Requesting Investor or, to the extent nonrecoverable, trust fund expenses. See “Description of the Mortgage Loan Purchase Agreements—Dispute Resolution Provisions”.
Dispute Resolution Provisions
Certificateholder’s Rights When a Repurchase Request is Initially Delivered By a Certificateholder
In the event an Initial Requesting Certificateholder delivers a written request to a party to the PSA that a Mortgage Loan be repurchased by the applicable mortgage loan seller alleging the existence of a Material Defect with respect to such Mortgage Loan and setting forth the basis for such allegation (a “Certificateholder Repurchase Request”), the receiving party will be required to promptly forward that Certificateholder Repurchase Request to the master servicer and the special servicer, and the Enforcing Servicer will be required to promptly forward that Repurchase Request to the related mortgage loan seller and each other party to the PSA. An “Initial Requesting Certificateholder” is the first Certificateholder or Certificate Owner (in either case, other than a holder of the VRR Interest) to deliver a Certificateholder Repurchase Request as described above with respect to a Mortgage Loan, and there may not be more than one Initial Requesting Certificateholder with respect to any Mortgage Loan. Subject to the provisions described below under this heading “—Dispute Resolution Provisions”, the Enforcing Servicer will be the Enforcing Party with respect to the Repurchase Request.
The “Enforcing Servicer” will be (a) with respect to a Specially Serviced Loan, the special servicer, and (b) with respect to a non-Specially Serviced Loan, (i) in the case of a Repurchase Request made by the special servicer, the Trust Directing Holder or a Controlling Class Certificateholder, the master servicer, and (ii) in the case of a Repurchase Request made by any person other than the special servicer, the Trust Directing Holder or a Controlling Class Certificateholder, (A) prior to a Resolution Failure relating to such non-Specially Serviced Loan, the master servicer (provided that the consent of the special servicer will be required with respect to any Qualified Substitute Mortgage Loan), and (B) from and after a Resolution Failure relating to such non-Specially Serviced Loan, the special servicer.
An “Enforcing Party” is the person obligated to or that elects pursuant to the terms of the PSA to enforce the rights of the issuing entity against the related mortgage loan seller with respect to the Repurchase Request.
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Repurchase Request Delivered by a Party to the PSA
In the event that the depositor, the master servicer, the special servicer, the trustee, the certificate administrator or the operating advisor (solely in its capacity as operating advisor) has knowledge of a Material Defect with respect to a Mortgage Loan, that party will be required to deliver prompt written notice of such Material Defect to the master servicer and the special servicer, and the Enforcing Servicer will be required to promptly forward to each other party to the PSA and the related mortgage loan seller, identifying the applicable Mortgage Loan and setting forth the basis for such allegation (a “PSA Party Repurchase Request” and, each of a Certificateholder Repurchase Request or a PSA Party Repurchase Request, a “Repurchase Request”). The Enforcing Servicer will be required to act as the Enforcing Party and enforce the rights of the issuing entity against the related mortgage loan seller with respect to the PSA Party Repurchase Request. However, if a Resolution Failure occurs with respect to the PSA Party Repurchase Request, the provisions described below under “—Resolution of a Repurchase Request” will apply.
Resolution of a Repurchase Request
In the event the Repurchase Request is not Resolved within 180 days after the mortgage loan seller receives the Repurchase Request as described in “—Certificateholder’s Rights When a Repurchase Request is Initially Delivered By a Certificateholder” or “—Repurchase Request Delivered by a Party to the PSA” above, a “Resolution Failure” will be deemed to have occurred. Receipt of the Repurchase Request will be deemed to occur two business days after the Repurchase Request is sent to the related mortgage loan seller. “Resolved” means, with respect to a Repurchase Request, (i) that the related Material Defect has been cured, (ii) the related Mortgage Loan has been repurchased in accordance with the related MLPA, (iii) a mortgage loan has been substituted for the related Mortgage Loan in accordance with the related MLPA, (iv) the applicable mortgage loan seller made the Loss of Value Payment, (v) a contractually binding agreement is entered into between the Enforcing Servicer, on behalf of the issuing entity, and the related mortgage loan seller that settles the related mortgage loan seller’s obligations under the related MLPA, or (vi) the related Mortgage Loan is no longer property of the issuing entity as a result of a sale or other disposition in accordance with the PSA.
Within 2 business days after a Resolution Failure occurs with respect to a PSA Party Repurchase Request made by any party other than the special servicer or a Certificateholder Repurchase Request made by any Certificateholder other than the Trust Directing Holder or a Controlling Class Certificateholder, in each case, related to a non-Specially Serviced Loan, the master servicer will be required to send a written notice (a “Master Servicer Proposed Course of Action Notice”) to the special servicer, indicating the master servicer’s analysis and recommended course of action with respect to such Repurchase Request, along with the servicing file and all information, documents (but excluding the original documents constituting the mortgage file) and records (including records stored electronically on computer tapes, magnetic discs and the like) relating to such non-Specially Serviced Loan and, if applicable, the related Serviced Companion Loan, either in the master servicer’s possession or otherwise reasonably available to the master servicer, and reasonably requested by the special servicer to enable it to assume its duties under the PSA to the extent set forth in the PSA for such non-Specially Serviced Loan. Upon receipt of such Master Servicer Proposed Course of Action Notice and such servicing file, the special servicer will become the Enforcing Servicer with respect to such Repurchase Request.
After a Resolution Failure occurs with respect to a Repurchase Request regarding a Mortgage Loan (whether the Repurchase Request was initiated by an Initial Requesting Certificateholder or by a party to the PSA), the Enforcing Servicer will be required to send a notice (a “Proposed Course of Action Notice”) to the Initial Requesting Certificateholder, if any, to the address specified in the Initial Requesting Certificateholder’s Repurchase Request, and to the certificate administrator, who will make such notice available to all other Certificateholders and Certificate Owners (by posting such notice on the certificate administrator’s website) indicating the Enforcing Servicer’s intended course of action with respect to the Repurchase Request (the “Proposed Course of Action”). If the master servicer is the Enforcing Servicer, the master servicer may (but will not be obligated to) consult with the special servicer and (for so long as no Consultation Termination Event is continuing) the Directing Holder regarding any Proposed Course of
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Action. Such notice will be required to include (a) a request to Certificateholders to indicate their agreement with or dissent from such Proposed Course of Action by clearly marking “agree” or “disagree” to the Proposed Course of Action on such notice within 30 days of the date of such notice and a disclaimer that responses received after such 30-day period will not be taken into consideration, (b) a statement that in the event any Certificateholder disagrees with the Proposed Course of Action, the Enforcing Servicer (either as the Enforcing Party or as the Enforcing Servicer in circumstances where a Certificateholder is acting as the Enforcing Party) will be compelled to follow the course of action agreed to and/or proposed by the majority of the responding Certificateholders that involves referring the matter to mediation or arbitration, as the case may be, (c) a statement that responding Certificateholders will be required to certify their holdings in connection with such response, (d) a statement that only responses clearly marked “agree” or “disagree” with such Proposed Course of Action will be taken into consideration and (e) instructions for responding Certificateholders to send their responses to the applicable Enforcing Servicer and the certificate administrator. The certificate administrator will within three (3) business days after the expiration of the 30-day response period, tabulate the responses received from the Certificateholders and share the results with the Enforcing Servicer. The certificate administrator will only count responses timely received and clearly indicating agreement or dissent with the related Proposed Course of Action and additional verbiage or qualifying language will not be taken into consideration for purposes of determining whether the related Certificateholder agrees or disagrees with the Proposed Course of Action. The certificate administrator will be under no obligation to answer any questions from Certificateholders regarding such Proposed Course of Action. For the avoidance of doubt, the certificate administrator’s obligations in connection with this heading “—Resolution of a Repurchase Request” will be limited solely to tabulating Certificateholder responses of “agree” or “disagree” to the Proposed Course of Action, and such obligation will not be construed to impose any enforcement obligation on the certificate administrator. The Enforcing Servicer may conclusively rely (without investigation) on the certificate administrator’s tabulation of the majority of the responding Certificateholders. If (a) the Enforcing Servicer’s intended course of action with respect to the Repurchase Request does not involve pursuing further action to exercise rights against the applicable mortgage loan seller with respect to the Repurchase Request and the Initial Requesting Certificateholder, if any, or any other Certificateholder or Certificate Owner wishes to exercise its right to refer the matter to mediation (including nonbinding arbitration) or arbitration, as discussed below under “—Mediation and Arbitration Provisions”, or (b) the Enforcing Servicer’s intended course of action is to pursue further action to exercise rights against the applicable mortgage loan seller with respect to the Repurchase Request but the Initial Requesting Certificateholder, if any, or any other Certificateholder or Certificate Owner does not agree with the dispute resolution method selected by the Enforcing Servicer, then the Initial Requesting Certificateholder, if any, or such other Certificateholder or Certificate Owner may deliver to the Enforcing Servicer a written notice (a “Preliminary Dispute Resolution Election Notice”) within 30 days from the date the Proposed Course of Action Notice is posted on the certificate administrator’s website (the “Dispute Resolution Cut-off Date”) indicating its intent to exercise its right to refer the matter to either mediation or arbitration. In the event any Certificateholder or Certificate Owner delivers a Preliminary Dispute Resolution Election Notice, and the Enforcing Servicer has also received responses from other Certificateholders or Certificate Owners supporting the Enforcing Servicer’s initial Proposed Course of Action, such responses will be considered Preliminary Dispute Resolution Election Notices supporting the Proposed Course of Action for purposes of determining the course of action proposed by the majority of Certificateholders.
If neither the Initial Requesting Certificateholder, if any, nor any other Certificateholder or Certificate Owner delivers a Preliminary Dispute Resolution Election Notice prior to the Dispute Resolution Cut-off Date, no Certificateholder or Certificate Owner will have the right to refer the Repurchase Request to mediation or arbitration, and the Enforcing Servicer, as the Enforcing Party, will be the sole party obligated and entitled to determine a course of action, including but not limited to, enforcing the issuing entity’s rights against the related mortgage loan seller, subject to any consent or consultation rights of the Trust Directing Holder.
Promptly and in any event within 10 business days following receipt of a Preliminary Dispute Resolution Election Notice from (i) the Initial Requesting Certificateholder, if any, or (ii) any other Certificateholder or Certificate Owner (other than a holder of the VRR Interest) (each of clauses (i) and
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(ii), a “Requesting Certificateholder”), the Enforcing Servicer will be required to consult with each Requesting Certificateholder regarding such Requesting Certificateholder’s intention to elect either mediation (including nonbinding arbitration) or arbitration as the dispute resolution method with respect to the Repurchase Request (the “Dispute Resolution Consultation”) so that such Requesting Certificateholder may consider the views of the Enforcing Servicer as to the claims underlying the Repurchase Request and possible dispute resolution methods, such discussions to occur and be completed no later than 10 business days following the Dispute Resolution Cut-off Date. The Enforcing Servicer will be entitled to establish procedures the Enforcing Servicer deems to be in accordance with the Servicing Standard relating to the timing and extent of such consultations. No later than 5 business days after completion of the Dispute Resolution Consultation, a Requesting Certificateholder may provide a final notice to the Enforcing Servicer indicating its decision to exercise its right to refer the matter to either mediation or arbitration (“Final Dispute Resolution Election Notice”).
If, following the Dispute Resolution Consultation, no Requesting Certificateholder timely delivers a Final Dispute Resolution Election Notice to the Enforcing Servicer, then the Enforcing Servicer will continue to act as the Enforcing Party and remain obligated under the PSA to determine a course of action, including but not limited to, enforcing the rights of the issuing entity with respect to the Repurchase Request and no Certificateholder or Certificate Owner will have any further right to elect to refer the matter to mediation or arbitration.
If a Requesting Certificateholder timely delivers a Final Dispute Resolution Election Notice to the Enforcing Servicer, then such Requesting Certificateholder will become the Enforcing Party and must promptly submit the matter to mediation (including nonbinding arbitration) or arbitration. If there is more than one Requesting Certificateholder that timely delivers a Final Dispute Resolution Election Notice, then such Requesting Certificateholders will collectively become the Enforcing Party, and the holder or holders of a majority of the Voting Rights among such Requesting Certificateholders will be entitled to make all decisions relating to such mediation or arbitration. If, however, no Requesting Certificateholder commences arbitration or mediation pursuant to the terms of the PSA within 30 days after delivery of its Final Dispute Resolution Election Notice to the Enforcing Servicer, then (i) the rights of a Requesting Certificateholder to act as the Enforcing Party will terminate and no Certificateholder or Certificate Owner will have any further right to elect to refer the matter to mediation or arbitration, (ii) if the Proposed Course of Action Notice indicated that the Enforcing Servicer will take no further action with respect to the Repurchase Request, then the related Material Defect will be deemed waived for all purposes under the PSA and related MLPA; provided, however, that such Material Defect will not be deemed waived with respect to a Requesting Certificateholder, any other Certificateholder or Certificate Owner or the Enforcing Servicer to the extent there is a material change in the facts and circumstances known to such party and (iii) if the Proposed Course of Action Notice had indicated a course of action other than the course of action under clause (ii), then the Enforcing Servicer will again become the Enforcing Party and, as such, will be the sole party obligated and entitled to determine a course of action including, but not limited to, enforcing the issuing entity’s rights against the related mortgage loan seller.
Notwithstanding the foregoing, the dispute resolution provisions described under this heading “—Resolution of a Repurchase Request” will not apply, and the Enforcing Servicer will remain the Enforcing Party, if the Enforcing Servicer has commenced litigation with respect to the Repurchase Request, or determines in accordance with the Servicing Standard that it is in the best interest of Certificateholders to commence litigation with respect to the Repurchase Request to avoid the running of any applicable statute of limitations.
In the event a Requesting Certificateholder becomes the Enforcing Party, the Enforcing Servicer, on behalf of the issuing entity, will remain a party to any proceedings against the related mortgage loan seller as further described below; provided that the degree and extent to which the Enforcing Servicer actively prepares for and participates in such proceeding will be determined by such Enforcing Servicer (in consultation with the Trust Directing Holder for so long as no Consultation Termination Event is continuing), and in accordance with the Servicing Standard. For the avoidance of doubt, the depositor, the mortgage loan sellers and any of their respective affiliates will not be entitled to be an Initial Requesting Certificateholder or a Requesting Certificateholder.
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The Requesting Certificateholder is entitled to elect either mediation or arbitration in its sole discretion; however, the Requesting Certificateholder may not elect to then utilize the alternative method in the event that the initial method is unsuccessful.
If (i) a Repurchase Request is made with respect to any Mortgage Loan based on any particular alleged Material Defect, (ii) a Resolution Failure is deemed to occur with respect to such Repurchase Request, and (iii) if either (A) a mediation or arbitration is undertaken with respect to such Repurchase Request or (B) the Certificateholders and Certificate Owners cease to have a right to refer such Repurchase Request to mediation or arbitration, in either case in accordance with the foregoing discussion under this heading “—Resolution of a Repurchase Request,” then no Certificateholder or Certificate Owner may make any subsequent Repurchase Request with respect to such Mortgage Loan based on the same alleged Material Defect unless there is a material change in the facts and circumstances known to such party.
Mediation and Arbitration Provisions
If the Enforcing Party elects mediation (including nonbinding arbitration) or arbitration, the mediation or arbitration will be administered by a nationally recognized arbitration or mediation organization selected by the related mortgage loan seller. A single mediator or arbitrator will be selected by the mediation or arbitration organization from a list of neutrals maintained by it according to its mediation or arbitration rules then in effect. The mediator or arbitrator must be impartial, an attorney admitted to practice in the State of New York and have at least 15 years of experience in commercial litigation and commercial real estate finance or commercial mortgage-backed securitization matters or other complex commercial transactions.
The expenses of any mediation will be allocated among the parties to the mediation including, if applicable, between the Enforcing Party and the Enforcing Servicer, as mutually agreed by the parties as part of the mediation.
In any arbitration, the arbitrator will be required to resolve the dispute in accordance with the MLPA and PSA, and may not modify or change those agreements in any way or award remedies not consistent with those agreements. The arbitrator will not have the power to award punitive or consequential damages. In its final determination, the arbitrator will determine and award the costs of the arbitration to the parties to the arbitration in its reasonable discretion. In the event a Requesting Certificateholder is the Enforcing Party, the Requesting Certificateholder will be required to pay any expenses allocated to the Enforcing Party in the arbitration proceedings or any expenses that the Enforcing Party agrees to bear in the mediation proceedings.
For the avoidance of doubt, any expenses required to be borne by or allocated to the Enforcing Servicer in mediation or arbitration or related responsibilities under the PSA will be reimbursable as trust fund expenses.
The final determination of the arbitrator will be final and non-appealable, except for actions to confirm or vacate the determination permitted under federal or state law, and may be entered and enforced in any court with jurisdiction over the parties and the matter. By selecting arbitration, the Enforcing Party would be waiving its right to sue in court, including the right to a trial by jury.
In the event a Requesting Certificateholder is the Enforcing Party, the agreement with the arbitrator or mediator, as the case may be, will be required under the PSA to contain an acknowledgment that the issuing entity, or the Enforcing Servicer on its behalf, will be a party to any arbitration or mediation proceedings solely for the purpose of being the beneficiary of any award in favor of the Enforcing Party; provided that the degree and extent to which the Enforcing Servicer actively prepares for and participates in such proceeding will be determined by such Enforcing Servicer in consultation with the Trust Directing Holder, provided that a Consultation Termination Event is not continuing, and in accordance with the Servicing Standard. All amounts recovered by the Enforcing Party will be required to be paid to the issuing entity, or the Enforcing Servicer on its behalf, and deposited in the Collection Account. The agreement with the arbitrator or mediator, as the case may be, will provide that in the event a Requesting
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Certificateholder is allocated any related costs and expenses pursuant to the terms of the arbitrator’s decision or the agreement reached in mediation, neither the issuing entity nor the Enforcing Servicer acting on its behalf will be responsible for any such costs and expenses allocated to the Requesting Certificateholder.
The issuing entity (or the trustee or the Enforcing Servicer, acting on its behalf), the depositor or any mortgage loan seller will be permitted to redact any personally identifiable customer information included in any information provided for purposes of any mediation or arbitration. Each party to the proceedings will be required to agree to keep confidential the details related to the Repurchase Request and the dispute resolution identified in connection with such proceedings; provided, however, the Certificateholders will be permitted to communicate prior to the commencement of any such proceedings to the extent described under “Description of the Certificates—Certificateholder Communication”.
For avoidance of doubt, in no event will the exercise of any right of a Requesting Certificateholder to refer a Repurchase Request to mediation or arbitration or participation in such mediation or arbitration affect in any manner the ability of the master servicer or the special servicer to perform its obligations with respect to a Mortgage Loan or the exercise of any rights of the Trust Directing Holder (including without limitation, a liquidation, foreclosure, negotiation of a loan modification or workout, acceptance of a discounted pay off or deed in lieu, or bankruptcy or other litigation).
Servicing of the Non-Serviced Mortgage Loans
| General |
Each Non-Serviced Mortgage Loan is expected to be serviced pursuant to the related Non-Serviced PSA and the related Intercreditor Agreement. See “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced Pari Passu Whole Loans”.
The servicing terms of each such Non-Serviced PSA is expected to be similar in all material respects to the servicing terms of the PSA applicable to the Serviced Mortgage Loans; however, the servicing arrangements under such agreements will differ in certain respects. For example:
| ● | Each Non-Serviced Master Servicer and Non-Serviced Special Servicer will be required to service the related Non-Serviced Mortgage Loan pursuant to a servicing standard set forth in the related Non-Serviced PSA that is substantially similar to, but may not be identical to, the Servicing Standard. |
| ● | Any party to the related Non-Serviced PSA that makes a property protection advance with respect to the related Non-Serviced Mortgage Loan will be entitled to reimbursement for that advance, with interest at the prime rate, in a manner substantially similar to the reimbursement of Servicing Advances under the PSA. The issuing entity, as holder of the related Non-Serviced Mortgage Loan, will be responsible for its pro rata share of any such advance reimbursement amounts (including out of general collections on the Benchmark 2022-B34 mortgage pool, if necessary); provided that, in the case of the Non-Serviced PSA for the 601 Lexington Avenue Whole Loan, there are no mortgage loans other than the related Non-Serviced Whole Loan serviced under the related Non-Serviced PSA. |
| ● | Pursuant to the related Non-Serviced PSA, the liquidation fee, the special servicing fee and the workout fee with respect to the related Non-Serviced Mortgage Loan are similar to or less than the corresponding fees payable under the PSA, except that caps, floors and offsets may differ or not apply. |
| ● | The extent to which modification fees or other fee items with respect to the related Whole Loan may be applied to offset interest on advances, servicer expenses and servicing compensation will, in certain circumstances, be less than is the case under the PSA. |
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| ● | Items with respect to the related Non-Serviced Whole Loan that are the equivalent of assumption application fees, defeasance fees, assumption, waiver, consent and earnout fees, late payment charges, default interest and/or modification fees and that constitute additional servicing compensation under the related Non-Serviced PSA will not be payable to master servicers or special servicers under the PSA and one or more of such items will be allocated between the related Non-Serviced Master Servicer and the related Non-Serviced Special Servicer under the related Non-Serviced PSA in proportions that may be different than the allocation of similar fees under the PSA between the master servicers and special servicers for this transaction. |
| ● | The Non-Serviced Directing Holder under the related Non-Serviced PSA will have rights substantially similar to the Trust Directing Holder under the PSA with respect to the servicing and administration of the related Non-Serviced Whole Loan, including consenting to the substantial equivalent of Major Decisions under such Non-Serviced PSA proposed by the related Non-Serviced Special Servicer and reviewing and consenting to asset status reports prepared by such Non-Serviced Special Servicer in respect of the related Non-Serviced Whole Loan. “Major Decisions” under the related Non-Serviced PSA will differ in certain respects from those actions that constitute Major Decisions under the PSA, and therefore the specific types of servicer actions with respect to which the applicable Non-Serviced Directing Holder will be permitted to consent will correspondingly differ. The related Non-Serviced PSA also provides for the removal of the Non-Serviced Special Servicer by the related Non-Serviced Directing Holder under such Non-Serviced PSA under certain conditions that are similar to the conditions under which the Trust Directing Holder is permitted to replace the special servicers under the PSA. |
| ● | The termination events that will result in the termination of the related Non-Serviced Master Servicer or Non-Serviced Special Servicer are substantially similar to, but not identical to, the Servicer Termination Events under the PSA applicable to the master servicers and special servicers, as applicable. |
| ● | Servicing transfer events under the related Non-Serviced PSA that would cause the related Non-Serviced Whole Loan to become specially serviced will be substantially similar to, but not identical to, the corresponding provisions under the PSA. |
| ● | The servicing decisions which the related Non-Serviced Master Servicer will perform, and in certain cases for which the related Non-Serviced Master Servicer must obtain the related Non-Serviced Directing Holder’s or Non-Serviced Special Servicer’s consent, differ in certain respects from those decisions that constitute Major Decisions under the PSA. |
| ● | The
related Non-Serviced Special Servicer is required to take actions with respect to the
related Non-Serviced Whole Loan if it becomes the equivalent of a defaulted mortgage
loan, which actions are substantially similar, but not necessarily identical, to the
actions described under “—Sale of Defaulted Loans and REO Properties”. |
| ● | Appraisal reduction amounts in respect of the related Non-Serviced Mortgage Loan will be calculated by the related Non-Serviced Special Servicer under the related Non-Serviced PSA in a manner substantially similar to, but not necessarily identical to, calculations of such amounts by the special servicer under the PSA in respect of Serviced Mortgage Loans; except that, in the case of the Non-Serviced PSA for the 601 Lexington Avenue Whole Loan, the related Non-Serviced PSA does not contain an express exception in the definition of “Appraisal Reduction Event” (or equivalent term) for the entering into of any temporary forbearance agreement (such as a Payment Accommodation) as a result of the COVID-19 emergency. |
| ● | With respect to the 601 Lexington Avenue Whole Loan, the related Non-Serviced PSA does not contain an express exception to any servicing transfer events for the entering into of any temporary forbearance agreement (such as a Payment Accommodation) as a result of the COVID-19 emergency. |
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| ● | The requirement of the related Non-Serviced Master Servicer to make compensating interest payments in respect of the related Non-Serviced Mortgage Loan is similar, but not necessarily identical, to the requirement of the master servicer to make Compensating Interest Payments in respect of the Serviced Mortgage Loans under the PSA; except that, in the case of the Non-Serviced PSA for the 601 Lexington Avenue Whole Loan, the related Non-Serviced PSA does not provide for compensating interest payments. |
| ● | The servicing provisions under the related Non-Serviced PSA relating to performing inspections and collecting operating information are substantially similar but not necessarily identical to those of the PSA. |
| ● | While the special servicers under the PSA and the Non-Serviced Special Servicer under the related Non-Serviced PSA must each resign as special servicer with respect to a mortgage loan if it becomes affiliated with the related borrower under such mortgage loan, the particular types of affiliations that trigger such resignation obligation, as well as the parties that are entitled to appoint a successor special servicer, may differ as between the PSA and the related Non-Serviced PSA. |
| ● | The parties to the related Non-Serviced PSA (and their related directors, officers and other agents) will be entitled to reimbursement and/or indemnification for losses, liabilities, costs and expenses associated with the servicing of the related Non-Serviced Whole Loan under such Non-Serviced PSA to the same extent that parties to the PSA performing similar functions (and their related directors, officers and other agents) are entitled to reimbursement and/or indemnification for losses, liabilities, costs and expenses associated with their obligations under the PSA. The Trust, as holder of the related Non-Serviced Mortgage Loan, will be responsible for its pro rata share of any such indemnification amounts (including out of general collections on the Benchmark 2022-B34 mortgage pool, if necessary). |
| ● | The matters as to which notice or rating agency confirmation with respect to the rating agencies under the related Non-Serviced PSA are required are similar, but not identical to, similar matters with respect to the Rating Agencies under the PSA (and such agreements differ as to whether it is notice or rating agency confirmation that is required). |
| ● | With respect to non-specially serviced mortgage loans, the related Non-Serviced PSA may differ with respect to whether the related Non-Serviced Master Servicer or related Non-Serviced Special Servicer will be responsible for conducting or managing certain litigation related to such mortgage loans. |
| ● | Each of the related Non-Serviced Master Servicer and related Non-Serviced Special Servicer will be liable in accordance with the related Non-Serviced PSA only to the extent of its obligations specifically imposed by that agreement. Accordingly, in general, each of the related Non-Serviced Master Servicer and related Non-Serviced Special Servicer will not be liable for any action taken, or for refraining from the taking of any action, in good faith pursuant to the related Non-Serviced PSA or for errors in judgment; provided that neither such party will be protected against any breach of representations or warranties made by it in the related Non-Serviced PSA or against any liability which would otherwise be imposed by reason of willful misconduct, bad faith or negligence in the performance of duties or by reason of negligent disregard of obligations and duties under the related Non-Serviced PSA. |
| ● | With respect to the 601 Lexington Avenue Whole Loan, there is no operating advisor under the related Non-Serviced PSA. |
| ● | With respect to the 601 Lexington Avenue Whole Loan, there is no (i) asset representations reviewer under the related Non-Serviced PSA and (ii) certificateholder-directed dispute resolution procedures similar to those described under “—Dispute Resolution Provisions” with respect to the Companion Loan(s) securitized under the related Non-Serviced PSAs. The provisions of the |
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related Non-Serviced PSA will also vary from the PSA with respect to one or more of the following: timing, control or consultation triggers or thresholds, terminology, allocation of ministerial duties between multiple servicers or other service providers or certificateholder or investor voting or consent thresholds, master servicer and special servicer termination events, rating requirements for accounts and permitted investments, eligibility requirements applicable to servicers and other service providers, and the circumstances under which approvals, consents, consultation, notices or rating agency confirmations may be required.
The master servicer, the special servicer, the certificate administrator and the trustee under the PSA have no obligation or authority to (a) supervise any related Non-Serviced Master Servicer, Non-Serviced Special Servicer, Non-Serviced Certificate Administrator or Non-Serviced Trustee or (b) make servicing advances with respect to any Non-Serviced Whole Loan. The obligation of the master servicer to provide information and collections and make P&I Advances to the certificate administrator for the benefit of the Certificateholders with respect to each Non-Serviced Mortgage Loan is dependent on its receipt of the corresponding information and/or collections from the applicable Non-Serviced Master Servicer or Non-Serviced Special Servicer.
Prospective investors are encouraged to review the full provisions of each of the Non-Serviced PSAs, which are or will be available online at www.sec.gov or by requesting copies from the underwriters.
Servicing of the 601 Lexington Avenue Mortgage Loan
The 601 Lexington Avenue Mortgage Loan is being serviced pursuant to the BXP 2021-601L TSA. The servicing terms of the BXP 2021-601L TSA are similar in all material respects to the servicing terms of the PSA applicable to the Serviced Whole Loans; however, the servicing arrangements under such agreements may differ in certain respects, including as set forth above under “—General” and the following:
| ● | The 601 Lexington Avenue Servicer will earn a servicing fee with respect to the 601 Lexington Avenue Mortgage Loan that is to be calculated at 0.0050% per annum. |
| ● | Upon the 601 Lexington Avenue Whole Loan becoming a specially serviced loan under the BXP 2021-601L TSA, the 601 Lexington Avenue Special Servicer will earn a special servicing fee payable monthly with respect to the 601 Lexington Avenue Whole Loan accruing at a rate equal to 0.15% per annum, until such time as the 601 Lexington Avenue Whole Loan is no longer specially serviced. The special servicing fee is not subject to any cap or minimum fee. |
| ● | The 601 Lexington Avenue Special Servicer is entitled to a workout fee equal to 0.25% of each payment of principal and interest (other than default interest) made by the related borrower after any workout of the 601 Lexington Avenue Whole Loan. The workout fee is not subject to any cap or minimum fee. |
| ● | The 601 Lexington Avenue Special Servicer is entitled to a liquidation fee equal to 0.25% of net liquidation proceeds received in connection with the liquidation of the 601 Lexington Avenue Whole Loan or the related Mortgaged Property. The liquidation fee is not subject to any cap or minimum fee. |
| ● | The BXP 2021-601L TSA does not provide for any asset representations review procedures or for any dispute resolution procedures similar to those described under “—Dispute Resolution Provisions”. There will be no asset representations reviewer (or equivalent party) with respect to the securitization trust created pursuant to BXP 2021-601L TSA. |
| ● | The BXP 2021-601L TSA does not require the 601 Lexington Avenue Servicer to make the equivalent of compensating interest payments in respect of the 601 Lexington Avenue Whole Loan. |
| ● | The BXP 2021-601L TSA does not provide for any operating advisor or similar entity. |
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| ● | While the BXP 2021-601L TSA does provide for a directing certificateholder that has consent and consultation rights with respect to the 601 Lexington Avenue Whole Loan similar to those held by the Directing Holder under the terms of the PSA, but no such directing certificateholder has been appointed as of the date hereof. |
Prospective investors are encouraged to review the full provisions of the BXP 2021-601L TSA, which is available by requesting a copy from the underwriters.
See also “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced AB Whole Loans—The 601 Lexington Avenue Whole Loan”.
See also “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced AB Whole Loans—601 Lexington Avenue Whole Loan”.
Servicing of the Servicing Shift Mortgage Loans
The servicing of each Servicing Shift Whole Loan is expected to be governed by the PSA only temporarily, until the related Servicing Shift Securitization Date. From and after the related Servicing Shift Securitization Date, such related Servicing Shift Whole Loan will be serviced by the master servicer and special servicer under the related Servicing Shift PSA pursuant to the terms of the Servicing Shift PSA. Although each related Intercreditor Agreement imposes some requirements regarding the terms of the Servicing Shift PSA (and it is expected that the related Servicing Shift PSAs will contain servicing provisions similar to, but not identical with, the provisions of the PSA), the securitization to which the related Controlling Companion Loan is to be contributed has not been determined, and accordingly, the servicing terms of the related Servicing Shift PSAs are unknown. See “Risk Factors—The Servicing of the Servicing Shift Whole Loans Will Shift to Other Servicers” and “Description of the Mortgage Pool—The Whole Loans—The Serviced Pari Passu Whole Loans” and “—The Non-Serviced Pari Passu Whole Loans”.
Rating Agency Confirmations
The PSA will provide that, notwithstanding the terms of the related Mortgage Loan documents or other provisions of the PSA, if any action under such Mortgage Loan documents or the PSA requires a Rating Agency Confirmation from each of the Rating Agencies as a condition precedent to such action, if the party (the “Requesting Party”) attempting and/or required to obtain such Rating Agency Confirmations has made a request to any Rating Agency for such Rating Agency Confirmation and, within 10 business days of such request being posted to the 17g-5 Information Provider’s website, such Rating Agency has not replied to such request or has responded in a manner that indicates that such Rating Agency is neither reviewing such request nor waiving the requirement for Rating Agency Confirmation, then such Requesting Party will be required to confirm (through direct communication and not by posting any confirmation on the 17g-5 Information Provider’s website) that the applicable Rating Agency has received the Rating Agency Confirmation request, and, if it has not, promptly request the related Rating Agency Confirmation again (which may also be through direct communication). The circumstances described in the preceding sentence are referred to in this prospectus as a “RAC No-Response Scenario”.
If there is no response to either such Rating Agency Confirmation request within 5 business days of such second request in a RAC No-Response Scenario or if such Rating Agency has responded in a manner that indicates such Rating Agency is neither reviewing such request nor waiving the requirement for Rating Agency Confirmation, then (x) with respect to any condition in any Mortgage Loan document requiring such Rating Agency Confirmation, or with respect to any other matter under the PSA relating to the servicing of the Mortgage Loans (other than as set forth in clause (y) below), the requirement to obtain a Rating Agency Confirmation will be deemed not to apply (as if such requirement did not exist) with respect to such Rating Agency, and the master servicer or the special servicer, as the case may be, may then take such action if the master servicer or the special servicer, as applicable, confirms its original determination (made prior to making such request) that taking the action with respect to which it requested the Rating Agency Confirmation would still be consistent with the Servicing Standard, and
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(y) with respect to a replacement of the master servicer or special servicer, such condition will be deemed not to apply (as if such requirement did not exist) if (i) the applicable replacement master servicer or special servicer is rated at least “CMS3” (in the case of the master servicer) or “CSS3” (in the case of the special servicer), if Fitch is the non-responding Rating Agency, (ii) the applicable replacement master servicer or special servicer is on S&P’s Select Servicer List as a U.S. Commercial Mortgage Master Servicer or U.S. Commercial Mortgage Special Servicer, as applicable, if S&P is the non-responding Rating Agency or (iii) DBRS Morningstar has not cited servicing concerns of the applicable replacement master servicer or special servicer as the sole or a material factor in any qualification, downgrade or withdrawal of the ratings (or placement on “watch status” in contemplation of a ratings downgrade or withdrawal) of securities in any other commercial mortgage-backed securitization transaction serviced by the master servicer or special servicer prior to the time of determination, if DBRS Morningstar is the non-responding Rating Agency. Promptly following the master servicer’s or special servicer’s determination to take any action discussed above following any requirement to obtain Rating Agency Confirmation being deemed not to apply (as if such requirement did not exist) as described in clause (x) above, the master servicer or special servicer will be required to provide electronic written notice to the 17g-5 Information Provider, who will promptly post such notice to the 17g-5 Information Provider’s website pursuant to the PSA, of the action taken.
For all other matters or actions not specifically discussed above, the applicable Requesting Party will be required to obtain a Rating Agency Confirmation from each of the Rating Agencies. In the event an action otherwise requires a Rating Agency Confirmation from each of the Rating Agencies, in absence of such Rating Agency Confirmation, we cannot assure you that any Rating Agency will not downgrade, qualify or withdraw its ratings as a result of any such action taken by the master servicer or the special servicer in accordance with the procedures discussed above.
As used above, “Rating Agency Confirmation” means, with respect to any matter, confirmation in writing (which may be in electronic form) by each applicable Rating Agency that a proposed action, failure to act or other event specified in this prospectus will not in and of itself result in the downgrade, withdrawal or qualification of the then-current rating assigned to any class of certificates (if then rated by the Rating Agency); provided that a written waiver or acknowledgment from the Rating Agency indicating its decision not to review the matter for which the Rating Agency Confirmation is sought will be deemed to satisfy the requirement for the Rating Agency Confirmation from the Rating Agency with respect to such matter. The “Rating Agencies” mean each of S&P Global Ratings, acting through Standard & Poor’s Financial Services LLC (“S&P”), Fitch Ratings, Inc. (“Fitch”) and DBRS, Inc. (“DBRS Morningstar”).
Any Rating Agency Confirmation requests made by the master servicer, special servicer, certificate administrator, or trustee, as applicable, pursuant to the PSA, will be required to be made in writing, which writing must contain a cover page indicating the nature of the Rating Agency Confirmation request, and must contain all back-up material necessary for the Rating Agency to process such request. Such written Rating Agency Confirmation requests must be provided in electronic format to the 17g-5 Information Provider (who will be required to post such request on the 17g-5 Information Provider’s website in accordance with the PSA).
The master servicer, the special servicer, the certificate administrator and the trustee will be permitted (but not obligated) to orally communicate with the Rating Agencies regarding any of the Mortgage Loan documents or any matter related to the Mortgage Loans, the related Mortgaged Properties, the related borrowers or any other matters relating to the PSA or any related Intercreditor Agreement; provided that such party summarizes the information provided to the Rating Agencies in such communication in writing and provides the 17g-5 Information Provider with such written summary the same day such communication takes place; provided, further, that the summary of such oral communications will not identify with which Rating Agency the communication was. The 17g-5 Information Provider will be required to post such written summary on the 17g-5 Information Provider’s website in accordance with the provisions of the PSA. All other information required to be delivered to the Rating Agencies pursuant to the PSA or requested by the Rating Agencies, will first be provided in electronic format to the 17g-5 Information Provider, who will be required to post such information to the 17g-5 Information Provider’s website in accordance with the PSA, and thereafter may be delivered by the applicable party to the
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Rating Agencies in accordance with the delivery instructions set forth in the PSA. The operating advisor will have no obligation or authority to communicate directly with the Rating Agencies, but may deliver required information to the Rating Agencies to the extent set forth in this prospectus.
The PSA will provide that the PSA may be amended to change the procedures regarding compliance with Rule 17g-5 without any Certificateholder consent; provided that notice of any such amendment must be provided to the 17g-5 Information Provider (who will post such notice to the 17g-5 Information Provider’s website) and to the certificate administrator (which will post such report to the certificate administrator’s website).
To the extent required under the PSA, in the event a rating agency confirmation is required by the applicable rating agencies that any action under any Mortgage Loan documents or the PSA will not result in the downgrade, withdrawal or qualification of any such rating agency’s then-current ratings of any securities related to a Companion Loan, then such rating agency confirmation may be considered satisfied in the same manner as described above with respect to any Rating Agency Confirmation from a Rating Agency. With respect to any matter affecting any Pari Passu Companion Loan, any Rating Agency Confirmation will also refer to a comparable confirmation from the nationally recognized statistical rating organizations then rating the securities representing an interest in such Pari Passu Companion Loan and such rating organizations’ respective ratings of such securities.
Evidence as to Compliance
Each of the master servicer, the special servicer (regardless of whether the special servicer has commenced special servicing of a Mortgage Loan), the custodian, the trustee (only if an advance was made by the trustee in the applicable calendar year) and the certificate administrator will be required to furnish (and each such party will be required, with respect to each servicing function participant with which it has entered into a servicing relationship with respect to the Mortgage Loans, to cause (or, in the case of a sub-servicer that is a servicing function participant that a mortgage loan seller requires the master servicer to retain, to use commercially reasonable efforts to cause) such servicing function participant to furnish) to the depositor, the certificate administrator, the trustee and the 17g-5 Information Provider, an officer’s certificate of the officer responsible for the servicing activities of such party stating, among other things, that (i) a review of that party’s activities during the preceding calendar year or portion of that year and of performance under the PSA or any sub-servicing agreement in the case of an additional master servicer or special servicer, as applicable, has been made under such officer’s supervision and (ii) to the best of such officer’s knowledge, based on the review, such party has fulfilled all of its obligations under the PSA or the sub-servicing agreement in the case of an additional master servicer or special servicer, as applicable, in all material respects throughout the preceding calendar year or portion of such year, or, if there has been a failure to fulfill any such obligation in any material respect, specifying each such failure known to such officer and the nature and status of the failure.
In addition, each of the master servicer, the special servicer (regardless of whether the special servicer has commenced special servicing of any Mortgage Loan), the trustee (only if an advance was made by the trustee in the applicable calendar year), the custodian, the certificate administrator and the operating advisor, each at its own expense, will be required to furnish (and each such party will be required, with respect to each servicing function participant with which it has entered into a servicing relationship with respect to the Mortgage Loans, to cause (or, in the case of a sub-servicer that is a servicing function participant that a mortgage loan seller requires the master servicer to retain, to use commercially reasonable efforts to cause) such servicing function participant to furnish) to the trustee, the certificate administrator, the 17g-5 Information Provider and the depositor (and, with respect to the special servicer, also to the operating advisor) a report (an “Assessment of Compliance”) assessing compliance by that party with the servicing criteria set forth in Item 1122(d) of Regulation AB (as described below) under the Securities Act of 1933, as amended (the “Securities Act”) that contains the following:
| ● | a statement of the party’s responsibility for assessing compliance with the servicing criteria set forth in Item 1122 of Regulation AB applicable to it; |
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| ● | a statement that the party used the criteria in Item 1122(d) of Regulation AB to assess compliance with the applicable servicing criteria; |
| ● | the party’s assessment of compliance with the applicable servicing criteria during and as of the end of the fiscal year, covered by the Form 10-K required to be filed pursuant to the PSA setting forth any material instance of noncompliance identified by the party, a discussion of each such failure and the nature and status of such failure; and |
| ● | a statement that a registered public accounting firm has issued an attestation report (an “Attestation Report”) on the party’s assessment of compliance with the applicable servicing criteria during and as of the end of the prior fiscal year. |
Each party that is required to deliver an Assessment of Compliance will also be required to simultaneously deliver an Attestation Report of a registered public accounting firm, prepared in accordance with the standards for attestation engagements issued or adopted by the public company accounting oversight board, that expresses an opinion, or states that an opinion cannot be expressed (and the reasons for this), concerning the party’s assessment of compliance with the applicable servicing criteria set forth in Item 1122(d) of Regulation AB.
With respect to any Non-Serviced Whole Loan, each of the Non-Serviced Master Servicer, the Non-Serviced Special Servicer, the Non-Serviced Trustee and the Non-Serviced Certificate Administrator will have obligations under the related Non-Serviced PSA similar to those described above.
“Regulation AB” means subpart 229.1100 – Asset Backed Securities (Regulation AB), 17 C.F.R. §§ 229.1100–229.1125, as such may be amended from time to time, and subject to such clarification and interpretation as have been provided by the SEC or by the staff of the SEC, or as may be provided by the SEC or its staff from time to time.
Limitation on Rights of Certificateholders to Institute a Proceeding
Other than with respect to any rights to deliver a Certificateholder Repurchase Request and exercise the rights described under “—Dispute Resolution Provisions”, no Certificateholder will have any right under the PSA to institute any proceeding with respect to the PSA or with respect to the certificates, unless the holder previously has given to the trustee and the certificate administrator written notice of default and the continuance of the default and unless the holders of certificates of any class evidencing not less than 25% of the aggregate percentage interests constituting the class have made written request upon the trustee to institute a proceeding in its own name (as trustee) and have offered to the trustee reasonable indemnity satisfactory to it, and the trustee for 60 days after receipt of the request and indemnity has neglected or refused to institute the proceeding. However, the trustee will be under no obligation to exercise any of the trusts or powers vested in it by the PSA, the certificates or to institute, conduct or defend any related litigation at the request, order or direction of any of the Certificateholders, unless the Certificateholders have offered to the trustee reasonable security or indemnity against the costs, expenses and liabilities that may be incurred as a result.
It is understood and intended, and expressly covenanted by each Certificateholder with every other Certificateholder and the trustee, that no one or more Certificateholders will have any right in any manner whatsoever by virtue of any provision of the PSA or the certificates to affect, disturb or prejudice the rights of the holders of any other of such certificates, or to obtain or seek to obtain priority over or preference to any other such Certificateholder, which priority or preference is not otherwise provided for in the PSA, or to enforce any right under the PSA or the certificates, except in the manner provided in the PSA or the certificates and for the equal, ratable and common benefit of all Certificateholders.
Termination; Retirement of Certificates
The obligations created by the PSA will terminate upon payment (or provision for payment) to all Certificateholders of all amounts held by the certificate administrator on behalf of the trustee and required to be paid on the Distribution Date following the earlier of (1) the final payment (or related Advance) or
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other liquidation of the last Mortgage Loan and REO Property (as applicable) subject to the PSA, (2) the voluntary exchange of all the then-outstanding Certificates (other than the Class S and Class R certificates) for the Mortgage Loans and REO Properties remaining in the issuing entity, as described below or (3) the purchase or other liquidation of all of the assets of the issuing entity as described below by the holders of the Controlling Class, the special servicer, or the master servicer, in that order of priority. Written notice of termination of the PSA will be given by the certificate administrator to each Certificateholder, the Directing Holder and the 17g-5 Information Provider (who will promptly post such notice to the 17g-5 Information Provider’s website). The final distribution will be made only upon surrender and cancellation of the certificates at the office of the certificate registrar or other location specified in the notice of termination.
Any holder of certificates owning a majority of the percentage interest of the then Controlling Class, and, if such holder does not exercise its option, the special servicer and, if the special servicer does not exercise its option, the master servicer, will have the option to purchase all of the Mortgage Loans and all property acquired in respect of any Mortgage Loan remaining in the issuing entity, and thereby effect termination of the issuing entity and early retirement of the then-outstanding certificates, on any Distribution Date on which the aggregate Stated Principal Balance of the Mortgage Loans remaining in the issuing entity is less than 1% of the Initial Pool Balance of all of the Mortgage Loans as of the Cut-off Date (solely for the purposes of this calculation, if an ARD Loan is still an asset of the issuing entity and such right is being exercised after its respective Anticipated Repayment Date, then such Mortgage Loan will be excluded from the then-aggregate Stated Principal Balance of the pool of Mortgage Loans and from the Initial Pool Balance). Any such party may be an affiliate of the sponsor, depositor, issuing entity or other related party at the time it exercises such right. The purchase price payable upon the exercise of such option on such a Distribution Date will be an amount equal to the sum of, without duplication, (A) 100% of the outstanding principal balance of each Mortgage Loan included in the issuing entity as of the last day of the month preceding such Distribution Date (less any P&I Advances previously made on account of principal); (B) the fair market value of all other property included in the issuing entity as of the last day of the month preceding such Distribution Date, as determined by an independent appraiser as of a date not more than 30 days prior to the last day of the month preceding such Distribution Date; (C) all unpaid interest accrued on the outstanding principal balance of each Mortgage Loan (including any Mortgage Loan as to which title to the related Mortgaged Property has been acquired) at the Mortgage Rate to the last day of the month preceding such Distribution Date (less any P&I Advances previously made on account of interest); and (D) unreimbursed Advances (with interest thereon), unpaid Servicing Fees and other servicing compensation, Certificate Administrator/Trustee Fees, CREFC® Intellectual Property Royalty License Fees, Operating Advisor Fees, and unpaid expenses of and indemnity amounts owed by the issuing entity. The issuing entity may also be terminated in connection with an exchange by the Sole Certificateholder of all the then-outstanding certificates (excluding the Class R certificates) (provided that the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4, Class A-5, Class A-M, Class B, Class C, Class D and Class E certificates are no longer outstanding) if the Sole Certificateholder compensates the certificate administrator for the amount of investment income the certificate administrator would have earned if the outstanding Certificate Balance of the then-outstanding certificates (other than the Class X Certificates, Class S certificates and Class R certificates) were on deposit with the certificate administrator as of the first day of the current calendar month and the Sole Certificateholder pays to the master servicer an amount equal to (i) the product of (a) the prime rate, (b) the aggregate Certificate Balance of the then-outstanding certificates (other than the Class X Certificates, Class S certificates and Class R certificates) as of the date of the exchange and (c) three, divided by (ii) 360, for the Mortgage Loans and any REO Properties remaining in the issuing entity; provided, further, that if the Sole Certificateholder has taken only an assignment of the Voting Rights of the Class X Certificates, the holders of the Class X Certificates will be entitled to receive a cash payment in consideration for an exchange of their certificates. Following such termination, no further amount will be payable on the certificates, regardless of whether any recoveries are received on the REO Properties. Notice of any such termination is required to be given promptly by the certificate administrator by mail to the Certificateholders with a copy to the master servicer, the special servicer, the operating advisor, the mortgage loan sellers, the trustee and the 17g-5 Information Provider (who will promptly post such notice to the 17g-5 Information Provider’s website). Notice to the Certificateholders will be given at their addresses shown in the certificate registrar not more than 30 days, and not less than ten days, prior to
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the anticipated termination date. With respect to any book-entry certificates, such notice will be mailed to DTC and beneficial owners of certificates will be notified to the extent provided in the procedures of DTC and its participants.
On the applicable Distribution Date, the aggregate amount paid by the holders of the Controlling Class, the special servicer, the master servicer or the holders of the Class R certificates, as the case may be, for the Mortgage Loans and other applicable assets in the issuing entity, together with all other amounts on deposit in the Collection Account and not otherwise payable to a person other than the Certificateholders, will be applied generally as described above under “Description of the Certificates—Distributions—Priority of Distributions”.
| Amendment |
The PSA may be amended by the parties to the PSA, without the consent of any of the Certificateholders or holders of any Companion Loan:
(a) to correct any defect or ambiguity in the PSA or in order to address any manifest error in any provision of the PSA;
(b) to cause the provisions in the PSA to conform or be consistent with or in furtherance of the statements made in this prospectus (or in an offering document for any related non-offered certificates) with respect to the certificates, the issuing entity or the PSA or to correct or supplement any of its provisions which may be defective or inconsistent with any other provisions in the PSA or to correct any error;
(c) to change the timing and/or nature of deposits in the Collection Account, the Distribution Accounts or any REO Account, provided that (A) the Master Servicer Remittance Date will in no event be later than the business day prior to the related Distribution Date and (B) the change would not adversely affect in any material respect the interests of any Certificateholder, as evidenced in writing by an opinion of counsel at the expense of the party requesting such amendment or as evidenced by a Rating Agency Confirmation from each of the Rating Agencies with respect to such amendment;
(d) to modify, eliminate or add to any of its provisions to the extent as will be necessary to maintain the qualification of any Trust REMIC as a REMIC or the Grantor Trust as a grantor trust under the relevant provisions of the Code at all times that any certificate is outstanding, or to avoid or minimize the risk of imposition of any tax on the issuing entity or any Trust REMIC or the Grantor Trust that would be a claim against the issuing entity or any Trust REMIC or the Grantor Trust; provided that the trustee and the certificate administrator have received an opinion of counsel (at the expense of the party requesting the amendment) to the effect that (1) the action is necessary or desirable to maintain such qualification or to avoid or minimize the risk of imposition of any such tax and (2) the action will not adversely affect in any material respect the interests of any Certificateholder or holder of a Companion Loan;
(e) to modify, eliminate or add to any of its provisions to restrict (or to remove any existing restrictions with respect to) the transfer of the Residual Certificates; provided that the depositor has determined that the amendment will not, as evidenced by an opinion of counsel, cause the issuing entity, any Trust REMIC or any of the Certificateholders (other than the transferor) to be subject to a federal tax caused by a transfer to a person that is a “disqualified organization” or a Non-U.S. Person;
(f) to revise or add any other provisions with respect to matters or questions arising under the PSA or any other change, provided that the required action will not adversely affect in any material respect the interests of any Certificateholder or any holder of a Pari Passu Companion Loan not consenting to such revision or addition, as evidenced in writing by an opinion of counsel at the expense of the party requesting such amendment or as evidenced by a Rating Agency Confirmation from each of the Rating Agencies with respect to such amendment or supplement and confirmation of the applicable rating agencies that such action will not result in the downgrade, withdrawal or qualification of its then-current ratings of any securities related to a Companion Loan, if any (provided
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that such rating agency confirmation may be considered satisfied in the same manner as any Rating Agency Confirmation may be considered satisfied with respect to the certificates as described in this prospectus);
(g) to amend or supplement any provision of the PSA to the extent necessary to maintain the then-current ratings assigned to each class of Offered Certificates by each Rating Agency, as evidenced by a Rating Agency Confirmation from each of the Rating Agencies and confirmation of the applicable rating agencies that such action will not result in the downgrade, withdrawal or qualification of its then-current ratings of any securities related to a Companion Loan, if any (provided that such rating agency confirmation may be considered satisfied in the same manner as any Rating Agency Confirmation may be considered satisfied with respect to the certificates as described in this prospectus); provided that such amendment or supplement would not adversely affect in any material respect the interests of any Certificateholder not consenting to such amendment or supplement, as evidenced by an opinion of counsel;
(h) to modify the provisions of the PSA with respect to reimbursement of Nonrecoverable Advances and Workout-Delayed Reimbursement Amounts if (a) the depositor, the master servicer, the trustee and, for so long as no Control Termination Event is continuing, the Directing Holder, determine that the commercial mortgage-backed securities industry standard for such provisions has changed, in order to conform to such industry standard, (b) such modification does not adversely affect the status of any Trust REMIC as a REMIC or the status of the Grantor Trust as a grantor trust under the relevant provisions of the Code, as evidenced by an opinion of counsel and (c) a Rating Agency Confirmation and confirmation of the applicable rating agencies that such action will not result in the downgrade, withdrawal or qualification of its then-current ratings of any securities related to a Pari Passu Companion Loan, if any (provided that such rating agency confirmation may be considered satisfied in the same manner as any Rating Agency Confirmation may be considered satisfied with respect to the certificates as described in this prospectus);
(i) to modify the procedures set forth in the PSA relating to compliance with Rule 17g-5, provided that the change would not adversely affect in any material respect the interests of any Certificateholder, as evidenced by (A) an opinion of counsel or (B) if any certificate is then rated, receipt of Rating Agency Confirmation from each Rating Agency rating such certificates; and provided, further, that the certificate administrator must give notice of any such amendment to the 17g-5 Information Provider for posting on the 17g-5 Information Provider’s website and the certificate administration must post such notice to its website;
(j) to modify, eliminate or add to any provisions of the PSA to such extent as will be necessary to comply with the requirements for use of Form SF-3 in registered offerings to the extent provided in CFR 239.45(b)(1)(ii), (iii) or (iv); or
(k) to modify, eliminate or add to any of its provisions (i) to such extent as will be necessary to comply with the requirements of the Credit Risk Retention Rules, as evidenced by an opinion of counsel, or (ii) in the event the Credit Risk Retention Rules or any other regulations applicable to the risk retention requirements for this securitization transaction are amended or repealed, to the extent required to comply with any such amendment or to modify or eliminate the risk retention requirements in the event of such repeal, as evidenced by an opinion of counsel.
The PSA may also be amended by the parties to the PSA with the consent of the holders of certificates of each class affected by such amendment evidencing, in each case, a majority of the aggregate percentage interests constituting the class for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the PSA or of modifying in any manner the rights of the holders of the certificates, except that the amendment may not directly (1) reduce in any manner the amount of, or delay the timing of, payments received on the Mortgage Loans that are required to be distributed on a certificate of any class without the consent of the holder of such certificate or which are required to be distributed to a holder of a Companion Loan without the consent of such holder, (2) reduce the aforesaid percentage of certificates of any class the holders of which are required to consent to the amendment or remove the requirement to obtain consent of any holder of a Companion
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Loan, without the consent of the holders of all certificates of that class then-outstanding or such holder of the related Companion Loan, (3) adversely affect the Voting Rights of any class of certificates, without the consent of the holders of all certificates of that class then-outstanding, (4) change in any manner any defined term used in any MLPA or the obligations or rights of any mortgage loan seller under any MLPA without the consent of the applicable mortgage loan seller, or (5) amend the Servicing Standard without, in each case, the consent of 100% of the holders of certificates or a Rating Agency Confirmation by each Rating Agency and confirmation of the applicable rating agencies that such action will not result in the downgrade, withdrawal or qualification of its then-current ratings of any securities related to a Companion Loan, if any (provided that such rating agency confirmation may be considered satisfied in the same manner as any Rating Agency Confirmation may be considered satisfied with respect to the certificates as described in this prospectus).
Notwithstanding the foregoing, no amendment to the PSA may be made that changes in any manner the obligations of any mortgage loan seller under any MLPA or the rights of any mortgage loan seller, including as a third party beneficiary, under the PSA, without the consent of such mortgage loan seller. In addition, no amendment to the PSA may be made that changes any provisions specifically required to be included in the PSA by any Intercreditor Agreement without the consent of the holder(s) of the related Non-Serviced Companion Loan(s).
Also, notwithstanding the foregoing, no party will be required to consent to any amendment to the PSA without the trustee, the certificate administrator, the master servicer, the special servicer, the asset representations reviewer and the operating advisor having first received an opinion of counsel (at the issuing entity’s expense) to the effect that the amendment does not conflict with the terms of the PSA, and that the amendment or the exercise of any power granted to the master servicer, the special servicer, the depositor, the certificate administrator, the trustee, the operating advisor, the asset representations reviewer or any other specified person in accordance with the amendment will not result in the imposition of a tax on any portion of the issuing entity or cause any Trust REMIC to fail to qualify as a REMIC or cause the Grantor Trust to fail to qualify as a grantor trust under the relevant provisions of the Code.
Resignation and Removal of the Trustee and the Certificate Administrator
Each of the trustee and the certificate administrator will at all times be, and will be required to resign if it fails to: (i) be a corporation, national bank, national banking association or a trust company, organized and doing business under the laws of any state or the United States of America, (ii) be authorized under such laws to exercise corporate trust powers and to accept the trust conferred under the PSA, (iii) have a combined capital and surplus of at least $100,000,000, (iv) be subject to supervision or examination by federal or state authority and, in the case of the trustee, will not be an affiliate of the master servicer or the special servicer (except during any period when the trustee has assumed the duties of the master servicer or the special servicer, as the case may be), (v) be an entity that is not on the depositor’s “prohibited party” list, and (vi) in the case of the trustee, have a rating on its long-term senior unsecured debt of at least (x) “BBB” by S&P”, (y) “A” by Fitch (or short-term rating of “F1” by Fitch) and (z) “A” by DBRS Morningstar (or if not rated by DBRS Morningstar (and solely with respect to satisfying the requirements of this clause (z)), then at least an equivalent rating by two other NRSROs, which may include S&P and Fitch) or such other rating with respect to which the Rating Agencies have provided a Rating Agency Confirmation.
The trustee and the certificate administrator also will be permitted at any time to resign from their obligations and duties under the PSA by giving written notice (which notice will be posted to the certificate administrator’s website pursuant to the PSA) to the depositor, the master servicer, the special servicer, the trustee or the certificate administrator, as applicable, all Certificateholders, the operating advisor, the asset representations reviewer and the 17g-5 Information Provider (who will promptly post such notice to the 17g-5 Information Provider’s website). Upon receiving this notice of resignation, the depositor will be required to use its reasonable best efforts to promptly appoint a successor trustee or certificate administrator which, for so long as no Control Termination Event is continuing, is acceptable to the Directing Holder. If no successor trustee or certificate administrator has accepted an appointment within 30 days after the giving of notice of resignation, the resigning trustee or certificate administrator, as
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applicable, may petition any court of competent jurisdiction to appoint a successor trustee or certificate administrator, as applicable.
If at any time the trustee or certificate administrator ceases to be eligible to continue as trustee or certificate administrator, as applicable, under the PSA, and fails to resign after written request therefor by the depositor or the master servicer, or if at any time the trustee or certificate administrator becomes incapable of acting, or if certain events of, or proceedings in respect of, bankruptcy or insolvency occur with respect to the trustee or certificate administrator, or if the trustee or certificate administrator fails to timely publish any report to be delivered, published, or otherwise made available by the certificate administrator pursuant to the PSA, and such failure continues unremedied for a period of five (5) days, or if the certificate administrator fails to make distributions required pursuant to the PSA, the depositor will be authorized to remove the trustee or certificate administrator, as applicable, and appoint a successor trustee or certificate administrator acceptable to the master servicer.
In addition, holders of the certificates entitled to at least 50% of the Voting Rights may, with cause (at any time) or without cause (at any time with 30 days’ prior written notice), remove the trustee or certificate administrator under the PSA and appoint a successor trustee or certificate administrator. In the event that holders of the certificates entitled to at least 50% of the Voting Rights elect to remove the trustee or certificate administrator without cause and appoint a successor, the successor trustee or certificate administrator, as applicable, will be responsible for all expenses necessary to effect the transfer of responsibilities from its predecessor.
Any resignation or removal of the trustee or certificate administrator and appointment of a successor trustee or certificate administrator will not become effective until (i) acceptance of appointment by the successor trustee or certificate administrator, as applicable, and (ii) the certificate administrator files any required Form 8-K. Further, the resigning trustee or certificate administrator, as the case may be, must pay all costs and expenses associated with the transfer of its duties.
The PSA will prohibit the appointment of the asset representations reviewer or one of its affiliates as successor to the trustee or certificate administrator.
Governing Law; Waiver of Jury Trial; and Consent to Jurisdiction
The PSA will be governed by the laws of the State of New York. Each party to the PSA will waive its respective right to a jury trial for any claim or cause of action based upon or arising out of or related to the PSA or certificates. Additionally each party to the PSA will consent to the jurisdiction of any New York State and Federal courts sitting in New York City with respect to matters arising out of or related to the PSA.
CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS
The following discussion contains general summaries of certain legal aspects of mortgage loans secured by commercial and multifamily residential properties. Because such legal aspects are governed by applicable local law (which laws may differ substantially), the summaries do not purport to be complete, to reflect the laws of any particular jurisdiction, or to encompass the laws of all jurisdictions in which the security for the mortgage loans is situated.
| California |
Eight (8) Mortgaged Properties (31.3%) are located in California. Mortgage loans in California are generally secured by deeds of trust on the related real estate. Foreclosure of a deed of trust in California may be accomplished by a non-judicial trustee’s sale (so long as it is permitted under a specific provision in the deed of trust) or by judicial foreclosure, in each case subject to and accordance with the applicable procedures and requirements of California law. Public notice of either the trustee’s sale or the judgment of foreclosure is given for a statutory period of time after which the mortgaged real estate may be sold by the trustee, if foreclosed pursuant to the trustee’s power of sale, or by court appointed sheriff under a
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judicial foreclosure. Following a judicial foreclosure sale, the borrower or its successor-in-interest may, for a period of up to one year, redeem the property; however, there is no redemption following a trustee’s power of sale. California’s “security first” and “one action” rules require the lender to complete foreclosure of all real estate provided as security under the deed of trust in a single action in an attempt to satisfy the full debt before bringing a personal action (if otherwise permitted) against the borrower for recovery of the debt, except in certain cases involving environmentally impaired real property where foreclosure of the real property is not required before making a claim under the indemnity. This restriction may apply to property which is not located in California if a single promissory note is secured by property located in California and other jurisdictions. California case law has held that acts such as (but not limited to) an offset of an unpledged account constitute violations of such statutes. Violations of such statutes may result in the loss of some or all of the security under the mortgage loan and a loss of the ability to sue for the debt. A sale by the trustee under the deed of trust does not constitute an “action” for purposes of the “one action rule”. Other statutory provisions in California limit any deficiency judgment (if otherwise permitted) against the borrower following a judicial foreclosure to the amount by which the indebtedness exceeds the fair value at the time of the public sale and in no event greater than the difference between the foreclosure sale price and the amount of the indebtedness. Further, under California law, once a property has been sold pursuant to a power of sale clause contained in a deed of trust (and in the case of certain types of purchase money acquisition financings, under all circumstances), the lender is precluded from seeking a deficiency judgment from the borrower or, under certain circumstances, guarantors.
On the other hand, under certain circumstances, California law permits separate and even contemporaneous actions against both the borrower (as to the enforcement of the interests in the collateral securing the loan) and any guarantors. California statutory provisions regarding assignments of rents and leases require that a lender whose loan is secured by such an assignment must exercise a remedy with respect to rents as authorized by statute in order to establish its right to receive the rents after an event of default. Among the remedies authorized by statute is the lender’s right to have a receiver appointed under certain circumstances.
New York
Eleven (11) Mortgaged Properties (18.1%) are located in New York. Mortgage loans in New York are generally secured by mortgages on the related real estate. Foreclosure of a mortgage is usually accomplished in judicial proceedings. After an action for foreclosure is commenced, and if the lender secures a ruling that is entitled to foreclosure ordinarily by motion for summary judgment, the court then appoints a referee to compute the amount owed together with certain costs, expenses and legal fees of the action. The lender then moves to confirm the referee’s report and enter a final judgment of foreclosure and sale. Public notice of the foreclosure sale, including the amount of the judgment, is given for a statutory period of time, after which the mortgaged real estate is sold by a referee at public auction. There is no right of redemption after the foreclosure of sale. In certain circumstances, deficiency judgments may be obtained. Under mortgages containing a statutorily sanctioned covenant, the lender has a right to have a receiver appointed without notice and without regard to the adequacy of the mortgaged real estate as security for the amount owed.
| Michigan |
Sixteen (16) Mortgaged Properties (13.8%) are located in Michigan. A mortgage (with an assignment of rents), recorded in the office of the county Register of Deeds, is the standard real property security instrument in Michigan. Sometimes a separate assignment of leases and rents is also used. Under the Michigan Uniform Commercial Code a mortgage containing the appropriate language can be used for a fixture filing, but often a separate fixture filing financing statement is recorded as well. Mortgages often contain express future advance clauses to insure the priority of later advances, as well as a clause that provides for the use of a receiver in the event of “waste” as a result of failure to pay property taxes or insurance premiums. A Michigan mortgagee cannot expect to be able to exercise self-help and enter the property in the event of a default. Typically, the mortgage will obtain the mortgagor’s consent to a receiver in certain circumstances, but actually obtaining a receiver still requires court approval. Mortgages may be enforced by either judicial foreclosure or foreclosure by advertisement (the mortgage
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should contain a good power of sale clause), carried out as a sheriff’s sale after the requisite publication. The latter is much quicker -- perhaps 45 to 60 days to sale -- but a judicial foreclosure, requiring at least six months before the foreclosure sale, may be desirable in some circumstances. In both cases, there is a statutory redemption period, in most cases six months, following the foreclosure sale, in which the mortgagor and other persons with interests under the mortgagor may redeem the mortgaged property, and this can only be waived by the mortgagor for adequate contemporaneous consideration. An agreement for a deed-in-lieu of foreclosure is generally also enforceable provided there is adequate independent consideration at the time of the deed. A prior waiver of the redemption period set forth in the mortgage is difficult to enforce no matter how elaborately the lender’s counsel constructs the waiver language. Both before foreclosure and during the redemption period the assignment of rents can to be exercised in accordance with the procedural requirements of Michigan’s assignment of rents statute. Both foreclosure remedies allow for deficiencies to be established; however, without judicial authorization, a separate action on the debt cannot be maintained while foreclosure is pending.
| General |
Each mortgage loan will be evidenced by a promissory note and secured by an instrument granting a security interest in real property, which may be a mortgage, deed of trust or a deed to secure debt, depending upon the prevailing practice and law in the state in which the related Mortgaged Property is located. Mortgages, deeds of trust and deeds to secure debt are in this prospectus collectively referred to as “mortgages”. A mortgage creates a lien upon, or grants a title interest in, the real property covered thereby, and represents the security for the repayment of the indebtedness customarily evidenced by a promissory note. The priority of the lien created or interest granted will depend on the terms of the mortgage and, in some cases, on the terms of separate subordination agreements or intercreditor agreements with others that hold interests in the real property, the knowledge of the parties to the mortgage and, generally, the order of recordation of the mortgage in the appropriate public recording office. However, the lien of a recorded mortgage will generally be subordinate to later-arising liens for real estate taxes and assessments and other charges imposed under governmental police powers.
Types of Mortgage Instruments
There are two parties to a mortgage: a mortgagor (the borrower and usually the owner of the applicable property) and a mortgagee (the lender). In contrast, a deed of trust is a three-party instrument, among a trustor (the equivalent of a borrower), a trustee to whom the real property is conveyed, and a beneficiary (the lender) for whose benefit the conveyance is made. Under a deed of trust, the trustor grants the property, irrevocably until the debt is paid, in trust and generally with a power of sale, to the trustee to secure repayment of the indebtedness evidenced by the related note. A deed to secure debt typically has two parties, pursuant to which the borrower, or grantor, conveys title to the real property to the grantee, or lender generally with a power of sale, until such time as the debt is repaid. In a case where the borrower is a land trust, there would be an additional party because legal title to the property is held by a land trustee under a land trust agreement for the benefit of the borrower. At origination of a mortgage loan involving a land trust, the borrower may execute a separate undertaking to make payments on the promissory note. The land trustee would not be personally liable for the promissory note obligation. The mortgagee’s authority under a mortgage, the trustee’s authority under a deed of trust and the grantee’s authority under a deed to secure debt are governed by the express provisions of the related instrument, the law of the state in which the real property is located, certain federal laws and, in some deed of trust transactions, the directions of the beneficiary.
Leases and Rents
Mortgages that encumber income-producing property often contain an assignment of rents and leases, and/or may be accompanied by a separate assignment of rents and leases, pursuant to which the borrower assigns to the lender the borrower’s right, title and interest as landlord under each lease and the income derived from the lease, while (unless rents are to be paid directly to the lender) retaining a revocable license to collect the rents for so long as there is no default. If the borrower defaults, the license
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terminates and the lender is entitled to collect the rents. Local law may require that the lender take possession of the property and/or obtain a court-appointed receiver before becoming entitled to collect the rents.
In most states, hospitality property and motel room rates are considered accounts receivable under the Uniform Commercial Code (“UCC”). In cases where hospitality properties or motels constitute loan security, the revenues are generally pledged by the borrower as additional security for the loan. In general, the lender must file financing statements in order to perfect its security interest in the room revenues and must file continuation statements, generally every five years, to maintain perfection of such security interest. In certain cases, mortgage loans secured by hospitality properties or motels may be included in the issuing entity even if the security interest in the room revenues was not perfected. Even if the lender’s security interest in room revenues is perfected under applicable nonbankruptcy law, it will generally be required to commence a foreclosure action or otherwise take possession of the property in order to enforce its rights to collect the room revenues following a default. In the bankruptcy setting, however, the lender will be stayed from enforcing its rights to collect room revenues, but those room revenues constitute “cash collateral” and therefore generally cannot be used by the bankruptcy debtor without a hearing or lender’s consent or unless the lender’s interest in the room revenues is given adequate protection (e.g., cash payment for otherwise encumbered funds or a replacement lien on unencumbered property, in either case in value equivalent to the amount of room revenues that the debtor proposes to use, or other similar relief). See “—Bankruptcy Laws” below.
| Personalty |
In the case of certain types of mortgaged properties, such as hospitality properties, motels, nursing homes and manufactured housing, personal property (to the extent owned by the borrower and not previously pledged) may constitute a significant portion of the property’s value as security. The creation and enforcement of liens on personal property are governed by the UCC. Accordingly, if a borrower pledges personal property as security for a mortgage loan, the lender generally must file UCC financing statements in order to perfect its security interest in that personal property, and must file continuation statements, generally every five years, to maintain that perfection. Certain mortgage loans secured in part by personal property may be included in the issuing entity even if the security interest in such personal property was not perfected.
| Foreclosure |
| General |
Foreclosure is a legal procedure that allows the lender to recover its mortgage debt by enforcing its rights and available legal remedies under the mortgage. If the borrower defaults in payment or performance of its obligations under the promissory note or mortgage, the lender has the right to institute foreclosure proceedings to sell the real property at public auction to satisfy the indebtedness.
Foreclosure Procedures Vary from State to State
Two primary methods of foreclosing a mortgage are judicial foreclosure, involving court proceedings, and nonjudicial foreclosure pursuant to a power of sale granted in the mortgage instrument. Other foreclosure procedures are available in some states, but they are either infrequently used or available only in limited circumstances.
A foreclosure action is subject to most of the delays and expenses of other lawsuits if defenses are raised or counterclaims are interposed, and sometimes requires several years to complete.
Judicial Foreclosure
A judicial foreclosure proceeding is conducted in a court having jurisdiction over the mortgaged property. Generally, the action is initiated by the service of legal pleadings upon all parties having a
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subordinate interest of record in the real property and all parties in possession of the property, under leases or otherwise, whose interests are subordinate to the mortgage. Delays in completion of the foreclosure may occasionally result from difficulties in locating defendants. When the lender’s right to foreclose is contested, the legal proceedings can be time-consuming. Upon successful completion of a judicial foreclosure proceeding, the court generally issues a judgment of foreclosure and appoints a referee or other officer to conduct a public sale of the mortgaged property, the proceeds of which are used to satisfy the judgment. Such sales are made in accordance with procedures that vary from state to state.
Equitable and Other Limitations on Enforceability of Certain Provisions
United States courts have traditionally imposed general equitable principles to limit the remedies available to lenders in foreclosure actions. These principles are generally designed to relieve borrowers from the effects of mortgage defaults perceived as harsh or unfair. Relying on such principles, a court may alter the specific terms of a loan to the extent it considers necessary to prevent or remedy an injustice, undue oppression or overreaching, or may require the lender to undertake affirmative actions to determine the cause of the borrower’s default and the likelihood that the borrower will be able to reinstate the loan. In some cases, courts have substituted their judgment for the lender’s and have required that lenders reinstate loans or recast payment schedules in order to accommodate borrowers who are suffering from a temporary financial disability. In other cases, courts have limited the right of the lender to foreclose in the case of a nonmonetary default, such as a failure to adequately maintain the mortgaged property or an impermissible further encumbrance of the mortgaged property. Finally, some courts have addressed the issue of whether federal or state constitutional provisions refiecting due process concerns for adequate notice require that a borrower receive notice in addition to statutorily-prescribed minimum notice. For the most part, these cases have upheld the reasonableness of the notice provisions or have found that a public sale under a mortgage providing for a power of sale does not involve sufficient state action to trigger constitutional protections.
In addition, some states may have statutory protection such as the right of the borrower to reinstate a mortgage loan after commencement of foreclosure proceedings but prior to a foreclosure sale.
Nonjudicial Foreclosure/Power of Sale
In states permitting nonjudicial foreclosure proceedings, foreclosure of a deed of trust is generally accomplished by a nonjudicial trustee’s sale pursuant to a power of sale typically granted in the deed of trust. A power of sale may also be contained in any other type of mortgage instrument if applicable law so permits. A power of sale under a deed of trust allows a nonjudicial public sale to be conducted generally following a request from the beneficiary/lender to the trustee to sell the property upon default by the borrower and after notice of sale is given in accordance with the terms of the deed of trust and applicable state law. In some states, prior to such sale, the trustee under the deed of trust must record a notice of default and notice of sale and send a copy to the borrower and to any other party who has recorded a request for a copy of a notice of default and notice of sale. In addition, in some states the trustee must provide notice to any other party having an interest of record in the real property, including junior lienholders. A notice of sale must be posted in a public place and, in most states, published for a specified period of time in one or more newspapers. The borrower or junior lienholder may then have the right, during a reinstatement period required in some states, to cure the default by paying the entire actual amount in arrears (without regard to the acceleration of the indebtedness), plus the lender’s expenses incurred in enforcing the obligation. In other states, the borrower or the junior lienholder is not provided a period to reinstate the loan, but has only the right to pay off the entire debt to prevent the foreclosure sale. Generally, state law governs the procedure for public sale, the parties entitled to notice, the method of giving notice and the applicable time periods.
Public Sale
A third party may be unwilling to purchase a mortgaged property at a public sale because of the difficulty in determining the exact status of title to the property (due to, among other things, redemption
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rights that may exist) and because of the possibility that physical deterioration of the mortgaged property may have occurred during the foreclosure proceedings. Potential buyers may also be reluctant to purchase mortgaged property at a foreclosure sale as a result of the 1980 decision of the United States Court of Appeals for the Fifth Circuit in Durrett v. Washington National Insurance Co., 621 F.2d 2001 (5th Cir. 1980) and other decisions that have followed its reasoning. The court in Durrett held that even a non-collusive, regularly conducted foreclosure sale was a fraudulent transfer under the federal bankruptcy code and, thus, could be rescinded in favor of the bankrupt’s estate, if (1) the foreclosure sale was held while the debtor was insolvent and not more than one year prior to the filing of the bankruptcy petition and (2) the price paid for the foreclosed property did not represent “fair consideration”, which is “reasonably equivalent value” under the federal bankruptcy code. Although the reasoning and result of Durrett in respect of the federal bankruptcy code was rejected by the United States Supreme Court in BFP v. Resolution Trust Corp., 511 U.S. 531 (1994), the case could nonetheless be persuasive to a court applying a state fraudulent conveyance law which has provisions similar to those construed in Durrett. Therefore, it is common for the lender to purchase the mortgaged property for an amount equal to the secured indebtedness and accrued and unpaid interest plus the expenses of foreclosure, in which event the borrower’s debt will be extinguished, or for a lesser amount in order to preserve its right to seek a deficiency judgment if such is available under state law and under the terms of the Mortgage Loan documents. Thereafter, subject to the borrower’s right in some states to remain in possession during a redemption period, the lender will become the owner of the property and have both the benefits and burdens of ownership, including the obligation to pay debt service on any senior mortgages, to pay taxes, to obtain casualty insurance and to make such repairs as are necessary to render the property suitable for sale. Frequently, the lender employs a third-party management company to manage and operate the property. The costs of operating and maintaining a property may be significant and may be greater than the income derived from that property. The costs of management and operation of those mortgaged properties which are hotels, motels, restaurants, nursing or convalescent homes, hospitals or casinos may be particularly significant because of the expertise, knowledge and, with respect to certain property types, regulatory compliance, required to run those operations and the effect which foreclosure and a change in ownership may have on the public’s and the industry’s, including franchisors’, perception of the quality of those operations. The lender also will commonly obtain the services of a real estate broker and pay the broker’s commission in connection with the sale or lease of the property. Depending upon market conditions, the ultimate proceeds of the sale of a property may not equal the lender’s investment in the property. Moreover, a lender commonly incurs substantial legal fees and court costs in acquiring a mortgaged property through contested foreclosure and/or bankruptcy proceedings. Because of the expenses associated with acquiring, owning and selling a mortgaged property, a lender could realize an overall loss on a mortgage loan even if the mortgaged property is sold at foreclosure, or resold after it is acquired through foreclosure, for an amount equal to the full outstanding principal amount of the loan plus accrued interest.
Furthermore, an increasing number of states require that any environmental contamination at certain types of properties be cleaned up before a property may be resold. In addition, a lender may be responsible under federal or state law for the cost of cleaning up a mortgaged property that is environmentally contaminated. See “—Environmental Considerations” below.
The holder of a junior mortgage that forecloses on a mortgaged property does so subject to senior mortgages and any other prior liens, and may be obliged to keep senior mortgage loans current in order to avoid foreclosure of its interest in the property. In addition, if the foreclosure of a junior mortgage triggers the enforcement of a “due-on-sale” clause contained in a senior mortgage, the junior mortgagee could be required to pay the full amount of the senior mortgage indebtedness or face foreclosure.
Rights of Redemption
The purposes of a foreclosure action are to enable the lender to realize upon its security and to bar the borrower, and all persons who have interests in the property that are subordinate to that of the foreclosing lender, from exercise of their “equity of redemption”. The doctrine of equity of redemption provides that, until the property encumbered by a mortgage has been sold in accordance with a properly conducted foreclosure and foreclosure sale, those having interests that are subordinate to that of the
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foreclosing lender have an equity of redemption and may redeem the property by paying the entire debt with interest. Those having an equity of redemption must generally be made parties to and joined in the foreclosure proceeding in order for their equity of redemption to be terminated.
The equity of redemption is a common-law (nonstatutory) right which should be distinguished from post-sale statutory rights of redemption. In some states, after sale pursuant to a deed of trust or foreclosure of a mortgage, the borrower and foreclosed junior lienors are given a statutory period in which to redeem the property. In some states, statutory redemption may occur only upon payment of the foreclosure sale price. In other states, redemption may be permitted if the former borrower pays only a portion of the sums due. The effect of a statutory right of redemption is to diminish the ability of the lender to sell the foreclosed property because the exercise of a right of redemption would defeat the title of any purchaser through a foreclosure. Consequently, the practical effect of the redemption right is to force the lender to maintain the property and pay the expenses of ownership until the redemption period has expired. In some states, a post-sale statutory right of redemption may exist following a judicial foreclosure, but not following a trustee’s sale under a deed of trust.
Anti-Deficiency Legislation
Some or all of the mortgage loans are non-recourse loans, as to which recourse in the case of default will be limited to the mortgaged property and such other assets, if any, that were pledged to secure the mortgage loan. However, even if a mortgage loan by its terms provides for recourse to the borrower’s other assets, a lender’s ability to realize upon those assets may be limited by state law. For example, in some states a lender cannot obtain a deficiency judgment against the borrower following foreclosure or sale under a deed of trust.
A deficiency judgment is a personal judgment against the former borrower equal to the difference between the net amount realized upon the public sale of the real property and the amount due to the lender. Other statutes may require the lender to exhaust the security afforded under a mortgage before bringing a personal action against the borrower. In certain other states, the lender has the option of bringing a personal action against the borrower on the debt without first exhausting that security; however, in some of those states, the lender, following judgment on that personal action, may be deemed to have elected a remedy and thus may be precluded from foreclosing upon the security. Consequently, lenders in those states where such an election of remedy provision exists will usually proceed first against the security. Finally, other statutory provisions, designed to protect borrowers from exposure to large deficiency judgments that might result from bidding at below-market values at the foreclosure sale, limit any deficiency judgment to the excess of the outstanding debt over the fair market value of the property at the time of the sale.
Leasehold Considerations
Mortgage loans may be secured by a mortgage on the borrower’s leasehold interest in a ground lease. Leasehold mortgage loans are subject to certain risks not associated with mortgage loans secured by a lien on the fee estate of the borrower. The most significant of these risks is that if the borrower’s leasehold were to be terminated upon a lease default, the leasehold mortgagee would lose its security. This risk may be lessened if the ground lease requires the lessor to give the leasehold mortgagee notices of lessee defaults and an opportunity to cure them, permits the leasehold estate to be assigned to and by the leasehold mortgagee or the purchaser at a foreclosure sale, and contains certain other protective provisions typically included in a “mortgageable” ground lease. Certain mortgage loans, however, may be secured by ground leases which do not contain these provisions.
In addition, where a lender has as its security both the fee and leasehold interest in the same property, the grant of a mortgage lien on its fee interest by the land owner/ground lessor to secure the debt of a borrower/ground lessee may be subject to challenge as a fraudulent conveyance. Among other things, a legal challenge to the granting of the liens may focus on the benefits realized by the land owner/ground lessor from the loan. If a court concluded that the granting of the mortgage lien was an avoidable fraudulent conveyance, it might take actions detrimental to the holders of the offered
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certificates, including, under certain circumstances, invalidating the mortgage lien on the fee interest of the land owner/ground lessor.
Cooperative Shares
Mortgage loans may be secured by a security interest on the borrower’s ownership interest in shares, and the related proprietary leases, allocable to cooperative dwelling units that may be vacant or occupied by non-owner tenants. Such loans are subject to certain risks not associated with mortgage loans secured by a lien on the fee estate of a borrower in real property. Such a loan typically is subordinate to the mortgage, if any, on the cooperative’s building which, if foreclosed, could extinguish the equity in the building and the proprietary leases of the dwelling units derived from ownership of the shares of the cooperative. Further, transfer of shares in a cooperative are subject to various regulations as well as to restrictions under the governing documents of the cooperative, and the shares may be cancelled in the event that associated maintenance charges due under the related proprietary leases are not paid. Typically, a recognition agreement between the lender and the cooperative provides, among other things, the lender with an opportunity to cure a default under a proprietary lease.
Under the laws applicable in many states, “foreclosure” on cooperative shares is accomplished by a sale in accordance with the provisions of Article 9 of the UCC and the security agreement relating to the shares. Article 9 of the UCC requires that a sale be conducted in a “commercially reasonable” manner, which may be dependent upon, among other things, the notice given the debtor and the method, manner, time, place and terms of the sale. Article 9 of the UCC provides that the proceeds of the sale will be applied first to pay the costs and expenses of the sale and then to satisfy the indebtedness secured by the lender’s security interest. A recognition agreement, however, generally provides that the lender’s right to reimbursement is subject to the right of the cooperative to receive sums due under the proprietary leases.
Bankruptcy Laws
Operation of the federal bankruptcy code and related state laws may interfere with or affect the ability of a lender to obtain payment of a loan, realize upon collateral and/or to enforce a deficiency judgment. For example, under the federal bankruptcy code, virtually all actions (including foreclosure actions and deficiency judgment proceedings) are automatically stayed upon the filing of the bankruptcy petition, and, usually, no interest or principal payments are made during the course of the bankruptcy case. The delay and the consequences of a delay caused by an automatic stay can be significant. For example, the filing of a petition in bankruptcy by or on behalf of a junior mortgage lien holder may stay the senior lender from taking action to foreclose out such junior lien. At a minimum, the senior lender would suffer delay due to its need to seek bankruptcy court approval before taking any foreclosure or other action that could be deemed in violation of the automatic stay under the federal bankruptcy code.
Under the federal bankruptcy code, a bankruptcy trustee, or a borrower as debtor-in-possession, may under certain circumstances sell the related mortgaged property or other collateral free and clear of all liens, claims, encumbrances and interests, which liens would then attach to the proceeds of such sale, despite the provisions of the related mortgage or other security agreement to the contrary. Such a sale may be approved by a bankruptcy court even if the proceeds are insufficient to pay the secured debt in full.
Under the federal bankruptcy code, provided certain substantive and procedural safeguards for a lender are met, the amount and terms of a mortgage or other security agreement secured by property of a debtor may be modified under certain circumstances. Pursuant to a confirmed plan of reorganization, lien avoidance or claim objection proceeding, the secured claim arising from a loan secured by real property or other collateral may be reduced to the then-current value of the property (with a corresponding partial reduction of the amount of lender’s security interest), thus leaving the lender a secured creditor to the extent of the then current value of the property and a general unsecured creditor for the difference between such value and the outstanding balance of the loan. Such general unsecured claims may be paid less than 100% of the amount of the debt or not at all, depending upon the circumstances. Other
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modifications may include the reduction in the amount of each scheduled payment, which reduction may result from a reduction in the rate of interest and/or the alteration of the repayment schedule (with or without affecting the unpaid principal balance of the loan), and/or an extension (or reduction) of the final maturity date. Some courts have approved bankruptcy plans, based on the particular facts of the reorganization case, that effected the curing of a mortgage loan default by paying arrearages over a number of years. Also, under the federal bankruptcy code, a bankruptcy court may permit a debtor through its plan of reorganization to reinstate the loan even though the lender accelerated the mortgage loan and final judgment of foreclosure had been entered in state court (provided that no sale of the property had yet occurred) prior to the filing of the debtor’s petition. This may be done even if the plan of reorganization does not provide for payment of the full amount due under the original loan. Thus, the full amount due under the original loan may never be repaid. Other types of significant modifications to the terms of a mortgage loan may be acceptable to the bankruptcy court, such as making distributions to the mortgage holder of property other than cash, or the substitution of collateral which is the “indubitable equivalent” of the real property subject to the mortgage, or the subordination of the mortgage to liens securing new debt (provided that the lender’s secured claim is “adequately protected” as such term is defined and interpreted under the federal bankruptcy code), often depending on the particular facts and circumstances of the specific case.
Federal bankruptcy law may also interfere with or otherwise adversely affect the ability of a secured mortgage lender to enforce an assignment by a borrower of rents and leases (which “rents” may include revenues from hotels and other lodging facilities specified in the federal bankruptcy code) related to a mortgaged property if the related borrower is in a bankruptcy proceeding. Under the federal bankruptcy code, a lender may be stayed from enforcing the assignment, and the legal proceedings necessary to resolve the issue can be time consuming and may result in significant delays in the receipt of the rents. Rents (including applicable hotel and other lodging revenues) and leases may also escape such an assignment, among other things, (i) if the assignment is not fully perfected under state law prior to commencement of the bankruptcy proceeding, (ii) to the extent such rents and leases are used by the borrower to maintain the mortgaged property, or for other court authorized expenses, (iii) to the extent other collateral may be substituted for the rents and leases, (iv) to the extent the bankruptcy court determines that the lender is adequately protected, or (v) to the extent the court determines based on the equities of the case that the post-petition rents are not subject to the lender’s pre-petition securities interest.
Under the federal bankruptcy code, a security interest in real property acquired before the commencement of the bankruptcy case does not extend to income received after the commencement of the bankruptcy case unless such income is a proceed, product or rent of such property. Therefore, to the extent a business conducted on the mortgaged property creates accounts receivable rather than rents or results from payments under a license rather than payments under a lease, a valid and perfected pre-bankruptcy lien on such accounts receivable or license income generally would not continue as to post-bankruptcy accounts receivable or license income.
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federal bankruptcy code provides that a lender’s perfected pre-petition security interest in leases, rents and hotel revenues
continues in the post-petition leases, rents and hotel revenues, unless a bankruptcy court orders to the contrary “based
on the equities of the case”. The equities of a particular case may permit the discontinuance of pre-petition security interests
in post-petition leases and rents. Thus, unless a court orders otherwise, revenues from a mortgaged property generated after the
date the bankruptcy petition is filed will constitute “cash collateral” under the federal bankruptcy code. Debtors
may only use cash collateral upon obtaining the lender’s consent or a prior court order finding that the lender’s
interest in the mortgaged hotel, motel or other lodging property and the cash collateral is “adequately protected”
as the term is defined and interpreted under the federal bankruptcy code. In addition to post-petition rents, any cash held by
a lender in a lockbox or reserve account generally would also constitute “cash collateral” under the federal bankruptcy
code. So long as the lender is adequately protected, a debtor’s use of cash collateral may be for its own benefit or for
the benefit of any affiliated entity group that is also subject to bankruptcy proceedings, including use as collateral for new
debt. It should be noted, however, that the court may find that the lender has no security interest in either pre-petition
or
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post-petition revenues if the court finds that the loan documents do not contain language covering accounts, room rents,
or other forms of personalty necessary for a security interest to attach to such revenues.
The federal bankruptcy code provides generally that rights and obligations under an unexpired lease of the debtor/lessee may not be terminated or modified at any time after the commencement of a case under the federal bankruptcy code solely because of a provision in the lease to that effect or because of certain other similar events. This prohibition on so-called “ipso facto” clauses could limit the ability of a lender to exercise certain contractual remedies with respect to the leases on any mortgaged property. In addition, section 362 of the federal bankruptcy code operates as an automatic stay of, among other things, any act to obtain possession of property from a debtor’s estate, which may delay a lender’s exercise of those remedies, including foreclosure, in the event that a lessee becomes the subject of a proceeding under the federal bankruptcy code. Thus, the filing of a petition in bankruptcy by or on behalf of a lessee of a mortgaged property would result in a stay against the commencement or continuation of any state court proceeding for past due rent, for accelerated rent, for damages or for a summary eviction order with respect to a default under the related lease that occurred prior to the filing of the lessee’s petition. While relief from the automatic stay to enforce remedies may be requested, it can be denied for a number of reasons, including where the collateral is “necessary to an effective reorganization” for the debtor, and if a debtor’s case has been administratively consolidated with those of its affiliates, the court may also consider whether the property is “necessary to an effective reorganization” of the debtor and its affiliates, taken as a whole.
The federal bankruptcy code generally provides that a trustee in bankruptcy or debtor-in-possession may, with respect to an unexpired lease of non-residential real property, before the earlier of (i) 120 days after the filing of a bankruptcy case or (ii) the entry of an order confirming a plan, subject to approval of the court, (a) assume the lease and retain it or assign it to a third party or (b) reject the lease. If the trustee or debtor-in-possession fails to assume or reject the lease within the time specified in the preceding sentence, subject to any extensions by the bankruptcy court, the lease will be deemed rejected and the property will be surrendered to the lessor. The bankruptcy court may for cause shown extend the 120-day period up to 90 days for a total of 210 days. If the lease is assumed, the trustee in bankruptcy on behalf of the lessee, or the lessee as debtor-in-possession, or the assignee, if applicable, must cure any defaults under the lease, compensate the lessor for its losses and provide the lessor with “adequate assurance” of future performance. These remedies may be insufficient, however, as the lessor may be forced to continue under the lease with a lessee that is a poor credit risk or an unfamiliar tenant (if the lease was assigned), and any assurances provided to the lessor may, in fact, be inadequate. If the lease is rejected, the rejection generally constitutes a breach of the executory contract or unexpired lease as of the date immediately preceding the filing date of the bankruptcy petition. As a consequence, the other party or parties to the lease, such as the borrower, as lessor under a lease, generally would have only an unsecured claim against the debtor, as lessee, for damages resulting from the breach, which could adversely affect the security for the related mortgage loan. In addition, under the federal bankruptcy code, a lease rejection damages claim is limited to the “(a) rent reserved by the lease, without acceleration, for the greater of one year, or 15 percent, not to exceed three years, of the remaining term of such lease, following the earlier of the date of the bankruptcy petition and the date on which the lessor regained possession of the real property, (b) plus any unpaid rent due under such lease, without acceleration, on the earlier of such dates”.
If a trustee in bankruptcy on behalf of a lessor, or a lessor as debtor-in-possession, rejects an unexpired lease of real property, the lessee may treat the lease as terminated by the rejection or, in the alternative, the lessee may remain in possession of the leasehold for the balance of the term and for any renewal or extension of the term that is enforceable by the lessee under applicable non-bankruptcy law. The federal bankruptcy code provides that if a lessee elects to remain in possession after a rejection of a lease, the lessee may offset against rents reserved under the lease for the balance of the term after the date of rejection of the lease, and the related renewal or extension of the lease, any damages occurring after that date caused by the nonperformance of any obligation of the lessor under the lease after that date.
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Similarly, bankruptcy risk is associated with an insolvency proceeding under the federal bankruptcy code of either a borrower ground lessee or a ground lessor. In general, upon the bankruptcy of a lessor or a lessee under a lease of nonresidential real property, including a ground lease, that has not been terminated prior to the bankruptcy filing date, the debtor entity has the statutory right to assume or reject the lease. Given that the federal bankruptcy code generally invalidates clauses that terminate contracts automatically upon the filing by one of the parties of a bankruptcy petition or that are conditioned on a party’s insolvency, following the filing of a bankruptcy petition, a debtor would ordinarily be required to perform its obligations under such lease until the debtor decides whether to assume or reject the lease. The federal bankruptcy code provides certain additional protections with respect to non-residential real property leases, such as establishing a specific timeframe in which a debtor must determine whether to assume or reject the lease. The bankruptcy court may extend the time to perform for up to 60 days for cause shown. Even if the agreements were terminated prior to bankruptcy, a bankruptcy court may determine that the agreement was improperly terminated and therefore remains part of the debtor’s bankruptcy estate. The debtor also can seek bankruptcy court approval to assume and assign the lease to a third party, and to modify the lease in connection with such assignment. In order to assume the lease, the debtor or assignee generally will have to cure outstanding defaults and provide “adequate assurance of future performance” in addition to satisfying other requirements imposed under the federal bankruptcy code. Under the federal bankruptcy code, subject to certain exceptions, once a lease is rejected by a debtor lessee, it is deemed breached, and the non-debtor lessor will have a claim for lease rejection damages, as described above.
If the ground lessor files for bankruptcy, it may determine until the confirmation of its plan of reorganization whether to reject the ground lease. On request of any party to the lease, the bankruptcy court may order the debtor to determine within a specific period of time whether to assume or reject the lease or to comply with the terms of the lease pending its decision to assume or reject. In the event of rejection, the non-debtor lessee will have the right to treat the lease as terminated by virtue of its terms, applicable nonbankruptcy law, or any agreement made by the lessee. The non-debtor lessee may also, if the lease term has begun, retain its rights under the lease, including its rights to remain in possession of the leased premises under the rent reserved in the lease for the balance of the term of the lease (including renewals). The term “lessee” includes any “successor, assign or mortgagee permitted under the terms of such lease”. If, pre-petition, the ground lessor had specifically granted the leasehold mortgagee such right, the leasehold mortgagee may have the right to succeed to the lessee/borrower’s position under the lease.
In the event of concurrent bankruptcy proceedings involving the ground lessor and the lessee/borrower, actions by creditors against the borrower/lessee debtor would be subject to the automatic stay, and a lender may be unable to enforce both (a) the bankrupt lessee/borrower’s pre-petition agreement to refuse to treat a ground lease rejected by a bankrupt lessor as terminated and to remain in possession of the property pursuant to the lease and (b) any agreement by the ground lessor to grant the lender a new lease upon such termination. In such circumstances, a lease could be terminated notwithstanding lender protection provisions contained in that lease or in the mortgage. A lender could lose its security unless the lender holds a fee mortgage or the bankruptcy court, as a court of equity, allows the mortgagee to assume the ground lessee’s obligations under the ground lease and succeed to the ground lessee’s position. Although consistent with the federal bankruptcy code, such position may not be adopted by the bankruptcy court.
Further, in an appellate decision by the United States Court of Appeals for the Seventh Circuit (Precision Indus. v. Qualitech Steel SBQ, LLC, 327 F.3d 537 (7th Cir, 2003)), the court ruled with respect to an unrecorded lease of real property that where a statutory sale of leased property occurs under the federal bankruptcy code upon the bankruptcy of a landlord, that sale terminates a lessee’s possessory interest in the property, and the purchaser assumes title free and clear of any interest, including any leasehold estates. Pursuant to the federal bankruptcy code, a lessee may request the bankruptcy court to prohibit or condition the statutory sale of the property so as to provide adequate protection of the leasehold interest; however, the court ruled that, at least where a memorandum of lease had not been recorded, this provision does not ensure continued possession of the property, but rather entitles the lessee to compensation for the value of its leasehold interest, typically from the sale proceeds. As a
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result, we cannot assure you that, in the event of a statutory sale of leased property pursuant to the federal bankruptcy code, the lessee would be able to maintain possession of the property under the ground lease. In addition, we cannot assure you that a leasehold mortgagor and/or a leasehold mortgagee (to the extent it has standing to intervene) would be able to recover the full value of the leasehold interest in bankruptcy court.
Because of the possible termination of the related ground lease, whether arising from a bankruptcy, the expiration of a lease term or an uncured defect under the related ground lease, lending on a leasehold interest in a real property is riskier than lending on the fee interest in the property.
In a bankruptcy or similar proceeding involving a borrower, action may be taken seeking the recovery as a preferential transfer of any payments made by such borrower, or made directly by the related lessee, under the related mortgage loan to the issuing entity. Payments on long term debt may be protected from recovery as preferences if they qualify for the “ordinary course” exception under the federal bankruptcy code or if certain other defenses in the federal bankruptcy code are applicable. Whether any particular payment would be protected depends upon the facts specific to a particular transaction.
In addition, in a bankruptcy or similar proceeding involving any borrower or an affiliate, an action may be taken to avoid the transaction (or any component of the transaction, such as joint and several liability on the related mortgage loan) as an actual or constructive fraudulent conveyance under state or federal law. Any payment by a borrower in excess of its allocated share of the loan could be challenged as a fraudulent conveyance by creditors of that borrower in an action outside a bankruptcy case or by the representative of the borrower’s bankruptcy estate in a bankruptcy case. Generally, under federal and most state fraudulent conveyance statutes, the incurrence of an obligation or the transfer of property by a person will be subject to avoidance under certain circumstances if the person transferred such property with the intent to hinder, delay or defraud its creditors or the person did not receive fair consideration or reasonably equivalent value in exchange for such obligation or transfer and (i) was insolvent or was rendered insolvent by such obligation or transfer, (ii) was engaged in business or a transaction, or was about to engage in business or a transaction, for which any property remaining with the person constituted unreasonably small capital, or (iii) intended to, or believed that it would, incur debts that would be beyond the person’s ability to pay as such debts matured. The measure of insolvency will vary depending on the law of the applicable jurisdiction. However, an entity will generally be considered insolvent if the present fair salable value of its assets is less than (x) the sum of its debts or (y) the amount that would be required to pay its probable liabilities on its existing debts as they become absolute and matured. Accordingly, in a multi-borrower loan transaction, a lien granted by one of the borrowers to secure repayment of the loan in excess of its allocated share of loan proceeds could be avoided if a court were to determine that (i) such borrower was insolvent at the time of granting the lien, was rendered insolvent by the granting of the lien, was left with inadequate capital, or was not able to pay its debts as they matured and (ii) such borrower did not, when it allowed its property to be encumbered by a lien securing the entire indebtedness represented by the loan, receive fair consideration or reasonably equivalent value for pledging such property for the equal benefit of each other borrower.
A bankruptcy court may, under certain circumstances, authorize a debtor to obtain credit after the commencement of a bankruptcy case, secured by among other things, senior, equal or junior liens on property that is already subject to a lien. In the bankruptcy case of In re General Growth Properties, Inc. 409 B.R. 43 (Bankr. S.D.N.Y. 2009) filed on April 16, 2009, the debtors initially sought approval of a debtor-in-possession loan to the corporate parent entities guaranteed by the property-level single purpose entities and secured by second liens on their properties. Although the debtor-in-possession loan subsequently was modified to eliminate the subsidiary guarantees and second liens, we cannot assure you that, in the event of a bankruptcy of the borrower sponsor, the borrower sponsor would not seek approval of a similar debtor-in-possession loan, or that a bankruptcy court would not approve a debtor-in-possession loan that included such subsidiary guarantees and second liens on such subsidiaries’ properties.
Certain of the borrowers may be partnerships. The laws governing limited partnerships in certain states provide that the commencement of a case under the federal bankruptcy code with respect to a general partner will cause a person to cease to be a general partner of the limited partnership, unless
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otherwise provided in writing in the limited partnership agreement. This provision may be construed as an “ipso facto” clause and, in the event of the general partner’s bankruptcy, may not be enforceable. Certain limited partnership agreements of the borrowers may provide that the commencement of a case under the federal bankruptcy code with respect to the related general partner constitutes an event of withdrawal (assuming the enforceability of the clause is not challenged in bankruptcy proceedings or, if challenged, is upheld) that might trigger the dissolution of the limited partnership, the winding up of its affairs and the distribution of its assets, unless (i) at the time there was at least one other general partner and the written provisions of the limited partnership permit the business of the limited partnership to be carried on by the remaining general partner and that general partner does so or (ii) the written provisions of the limited partnership agreement permit the limited partners to agree within a specified time frame (often 60 days) after the withdrawal to continue the business of the limited partnership and to the appointment of one or more general partners and the limited partners do so. In addition, the laws governing general partnerships in certain states provide that the commencement of a case under the federal bankruptcy code or state bankruptcy laws with respect to a general partner of the partnerships triggers the dissolution of the partnership, the winding up of its affairs and the distribution of its assets. Those state laws, however, may not be enforceable or effective in a bankruptcy case. Limited liability companies may be subjected to similar treatment as that described in this prospectus with respect to limited partnerships. The dissolution of a borrower, the winding up of its affairs and the distribution of its assets could result in an acceleration of its payment obligation under the borrower’s mortgage loan, which may reduce the yield on the Offered Certificates in the same manner as a principal prepayment.
In addition, the bankruptcy of the general or limited partner of a borrower that is a partnership, or the bankruptcy of a member of a borrower that is a limited liability company or the bankruptcy of a shareholder of a borrower that is a corporation may provide the opportunity in the bankruptcy case of the partner, member or shareholder to obtain an order from a court consolidating the assets and liabilities of the partner, member or shareholder with those of the mortgagor pursuant to the doctrines of substantive consolidation or piercing the corporate veil. In such a case, the respective mortgaged property, for example, would become property of the estate of the bankrupt partner, member or shareholder. Not only would the mortgaged property be available to satisfy the claims of creditors of the partner, member or shareholder, but an automatic stay would apply to any attempt by the trustee to exercise remedies with respect to the mortgaged property. However, such an occurrence should not affect a lender’s status as a secured creditor with respect to the mortgagor or its security interest in the mortgaged property.
A borrower that is a limited partnership, in many cases, may be required by the loan documents to have a single purpose entity as its sole general partner, and a borrower that is a general partnership, in many cases, may be required by the loan documents to have as its general partners only entities that are single purpose entities. A borrower that is a limited liability company may be required by the loan documents to have a single purpose member or a springing member. All borrowers that are tenants-in-common may be required by the loan documents to be single purpose entities. These provisions are designed to mitigate the risk of the dissolution or bankruptcy of the borrower partnership or its general partner, a borrower limited liability company or its member (if applicable), or a borrower that is a tenant-in-common. However, we cannot assure you that any borrower partnership or its general partner, or any borrower limited liability company or its member (if applicable), or a borrower that is a tenant-in-common, will not dissolve or become a debtor under the federal bankruptcy code.
Environmental Considerations
| General |
A lender may be subject to environmental risks when taking a security interest in real property. Of particular concern may be properties that are or have been used for industrial, manufacturing, military or disposal activity. Such environmental risks include the possible diminution of the value of a contaminated property or, as discussed below, potential liability for clean-up costs or other remedial actions that could exceed the value of the property or the amount of the lender’s loan. In certain circumstances, a lender may decide to abandon a contaminated mortgaged property as collateral for its loan rather than foreclose and risk liability for clean-up costs.
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Superlien Laws
Under the laws of many states, contamination on a property may give rise to a lien on the property for clean-up costs. In several states, such a lien has priority over all existing liens, including those of existing mortgages. In these states, the lien of a mortgage may lose its priority to such a “superlien”.
| CERCLA |
The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (“CERCLA”), imposes strict liability on present and past “owners” and “operators” of contaminated real property for the costs of clean-up. A secured lender may be liable as an “owner” or “operator” of a contaminated mortgaged property if agents or employees of the lender have participated in the management or operation of such mortgaged property. Such liability may exist even if the lender did not cause or contribute to the contamination and regardless of whether the lender has actually taken possession of a mortgaged property through foreclosure, deed in lieu of foreclosure or otherwise. Moreover, such liability is not limited to the original or unamortized principal balance of a loan or to the value of the property securing a loan. Excluded from CERCLA’s definition of “owner” or “operator,” however, is a person “who, without participating in the management of the facility, holds indicia of ownership primarily to protect his security interest”. This is the so called “secured creditor exemption”.
The Asset Conservation, Lender Liability and Deposit Insurance Protection Act of 1996 (the “1996 Act”) amended, among other things, the provisions of CERCLA with respect to lender liability and the secured creditor exemption. The 1996 Act offers protection to lenders by defining the activities in which a lender can engage and still have the benefit of the secured creditor exemption. In order for a lender to be deemed to have participated in the management of a mortgaged property, the lender must actually participate in the operational affairs of the property of the borrower. The 1996 Act provides that “merely having the capacity to influence, or unexercised right to control” operations does not constitute participation in management. A lender will lose the protection of the secured creditor exemption if it exercises decision-making control over the borrower’s environmental compliance and hazardous substance handling or disposal practices, or assumes day-to-day management of environmental or substantially all other operational functions of the mortgaged property. The 1996 Act also provides that a lender will continue to have the benefit of the secured creditor exemption even if it forecloses on a mortgaged property, purchases it at a foreclosure sale or accepts a deed-in-lieu of foreclosure provided that the lender seeks to sell the mortgaged property at the earliest practicable commercially reasonable time on commercially reasonable terms.
Certain Other Federal and State Laws
Many states have statutes similar to CERCLA, and not all of those statutes provide for a secured creditor exemption. In addition, under federal law, there is potential liability relating to hazardous wastes and underground storage tanks under the federal Resource Conservation and Recovery Act.
Some federal, state and local laws, regulations and ordinances govern the management, removal, encapsulation or disturbance of asbestos-containing materials. These laws, as well as common law standards, may impose liability for releases of or exposure to asbestos-containing materials, and provide for third parties to seek recovery from owners or operators of real properties for personal injuries associated with those releases.
Federal legislation requires owners of residential housing constructed prior to 1978 to disclose to potential residents or purchasers any known lead-based paint hazards and will impose treble damages for any failure to disclose. In addition, the ingestion of lead-based paint chips or dust particles by children can result in lead poisoning. If lead-based paint hazards exist at a property, then the owner of that property may be held liable for injuries and for the costs of removal or encapsulation of the lead-based paint.
In a few states, transfers of some types of properties are conditioned upon clean-up of contamination prior to transfer. In these cases, a lender that becomes the owner of a property through foreclosure, deed
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in lieu of foreclosure or otherwise, may be required to clean-up the contamination before selling or otherwise transferring the property.
Beyond statute-based environmental liability, there exist common law causes of action (for example, actions based on nuisance or on toxic tort resulting in death, personal injury or damage to property) related to hazardous environmental conditions on a property. While it may be more difficult to hold a lender liable under common law causes of action, unanticipated or uninsured liabilities of the borrower may jeopardize the borrower’s ability to meet its loan obligations or may decrease the re-sale value of the collateral.
Additional Considerations
The cost of remediating hazardous substance contamination at a property can be substantial. If a lender becomes liable, it can bring an action for contribution against the owner or operator who created the environmental hazard, but that individual or entity may be without substantial assets. Accordingly, it is possible that such costs could become a liability of the issuing entity and occasion a loss to the certificateholders.
If a lender forecloses on a mortgage secured by a property, the operations on which are subject to environmental laws and regulations, the lender will be required to operate the property in accordance with those laws and regulations. Such compliance may entail substantial expense, especially in the case of industrial or manufacturing properties.
In addition, a lender may be obligated to disclose environmental conditions on a property to government entities and/or to prospective buyers (including prospective buyers at a foreclosure sale or following foreclosure). Such disclosure may decrease the amount that prospective buyers are willing to pay for the affected property, sometimes substantially, and thereby decrease the ability of the lender to recover its investment in a loan upon foreclosure.
Due-on-Sale and Due-on-Encumbrance Provisions
Certain of the mortgage loans may contain “due-on-sale” and “due-on-encumbrance” clauses that purport to permit the lender to accelerate the maturity of the loan if the borrower transfers or encumbers the related mortgaged property. The Garn-St Germain Depository Institutions Act of 1982 (the “Garn Act”) generally preempts state laws that prohibit the enforcement of “due-on-sale” clauses and permits lenders to enforce these clauses in accordance with their terms, subject to certain limitations as set forth in the Garn Act and related regulations. Accordingly, a lender may nevertheless have the right to accelerate the maturity of a mortgage loan that contains a “due-on-sale” provision upon transfer of an interest in the property, without regard to the lender’s ability to demonstrate that a sale threatens its legitimate security interest.
Subordinate Financing
The terms of certain of the mortgage loans may not restrict the ability of the borrower to use the mortgaged property as security for one or more additional loans, or such restrictions may be unenforceable. Where a borrower encumbers a mortgaged property with one or more junior liens, the senior lender is subjected to additional risk. First, the borrower may have difficulty servicing and repaying multiple loans. Moreover, if the subordinate financing permits recourse to the borrower (as-is frequently the case) and the senior loan does not, a borrower may have more incentive to repay sums due on the subordinate loan. Second, acts of the senior lender that prejudice the junior lender or impair the junior lender’s security may create a superior equity in favor of the junior lender. For example, if the borrower and the senior lender agree to an increase in the principal amount of or the interest rate payable on the senior loan, the senior lender may lose its priority to the extent any existing junior lender is harmed or the borrower is additionally burdened. Third, if the borrower defaults on the senior loan and/or any junior loan or loans, the existence of junior loans and actions taken by junior lenders can impair the security available to the senior lender and can interfere with or delay the taking of action by the senior lender. Moreover, the bankruptcy of a junior lender may operate to stay foreclosure or similar proceedings by the senior lender.
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Default Interest and Limitations on Prepayments
Promissory notes and mortgages may contain provisions that obligate the borrower to pay a late charge or additional interest if payments are not timely made, and in some circumstances, may prohibit prepayments for a specified period and/or condition prepayments upon the borrower’s payment of prepayment fees or yield maintenance penalties. In certain states, there are or may be specific limitations upon the late charges which a lender may collect from a borrower for delinquent payments. Certain states also limit the amounts that a lender may collect from a borrower as an additional charge if the loan is prepaid. In addition, the enforceability of provisions that provide for prepayment fees or penalties upon an involuntary prepayment is unclear under the laws of many states.
Applicability of Usury Laws
Title V of the Depository Institutions Deregulation and Monetary Control Act of 1980 (“Title V”) provides that state usury limitations will not apply to certain types of residential (including multifamily) first mortgage loans originated by certain lenders after March 31, 1980. Title V authorized any state to reimpose interest rate limits by adopting, before April 1, 1983, a law or constitutional provision that expressly rejects application of the federal law. In addition, even where Title V is not so rejected, any state is authorized by the law to adopt a provision limiting discount points or other charges on mortgage loans covered by Title V. Certain states have taken action to reimpose interest rate limits and/or to limit discount points or other charges.
Statutes differ in their provisions as to the consequences of a usurious loan. One group of statutes requires the lender to forfeit the interest due above the applicable limit or impose a specified penalty. Under this statutory scheme, the borrower may cancel the recorded mortgage or deed of trust upon paying its debt with lawful interest, and the lender may foreclose, but only for the debt plus lawful interest. A second group of statutes is more severe. A violation of this type of usury law results in the invalidation of the transaction, thereby permitting the borrower to cancel the recorded mortgage or deed of trust without any payment or prohibiting the lender from foreclosing.
Americans with Disabilities Act
Under Title III of the Americans with Disabilities Act of 1990 and related regulations (collectively, the “ADA”), in order to protect individuals with disabilities, public accommodations (such as hospitality properties, restaurants, shopping centers, hospitals, schools and social service center establishments) must remove architectural and communication barriers which are structural in nature from existing places of public accommodation to the extent “readily achievable”. In addition, under the ADA, alterations to a place of public accommodation or a commercial facility are to be made so that, to the maximum extent feasible, such altered portions are readily accessible to and usable by disabled individuals. The “readily achievable” standard takes into account, among other factors, the financial resources of the affected site, owner, landlord or other applicable person. In addition to imposing a possible financial burden on the borrower in its capacity as owner or landlord, the ADA may also impose such requirements on a foreclosing lender who succeeds to the interest of the borrower as owner or landlord. Furthermore, since the “readily achievable” standard may vary depending on the financial condition of the owner or landlord, a foreclosing lender who is financially more capable than the borrower of complying with the requirements of the ADA may be subject to more stringent requirements than those to which the borrower is subject.
Servicemembers Civil Relief Act
Under the terms of the Servicemembers Civil Relief Act as amended (the “Relief Act”), a borrower who enters military service after the origination of such borrower’s mortgage loan (including a borrower who was in reserve status and is called to active duty after origination of the mortgage loan), upon notification by such borrower, will not be charged interest, including fees and charges, in excess of 6% per annum during the period of such borrower’s active duty status. In addition to adjusting the interest, the lender must forgive any such interest in excess of 6% unless a court or administrative agency orders otherwise upon application of the lender. The Relief Act applies to individuals who are members of the
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Army, Navy, Air Force, Marines, National Guard, Reserves, Coast Guard and officers of the U.S. Public Health Service or the National Oceanic and Atmospheric Administration assigned to duty with the military. Because the Relief Act applies to individuals who enter military service (including reservists who are called to active duty) after origination of the related mortgage loan, no information can be provided as to the number of loans with individuals as borrowers that may be affected by the Relief Act. Application of the Relief Act would adversely affect, for an indeterminate period of time, the ability of a master servicer or special servicer to collect full amounts of interest on certain of the mortgage loans. Any shortfalls in interest collections resulting from the application of the Relief Act would result in a reduction of the amounts distributable to the holders of certificates, and would not be covered by advances or, any other form of credit support provided in connection with the certificates. In addition, the Relief Act imposes limitations that would impair the ability of a lender to foreclose on an affected mortgage loan during the borrower’s period of active duty status, and, under certain circumstances, during an additional one-year period thereafter.
Anti-Money Laundering, Economic Sanctions and Bribery
Many jurisdictions have adopted wide-ranging anti-money laundering, economic and trade sanctions, and anti-corruption and anti-bribery laws, and regulations (collectively, the “Requirements”). Any of the depositor, the issuing entity, the underwriters or other party to the PSA could be requested or required to obtain certain assurances from prospective investors intending to purchase certificates and to retain such information or to disclose information pertaining to them to governmental, regulatory or other authorities or to financial intermediaries or engage in due diligence or take other related actions in the future. Failure to honor any request by the depositor, the issuing entity, the underwriters or other party to the PSA to provide requested information or take such other actions as may be necessary or advisable for the depositor, the issuing entity, the underwriters or other party to the PSA to comply with any Requirements, related legal process or appropriate requests (whether formal or informal) may result in, among other things, a forced sale to another investor of such investor’s certificates. In addition, it is expected that each of the depositor, the issuing entity, the underwriters and the other parties to the PSA will comply with the U.S. Bank Secrecy Act, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (also known as the “Patriot Act”), the Anti-Money Laundering Act of 2020, including the Corporate Transparency Act, and any other anti-money laundering and anti-terrorism, economic and trade sanctions, and anti-corruption or anti-bribery laws, and regulations of the United States and other countries, and will disclose any information required or requested by authorities in connection with such compliance. It is currently unclear as to the long-term implications of the Anti-Money Laundering Act of 2020 or the Corporate Transparency Act.
Potential Forfeiture of Assets
Federal law provides that assets (including property purchased or improved with assets) derived from criminal activity or otherwise tainted, or used in the commission of certain offenses, is subject to the blocking requirements of economic sanctions laws and regulations, and can be blocked and/or seized and ordered forfeited to the United States of America. The offenses that can trigger such a blocking and/or seizure and forfeiture include, among others, violations of the Racketeer Influenced and Corrupt Organizations Act, the U.S. Bank Secrecy Act, the anti-money laundering, anti-terrorism, economic sanctions, and anti-bribery laws and regulations, including the Patriot Act and the regulations issued pursuant to that act, as well as the narcotic drug laws. In many instances, the United States may seize the property even before a conviction occurs.
In the event of a forfeiture proceeding, a lender may be able to establish its interest in the property by proving that (a) its mortgage was executed and recorded before the commission of the illegal conduct from which the assets used to purchase or improve the property were derived or before the commission of any other crime upon which the forfeiture is based, or (b) the lender, at the time of the execution of the mortgage, “did not know or was reasonably without cause to believe that the property was subject to forfeiture”. However, we cannot assure you that such a defense will be successful.
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CERTAIN AFFILIATIONS, RELATIONSHIPS AND RELATED TRANSACTIONS INVOLVING TRANSACTION PARTIES
GACC and its affiliates are playing several roles in this transaction. Deutsche Bank Securities Inc., an underwriter, is an affiliate of Deutsche Mortgage & Asset Receiving Corporation, the depositor, GACC, a mortgage loan seller and a sponsor, DBNY, an originator, a Retaining Party, an initial Risk Retention Consultation Party, and DBRI, an originator and the holder of the companion loans for which the noteholder is identified as “DBRI” in the table titled “Whole Loan Control Notes and Non-Control Notes” under “Description of the Mortgage Pool—The Whole Loans—General”. CREFI and its affiliates are playing several roles in this transaction. Citigroup Global Markets Inc., an underwriter, is an affiliate of CREFI, a mortgage loan seller, a sponsor, an originator, a Retaining Party, an initial Risk Retention Consultation Party and the holder of the companion loans for which the noteholder is identified as “CREFI” in the table titled “Whole Loan Control Notes and Non-Control Notes” under “Description of the Mortgage Pool—The Whole Loans—General”. GSMC and its affiliates are playing several roles in this transaction. Goldman Sachs & Co. LLC, an underwriter, is an affiliate of (i) GS Bank, an originator and the holder of the companion loans for which the noteholder is identified as “GS Bank” in the table titled “Whole Loan Control Notes and Non-Control Notes” under “Description of the Mortgage Pool—The Whole Loans—General” and (ii) GSMC, a mortgage loan seller and a sponsor. JPMCB and its affiliates are playing several roles in this transaction. J.P. Morgan Securities LLC, an underwriter, is an affiliate of JPMCB, a mortgage loan seller, a sponsor, an originator and the holder of the companion loans for which the noteholder is identified as “JPMCB” in the table titled “Whole Loan Control Notes and Non-Control Notes” under “Description of the Mortgage Pool—The Whole Loans—General”.
Computershare Trust Company, N.A. acts as interim custodian with respect to all the GACC Mortgage Loans, except for the Novo Nordisk HQ Mortgage Loan (2.4%).
Computershare Trust Company, N.A. acts as interim custodian with respect to all the CREFI Mortgage Loans.
Computershare Trust Company, N.A. acts as interim custodian with respect to all the GSMC Mortgage Loans.
Computershare Trust Company, N.A. acts as interim custodian with respect to all the JPMCB Mortgage Loans.
Pursuant to certain interim servicing agreements between GACC and certain of its affiliates, on the one hand, and Midland, on the other hand, Midland acts as interim servicer with respect to certain mortgage loans, including prior to their inclusion in the issuing entity certain of the Mortgage Loans.
Pursuant to certain interim servicing agreements between CREFI and certain of its affiliates, on the one hand, and Midland, on the other hand, Midland acts as interim servicer with respect to certain mortgage loans, including prior to their inclusion in the issuing entity certain of the Mortgage Loans.
Pursuant to certain interim servicing agreements between GSMC and certain of its affiliates, on the one hand, and Midland, on the other hand, Midland acts as interim servicer with respect to certain mortgage loans, including prior to their inclusion in the issuing entity certain of the Mortgage Loans.
Pursuant to certain interim servicing agreements between JPMCB and certain of its affiliates, on the one hand, and Midland, on the other hand, Midland acts as interim servicer with respect to certain mortgage loans, including prior to their inclusion in the issuing entity certain of the Mortgage Loans.
Midland is also (i) the master servicer with respect to the One Wilshire Mortgage Loan (9.3%) which is currently being serviced under the Benchmark 2022-B32 PSA, (ii) the master servicer with respect to the Bedrock Portfolio Mortgage Loan (9.3%), which is currently being serviced under the Benchmark 2022-B32 PSA, (iii) the master servicer with respect to the Novo Nordisk HQ Mortgage Loan (2.4%), which is currently being serviced under the Benchmark 2021-B31 PSA, (iv) the master servicer with respect to the JW Marriott Desert Springs Mortgage Loan (2.2%), which is currently being serviced under
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the Benchmark 2022-B32 PSA and (v) the master servicer with respect to the Glen Forest Office Portfolio Mortgage Loan (1.0%), which is currently being serviced under the Benchmark 2022-B32 PSA.
KeyBank is also the special servicer under the Benchmark 2022-B32 transaction (with respect to the Bedrock Portfolio Whole Loan, the One Wilshire Whole Loan, the JW Marriott Desert Springs Whole Loan and the Glen Forest Office Portfolio Whole Loan).
Computershare Trust Company, N.A., the certificate administrator and custodian, is also (i) the certificate administrator and custodian under the Benchmark 2022-B32 PSA with respect to the One Wilshire Whole Loan, the Bedrock Portfolio Whole Loan, the JW Marriott Desert Springs Whole Loan and the Glen Forest Office Portfolio Whole Loan and (ii) the trustee, certificate administrator and custodian under the BXP 2021-601L TSA with respect to the 601 Lexington Avenue Whole Loan.
Wilmington Trust, National Association, the trustee, is also (i) the trustee under Benchmark 2022-B32 PSA with respect to the One Wilshire Whole Loan, the Bedrock Portfolio Whole Loan, the JW Marriott Desert Springs Whole Loan and the Glen Forest Office Portfolio Whole Loan and (ii) the trustee under the Benchmark 2021-B31 PSA with respect to the Novo Nordisk HQ Whole Loan.
LNR Partners, or an affiliate, assisted Eightfold Real Estate Capital Fund V, L.P., or its affiliate with due diligence regarding the Mortgage Loans.
Eightfold Real Estate Capital Fund V, L.P. or its affiliate is expected to be appointed as the initial Trust Directing Holder and, therefore, the initial Directing Holder with respect to each Serviced Mortgage Loan (other than any applicable Excluded Loan and any Servicing Shift Mortgage Loan) and is expected to purchase the Class F, Class G, Class H, Class X-F, Class X-G and Class X-H certificates, and will receive the Class S certificates, and may purchase certain additional classes of certificates.
See “Risk Factors—Risks Related to Conflicts of Interest—Potential Conflicts of Interest of the Master Servicer and the Special Servicer”, “—Potential Conflicts of Interest of the Operating Advisor”, “—Potential Conflicts of Interest of the Asset Representations Reviewer”, “—Potential Conflicts of Interest of the Directing Holder and the Companion Loan Holders” and “—Risks Relating to the Mortgage Loans—Performance of the Mortgage Loans Will Be Highly Dependent on the Performance of Tenants and Tenant Leases—Mortgaged Properties Leased to Borrowers or Borrower Affiliated Entities Also Have Risks”. For a description of certain other affiliations, relationships and related transactions, to the extent known and material, among the transaction parties, see the individual descriptions of the transaction parties under “Transaction Parties”.
PENDING LEGAL PROCEEDINGS INVOLVING TRANSACTION PARTIES
While the sponsors have been involved in, and are currently involved in, certain litigation or potential litigation, including actions relating to repurchase claims, there are no legal proceedings pending, or any proceedings known to be contemplated by any governmental authorities, against the sponsors that are material to Certificateholders.
For a description of certain other material legal proceedings pending against the transaction parties, see the individual descriptions of the transaction parties under “Transaction Parties”.
USE OF PROCEEDS
Certain of the net proceeds from the sale of the Offered Certificates, together with the net proceeds from the sale of the other certificates not being offered by this prospectus, will be used by the depositor to purchase the mortgage loans from the mortgage loan sellers and to pay certain expenses in connection with the issuance of the certificates.
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YIELD AND MATURITY CONSIDERATIONS
Yield Considerations
| General |
The yield to maturity on the Offered Certificates will depend upon the price paid by the investors, the rate and timing of the distributions in reduction of the Certificate Balance or Notional Amount of the applicable class of Offered Certificates, the extent to which yield maintenance charges and prepayment premiums allocated to the class of Offered Certificates are collected, and the rate, timing and severity of losses on the Mortgage Loans and the extent to which such losses are allocable in reduction of the Certificate Balance or Notional Amount of the class of Offered Certificates, as well as prevailing interest rates at the time of payment or loss realization.
Rate and Timing of Principal Payments
The rate and amount of distributions in reduction of the Certificate Balance of any class of Offered Certificates that are also Principal Balance Certificates and the yield to maturity of any class of Offered Certificates will be directly related to the rate of payments of principal (both scheduled and unscheduled) on the Mortgage Loans, as well as borrower defaults and the severity of losses occurring upon a default and the resulting rate and timing of collections made in connection with liquidations of Mortgage Loans due to these defaults. Principal payments on the Mortgage Loans will be affected by their amortization schedules, lockout periods, defeasance provisions, provisions relating to the release and/or application of earnout reserves, provisions requiring prepayments in connection with the release of real property collateral, requirements to pay yield maintenance charges or prepayment premiums in connection with principal payments, the dates on which balloon payments are due, incentives for a borrower to repay an ARD Loan by the related Anticipated Repayment Date, property release provisions, provisions relating to the application or release of earnout reserves, and any extensions of maturity dates by the master servicer or the special servicer. While voluntary prepayments of some Mortgage Loans are generally prohibited during applicable prepayment lockout periods, effective prepayments may occur if a sufficiently significant portion of a mortgaged property is lost due to casualty or condemnation. In addition, such distributions in reduction of Certificate Balances of the respective classes of Offered Certificates that are also Principal Balance Certificates may result from repurchases of, or substitutions for, Mortgage Loans made by the sponsors due to missing or defective documentation or breaches of representations and warranties with respect to the Mortgage Loans as described under “Description of the Mortgage Loan Purchase Agreements”, purchases of the Mortgage Loans in the manner described under “Pooling and Servicing Agreement—Termination; Retirement of Certificates”, and the exercise of purchase options by the holder of a Subordinate Companion Loan or a mezzanine loan, if any. See “Description of the Mortgage Pool—The Whole Loans”. To the extent a Mortgage Loan requires payment of a yield maintenance charge or prepayment premium in connection with a voluntary prepayment, any such yield maintenance charge or prepayment premium generally is not due in connection with a prepayment due to casualty or condemnation, is not included in the purchase price of a Mortgage Loan purchased or repurchased due to a breach of a representation or warranty or otherwise, and may not be enforceable or collectible upon a default.
Because the certificates with Notional Amounts are not entitled to distributions of principal, the yield on such certificates will be extremely sensitive to prepayments received in respect of the Mortgage Loans to the extent distributed to reduce the related Notional Amount of the applicable class of certificates. In addition, although the borrower under an ARD Loan may have certain incentives to prepay such ARD Loan on its Anticipated Repayment Date, we cannot assure you that the borrower will be able to prepay such ARD Loan on its related Anticipated Repayment Date. The failure of the borrower to prepay an ARD Loan on its Anticipated Repayment Date will not be an event of default under the terms of such ARD Loan, and pursuant to the terms of the PSA, neither the master servicer nor the special servicer will be permitted to take any enforcement action with respect to the borrower’s failure to pay Excess Interest until the scheduled maturity of such ARD Loan; provided that the master servicer or the special servicer, as the case may be, may take action to enforce the issuing entity’s right to apply excess cash flow to
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principal in accordance with the terms of the respective ARD Loan documents. With respect to the Class A-SB certificates, the extent to which the planned balances are achieved and the sensitivity of the Class A-SB certificates to principal prepayments of the Mortgage Loans allocated to the Principal Balance Certificates will depend in part on the period of time during which the Senior Principal Balance Certificates remain outstanding. As such, the Class A-SB certificates will become more sensitive to the rate of prepayments on the Mortgage Loans allocated to the Principal Balance Certificates than they were when the Senior Principal Balance Certificates were outstanding.
Prospective investors should consider the effects of the COVID-19 pandemic on the rate, timing and amount of collections on the Mortgage Loans, including the likelihood of resulting defaults and/or the impact of associated forbearance arrangements.
The extent to which the yield to maturity of any class of Offered Certificates may vary from the anticipated yield will depend upon the degree to which the certificates are purchased at a discount or premium and when, and to what degree, payments of principal on the Mortgage Loans are in turn distributed on the certificates or, in the case of the Class X Certificates, applied to reduce their Notional Amounts. An investor should consider, in the case of any certificate (other than a certificate with a Notional Amount) purchased at a discount, the risk that a slower than anticipated rate of principal payments on the Mortgage Loans could result in an actual yield to such investor that is lower than the anticipated yield and, in the case of any certificate purchased at a premium (including certificates with Notional Amounts), the risk that a faster than anticipated rate of principal payments could result in an actual yield to such investor that is lower than the anticipated yield. In general, the earlier a payment of principal on the Mortgage Loans is distributed or otherwise results in reduction of the Certificate Balance of a certificate purchased at a discount or premium, the greater will be the effect on an investor’s yield to maturity. As a result, the effect on an investor’s yield of principal payments distributed on an investor’s certificates occurring at a rate higher (or lower) than the rate anticipated by the investor during any particular period would not be fully offset by a subsequent like reduction (or increase) in the rate of principal payments.
The yield on each of the classes of certificates that have a Pass-Through Rate equal to, limited by, or based on, the WAC Rate could (or in the case of any class of certificates with a Pass-Through Rate equal to, or based on, the WAC Rate, would) be adversely affected if Mortgage Loans with higher Mortgage Rates prepay faster than Mortgage Loans with lower Mortgage Rates. The Pass-Through Rates on these classes of certificates may be adversely affected by a decrease in the WAC Rate even if principal prepayments do not occur.
Losses and Shortfalls
The Certificate Balance or Notional Amount of any class of Offered Certificates may be reduced without distributions of principal as a result of the occurrence and allocation of Realized Losses, reducing the maximum amount distributable in respect of principal on the Offered Certificates that are Principal Balance Certificates as well as the amount of interest that would have otherwise been payable on the Offered Certificates in the absence of such reduction. In general, a Realized Loss occurs when the principal balance of a Mortgage Loan is reduced without an equal distribution (based on the allocation of amounts among the Principal Balance Certificates, on the one hand, and the VRR Interest, on the other hand) to applicable Certificateholders in reduction of the Certificate Balances of the certificates. Realized Losses may occur in connection with a default on a Mortgage Loan, acceptance of a discounted pay-off, the liquidation of the related Mortgaged Properties, a reduction in the principal balance of a Mortgage Loan by a bankruptcy court or pursuant to a modification, a recovery by the master servicer or trustee of a Nonrecoverable Advance on a Distribution Date or the incurrence of certain unanticipated or default-related costs and expenses (such as interest on Advances, Workout Fees, Liquidation Fees and Special Servicing Fees). Any reduction of the Certificate Balance of a class of Principal Balance Certificates indicated in the following table as a result of the application of Realized Losses will also reduce the Notional Amount of the related certificates. Realized Losses will be allocated to the respective Classes of the Principal Balance Certificates in reverse distribution priority and as more particularly described in “Description of the Certificates—Subordination; Allocation of Realized Losses”.
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Interest-Only Class of Certificates |
Class Notional Amount |
Underlying Class(es) |
| Class X-A | $675,717,000 | Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4, Class A-5, Class A-M |
| Class X-B | $43,455,000 | Class B |
| Class X-D | $44,540,000 | Class D, Class E |
| Class X-F | $26,073,000 | Class F |
| Class X-G | $8,691,000 | Class G |
| Class X-H | $29,332,336 | Class H |
Certificateholders are not entitled to receive distributions of Periodic Payments when due except to the extent they are either covered by a P&I Advance or actually received. Consequently, any defaulted Periodic Payment for which no such P&I Advance is made will tend to extend the weighted average lives of the Principal Balance Certificates, whether or not a permitted extension of the due date of the related Mortgage Loan has been completed.
Losses and shortfalls on any AB Whole Loan and Prepayment Interest Shortfalls for each Distribution Date with respect to an AB Whole Loan will generally be allocated first to the related Subordinate Companion Loan and then to the related Mortgage Loan (and correspondingly to the certificates to the extent not covered by the master servicer’s Compensating Interest Payment for such Distribution Date in the case of any Prepayment Interest Shortfall) and any Pari Passu Companion Loans on a pro rata basis.
Certain Relevant Factors Affecting Loan Payments and Defaults
The rate and timing of principal payments and defaults and the severity of losses on the Mortgage Loans may be affected by a number of factors, including, without limitation, the availability of credit for commercial or multifamily real estate, prevailing interest rates, the terms of the Mortgage Loans (for example, “due-on-sale” clauses, lockout periods or yield maintenance charges, release of property provisions, amortization terms that require balloon payments and incentives for a borrower to repay its ARD Loan by the Anticipated Repayment Date), the demographics and relative economic vitality of the areas in which the Mortgaged Properties are located and the general supply and demand for rental properties in those areas, the quality of management of the Mortgaged Properties, the servicing of the Mortgage Loans, possible changes in tax laws and other opportunities for investment. See “Risk Factors” and “Description of the Mortgage Pool”.
The rate of prepayment on the pool of Mortgage Loans is likely to be affected by prevailing market interest rates for Mortgage Loans of a comparable type, term and risk level as the Mortgage Loans. When the prevailing market interest rate is below a mortgage interest rate, a borrower may have an increased incentive to refinance its Mortgage Loan. Although the Mortgage Loans contain provisions designed to mitigate the likelihood of an early loan repayment, we cannot assure you that the related borrowers will refrain from prepaying their Mortgage Loans due to the existence of these provisions, or that involuntary prepayments will not occur. See “Description of the Mortgage Pool—Certain Terms of the Mortgage Loans”.
With respect to certain Mortgage Loans, the related Mortgage Loan documents allow for the sale of individual properties and the severance of the related debt and the assumption by the transferee of such portion of the Mortgage Loan as-is allocable to the individual property acquired by that transferee, subject to the satisfaction of certain conditions. In addition, with respect to certain Mortgage Loans, the related Mortgage Loan documents allow for partial releases of individual Mortgaged Properties during a lockout period or during such time as a yield maintenance charge would otherwise be payable, which could result in a prepayment of a portion of the initial principal balance of the related Mortgage Loan without payment of a yield maintenance charge or prepayment premium. Additionally, in the case of a partial release of an individual Mortgaged Property, the related release amount in many cases is greater than the Allocated Loan Amount for the Mortgaged Property being released, which would result in a greater than proportionate paydown of the Mortgage Loan. See “Description of the Mortgage Pool—Certain Terms of the Mortgage Loans—Partial Releases”.
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Depending on prevailing market interest rates, the outlook for market interest rates and economic conditions generally, some borrowers may sell Mortgaged Properties in order to realize their equity in the Mortgaged Property, to meet cash flow needs or to make other investments. In addition, some borrowers may be motivated by federal and state tax laws (which are subject to change) to sell Mortgaged Properties prior to the exhaustion of tax depreciation benefits.
We make no representation as to the particular factors that will affect the rate and timing of prepayments and defaults on the Mortgage Loans, as to the relative importance of those factors, as to the percentage of the principal balance of the Mortgage Loans that will be prepaid or as to which a default will have occurred as of any date or as to the overall rate of prepayment or default on the Mortgage Loans.
Delay in Payment of Distributions
Because each monthly distribution is made on each Distribution Date, which is at least 15 days after the end of the related Interest Accrual Period for the certificates, the effective yield to the holders of such certificates will be lower than the yield that would otherwise be produced by the applicable Pass-Through Rates and purchase prices (assuming the prices did not account for the delay).
Yield on the Certificates with Notional Amounts
The yield to maturity of the certificates with Notional Amounts will be highly sensitive to the rate and timing of reductions made to the Certificate Balances of the classes of certificates indicated in the following table, including by reason of prepayments and principal losses on the Mortgage Loans (or Whole Loans) and other factors described above.
Interest-Only Class of Certificates |
Class
Notional |
Underlying Class(es) |
| Class X-A | $675,717,000 | Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4, Class A-5, Class A-M |
| Class X-B | $43,455,000 | Class B |
| Class X-D | $44,540,000 | Class D, Class E |
| Class X-F | $26,073,000 | Class F |
| Class X-G | $8,691,000 | Class G |
| Class X-H | $29,332,336 | Class H |
Any optional termination by the holders of the Controlling Class, the special servicer, the master servicer or the holders of the Class R certificates would result in prepayment in full of the Offered Certificates and would have an adverse effect on the yield of a class of the certificates with Notional Amounts because a termination would have an effect similar to a principal prepayment in full of the Mortgage Loans and, as a result, investors in these certificates and any other Offered Certificates purchased at premium might not fully recoup their initial investment. See “Pooling and Servicing Agreement—Termination; Retirement of Certificates”.
Investors in the certificates with Notional Amounts should fully consider the associated risks, including the risk that an extremely rapid rate of prepayment or other liquidation of the Mortgage Loans could result in the failure of such investors to recoup fully their initial investments.
Weighted Average Life
The weighted average life of a Principal Balance Certificate refers to the average amount of time that will elapse from the date of its issuance until each dollar allocable to principal of the certificate is distributed to the related investor. The weighted average life of a Principal Balance Certificate will be influenced by, among other things, the rate at which principal on the mortgage loans is paid or otherwise received, which may be in the form of scheduled amortization, voluntary prepayments, Insurance and Condemnation Proceeds and Liquidation Proceeds. Distributions among the various classes of certificates will be made as set forth under “Description of the Certificates—Distributions—Priority of Distributions” and “Credit Risk Retention—The VRR Interest—Material Terms of the VRR Interest—Priority of Distributions on the VRR Interest”.
447
Prepayments on Mortgage Loans (or Whole Loans) may be measured by a prepayment standard or model. The “Constant Prepayment Rate” or “CPR” model represents an assumed constant annual rate of prepayment each month, expressed as a per annum percentage of the then-scheduled principal balance of the pool of Mortgage Loans. As used in each of the following tables, the column headed “0% CPR” assumes that none of the Mortgage Loans (or Whole Loans) is prepaid before its maturity date or Anticipated Repayment Date, as the case may be. The columns headed “25% CPR”, “50% CPR”, “75% CPR” and “100% CPR” assume that no prepayments are made on any Mortgage Loan (or Whole Loan) during such Mortgage Loan’s (or such Whole Loan’s) lockout period, defeasance period, yield maintenance period or prepayment premium lock-out period (in each case, if any), and that prepayments are otherwise made on each of the Mortgage Loans (or Whole Loans) at the indicated CPR percentages. We cannot assure you, however, that prepayments of the Mortgage Loans (or Whole Loans) will conform to any level of CPR, and we make no representation that the Mortgage Loans (or Whole Loans) will prepay at the levels of CPR shown or at any other prepayment rate or that Mortgage Loans (or Whole Loans) that are in a lockout period, defeasance period, yield maintenance period or prepayment premium lock-out period will not prepay as a result of involuntary liquidations upon default or otherwise.
The following tables indicate the percentage of the initial Certificate Balance of each class of the Offered Certificates (other than the Class X-A certificates) that would be outstanding after each of the dates shown at various CPRs and the corresponding weighted average life of each class of Offered Certificates (other than the Class X-A certificates). The tables have been prepared on the basis of the following assumptions (the “Modeling Assumptions”), among others:
| ● | Scheduled Periodic Payments, including payments due at maturity, of principal and/or interest on the Mortgage Loans will be received on a timely basis and will be distributed on the 15th day of the related month, beginning in May 2022; |
| ● | the Mortgage Rate in effect for each Mortgage and AB Whole Loan as of the Cut-off Date will remain in effect to the related maturity date or Anticipated Repayment Date and will be adjusted as required pursuant to the definition of Mortgage Rate; |
| ● | the Mortgage Loan Sellers will not be required to repurchase any Mortgage Loan, and none of the holders of the Controlling Class (or any other Certificateholder), the special servicer, the master servicer or the holders of the Class R certificates will exercise its option to purchase all the Mortgage Loans and thereby cause an early termination of the issuing entity and no holder of any mezzanine debt or other indebtedness will exercise its option to purchase the related Mortgage Loan; |
| ● | any principal prepayments on the Mortgage Loan and AB Whole Loans will be received on their respective Due Dates after the expiration of any applicable lockout period, any applicable period in which defeasance is permitted, and any applicable yield maintenance period, in each case, at the respective levels of CPR set forth in the tables below (and as applicable, without regard to any limitations in such Mortgage Loans and Whole Loans on partial voluntary principal prepayment) and allocated to the related Mortgage Loan pursuant to the related Intercreditor Agreement; |
| ● | no Prepayment Interest Shortfalls are incurred and no prepayment premiums or yield maintenance charges are collected; |
| ● | the Closing Date occurs on April 14, 2022; |
| ● | each ARD Loan prepays in full on the related Anticipated Repayment Date (in the case of a 0% CPR scenario); |
| ● | the Pass-Through Rates, initial Certificate Balances and initial Notional Amount of the respective classes of Offered Certificates are as described in this prospectus; |
448
| ● | the Administrative Cost Rate is calculated on the Stated Principal Balance of the Mortgage Loans and in the same manner as interest is calculated on the Mortgage Loans; |
| ● | no reserves, earnouts, holdbacks, insurance proceeds or condemnation proceeds are applied to prepay any related Mortgage Loan (or Whole Loan) in whole or in part; |
| ● | no additional trust fund expenses are incurred; |
| ● | no property releases (or related re-amortizations) occur; |
| ● | the optional termination is not exercised; and |
| ● | there are no modifications or maturity date extensions in respect of the Mortgage Loans. |
To the extent that the Mortgage Loans (or Whole Loans) have characteristics that differ from those assumed in preparing the tables set forth below, a class of Offered Certificates may mature earlier or later than indicated by the tables. The tables set forth below are for illustrative purposes only and it is highly unlikely that the Mortgage Loans (or Whole Loans) will actually prepay at any constant rate until maturity or that all the Mortgage Loans (and Whole Loans) will prepay at the same rate. In addition, variations in the actual prepayment experience and the balance of the Mortgage Loans (or Whole Loans) that prepay may increase or decrease the percentages of initial Certificate Balances (and weighted average lives) shown in the following tables. These variations may occur even if the average prepayment experience of the Mortgage Loans (or Whole Loans) were to equal any of the specified CPR percentages. Investors should not rely on the prepayment assumptions set forth in this prospectus and are urged to conduct their own analyses of the rates at which the Mortgage Loans (or Whole Loans) may be expected to prepay, based on their own assumptions. Furthermore, in light of the recent COVID-19 pandemic, several of the Modeling Assumptions (particularly, those regarding the timely receipt of all scheduled loan payments and the absence of any delinquencies, defaults, forbearances, loan modifications and advances) may not prove to be entirely accurate. Based on the foregoing assumptions, the following tables indicate the resulting weighted average lives of each class of Offered Certificates and set forth the percentage of the initial Certificate Balance of the class of the certificate that would be outstanding after each of the dates shown at the indicated CPRs.
Percent
of the Initial Certificate Balance
of the Class A-1 Certificates at the Respective CPRs
Set Forth Below:
Distribution Date |
0% CPR |
25% CPR |
50% CPR |
75% CPR |
100% CPR |
| Initial Percentage | 100% | 100% | 100% | 100% | 100% |
| April 2023 | 89% | 89% | 89% | 89% | 89% |
| April 2024 | 67% | 67% | 67% | 67% | 67% |
| April 2025 | 43% | 43% | 43% | 43% | 43% |
| April 2026 | 16% | 16% | 16% | 16% | 16% |
| April 2027 and thereafter | 0% | 0% | 0% | 0% | 0% |
| Weighted Average Life (years)(1) | 2.66 | 2.65 | 2.64 | 2.64 | 2.64 |
| (1) | The weighted average life of the Class A-1 certificates is determined by (a) multiplying the amount of each principal distribution on it by the number of years from the date of issuance of the Class A-1 certificates to the related Distribution Date, (b) summing the results and (c) dividing the sum by the aggregate amount of the reductions in the Certificate Balance of the Class A-1 certificates. |
449
Percent
of the Initial Certificate Balance
of the Class A-2 Certificates at the Respective CPRs
Set Forth Below:
Distribution Date |
0% CPR |
25% CPR |
50% CPR |
75% CPR |
100% CPR |
| Initial Percentage | 100% | 100% | 100% | 100% | 100% |
| April 2023 | 100% | 100% | 100% | 100% | 100% |
| April 2024 | 100% | 100% | 100% | 100% | 100% |
| April 2025 | 100% | 100% | 100% | 100% | 100% |
| April 2026 | 100% | 100% | 100% | 100% | 100% |
| April 2027 and thereafter | 0% | 0% | 0% | 0% | 0% |
| Weighted Average Life (years)(1) | 4.77 | 4.76 | 4.74 | 4.70 | 4.47 |
| (1) | The weighted average life of the Class A-2 certificates is determined by (a) multiplying the amount of each principal distribution on it by the number of years from the date of issuance of the Class A-2 certificates to the related Distribution Date, (b) summing the results and (c) dividing the sum by the aggregate amount of the reductions in the Certificate Balance of the Class A-2 certificates. |
Percent
of the Initial Certificate Balance
of the Class A-SB Certificates at the Respective CPRs
Set Forth Below:
Distribution Date |
0% CPR |
25% CPR |
50% CPR |
75% CPR |
100% CPR |
| Initial Percentage | 100% | 100% | 100% | 100% | 100% |
| April 2023 | 100% | 100% | 100% | 100% | 100% |
| April 2024 | 100% | 100% | 100% | 100% | 100% |
| April 2025 | 100% | 100% | 100% | 100% | 100% |
| April 2026 | 100% | 100% | 100% | 100% | 100% |
| April 2027 | 98% | 98% | 98% | 98% | 98% |
| April 2028 | 78% | 78% | 78% | 78% | 78% |
| April 2029 | 57% | 57% | 57% | 57% | 57% |
| April 2030 | 36% | 36% | 36% | 36% | 36% |
| April 2031 | 15% | 15% | 15% | 15% | 15% |
| April 2032 and thereafter | 0% | 0% | 0% | 0% | 0% |
| Weighted Average Life (years)(1) | 7.36 | 7.36 | 7.36 | 7.36 | 7.37 |
| (1) | The weighted average life of the Class A-SB certificates is determined by (a) multiplying the amount of each principal distribution on it by the number of years from the date of issuance of the Class A-SB certificates to the related Distribution Date, (b) summing the results and (c) dividing the sum by the aggregate amount of the reductions in the Certificate Balance of the Class A-SB certificates. |
450
Percent
of the Minimum Initial Certificate Balance ($0)(1)
of the Class A-4 Certificates at the Respective CPRs
Set Forth Below:
Distribution Date |
0% CPR |
25% CPR |
50% CPR |
75% CPR |
100% CPR |
| Initial Percentage | NAP | NAP | NAP | NAP | NAP |
| April 2023 | NAP | NAP | NAP | NAP | NAP |
| April 2024 | NAP | NAP | NAP | NAP | NAP |
| April 2025 | NAP | NAP | NAP | NAP | NAP |
| April 2026 | NAP | NAP | NAP | NAP | NAP |
| April 2027 | NAP | NAP | NAP | NAP | NAP |
| April 2028 | NAP | NAP | NAP | NAP | NAP |
| April 2029 | NAP | NAP | NAP | NAP | NAP |
| April 2030 | NAP | NAP | NAP | NAP | NAP |
| April 2031 | NAP | NAP | NAP | NAP | NAP |
| April 2032 and thereafter | NAP | NAP | NAP | NAP | NAP |
| Weighted Average Life (years)(2) | NAP | NAP | NAP | NAP | NAP |
| (1) | The exact initial Certificate Balance of the Class A-4 certificates is unknown and will be determined based on final pricing of that Class. The information in the chart above is based on the minimum potential initial Certificate Balance of the Class A-4 certificates, however, the actual Certificate Balance may be greater than the minimum shown, in which case the weighted average lives may be different than those shown above. |
| (2) | The weighted average life of the Class A-4 certificates is determined by (a) multiplying the amount of each principal distribution on it by the number of years from the date of issuance of the Class A-4 certificates to the related Distribution Date, (b) summing the results and (c) dividing the sum by the aggregate amount of the reductions in the Certificate Balance of the Class A-4 certificates. |
Percent
of the Maximum Initial Certificate Balance ($110,716,000)(1)
of the Class A-4 Certificates at the Respective CPRs
Set Forth Below:
Distribution Date |
0% CPR |
25% CPR |
50% CPR |
75% CPR |
100% CPR |
| Initial Percentage | 100% | 100% | 100% | 100% | 100% |
| April 2023 | 100% | 100% | 100% | 100% | 100% |
| April 2024 | 100% | 100% | 100% | 100% | 100% |
| April 2025 | 100% | 100% | 100% | 100% | 100% |
| April 2026 | 100% | 100% | 100% | 100% | 100% |
| April 2027 | 100% | 100% | 100% | 100% | 100% |
| April 2028 | 100% | 100% | 100% | 100% | 100% |
| April 2029 | 100% | 100% | 100% | 100% | 100% |
| April 2030 | 95% | 95% | 95% | 95% | 95% |
| April 2031 | 95% | 95% | 95% | 95% | 95% |
| April 2032 and thereafter | 0% | 0% | 0% | 0% | 0% |
| Weighted Average Life (years)(2) | 9.63 | 9.54 | 9.43 | 9.33 | 9.16 |
| (1) | The exact initial Certificate Balance of the Class A-4 certificates is unknown and will be determined based on final pricing of that Class. The information in the chart above is based on the maximum potential initial Certificate Balance of the Class A-4 certificates, however, the actual Certificate Balance may be less than the maximum shown, in which case the weighted average lives may be different than those shown above. |
| (2) | The weighted average life of the Class A-4 certificates is determined by (a) multiplying the amount of each principal distribution on it by the number of years from the date of issuance of the Class A-4 certificates to the related Distribution Date, (b) summing the results and (c) dividing the sum by the aggregate amount of the reductions in the Certificate Balance of the Class A-4 certificates. |
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Percent
of the Minimum Initial Certificate Balance ($241,475,000)(1)
of the Class A-5 Certificates at the Respective CPRs
Set Forth Below:
Distribution Date |
0% CPR |
25% CPR |
50% CPR |
75% CPR |
100% CPR |
| Initial Percentage | 100% | 100% | 100% | 100% | 100% |
| April 2023 | 100% | 100% | 100% | 100% | 100% |
| April 2024 | 100% | 100% | 100% | 100% | 100% |
| April 2025 | 100% | 100% | 100% | 100% | 100% |
| April 2026 | 100% | 100% | 100% | 100% | 100% |
| April 2027 | 100% | 100% | 100% | 100% | 100% |
| April 2028 | 100% | 100% | 100% | 100% | 100% |
| April 2029 | 100% | 100% | 100% | 100% | 100% |
| April 2030 | 100% | 100% | 100% | 100% | 100% |
| April 2031 | 100% | 100% | 100% | 100% | 100% |
| April 2032 and thereafter | 0% | 0% | 0% | 0% | 0% |
| Weighted Average Life (years)(2) | 9.86 | 9.84 | 9.81 | 9.74 | 9.44 |
| (1) | The exact initial Certificate Balance of the Class A-5 certificates is unknown and will be determined based on final pricing of that Class. The information in the chart above is based on the minimum potential initial Certificate Balance of the Class A-5 certificates, however, the actual Certificate Balance may be greater than the minimum shown, in which case the weighted average lives may be different than those shown above. |
| (2) | The weighted average life of the Class A-5 certificates is determined by (a) multiplying the amount of each principal distribution on it by the number of years from the date of issuance of the Class A-5 certificates to the related Distribution Date, (b) summing the results and (c) dividing the sum by the aggregate amount of the reductions in the Certificate Balance of the Class A-5 certificates. |
Percent
of the Maximum Initial Certificate Balance ($352,191,000)(1)
of the Class A-5 Certificates at the Respective CPRs
Set Forth Below:
Distribution Date |
0% CPR |
25% CPR |
50% CPR |
75% CPR |
100% CPR |
| Initial Percentage | 100% | 100% | 100% | 100% | 100% |
| April 2023 | 100% | 100% | 100% | 100% | 100% |
| April 2024 | 100% | 100% | 100% | 100% | 100% |
| April 2025 | 100% | 100% | 100% | 100% | 100% |
| April 2026 | 100% | 100% | 100% | 100% | 100% |
| April 2027 | 100% | 100% | 100% | 100% | 100% |
| April 2028 | 100% | 100% | 100% | 100% | 100% |
| April 2029 | 100% | 100% | 100% | 100% | 100% |
| April 2030 | 98% | 98% | 98% | 98% | 98% |
| April 2031 | 98% | 98% | 98% | 98% | 98% |
| April 2032 and thereafter | 0% | 0% | 0% | 0% | 0% |
| Weighted Average Life (years)(2) | 9.79 | 9.74 | 9.69 | 9.61 | 9.35 |
| (1) | The exact initial Certificate Balance of the Class A-5 certificates is unknown and will be determined based on final pricing of that Class. The information in the chart above is based on the maximum potential initial Certificate Balance of the Class A-5 certificates, however, the actual Certificate Balance may be less than the maximum shown, in which case the weighted average lives may be different than those shown above. |
| (2) | The weighted average life of the Class A-5 certificates is determined by (a) multiplying the amount of each principal distribution on it by the number of years from the date of issuance of the Class A-5 certificates to the related Distribution Date, (b) summing the results and (c) dividing the sum by the aggregate amount of the reductions in the Certificate Balance of the Class A-5 certificates. |
452
Percent
of the Initial Certificate Balance
of the Class A-M Certificates at the Respective CPRs
Set Forth Below:
Distribution Date |
0% CPR |
25% CPR |
50% CPR |
75% CPR |
100% CPR |
| Initial Percentage | 100% | 100% | 100% | 100% | 100% |
| April 2023 | 100% | 100% | 100% | 100% | 100% |
| April 2024 | 100% | 100% | 100% | 100% | 100% |
| April 2025 | 100% | 100% | 100% | 100% | 100% |
| April 2026 | 100% | 100% | 100% | 100% | 100% |
| April 2027 | 100% | 100% | 100% | 100% | 100% |
| April 2028 | 100% | 100% | 100% | 100% | 100% |
| April 2029 | 100% | 100% | 100% | 100% | 100% |
| April 2030 | 100% | 100% | 100% | 100% | 100% |
| April 2031 | 100% | 100% | 100% | 100% | 100% |
| April 2032 and thereafter | 0% | 0% | 0% | 0% | 0% |
| Weighted Average Life (years)(1) | 9.92 | 9.92 | 9.92 | 9.92 | 9.62 |
| (1) | The weighted average life of the Class A-M certificates is determined by (a) multiplying the amount of each principal distribution on it by the number of years from the date of issuance of the Class A-M certificates to the related Distribution Date, (b) summing the results and (c) dividing the sum by the aggregate amount of the reductions in the Certificate Balance of the Class A-M certificates. |
Percent
of the Initial Certificate Balance
of the Class B Certificates at the Respective CPRs
Set Forth Below:
Distribution Date |
0% CPR |
25% CPR |
50% CPR |
75% CPR |
100% CPR |
| Initial Percentage | 100% | 100% | 100% | 100% | 100% |
| April 2023 | 100% | 100% | 100% | 100% | 100% |
| April 2024 | 100% | 100% | 100% | 100% | 100% |
| April 2025 | 100% | 100% | 100% | 100% | 100% |
| April 2026 | 100% | 100% | 100% | 100% | 100% |
| April 2027 | 100% | 100% | 100% | 100% | 100% |
| April 2028 | 100% | 100% | 100% | 100% | 100% |
| April 2029 | 100% | 100% | 100% | 100% | 100% |
| April 2030 | 100% | 100% | 100% | 100% | 100% |
| April 2031 | 100% | 100% | 100% | 100% | 100% |
| April 2032 and thereafter | 0% | 0% | 0% | 0% | 0% |
| Weighted Average Life (years)(1) | 9.92 | 9.92 | 9.92 | 9.92 | 9.67 |
| (1) | The weighted average life of the Class B certificates is determined by (a) multiplying the amount of each principal distribution on it by the number of years from the date of issuance of the Class B certificates to the related Distribution Date, (b) summing the results and (c) dividing the sum by the aggregate amount of the reductions in the Certificate Balance of the Class B certificates. |
453
Percent
of the Initial Certificate Balance
of the Class C Certificates at the Respective CPRs
Set Forth Below:
Distribution Date |
0% CPR |
25% CPR |
50% CPR |
75% CPR |
100% CPR |
| Initial Percentage | 100% | 100% | 100% | 100% | 100% |
| April 2023 | 100% | 100% | 100% | 100% | 100% |
| April 2024 | 100% | 100% | 100% | 100% | 100% |
| April 2025 | 100% | 100% | 100% | 100% | 100% |
| April 2026 | 100% | 100% | 100% | 100% | 100% |
| April 2027 | 100% | 100% | 100% | 100% | 100% |
| April 2028 | 100% | 100% | 100% | 100% | 100% |
| April 2029 | 100% | 100% | 100% | 100% | 100% |
| April 2030 | 100% | 100% | 100% | 100% | 100% |
| April 2031 | 100% | 100% | 100% | 100% | 100% |
| April 2032 and thereafter | 0% | 0% | 0% | 0% | 0% |
| Weighted Average Life (years)(1) | 9.97 | 9.94 | 9.92 | 9.92 | 9.67 |
| (1) | The weighted average life of the Class C certificates is determined by (a) multiplying the amount of each principal distribution on it by the number of years from the date of issuance of the Class C certificates to the related Distribution Date, (b) summing the results and (c) dividing the sum by the aggregate amount of the reductions in the Certificate Balance of the Class C certificates. |
Pre-Tax Yield to Maturity Tables
The
following tables indicate the approximate pre-tax yield to maturity on a corporate bond equivalent basis on the Offered Certificates
for the specified CPRs based on the assumptions set forth under
“—Weighted Average Life” above. It was further assumed that the purchase price of the Offered Certificates
is as specified in the tables below, expressed as a percentage of the initial Certificate Balance or Notional Amount, as applicable,
plus accrued interest from April 1, 2022 to the Closing Date.
The yields set forth in the following tables were calculated by determining the monthly discount rates that, when applied to the assumed streams of cash flows to be paid on the applicable class of Offered Certificates, would cause the discounted present value of such assumed stream of cash flows to equal the assumed purchase price of such class, and by converting such monthly rates to semi-annual corporate bond equivalent rates. Such calculations do not take into account shortfalls in collection of interest due to prepayments (or other liquidations) of the Mortgage Loans (or Whole Loans) or the interest rates at which investors may be able to reinvest funds received by them as distributions on the applicable class of certificates (and, accordingly, do not purport to reflect the return on any investment in the applicable class of Offered Certificates when such reinvestment rates are considered).
The characteristics of the Mortgage Loans may differ from those assumed in preparing the tables below. In addition, we cannot assure you that the Mortgage Loans (or Whole Loans) will prepay in accordance with the above assumptions at any of the rates shown in the tables or at any other particular rate, that the cash flows on the applicable class of Offered Certificates will correspond to the cash flows shown in this prospectus or that the aggregate purchase price of such class of Offered Certificates will be as assumed. In addition, it is unlikely that the Mortgage Loans (or Whole Loans) will prepay in accordance with the above assumptions at any of the specified CPRs until maturity or that all the Mortgage Loans (or Whole Loans) will so prepay at the same rate. Timing of changes in the rate of prepayments may significantly affect the actual yield to maturity to investors, even if the average rate of principal prepayments is consistent with the expectations of investors. Investors must make their own decisions as to the appropriate prepayment assumption to be used in deciding whether to purchase any class of Offered Certificates.
Furthermore, in light of the recent COVID-19 pandemic, several of the Modeling Assumptions (particularly, those regarding the timely receipt of all scheduled loan payments and the absence of any delinquencies, defaults, forbearances, loan modifications and advances) may not prove to be entirely accurate.
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For purposes of this prospectus, prepayment assumptions with respect to the Mortgage Loans (or Whole Loans) are presented in terms of the CPR model described under “—Weighted Average Life” above.
Pre-Tax Yield to Maturity for the Class A-1 Certificates
Assumed
Purchase Price |
Prepayment Assumption (CPR) | ||||
0% CPR |
25% CPR |
50% CPR |
75% CPR |
100% CPR | |
Pre-Tax Yield to Maturity for the Class A-2 Certificates
Assumed
Purchase Price |
Prepayment Assumption (CPR) | ||||
0% CPR |
25% CPR |
50% CPR |
75% CPR |
100% CPR | |
Pre-Tax Yield to Maturity for the Class A-SB Certificates
Assumed
Purchase Price |
Prepayment Assumption (CPR) | ||||
0% CPR |
25% CPR |
50% CPR |
75% CPR |
100% CPR | |
Pre-Tax Yield to Maturity for the Class A-4 Certificates
Assumed
Purchase Price |
Prepayment Assumption (CPR) | ||||
0% CPR |
25% CPR |
50% CPR |
75% CPR |
100% CPR | |
Pre-Tax Yield to Maturity for the Class A-5 Certificates
Assumed
Purchase Price |
Prepayment Assumption (CPR) | ||||
0% CPR |
25% CPR |
50% CPR |
75% CPR |
100% CPR | |
Pre-Tax Yield to Maturity for the Class X-A Certificates
Assumed
Purchase Price |
Prepayment Assumption (CPR) | ||||
0% CPR |
25% CPR |
50% CPR |
75% CPR |
100% CPR | |
Pre-Tax Yield to Maturity for the Class A-M Certificates
Assumed
Purchase Price |
Prepayment Assumption (CPR) | ||||
0% CPR |
25% CPR |
50% CPR |
75% CPR |
100% CPR | |
455
Pre-Tax Yield to Maturity for the Class B Certificates
Assumed
Purchase Price |
Prepayment Assumption (CPR) | ||||
0% CPR |
25% CPR |
50% CPR |
75% CPR |
100% CPR | |
Pre-Tax Yield to Maturity for the Class C Certificates
Assumed
Purchase Price |
Prepayment Assumption (CPR) | ||||
0% CPR |
25% CPR |
50% CPR |
75% CPR |
100% CPR | |
MATERIAL FEDERAL INCOME TAX CONSIDERATIONS
General
The following is a general discussion of the anticipated material federal income tax consequences of the purchase, ownership and disposition of the certificates. The discussion below does not purport to address all federal income tax consequences that may be applicable to particular categories of investors (such as banks, insurance companies, securities dealers, foreign persons, investors whose functional currency is not the U.S. dollar, and investors that hold the certificates as part of a “straddle” or “conversion transaction”), some of which may be subject to special rules. The authorities on which this discussion is based are subject to change or different interpretations, and any such change or interpretation can apply retroactively. This discussion reflects provisions of the Internal Revenue Code of 1986, as amended (the “Code”), as well as regulations (the “REMIC Regulations”) promulgated by the U.S. Department of the Treasury and the IRS. Investors are encouraged to consult their tax advisors in determining the federal, state, local or any other tax consequences to them of the purchase, ownership and disposition of the certificates.
Two separate real estate mortgage investment conduit (“REMIC”) elections will be made with respect to designated portions of the issuing entity (the “Lower-Tier REMIC” and the “Upper-Tier REMIC”). The Lower-Tier REMIC will hold the Mortgage Loans (in the case of the STK Chicago Mortgage Loan, the entire interest in the STK Chicago Loan REMIC Regular Interest (as defined below) represented thereby) (excluding Excess Interest) and certain other assets and will issue (i) classes of regular interests (the “Lower-Tier Regular Interests”) to the Upper-Tier REMIC and (ii) an uncertificated interest represented by the Class R certificates as the sole class of “residual interests” in the Lower-Tier REMIC.
The Upper-Tier REMIC will hold the Lower-Tier Regular Interests and will issue (i) the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4, Class A-5, Class X-A, Class X-B, Class X-D, Class X-F, Class X-G, Class X-H, Class A-M, Class B, Class C, Class D, Class E, Class F, Class G, Class H certificates and the regular interests that correspond in the aggregate to the VRR Interest (the “VRR Upper-Tier Regular Interests”), each representing a regular interest in the Upper-Tier REMIC (the “Regular Interests”) and (ii) an uncertificated interest represented by the Class R certificates as the sole class of “residual interests” in the Upper-Tier REMIC.
Pursuant to a REMIC declaration effective as of August 26, 2021 (the “STK Chicago REMIC Declaration”) a REMIC election (the “STK Chicago Loan REMIC” and, together with the Lower-Tier REMIC and the Upper-Tier REMIC, the “Trust REMICs”) will be made with respect to the STK Chicago Mortgage Loan. The Certificate Administrator is responsible for preparing and filing the REMIC election and REMIC returns for the STK Chicago Loan REMIC. The STK Chicago Loan REMIC issued a single regular interest (the “STK Chicago Loan REMIC Regular Interest”) and a single uncertificated residual interest (the “STK Chicago Residual Interest”). The STK Chicago Loan REMIC Regular Interest represents the entire interest in the STK Chicago Mortgage Loan. The STK Chicago Residual Interest will
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be an asset of the issuing entity but will not be held by any REMIC. Its ownership will be evidenced by the Class R Certificates.
Qualification as a REMIC requires ongoing compliance with certain conditions. Assuming (i) the making of appropriate elections, (ii) compliance with the PSA and each Intercreditor Agreement, (iii) compliance with the STK Chicago REMIC Declaration and each Non-Serviced PSA and the continued qualification of each respective REMIC formed thereunder and (iv) compliance with any changes in the law, including any amendments to the Code or applicable Treasury regulations thereunder, in the opinion of Sidley Austin LLP, special tax counsel to the depositor, (a) each Trust REMIC will qualify as a REMIC on the Closing Date, (b) the STK Chicago Loan REMIC Regular Interest will constitute a “regular interest” in the STK Chicago Loan REMIC, (c) each of the Lower-Tier Regular Interests will constitute a “regular interest” in the Lower-Tier REMIC, (d) each of the Regular Interests will constitute a “regular interest” in the Upper-Tier REMIC and (e) the Class R certificates will evidence the sole class of “residual interests” in each of the Trust REMICs.
In addition, in the opinion of Sidley Austin LLP, special tax counsel to the depositor, (a) the portion of the issuing entity consisting of the entitlement to Excess Interest and the Excess Interest Distribution Account and the VRR Upper-Tier Regular Interests and distributions thereon will be classified as a trust under Treasury Regulations section 301.7701-4(c) (the “Grantor Trust”), (b) the VRR Interest will represent undivided beneficial interests in both the VRR Upper-Tier Regular Interest and the VRR Percentage of the Excess Interest and the Excess Interest Distribution Account under Section 671 of the Code, and (c) the Class S Certificates will represent undivided beneficial interests in the Non-VRR Percentage of the Excess Interest and the Excess Interest Distribution Account under Section 671 of the Code.
Qualification as a REMIC
In order for each Trust REMIC to qualify as a REMIC, there must be ongoing compliance on the part of such Trust REMIC with the requirements set forth in the Code. Each Trust REMIC must fulfill an asset test, which requires that no more than a de minimis portion of the assets of such Trust REMIC, as of the close of the third calendar month beginning after the Closing Date (which for purposes of this discussion is the date of the issuance of the Regular Interests, the “Startup Day”) and at all times thereafter, may consist of assets other than “qualified mortgages” and “permitted investments”. The REMIC Regulations provide a safe harbor pursuant to which the de minimis requirements will be met if at all times the aggregate adjusted basis of the nonqualified assets is less than 1% of the aggregate adjusted basis of all such Trust REMIC’s assets. Each Trust REMIC also must provide “reasonable arrangements” to prevent its residual interest from being held by “disqualified organizations” or their agents and must furnish applicable tax information to transferors or agents that violate this restriction. The PSA will provide that no legal or beneficial interest in the Class R certificates may be transferred or registered unless certain conditions, designed to prevent violation of this restriction, are met. It is expected that each Trust REMIC will qualify as a REMIC at all times that any of the Regular Interests are outstanding.
A qualified mortgage is any obligation that is principally secured by an interest in real property and that is either transferred to a REMIC on the Startup Day or is purchased by a REMIC within a three month period thereafter pursuant to a fixed price contract in effect on the Startup Day. Qualified mortgages include (i) whole mortgage loans such as the Mortgage Loans; provided that, in general, (a) the fair market value of the real property security (including buildings and structural components of the real property security) (reduced by (1) the amount of any lien on the real property security that is senior to the Mortgage Loan and (2) a proportionate amount of any lien on the real property security that is in parity with the Mortgage Loan) is at least 80% of the aggregate principal balance of such Mortgage Loan either at origination or as of the Startup Day (a loan-to-value ratio of not more than 125% with respect to the real property security) or (b) substantially all the proceeds of the Mortgage Loan or the underlying mortgages were used to acquire, improve or protect an interest in real property that, at the date of origination, was the only security for the Mortgage Loan, and (ii) regular interests in another REMIC, such as the STK Chicago Loan REMIC Interest evidenced by the STK Chicago Mortgage Loan and the Lower-Tier Regular Interests that will be held by the Upper-Tier REMIC. If a Mortgage Loan was not in fact principally secured
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by real property or is otherwise not a qualified mortgage, it must be disposed of within 90 days of discovery of such defect, or otherwise ceases to be a qualified mortgage after such 90-day period.
Permitted investments include “cash flow investments”, “qualified reserve assets” and “foreclosure property”. A cash flow investment is an investment, earning a return in the nature of interest, of amounts received on or with respect to qualified mortgages for a temporary period, not exceeding 13 months, until the next scheduled distribution to holders of interests in the Trust REMICs. A qualified reserve asset is any intangible property held for investment that is part of any reasonably required reserve maintained by the REMIC to provide for payments of expenses of the REMIC or amounts due on its regular or residual interests in the event of defaults (including delinquencies) on the qualified mortgages, lower than expected reinvestment returns, prepayment interest shortfalls and certain other contingencies. The Trust REMICs will not hold any qualified reserve assets. Foreclosure property is real property acquired by a REMIC in connection with the default or imminent default of a qualified mortgage and maintained by the REMIC in compliance with applicable rules and personal property that is incidental to such real property; provided that the mortgage loan sellers had no knowledge or reason to know, as of the Startup Day, that such a default had occurred or would occur. Foreclosure property may generally not be held after the close of the third calendar year beginning after the date the issuing entity acquires such property, with one extension that may be granted by the IRS.
A mortgage loan held by a REMIC will fail to be a qualified mortgage if it is “significantly modified” unless default is “reasonably foreseeable” or where the servicer believes there is a “significant risk of default” upon maturity of the mortgage loan or at an earlier date, and that by making such modification the risk of default is substantially reduced. A mortgage loan held by a REMIC will not be considered to have been “significantly modified” following the release of the lien on a portion of the real property collateral if (a) the release is pursuant to a defeasance permitted under the Mortgage Loan documents that occurs more than two years after the Startup Day of the REMIC or (b) following the release the loan-to-value ratio for the mortgage loan is not more than 125% with respect to the real property security. Furthermore, if the release is not pursuant to a defeasance and following the release the loan-to-value ratio for the mortgage loan is greater than 125%, the mortgage loan will continue to be a qualified mortgage if the release is part of a “qualified paydown transaction” in accordance with Revenue Procedure 2010-30.
In addition to the foregoing requirements, the various interests in a REMIC also must meet certain requirements. All of the interests in a REMIC must be either of the following: (i) one or more classes of regular interests or (ii) a single class of residual interests on which distributions, if any, are made pro rata. A regular interest is an interest in a REMIC that is issued on the Startup Day with fixed terms, is designated as a regular interest, and unconditionally entitles the holder to receive a specified principal amount (or other similar amount), and provides that interest payments (or other similar amounts), if any, at or before maturity either are payable based on a fixed rate or a qualified variable rate, or consist of a specified, nonvarying portion of the interest payments on the qualified mortgages. The rate on the specified portion may be a fixed rate, a variable rate, or the difference between one fixed or qualified variable rate and another fixed or qualified variable rate. The specified principal amount of a regular interest that provides for interest payments consisting of a specified, nonvarying portion of interest payments on qualified mortgages may be zero. An interest in a REMIC may be treated as a regular interest even if payments of principal with respect to such interest are subordinated to payments on other regular interests or the residual interest in the REMIC, and are dependent on the absence of defaults or delinquencies on qualified mortgages or permitted investments, lower than reasonably expected returns on permitted investments, expenses incurred by the REMIC or prepayment interest shortfalls. A residual interest is an interest in a REMIC other than a regular interest that is issued on the Startup Day that is designated as a residual interest. It is expected that each of the STK Chicago Loan REMIC Regular Interests will constitute a class of regular interests in the STK Chicago Loan REMIC, each of the Lower-Tier Regular Interests will constitute a class of regular interests in the Lower-Tier REMIC, each class of the Regular Interests will constitute a class of regular interests in the Upper-Tier REMIC, and the Class R certificates will evidence the sole class of residual interests in each Trust REMIC.
If an entity fails to comply with one or more of the ongoing requirements of the Code for status as a REMIC during any taxable year, the Code provides that the entity or applicable portion of it will not be
458
treated as a REMIC for such year and thereafter. In this event, any entity with debt obligations with two or more maturities, such as the Trust REMICs, may be treated as a separate association taxable as a corporation under Treasury regulations, and the certificates may be treated as equity interests in that association. The Code, however, authorizes the Treasury Department to issue regulations that address situations where failure to meet one or more of the requirements for REMIC status occurs inadvertently and in good faith. Investors should be aware, however, that the Conference Committee Report to the Tax Reform Act of 1986 (the “1986 Act”) indicates that the relief may be accompanied by sanctions, such as the imposition of a corporate tax on all or a portion of a REMIC’s income for the period of time in which the requirements for REMIC status are not satisfied.
Status of Offered Certificates
Offered Certificates held by a real estate investment trust will constitute “real estate assets” within the meaning of Code Section 856(c)(5)(B), and interest (including original issue discount) on the Offered Certificates will be considered “interest on obligations secured by mortgages on real property or on interests in real property” within the meaning of Code Section 856(c)(3)(B) in the same proportion that, for both purposes, the assets of the issuing entity would be so treated. For purposes of Code Section 856(c)(5)(B), payments of principal and interest on the Mortgage Loans that are reinvested pending distribution to holders of Offered Certificates qualify for such treatment. Offered Certificates held by a domestic building and loan association will be treated as “loans . . . secured by an interest in real property which is . . . residential real property” within the meaning of Code Section 7701(a)(19)(C)(v) or as other assets described in Code Section 7701(a)(19)(C) only to the extent the Mortgage Loans are secured by residential real property. As of the Cut-off Date, six (6) of the Mortgaged Properties (9.1%) are multifamily properties. Holders of Offered Certificates should consult their tax advisors whether the foregoing percentage or some other percentage applies to their Offered Certificates. If at all times 95% or more of the assets of the Trust REMICs qualify for each of the foregoing treatments, the Offered Certificates will qualify for the corresponding status in their entirety. For the purposes of the foregoing determinations, the Trust REMICs will be treated as a single REMIC. In addition, the Mortgage Loans that have been defeased with government securities will not qualify for such treatment. Offered Certificates will be “qualified mortgages” within the meaning of Code Section 860G(a)(3) for another REMIC if transferred to that REMIC within a prescribed time period in exchange for regular or residual interests in that REMIC. Moreover, Offered Certificates held by certain financial institutions will constitute an “evidence of indebtedness” within the meaning of Code Section 582(c)(1).
Taxation of Regular Interests
General
Each class of Regular Interests represents a regular interest in the Upper-Tier REMIC. The Regular Interests will represent newly originated debt instruments for federal income tax purposes. In general, interest, original issue discount and market discount on a Regular Interest will be treated as ordinary income to the holder of a Regular Interest (a “Regular Interest Holder”), and principal payments on a Regular Interest will be treated as a return of capital to the extent of the Regular Interest Holder’s basis in the Regular Interest. Regular Interest Holders must use the accrual method of accounting with regard to the Regular Interests, regardless of the method of accounting otherwise used by such Regular Interest Holders.
Original Issue Discount
Holders of Regular Interests issued with original issue discount generally must include original issue discount in ordinary income for federal income tax purposes as it accrues in accordance with the constant yield method, which takes into account the compounding of interest, in advance of receipt of the cash attributable to such income. The following discussion is based in part on temporary and final Treasury regulations (the “OID Regulations”) under Code Sections 1271 through 1273 and 1275 and in part on the provisions of the 1986 Act. Regular Interest Holders should be aware, however, that the OID Regulations do not adequately address certain issues relevant to prepayable securities, such as the Regular Interests.
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To the extent such issues are not addressed in the OID Regulations, the certificate administrator will apply the methodology described in the Conference Committee Report to the 1986 Act. We cannot assure you that the IRS will not take a different position as to those matters not currently addressed by the OID Regulations. Moreover, the OID Regulations include an anti-abuse rule allowing the IRS to apply or depart from the OID Regulations if necessary or appropriate to ensure a reasonable tax result in light of the applicable statutory provisions. A tax result will not be considered unreasonable under the anti-abuse rule, however, in the absence of a substantial effect on the present value of a taxpayer’s tax liability. Investors are advised to consult their own tax advisors as to the discussion in this prospectus and the appropriate method for reporting interest and original issue discount with respect to the Regular Interests.
Each Regular Interest will be treated as an installment obligation for purposes of determining the original issue discount includible in a Regular Interest Holder’s income. The total amount of original issue discount on a Regular Interest is the excess of the “stated redemption price at maturity” of the Regular Interest over its “issue price”. The issue price of a class of Regular Interests is the first price at which a substantial amount of Regular Interests of such class is sold to investors (excluding bond houses, brokers and underwriters) (in the case of the VRR Interest, as decreased for the portion of the price allocable to the right to receive Excess Interest). Although unclear under the OID Regulations, the certificate administrator will treat the issue price of Regular Interests for which there is no substantial sale as of the issue date as the fair market value of such Regular Interests as of the issue date (in the case of the VRR Interest, as decreased for the portion of the price allocable to the right to receive Excess Interest). The issue price of the Regular Interests also includes the amount paid by an initial Regular Interest Holder for accrued interest that relates to a period prior to the issue date of such class of Regular Interests. The stated redemption price at maturity of a Regular Interest is the sum of all payments provided by the debt instrument other than any qualified stated interest payments. Under the OID Regulations, qualified stated interest generally means interest payable at a single fixed rate or a qualified variable rate; provided that such interest payments are unconditionally payable at intervals of one year or less during the entire term of the obligation. Because there is no penalty or default remedy in the case of nonpayment of interest with respect to a Regular Interest, it is possible that no interest on any class of Regular Interests will be treated as qualified stated interest. However, because the Mortgage Loans provide for remedies in the event of default, the certificate administrator will treat all payments of stated interest on the Regular Interests (other than the Class X Certificates) as qualified stated interest (other than accrued interest distributed on the first Distribution Date for the number of days that exceed the interval between the Closing Date and the first Distribution Date). Based upon the anticipated issue price of each such class and a stated redemption price equal to the par amount of each such class (plus excess interest accrued thereon), it is anticipated that the Class certificates will be issued with original issue discount for federal income tax purposes.
It is anticipated that the certificate administrator will treat the Class X Certificates as having no qualified stated interest. Accordingly, such classes of Regular Interests will be considered to be issued with original issue discount in an amount equal to the excess of all distributions of interest expected to be received on such classes over their respective issue prices (including interest accrued prior to the Closing Date). Any “negative” amounts of original issue discount on such classes attributable to rapid prepayments with respect to the Mortgage Loans will not be deductible currently. The holder of any such class may be entitled to a deduction for a loss, which may be a capital loss, to the extent it becomes certain that such holder will not recover a portion of its basis in such class, assuming no further prepayments. In the alternative, it is possible that rules similar to the “noncontingent bond method” of the contingent interest rules of the OID Regulations may be promulgated with respect to such classes. Unless and until required otherwise by applicable authority, it is not anticipated that the contingent interest rules will apply.
Under a de minimis rule, original issue discount on a Regular Interest will be considered to be zero if such original issue discount is less than 0.25% of the stated redemption price at maturity of the Regular Interest multiplied by the weighted average maturity of the Regular Interest. For this purpose, the weighted average maturity is computed as the sum of the amounts determined by multiplying the number of full years (i.e., rounding down partial years) from the issue date until each distribution in reduction of
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stated redemption price at maturity is scheduled to be made by a fraction, the numerator of which is the amount of each distribution included in the stated redemption price at maturity of the Regular Interest and the denominator of which is the stated redemption price at maturity of the Regular Interest. The Conference Committee Report to the 1986 Act provides that the schedule of such distributions should be determined in accordance with the assumed rate of prepayment on the Mortgage Loans used in pricing the transaction, i.e., 0% CPR; provided that it is assumed that each ARD Loan prepays on its Anticipated Repayment Date (the “Prepayment Assumption”). See “Yield and Maturity Considerations—Weighted Average Life”. Holders generally must report de minimis original issue discount pro rata as principal payments are received, and such income will be capital gain if the Regular Interest is held as a capital asset. Under the OID Regulations, however, Regular Interest Holders may elect to accrue all de minimis original issue discount, as well as market discount and premium, under the constant yield method. See “—Election To Treat All Interest Under the Constant Yield Method” below. It is anticipated that the Class certificates will be issued with de minimis original issue discount for federal income tax purposes.
A holder of a Regular Interest issued with original issue discount generally must include in gross income for any taxable year the sum of the “daily portions”, as defined below, of the original issue discount on the Regular Interest accrued during an accrual period for each day on which it holds the Regular Interest, including the date of purchase but excluding the date of disposition. With respect to each such Regular Interest, a calculation will be made of the original issue discount that accrues during each successive full accrual period that ends on the day prior to each Distribution Date with respect to the Regular Interests, assuming that prepayments and extensions with respect to the Mortgage Loans will be made in accordance with the Prepayment Assumption. The original issue discount accruing in a full accrual period will be the excess, if any, of (i) the sum of (a) the present value of all of the remaining distributions to be made on the Regular Interest as of the end of that accrual period and (b) the distributions made on the Regular Interest during the accrual period that are included in the Regular Interest’s stated redemption price at maturity, over (ii) the adjusted issue price of the Regular Interest at the beginning of the accrual period. The present value of the remaining distributions referred to in the preceding sentence is calculated based on (i) the yield to maturity of the Regular Interest as of the Startup Day, (ii) events (including actual prepayments) that have occurred prior to the end of the accrual period and (iii) the assumption that the remaining payments will be made in accordance with the original Prepayment Assumption. For these purposes, the adjusted issue price of a Regular Interest at the beginning of any accrual period equals the issue price of the Regular Interest, increased by the aggregate amount of original issue discount with respect to the Regular Interest that accrued in all prior accrual periods and reduced by the amount of distributions included in the Regular Interest’s stated redemption price at maturity that were made on the Regular Interest that were attributable to such prior periods. The original issue discount accruing during any accrual period (as determined in this paragraph) will then be divided by the number of days in the period to determine the daily portion of original issue discount for each day in the period.
Under the method described above, the daily portions of original issue discount required to be included as ordinary income by a Regular Interest Holder (other than a holder of a Class X Certificate) generally will increase to take into account prepayments on the Regular Interests as a result of prepayments on the Mortgage Loans that exceed the Prepayment Assumption, and generally will decrease (but not below zero for any period) if the prepayments are slower than the Prepayment Assumption. Due to the unique nature of interest only certificates, the preceding sentence may not apply in the case of the Class X Certificates.
Acquisition Premium
A purchaser of a Regular Interest at a price greater than its adjusted issue price and less than its remaining stated redemption price at maturity will be required to include in gross income the daily portions of the original issue discount on the Regular Interest reduced pro rata by a fraction, the numerator of which is the excess of its purchase price over such adjusted issue price and the denominator of which is the excess of the remaining stated redemption price at maturity over the adjusted issue price. Alternatively, such a purchaser may elect to treat all such acquisition premium under the constant yield
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method, as described under the heading “—Election To Treat All Interest Under the Constant Yield Method” below.
Market Discount
A purchaser of a Regular Interest also may be subject to the market discount rules of Code Sections 1276 through 1278. Under these Code sections and the principles applied by the OID Regulations in the context of original issue discount, “market discount” is the amount by which the purchaser’s original basis in the Regular Interest (i) is exceeded by the remaining outstanding principal payments and non-qualified stated interest payments due on a Regular Interest, or (ii) in the case of a Regular Interest having original issue discount, is exceeded by the adjusted issue price of such Regular Interest at the time of purchase. Such purchaser generally will be required to recognize ordinary income to the extent of accrued market discount on such Regular Interest as distributions includible in its stated redemption price at maturity are received, in an amount not exceeding any such distribution. Such market discount would accrue in a manner to be provided in Treasury regulations and should take into account the Prepayment Assumption. The Conference Committee Report to the 1986 Act provides that until such regulations are issued, such market discount would accrue, at the election of the holder, either (i) on the basis of a constant interest rate or (ii) in the ratio of interest accrued for the relevant period to the sum of the interest accrued for such period plus the remaining interest after the end of such period, or, in the case of classes issued with original issue discount, in the ratio of original issue discount accrued for the relevant period to the sum of the original issue discount accrued for such period plus the remaining original issue discount after the end of such period. Such purchaser also generally will be required to treat a portion of any gain on a sale or exchange of the Regular Interest as ordinary income to the extent of the market discount accrued to the date of disposition under one of the foregoing methods, less any accrued market discount previously reported as ordinary income as partial distributions in reduction of the stated redemption price at maturity were received. Such purchaser will be required to defer deduction of a portion of the excess of the interest paid or accrued on indebtedness incurred to purchase or carry the Regular Interest over the interest (including original issue discount) distributable on the Regular Interest. The deferred portion of such interest expense in any taxable year generally will not exceed the accrued market discount on the Regular Interest for such year. Any such deferred interest expense is, in general, allowed as a deduction not later than the year in which the related market discount income is recognized or the Regular Interest is disposed of. As an alternative to the inclusion of market discount in income on the foregoing basis, the Regular Interest Holder may elect to include market discount in income currently as it accrues, in which case the interest deferral rule will not apply. If made, such selection will apply to all market discount instruments acquired by such Regular Interest Holder as of the first day of the taxable year for which the election is made and to all market discount instruments acquired thereafter. The election cannot be revoked without IRS consent. See “—Election To Treat All Interest Under the Constant Yield Method” below regarding making the election under Code Section 1276 and an alternative manner in which such election may be deemed to be made.
Market discount with respect to a Regular Interest will be considered to be zero if such market discount is less than 0.25% of the remaining stated redemption price at maturity of such Regular Interest multiplied by the weighted average maturity of the Regular Interest remaining after the date of purchase. For this purpose, the weighted average maturity is determined by multiplying the number of full years (i.e., rounding down partial years) from the issue date until each distribution in reduction of stated redemption price at maturity is scheduled to be made by a fraction, the numerator of which is the amount of each such distribution included in the stated redemption price at maturity of the Regular Interest and the denominator of which is the total stated redemption price at maturity of the Regular Interest. It appears that de minimis market discount would be reported pro rata as principal payments are received. Treasury regulations implementing the market discount rules have not yet been proposed, and investors should therefore consult their own tax advisors regarding the application of these rules as well as the advisability of making any of the elections with respect to such rules. Investors should also consult Revenue Procedure 92-67 concerning the elections to include market discount in income currently and to accrue market discount on the basis of the constant yield method.
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Premium
A Regular Interest purchased upon initial issuance or in the secondary market at a cost greater than its remaining stated redemption price at maturity generally is considered to be purchased at a premium. If the Regular Interest Holder holds such Regular Interest as a “capital asset” within the meaning of Code Section 1221, the Regular Interest Holder may elect under Code Section 171 to amortize such premium under the constant yield method. If made, such election will apply to all premium debt instruments (other than those paying tax-exempt interest) held by the Holder of the Regular Interest on the first day of the taxable year to which the election applies and to all taxable, premium debt instruments acquired thereafter. The election cannot be revoked without IRS consent. See “—Election To Treat All Interest Under the Constant Yield Method” below regarding making the election under Code Section 171 and an alternative manner in which the Code Section 171 election may be deemed to be made. Final Treasury regulations under Code Section 171 do not, by their terms, apply to prepayable obligations such as the Regular Interests. The Conference Committee Report to the 1986 Act indicates a Congressional intent that the same rules that will apply to the accrual of market discount on installment obligations will also apply to amortizing bond premium under Code Section 171 on installment obligations such as the Regular Interests, although it is unclear whether the alternatives to the constant interest method described above under “—Market Discount” are available. Amortizable bond premium will be treated as an offset to interest income on a Regular Interest rather than as a separate deduction item. Based on the foregoing, it is anticipated that the Class certificates will be issued at a premium for federal income tax purposes.
Election To Treat All Interest Under the Constant Yield Method
A holder of a debt instrument such as a Regular Interest may elect to treat all interest that accrues on the instrument using the constant yield method, with none of the interest being treated as qualified stated interest. For purposes of applying the constant yield method to a debt instrument subject to such an election, (i) “interest” includes stated interest, original issue discount, de minimis original issue discount, market discount and de minimis market discount, as adjusted by any amortizable bond premium or acquisition premium and (ii) the debt instrument is treated as if the instrument were issued on the holder’s acquisition date in the amount of the holder’s adjusted basis immediately after acquisition. It is unclear whether, for this purpose, the initial Prepayment Assumption would continue to apply or if a new prepayment assumption as of the date of the holder’s acquisition would apply. A holder generally may make such an election on an instrument by instrument basis or for a class or group of debt instruments. However, if the holder makes such an election with respect to a debt instrument with amortizable bond premium or with market discount, the holder is deemed to have made elections to amortize bond premium or to report market discount income currently as it accrues under the constant yield method, respectively, for all taxable premium bonds held or acquired or market discount bonds acquired by the holder on the first day of the year of the election and thereafter. The election is made on the holder’s federal income tax return for the year in which the debt instrument is acquired and is irrevocable except with the approval of the IRS. Investors are encouraged to consult their tax advisors regarding the advisability of making such an election.
Treatment of Losses
Holders of the Regular Interests will be required to report income with respect to the Regular Interests on the accrual method of accounting, without giving effect to delays or reductions in distributions attributable to defaults or delinquencies on the Mortgage Loans, except to the extent it can be established that such losses are uncollectible. Accordingly, a Regular Interest Holder may have income, or may incur a diminution in cash flow as a result of a default or delinquency, but may not be able to take a deduction (subject to the discussion below) for the corresponding loss until a subsequent taxable year. In this regard, investors are cautioned that while they generally may cease to accrue interest income if it reasonably appears that the interest will be uncollectible, the IRS may take the position that original issue discount must continue to be accrued in spite of its uncollectibility until the debt instrument is disposed of in a taxable transaction or becomes worthless in accordance with the rules of Code Section 166. The following discussion does not apply to holders of Class X Certificates. Under Code Section 166, it
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appears that the holders of Regular Interests that are corporations or that otherwise hold the Regular Interests in connection with a trade or business should in general be allowed to deduct as an ordinary loss any such loss sustained (and not previously deducted) during the taxable year on account of any such Regular Interests becoming wholly or partially worthless, and that, in general, the Regular Interest Holders that are not corporations and do not hold the Regular Interests in connection with a trade or business will be allowed to deduct as a short term capital loss any loss with respect to principal sustained during the taxable year on account of such Regular Interests becoming wholly worthless. Although the matter is not free from doubt, such non-corporate holders of Regular Interests should be allowed a bad debt deduction at such time as the principal balance of any class of such Regular Interests is reduced to reflect losses on the Mortgage Loans below such holder’s basis in the Regular Interests. The IRS, however, could take the position that non-corporate holders will be allowed a bad debt deduction to reflect such losses only after the classes of Regular Interests have been otherwise retired. The IRS could also assert that losses on a class of Regular Interests are deductible based on some other method that may defer such deductions for all holders, such as reducing future cash flow for purposes of computing original issue discount. This may have the effect of creating “negative” original issue discount that, with the possible exception of the method discussed in the following sentence, would be deductible only against future positive original issue discount or otherwise upon termination of the applicable class. Although not free from doubt, a holder of Regular Interests with negative original issue discount may be entitled to deduct a loss to the extent that its remaining basis would exceed the maximum amount of future payments to which such holder was entitled, assuming no further prepayments. No bad debt losses will be allowed with respect to the Class X Certificates. Regular Interest Holders are urged to consult their own tax advisors regarding the appropriate timing, amount and character of any loss sustained with respect to such Regular Interests. Special loss rules are applicable to banks and thrift institutions, including rules regarding reserves for bad debts. Such taxpayers are advised to consult their tax advisors regarding the treatment of losses on the Regular Interests.
Yield Maintenance Charges and Prepayment Provisions
Yield maintenance charges and prepayment premiums actually collected on the Mortgage Loans will be distributed to the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4, Class A-5, Class X-A, Class X-B, Class X-D, Class A-M, Class B, Class C, Class D and Class E certificates and the VRR Interest, respectively, as described in “Description of the Certificates—Allocation of Yield Maintenance Charges and Prepayment Premiums”. It is not entirely clear under the Code when the amount of yield maintenance charges and prepayment premiums so allocated should be taxed to the holders of the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4, Class A-5, Class X-A, Class X-B, Class X-D, Class A-M, Class B, Class C, Class D and Class E certificates and the VRR Interest, respectively, but it is not expected, for federal income tax reporting purposes, that yield maintenance charges and prepayment premiums will be treated as giving rise to any income to the holder of such class of certificates prior to the certificate administrator’s actual receipt of yield maintenance charges and prepayment premiums. Yield maintenance charges and prepayment premiums, if any, may be treated as paid upon the retirement or partial retirement of the Class A-1, Class A-2, Class A-3, Class A-SB, Class A-4, Class A-5, Class X-A, Class X-B, Class X-D, Class A-M, Class B, Class C, Class D and Class E certificates and the VRR Interest, respectively. The IRS may disagree with these positions. Certificateholders should consult their own tax advisors concerning the treatment of yield maintenance charges and prepayment premiums.
Sale or Exchange of Regular Interests
If a Regular Interest Holder sells or exchanges a Regular Interest, such Regular Interest Holder will recognize gain or loss equal to the difference, if any, between the amount received and its adjusted basis in the Regular Interest. The adjusted basis of a Regular Interest generally will equal the cost of the Regular Interest to the seller, increased by any original issue discount, market discount or other amounts previously included in the seller’s gross income with respect to the Regular Interest and reduced by amounts included in the stated redemption price at maturity of the Regular Interest that were previously received by the seller, by any amortized premium, and by any deductible losses on the Regular Interest.
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Except as described above with respect to market discount, and except as provided in this paragraph, any gain or loss on the sale or exchange of a Regular Interest realized by an investor that holds the Regular Interest as a capital asset will be capital gain or loss and will be long term or short term depending on whether the Regular Interest has been held for the long term capital gain holding period (more than one year). Such gain will be treated as ordinary income: (i) if the Regular Interest is held as part of a “conversion transaction” as defined in Code Section 1258(c), up to the amount of interest that would have accrued on the Regular Interest Holder’s net investment in the conversion transaction at 120% of the appropriate applicable federal rate under Code Section 1274(d) in effect at the time the taxpayer entered into the transaction minus any amount previously treated as ordinary income with respect to any prior disposition of property that was held as part of such transaction; (ii) in the case of a non-corporate taxpayer, to the extent such taxpayer has made an election under Code Section 163(d)(4) to have net capital gains taxed as investment income at ordinary income rates; or (iii) to the extent that such gain does not exceed the excess, if any, of (a) the amount that would have been includible in the gross income of the Regular Interest Holder if his yield on such Regular Interest were 110% of the applicable federal rate as of the date of purchase, over (b) the amount of income actually includible in the gross income of such Regular Interest Holder with respect to the Regular Interest. In addition, gain or loss recognized from the sale of a Regular Interest by certain banks or thrift institutions will be treated as ordinary income or loss pursuant to Code Section 582(c). Long-term capital gains of certain non-corporate taxpayers generally are subject to a lower maximum tax rate than ordinary income of such taxpayers for property held for more than one year. The rate for corporations is the same with respect to both ordinary income and capital gains. In connection with a sale or exchange of a VRR Interest, the related Regular Interest Holder must separately account for the sale or exchange of the related “regular interest” in the Upper-Tier REMIC and the related interest in the Grantor Trust.
Taxes That May Be Imposed on a REMIC
Prohibited Transactions
Income from certain transactions by any Trust REMIC, called prohibited transactions, will not be part of the calculation of income or loss includible in the federal income tax returns of holders of the Class R certificates, but rather will be taxed directly to such Trust REMIC at a 100% rate. Prohibited transactions generally include (i) the disposition of a qualified mortgage other than for (a) substitution within two years of the Startup Day for a defective (including a defaulted) obligation (or repurchase in lieu of substitution of a defective (including a defaulted) obligation at any time) or for any qualified mortgage within three months of the Startup Day, (b) foreclosure, default or imminent default of a qualified mortgage, (c) bankruptcy or insolvency of the REMIC, or (d) a qualified (complete) liquidation, (ii) the receipt of income from assets that are not the type of mortgages or investments that the REMIC is permitted to hold, (iii) the receipt of compensation for services or (iv) the receipt of gain from disposition of cash flow investments other than pursuant to a qualified liquidation. Notwithstanding (i) and (iv), it is not a prohibited transaction to sell REMIC property to prevent a default on regular interests as a result of a default on qualified mortgages or to facilitate a qualified liquidation or a clean-up call. The REMIC Regulations indicate that the modification of a mortgage loan generally will not be treated as a disposition if it is occasioned by a default or reasonably foreseeable default, an assumption of a mortgage loan or the waiver of a “due-on-sale” or “due-on-encumbrance” clause. It is not anticipated that the Trust REMICs will engage in any prohibited transactions.
Contributions to a REMIC After the Startup Day
In general, a REMIC will be subject to a tax at a 100% rate on the value of any property contributed to the REMIC after its Startup Day. Exceptions are provided for cash contributions to the REMIC (i) during the three months following its Startup Day, (ii) made to a qualified reserve fund by a holder of a Class R certificate, (iii) in the nature of a guarantee, (iv) made to facilitate a qualified liquidation or clean-up call, and (v) as otherwise permitted in Treasury regulations yet to be issued. It is not anticipated that there will be any taxable contributions to the Trust REMICs.
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Net Income from Foreclosure Property
The Lower-Tier REMIC or the STK Chicago Loan REMIC will be subject to federal income tax at the corporate rate on “net income from foreclosure property”, determined by reference to the rules applicable to real estate investment trusts. Generally, property acquired by foreclosure or deed-in-lieu of foreclosure would be treated as “foreclosure property” until the close of the third calendar year beginning after the Lower-Tier REMIC’s or the STK Chicago Loan REMIC’s, as applicable, acquisition of a REO Property, as applicable, with a possible extension. Net income from foreclosure property generally means gain from the sale of a foreclosure property that is inventory property and gross income from foreclosure property other than qualifying rents and other qualifying income for a real estate investment trust.
In order for a foreclosed property to qualify as foreclosure property, any operation of the foreclosed property by the Lower-Tier REMIC or the STK Chicago Loan REMIC generally must be conducted through an independent contractor. Further, such operation of foreclosed property, even if conducted through an independent contractor, may give rise to “net income from foreclosure property”, taxable at the corporate rate. Payment of such tax by the Lower-Tier REMIC or the STK Chicago Loan REMIC would reduce amounts available for distribution to Certificateholders.
The special servicer will be required to determine generally whether the operation of foreclosed property in a manner that would subject the Lower-Tier REMIC or the STK Chicago Loan REMIC to such tax would be expected to result in higher after-tax proceeds than an alternative method of operating such property that would not subject the Lower-Tier REMIC or the STK Chicago Loan REMIC to such tax.
REMIC Partnership Representative
A “partnership representative” (as defined in Code Section 6223) will represent each Trust REMIC in connection with any IRS and judicial proceeding relating to the REMIC and the PSA will designate the certificate administrator as such representative. Under the audit rules applicable to REMICs, (1) unless a REMIC elects otherwise, taxes arising from IRS audit adjustments are required to be paid by the REMIC rather than by its residual interest holders, (2) the partnership representative acts as a REMIC’s sole representative and its actions, including agreeing to adjustments to REMIC taxable income, are binding on the residual interest holders and (3) if the IRS makes an adjustment to a REMIC’s taxable year, the holders of residual interests for the audited taxable year may have to take the adjustment into account for the taxable year in which the adjustment is made rather than for the audited taxable year.
The partnership representative will be directed to utilize any election or other exception available to make the holders of the Class R certificates, rather than the REMICs, liable for any taxes arising from audit adjustments to the related REMICs’ taxable incomes. It is unclear how any such elections may affect the procedural rules available to challenge any audit adjustment that would otherwise be available in the absence of any such elections. Investors should discuss with their own tax advisors the possible effect of these rules on them.
Taxation of Certain Foreign Investors
Interest, including original issue discount, distributable to the Regular Interest Holders that are nonresident aliens, foreign corporations or other Non-U.S. Persons will be considered “portfolio interest” and, therefore, generally will not be subject to a 30% United States withholding tax; provided that such Non-U.S. Person (i) is not a “10 percent shareholder” within the meaning of Code Section 871(h)(3)(B) or a controlled foreign corporation described in Code Section 881(c)(3)(C) with respect to the Trust REMICs and (ii) provides the certificate administrator, or the person that would otherwise be required to withhold tax from such distributions under Code Section 1441 or 1442, with an appropriate statement, signed under penalties of perjury, identifying the beneficial owner and stating, among other things, that the beneficial owner of the Regular Interest is a Non-U.S. Person. The appropriate documentation includes IRS Form W-8BEN-E or W-8BEN, if the Non-U.S. Person is an entity (such as a corporation) or individual, respectively, eligible for the benefits of the portfolio interest exemption or an exemption based on a treaty; IRS Form W-8ECI if the Non-U.S. Person is eligible for an exemption on the basis of its income from the Regular Interest being effectively connected to a United States trade or business; IRS Form W-8BEN-E or
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W-8IMY if the Non-U.S. Person is a trust, depending on whether such trust is classified as the beneficial owner of the Regular Interest; and Form W-8IMY, with supporting documentation as specified in the Treasury regulations, required to substantiate exemptions from withholding on behalf of its partners, if the Non-U.S. Person is a partnership. With respect to IRS Forms W-8BEN, W-8BEN-E, W-8IMY and W-8ECI, each (other than IRS Form W-8IMY) expires after three full calendar years or as otherwise provided by applicable law. An intermediary (other than a partnership) must provide IRS Form W-8IMY, revealing all required information, including its name, address, taxpayer identification number, the country under the laws of which it is created, and certification that it is not acting for its own account. A “qualified intermediary” must certify that it has provided, or will provide, a withholding statement as required under Treasury regulations Section 1.1441-1(e)(5)(v), but need not disclose the identity of its account holders on its IRS Form W-8IMY, and may certify its account holders’ status without including each beneficial owner’s certification. A “non-qualified intermediary” must additionally certify that it has provided, or will provide, a withholding statement that is associated with the appropriate IRS Forms W-8 and W-9 required to substantiate exemptions from withholding on behalf of its beneficial owners. The term “intermediary” means a person acting as a custodian, a broker, nominee or otherwise as an agent for the beneficial owner of a Regular Interest. A “qualified intermediary” is generally a foreign financial institution or clearing organization or a non-U.S. branch or office of a U.S. financial institution or clearing organization that is a party to a withholding agreement with the IRS.
If such statement, or any other required statement, is not provided, 30% withholding will apply unless reduced or eliminated pursuant to an applicable tax treaty or unless the interest on the Regular Interest is effectively connected with the conduct of a trade or business within the United States by such Non-U.S. Person. In the latter case, such Non-U.S. Person will be subject to United States federal income tax at regular rates. Investors that are Non-U.S. Persons should consult their own tax advisors regarding the specific tax consequences to them of owning a Regular Interest.
“U.S. Person” means a citizen or resident of the United States, a corporation, partnership (except to the extent provided in the applicable Treasury regulations) or other entity created or organized in or under the laws of the United States, any State or the District of Columbia, including any entity treated as a corporation or partnership for federal income tax purposes, an estate that is subject to U.S. federal income tax regardless of the source of income, or a trust if a court within the United States is able to exercise primary supervision over the administration of such trust, and one or more such U.S. Persons have the authority to control all substantial decisions of such trust (or, to the extent provided in the applicable Treasury regulations, certain trusts in existence on August 20, 1996 that have elected to be treated as U.S. Persons). A “Non-U.S. Person” is a person other than a U.S. Person.
FATCA
Under the “Foreign Account Tax Compliance Act” (“FATCA”) provisions of the Hiring Incentives to Restore Employment Act, a 30% withholding tax is generally imposed on certain payments, including payments of U.S.-source interest to “foreign financial institutions” and certain other foreign financial entities if those foreign entities fail to comply with the requirements of FATCA. The certificate administrator will be required to withhold amounts under FATCA on payments made to holders who are subject to the FATCA requirements and who fail to provide the certificate administrator with proof that they have complied with such requirements. Prospective investors should consult their tax advisors regarding the applicability of FATCA to their certificates.
Backup Withholding
Distributions made on the certificates, and proceeds from the sale of the certificates to or through certain brokers, may be subject to a “backup” withholding tax under Code Section 3406 on “reportable payments” (including interest distributions, original issue discount and, under certain circumstances, principal distributions) unless the Certificateholder is a U.S. Person and provides IRS Form W-9 with the correct taxpayer identification number; in the case of the Regular Interests, is a Non-U.S. Person and provides IRS Form W-8BEN or W-8BEN-E, as applicable, identifying the Non-U.S. Person and stating that the beneficial owner is not a U.S. Person; or can be treated as an exempt recipient within the
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meaning of Treasury regulations Section 1.6049-4(c)(1)(ii). Any amounts to be withheld from distribution on the certificates would be refunded by the IRS or allowed as a credit against the Certificateholder’s federal income tax liability. Information reporting requirements may also apply regardless of whether withholding is required. Holders are urged to contact their own tax advisors regarding the application to them of backup withholding and information reporting.
Information Reporting
Holders who are individuals (and certain domestic entities that are formed or availed of for purposes of holding, directly or indirectly, “specified foreign financial assets”) may be subject to certain foreign financial asset reporting obligations with respect to their certificates held through a financial account maintained by a foreign financial institution if the aggregate value of their certificates and their other “specified foreign financial assets” exceeds $50,000. Significant penalties can apply if a holder fails to disclose its specified foreign financial assets. We urge you to consult your tax advisor with respect to this and other reporting obligations with respect to your certificates.
3.8% Medicare Tax on “Net Investment Income”
Certain non-corporate U.S. holders will be subject to an additional 3.8% tax on all or a portion of their “net investment income”, which may include the interest payments and any gain realized with respect to the certificates, to the extent of their net investment income that, when added to their other modified adjusted gross income, exceeds $200,000 for an unmarried individual, $250,000 for a married taxpayer filing a joint return (or a surviving spouse), or $125,000 for a married individual filing a separate return. The 3.8% Medicare tax is calculated in a different manner than the regular income tax. U.S. holders should consult their tax advisors with respect to their consequences with respect to the 3.8% Medicare tax.
Reporting Requirements
Each Trust REMIC will be required to maintain its books on a calendar year basis and to file federal income tax returns in a manner similar to a partnership. The form for such returns is IRS Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return. The trustee will be required to sign each Trust REMIC’s returns.
Reports of accrued interest, original issue discount, if any, and information necessary to compute the accrual of any market discount on the Regular Interests will be made annually to the IRS and to individuals, estates, non-exempt and non-charitable trusts, and partnerships that are either Regular Interest Holders or beneficial owners that own Regular Interests through a broker or middleman as nominee. All brokers, nominees and all other nonexempt Regular Interest Holders (including corporations, non-calendar year taxpayers, securities or commodities dealers, placement agents, real estate investment trusts, investment companies, common trusts, thrift institutions and charitable trusts) may request such information for any calendar quarter by telephone or in writing by contacting the person designated in IRS Publication 938 with respect to the Trust REMICs. Holders through nominees must request such information from the nominee.
Treasury
regulations require that, in addition to the foregoing requirements, information must be furnished annually to the residual interest
holders and filed annually with the IRS concerning the percentage of each Trust REMIC’s assets meeting the qualified asset
tests described under
“—Qualification as a REMIC” above.
These regulations also require that the certificate administrator make available information regarding interest income and information necessary to compute any original issue discount to (i) exempt recipients (including middlemen) and non-calendar year taxpayers, upon request, in accordance with the requirements of the regulations and (ii) Certificateholders who do not hold their certificates through a middleman. The information must be provided to parties specified in clause (i) on or before the later of the 30th day after the close of the calendar year to which the request relates and 14 days after the receipt of
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the request. The information must be provided to parties specified in clause (ii) on or before March 15 of the calendar year for which the statement is being furnished.
DUE TO THE COMPLEXITY OF THESE RULES AND THE CURRENT UNCERTAINTY AS TO THE MANNER OF THEIR APPLICATION TO THE ISSUING ENTITY AND CERTIFICATEHOLDERS, IT IS PARTICULARLY IMPORTANT THAT POTENTIAL INVESTORS CONSULT THEIR OWN TAX ADVISORS REGARDING THE TAX TREATMENT OF THEIR ACQUISITION, OWNERSHIP AND DISPOSITION OF THE CERTIFICATES.
CERTAIN STATE AND LOCAL TAX CONSIDERATIONS
In addition to the federal income tax consequences described in “Material Federal Income Tax Considerations” above, purchasers of Offered Certificates should consider the state and local income tax consequences of the acquisition, ownership, and disposition of the Offered Certificates. State and local income tax law may differ substantially from the corresponding federal law, and this discussion does not purport to describe any aspect of the income tax laws of any state or locality.
It is possible that one or more jurisdictions may attempt to tax nonresident holders of Offered Certificates solely by reason of the location in that jurisdiction of the depositor, the trustee, the certificate administrator, the sponsors, a related borrower or a mortgaged property or on some other basis, may require nonresident holders of certificates to file returns in such jurisdiction or may attempt to impose penalties for failure to file such returns; and it is possible that any such jurisdiction will ultimately succeed in collecting such taxes or penalties from nonresident holders of Offered Certificates. We cannot assure you that holders of Offered Certificates will not be subject to tax in any particular state, local or other taxing jurisdiction.
You should consult with your tax advisor with respect to the various state and local and any other tax consequences of an investment in the Offered Certificates.
METHOD OF DISTRIBUTION (CONFLICTS OF INTEREST)
Subject to the terms and conditions set forth in an underwriting agreement (the “Underwriting Agreement”), between the depositor and the underwriters, the depositor has agreed to sell to the underwriters, and the underwriters have severally, but not jointly, agreed to purchase from the depositor the respective Certificate Balance or the Notional Amount, as applicable, of each class of Offered Certificates set forth below subject in each case to a variance of 5%.
Class |
Deutsche Bank Securities Inc. |
Citigroup Global Markets Inc. |
| Class A-1 | $ | $ |
| Class A-2 | $ | $ |
| Class A-SB | $ | $ |
| Class A-4 | $ | $ |
| Class A-5 | $ | $ |
| Class X-A | $ | $ |
| Class A-M | $ | $ |
| Class B | $ | $ |
| Class C | $ | $ |
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Class |
Goldman Sachs & Co. LLC |
J.P. Morgan Securities LLC |
| Class A-1 | $ | $ |
| Class A-2 | $ | $ |
| Class A-SB | $ | $ |
| Class A-4 | $ | $ |
| Class A-5 | $ | $ |
| Class X-A | $ | $ |
| Class A-M | $ | $ |
| Class B | $ | $ |
| Class C | $ | $ |
Class |
Academy Securities |
Drexel Hamilton |
| Class A-1 | $ | $ |
| Class A-2 | $ | $ |
| Class A-SB | $ | $ |
| Class A-4 | $ | $ |
| Class A-5 | $ | $ |
| Class X-A | $ | $ |
| Class A-M | $ | $ |
| Class B | $ | $ |
| Class C | $ | $ |
The Underwriting Agreement provides that the obligations of the underwriters will be subject to certain conditions precedent and that the underwriters will be obligated to purchase all Offered Certificates if any are purchased. In the event of a default by any underwriter, the Underwriting Agreement provides that, in certain circumstances, purchase commitments of the non-defaulting underwriter(s) may be increased or the Underwriting Agreement may be terminated.
The parties to the PSA have severally agreed to indemnify the underwriters, and the underwriters have agreed to indemnify the depositor and controlling persons of the depositor, against certain liabilities, including liabilities under the Securities Act, and will contribute to payments required to be made in respect of these liabilities.
The depositor has been advised by the underwriters that they propose to offer the Offered Certificates to the public from time to time in one or more negotiated transactions, or otherwise, at varying prices to be determined at the time of sale. Proceeds to the depositor from the sale of Offered Certificates will be approximately % of the initial aggregate Certificate Balance of the Offered Certificates, plus accrued interest on the Offered Certificates from April 1, 2022, before deducting expenses payable by the depositor. The underwriters may effect the transactions by selling the Offered Certificates to or through dealers, and the dealers may receive compensation in the form of underwriting discounts, concessions or commissions from the underwriters. In connection with the purchase and sale of the Offered Certificates, the underwriters and dealers may be deemed to have received compensation from the depositor in the form of underwriting discounts and commissions.
Expenses payable by the depositor are estimated at approximately $, excluding underwriting discounts and commissions.
We anticipate that the Offered Certificates will be sold primarily to institutional investors. Purchasers of Offered Certificates, including dealers, may, depending on the facts and circumstances of those purchases, be deemed to be “underwriters” within the meaning of the Securities Act in connection with reoffers and resales by them of Offered Certificates. If you purchase Offered Certificates, you should consult with your legal advisors in this regard prior to any reoffer or resale. The underwriters expect to make, but are not obligated to make, a secondary market in the Offered Certificates. The ability of the underwriters to make a market in the Offered Certificates may be impacted by changes in any regulatory requirements applicable to the marketing, holding and selling of, and issuing quotations with respect to, the Offered Certificates or CMBS generally (including, without limitation, the application of Rule 15c2-11
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under the Exchange Act to the publication or submission of quotations, directly or indirectly, in any quotation medium by a broker or dealer for securities such as the Offered Certificates). See “Risk Factors—Other Risks Relating to the Certificates—The Certificates May Have Limited Liquidity and the Market Value of the Certificates May Decline”.
Pursuant to Rule 15c6-1 under the Exchange Act, trades in the secondary market generally are required to settle in 2 business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade Offered Certificates in the secondary market prior to such delivery should specify a longer settlement cycle, or should refrain from specifying a shorter settlement cycle, to the extent that failing to do so would result in a settlement date that is earlier than the date of delivery of such Offered Certificates.
The primary source of ongoing information available to investors concerning the Offered Certificates will be the monthly statements discussed under “Description of the Certificates—Reports to Certificateholders; Certain Available Information”. We cannot assure you that any additional information regarding the Offered Certificates will be available through any other source. In addition, we are not aware of any source through which price information about the Offered Certificates will be generally available on an ongoing basis. The limited nature of that information regarding the Offered Certificates may adversely affect the liquidity of the Offered Certificates, even if a secondary market for the Offered Certificates becomes available.
Deutsche Bank Securities Inc., one of the underwriters, is an affiliate of the depositor, one of the sponsors, one of the originators, a Retaining Party and an initial Risk Retention Consultation Party. Citigroup Global Markets Inc., one of the underwriters, is an affiliate of one of the sponsors, one of the originators, a Retaining Party and an initial Risk Retention Consultation Party. Goldman Sachs & Co. LLC, one of the underwriters, is an affiliate of one of the sponsors and one of the originators. J.P. Morgan Securities LLC, one of the underwriters, is an affiliate of one of the sponsors and one of the originators.
A substantial portion of the net proceeds of this offering (after the payment of underwriting compensation and transaction expenses) is expected to be directed to affiliates of Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC, which are underwriters for this offering. That flow of funds will occur by means of the collective effect of the payment by the underwriters to the depositor, an affiliate of Deutsche Bank Securities Inc., of the purchase price for the Offered Certificates, the payment described in the next paragraph and the following payments: (i) the payment by the depositor to GACC, an affiliate of Deutsche Bank Securities Inc., in its capacity as a sponsor, of the purchase price for the mortgage loans to be sold to the depositor by GACC, (ii) the payment by the depositor to CREFI, an affiliate of Citigroup Global Markets Inc., in its capacity as a sponsor, of the purchase price for the mortgage loans sold to the depositor by CREFI, (iii) the payment by the depositor to GSMC, an affiliate of Goldman Sachs & Co. LLC, in its capacity as a sponsor, of the purchase price for the mortgage loans sold to the depositor by GSMC and (iv) the payment by the depositor to JPMCB, an affiliate of J.P. Morgan Securities LLC, in its capacity as a sponsor, of the purchase price for the mortgage loans sold to the depositor by JPMCB. See “Transaction Parties—The Sponsors and Mortgage Loan Sellers”.
As a result of the circumstances described above in this paragraph and the prior paragraph, Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC have a “conflict of interest” within the meaning of Rule 5121 of the consolidated rules of The Financial Industry Regulatory Authority, Inc. In addition, other circumstances exist that result in the underwriters or their affiliates having conflicts of interest, notwithstanding that such circumstances may not constitute a “conflict of interest” within the meaning of such Rule 5121. See “Risk Factors—Risks Related to Conflicts of Interest—Interests and Incentives of the Underwriter Entities May Not Be Aligned With Your Interests”.
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INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
All reports filed or caused to be filed by the depositor with respect to the issuing entity before the termination of this offering pursuant to Section 13(a), 13(c) or 15(d) of the Securities Exchange Act of 1934, as amended, that relate to the Offered Certificates (other than Annual Reports on Form 10-K) will be deemed to be incorporated by reference into this prospectus, except that if a Non-Serviced PSA is entered into after termination of this offering, any Current Report on Form 8-K filed after termination of this offering that includes as an exhibit such Non-Serviced PSA will be deemed to be incorporated by reference into this prospectus.
In addition, any disclosures filed, on or prior to the date of filing of the final prospectus, as exhibits to Form ABS-EE by or on behalf of the depositor with respect to the issuing entity will be deemed to be incorporated by reference into the final prospectus.
The depositor will provide or cause to be provided without charge to each person to whom this prospectus is delivered in connection with this offering (including beneficial owners of the Offered Certificates), upon written or oral request of that person, a copy of any or all documents or reports incorporated in this prospectus by reference, in each case to the extent the documents or reports relate to the Offered Certificates, other than the exhibits to those documents (unless the exhibits are specifically incorporated by reference in those documents). Requests to the depositor should be directed in writing to its principal executive offices at 1 Columbus Circle, New York, New York 10019, Attention: President, or by telephone at (212) 250-2500.
WHERE YOU CAN FIND MORE INFORMATION
The depositor has filed a Registration Statement on Form SF-3 (SEC File No. 333-260277) (the “Registration Statement”) relating to multiple series of CMBS, including the Offered Certificates, with the SEC. This prospectus will form a part of the Registration Statement, but the Registration Statement includes additional information. Copies of the Registration Statement and other materials filed with or furnished to the SEC, including Distribution Reports on Form 10-D, Annual Reports on Form 10-K, Current Reports on Form 8-K, Forms ABS-15G, Form ABS-EE and any amendments to these reports may be accessed electronically at “http://www.sec.gov” at which you can view and download copies of reports, proxy and information statements and other information filed or furnished electronically through the Electronic Data Gathering, Analysis and Retrieval (“EDGAR”) system.
The depositor has met the registrant requirements of Section I.A.1. of the General Instructions to the Registration Statement.
Copies of all reports of the issuing entity on Forms ABS-EE, 10-D, 10-K and 8-K will also be made available on the website of the certificate administrator as soon as reasonably practicable after these materials are electronically filed with, or furnished to the SEC through the EDGAR system.
FINANCIAL INFORMATION
The issuing entity will be newly formed and will not have engage in any business activities or have any assets or obligations prior to the issuance of the Offered Certificates. Accordingly, no financial statements with respect to the issuing entity are included in this prospectus.
The depositor has determined that its financial statements will not be material to the offering of the Offered Certificates.
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CERTAIN ERISA CONSIDERATIONS
General
The Employee Retirement Income Security Act of 1974, as amended, or ERISA, and Code Section 4975 impose certain requirements on retirement plans, and on certain other employee benefit plans and arrangements, including individual retirement accounts and annuities, Keogh plans, collective investment funds, insurance company separate accounts and some insurance company general accounts in which those plans, accounts or arrangements are invested that are subject to the fiduciary responsibility provisions of ERISA or to Code Section 4975 (all of which are referred to as “Plans”), and on persons who are fiduciaries with respect to Plans, in connection with the investment of Plan assets. Certain employee benefit plans, such as governmental plans (as defined in ERISA Section 3(32)), and, if no election has been made under Code Section 410(d), church plans (as defined in Section 3(33) of ERISA) are not subject to ERISA requirements. However, those plans may be subject to the provisions of other applicable federal, state or local law (“Similar Law”) materially similar to the fiduciary responsibility provisions of ERISA or to Section 4975 of the Code. Moreover, those plans, if qualified and exempt from taxation under Code Sections 401(a) and 501(a), are subject to the prohibited transaction rules set forth in Code Section 503.
ERISA generally imposes on Plan fiduciaries certain general fiduciary requirements, including those of investment prudence and diversification and the requirement that a Plan’s investments be made in accordance with the documents governing the Plan. In addition, ERISA and the Code prohibit a broad range of transactions involving assets of a Plan and persons (“Parties in Interest”) who have certain specified relationships to the Plan, unless a statutory, regulatory or administrative exemption is available. Certain Parties in Interest that participate in a prohibited transaction may be subject to an excise tax imposed pursuant to Code Section 4975, unless a statutory, regulatory or administrative exemption is available. These prohibited transactions generally are set forth in Section 406 of ERISA and Code Section 4975. Special caution should be exercised before the assets of a Plan are used to purchase an Offered Certificate if, with respect to those assets, the depositor, any servicer or the trustee or any of their affiliates, either: (a) has investment discretion with respect to the investment of those assets of that Plan; or (b) has authority or responsibility to give, or regularly gives, investment advice with respect to those assets for a fee and pursuant to an agreement or understanding that the advice will serve as a primary basis for investment decisions with respect to those assets and that the advice will be based on the particular investment needs of the Plan; or (c) is an employer maintaining or contributing to the Plan.
Before purchasing any Offered Certificates with Plan assets, a Plan fiduciary should consult with its counsel and determine whether there exists any prohibition to that purchase under the requirements of ERISA or Code Section 4975, whether any prohibited transaction class exemption or any individual administrative prohibited transaction exemption (as described below) applies, including whether the appropriate conditions set forth in those exemptions would be met, or whether any statutory prohibited transaction exemption is applicable. Fiduciaries of plans subject to a Similar Law should consider the need for, and the availability of, an exemption under such applicable Similar Law.
Plan Asset Regulations
A Plan’s investment in Offered Certificates may cause the assets of the issuing entity to be deemed Plan assets. Section 2510.3-101 of the regulations of the United States Department of Labor (“DOL”), as modified by Section 3(42) of ERISA, provides that when a Plan acquires an equity interest in an entity, the Plan’s assets include both the equity interest and an undivided interest in each of the underlying assets of the entity, unless certain exceptions not applicable to this discussion apply, or unless the equity participation in the entity by “benefit plan investors” (that is, Plans and entities whose underlying assets include plan assets) is not “significant”. For this purpose, in general, equity participation in an entity will be “significant” on any date if, immediately after the most recent acquisition of any certificate, 25% or more of any class of certificates is held by benefit plan investors.
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In general, any person who has discretionary authority or control respecting the management or disposition of Plan assets, and any person who provides investment advice with respect to those assets for a fee, is a fiduciary of the investing Plan. If the assets of the issuing entity constitute Plan assets, then any party exercising management or discretionary control regarding those assets, such as a master servicer, a special servicer or any sub-servicer, may be deemed to be a Plan “fiduciary” with respect to the investing Plan, and thus subject to the fiduciary responsibility provisions and prohibited transaction provisions of ERISA and Code Section 4975. In addition, if the assets of the issuing entity constitute Plan assets, the purchase of Offered Certificates by a Plan, as well as the operation of the issuing entity, may constitute or involve a prohibited transaction under ERISA or the Code.
Administrative Exemption
The U.S. Department of Labor has issued an administrative exemption to Deutsche Bank Securities Inc., as Department Final Authorization Number 97-03E (December 9, 1996), as amended by Prohibited Transaction Exemption 2013-08, 78 Fed. Reg. 41,090 (July 9, 2013) (the “Exemption”). The Exemption generally exempts from the application of the prohibited transaction provisions of Sections 406 and 407 of ERISA, and the excise taxes imposed on prohibited transactions pursuant to Sections 4975(a) and (b) of the Code, certain transactions, among others, relating to the servicing and operation of pools of mortgage loans, such as the pool of mortgage loans held by the issuing entity, and the purchase, sale and holding of mortgage pass-through certificates, such as the Offered Certificates, underwritten by Deutsche Bank Securities Inc., provided that certain conditions set forth in the Exemption are satisfied. The depositor expects that the Exemption generally will apply to the Offered Certificates.
The Exemption sets forth five general conditions that must be satisfied for a transaction involving the purchase, sale and holding of the Offered Certificates to be eligible for exemptive relief:
First, the acquisition of the Offered Certificates by a Plan must be on terms (including the price paid for the Offered Certificates) that are at least as favorable to the Plan as they would be in an arm’s-length transaction with an unrelated party.
Second, the Offered Certificates at the time of acquisition by the Plan must be rated in one of the four highest generic rating categories by at least one NRSRO that meets the requirements of the Exemption (an “Exemption Rating Agency”).
Third, the trustee cannot be an affiliate of any other member of the Restricted Group other than an underwriter. The “Restricted Group” consists of any underwriter, the depositor, the trustee, the master servicer, the special servicer, any sub-servicer, any entity that provides insurance or other credit support to the issuing entity and any borrower with respect to mortgage loans constituting more than 5% of the aggregate unamortized principal balance of the mortgage loans as of the date of initial issuance of the Offered Certificates, and any affiliate of any of the foregoing entities.
Fourth, the sum of all payments made to and retained by the underwriters must represent not more than reasonable compensation for underwriting the Offered Certificates, the sum of all payments made to and retained by the depositor pursuant to the assignment of the mortgage loans to the issuing entity must represent not more than the fair market value of the mortgage loans and the sum of all payments made to and retained by the master servicer, the special servicer and any sub-servicer must represent not more than reasonable compensation for that person’s services under the PSA and reimbursement of the person’s reasonable expenses in connection therewith.
Fifth, the investing Plan must be an accredited investor as defined in Rule 501(a)(1) of Regulation D under the Securities Act.
It is a condition of the issuance of the Offered Certificates that they have the ratings described above required by the Exemption and the depositor believes that each of the Rating Agencies qualifies as an Exemption Rating Agency. Consequently, the second general condition set forth above will be satisfied with respect to the Offered Certificates as of the Closing Date. As of the Closing Date, the third general condition set forth above will be satisfied with respect to the Offered Certificates. In addition, the depositor
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believes that the fourth general condition set forth above will be satisfied with respect to the Offered Certificates. A fiduciary of a Plan contemplating purchasing an Offered Certificate in the secondary market must make its own determination that, at the time of purchase, the Offered Certificates continue to satisfy the second general condition set forth above. A fiduciary of a Plan contemplating purchasing an Offered Certificate, whether in the initial issuance of the Offered Certificates or in the secondary market, must make its own determination that the first and fifth general conditions set forth above will be satisfied with respect to the related Offered Certificate.
The Exemption also requires that the issuing entity meet the following requirements: (1) the issuing entity must consist solely of assets of the type that have been included in other investment pools; (2) certificates in those other investment pools must have been rated in one of the four highest categories by at least one of the Exemption Rating Agencies for at least one year prior to the Plan’s acquisition of Offered Certificates; and (3) certificates in those other investment pools must have been purchased by investors other than Plans for at least one year prior to any Plan’s acquisition of Offered Certificates.
The depositor believes that the conditions to the applicability of the Exemption will generally be met with respect to the Offered Certificates, other than those conditions which are dependent on facts unknown to the depositor or which it cannot control, such as those relating to the circumstances of the Plan purchaser or the Plan fiduciary making the decision to purchase any such Offered Certificates.
If the general conditions of the Exemption are satisfied, the Exemption may provide an exemption from the restrictions imposed by Sections 406(a) and 407(a) of ERISA (as well as the excise taxes imposed by Code Sections 4975(a) and (b) by reason of Code Sections 4975(c)(1)(A) through (D)) in connection with (1) the direct or indirect sale, exchange or transfer of Offered Certificates in the initial issuance of certificates between the depositor or the underwriters and a Plan when the depositor, any of the underwriters, the trustee, the master servicer, the special servicer, a sub-servicer or a borrower is a party in interest with respect to the investing Plan, (2) the direct or indirect acquisition or disposition in the secondary market of the Offered Certificates by a Plan and (3) the holding of Offered Certificates by a Plan. However, no exemption is provided from the restrictions of Sections 406(a)(1)(E), 406(a)(2) and 407 of ERISA for the acquisition or holding of an Offered Certificate on behalf of an “Excluded Plan” by any person who has discretionary authority or renders investment advice with respect to the assets of the Excluded Plan. For purposes of this prospectus, an “Excluded Plan” is a Plan sponsored by any member of the Restricted Group.
If certain specific conditions of the Exemption are also satisfied, the Exemption may provide an exemption from the restrictions imposed by Sections 406(b)(1) and (b)(2) of ERISA and the taxes imposed by Code Section 4975(c)(1)(E) in connection with (1) the direct or indirect sale, exchange or transfer of Offered Certificates in the initial issuance of certificates between the depositor or the underwriters and a Plan when the person who has discretionary authority or renders investment advice with respect to the investment of Plan assets in those certificates is (a) a borrower with respect to 5% or less of the fair market value of the mortgage loans or (b) an affiliate of that person, (2) the direct or indirect acquisition or disposition in the secondary market of Offered Certificates by a Plan and (3) the holding of Offered Certificates by a Plan.
Further, if certain specific conditions of the Exemption are satisfied, the Exemption may provide an exemption from the restrictions imposed by Sections 406(a), 406(b) and 407(a) of ERISA, and the taxes imposed by Code Sections 4975(a) and (b) by reason of Code Section 4975(c) for transactions in connection with the servicing, management and operation of the pool of mortgage loans.
A fiduciary of a Plan should consult with its counsel with respect to the applicability of the Exemption. The fiduciary of a plan not subject to ERISA or Code Section 4975, such as a governmental plan, should determine the need for and availability of exemptive relief under applicable Similar Law. A purchaser of an Offered Certificate should be aware, however, that even if the conditions specified in one or more exemptions are satisfied, the scope of relief provided by an exemption may not cover all acts which might be construed as prohibited transactions.
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Each purchaser of Offered Certificates that is an ERISA Plan will be deemed to have represented and warranted that (i) none of the depositor, the issuing entity, the trustee, any underwriter, the master servicer, the special servicer, the Certificate Administrator, the operating advisor, the asset representations reviewer, or any of their respective affiliated entities, has provided any investment advice within the meaning of Section 3(21) of ERISA (and regulations thereunder) to the ERISA Plan, or to any fiduciary or other person making the decision to invest the assets of the ERISA Plan (“Fiduciary”), in connection with its acquisition of Certificates, and (ii) the Fiduciary is exercising its own independent judgment in evaluating the transaction.
Insurance Company General Accounts
Sections I and III of Prohibited Transaction Class Exemption (“PTCE”) 95-60 exempt from the application of the prohibited transaction provisions of Sections 406(a), 406(b) and 407(a) of ERISA and Code Section 4975 transactions in connection with the acquisition of a security (such as a certificate issued by the issuing entity) as well as the servicing, management and operation of a trust (such as the issuing entity) in which an insurance company general account has an interest as a result of its acquisition of certificates issued by the issuing entity, provided that certain conditions are satisfied. If these conditions are met, insurance company general accounts investing assets that are treated as assets of Plans would be allowed to purchase certain classes of certificates which do not meet the ratings requirements of the Exemption. All other conditions of the Exemption would have to be satisfied in order for PTCE 95-60 to be available. Before purchasing any class of Offered Certificates, an insurance company general account seeking to rely on Sections I and III of PTCE 95-60 should itself confirm that all applicable conditions and other requirements have been satisfied.
Section 401(c) of ERISA provides certain exemptive relief from the provisions of Part 4 of Title I of ERISA and Code Section 4975, including the prohibited transaction restrictions imposed by ERISA and the related excise taxes imposed by the Code, for transactions involving an insurance company general account. Pursuant to Section 401(c) of ERISA, the DOL issued regulations (“401(c) Regulations”), generally effective July 5, 2001, to provide guidance for the purpose of determining, in cases where insurance policies supported by an insurance company’s general account are issued to or for the benefit of a Plan on or before December 31, 1998, which general account assets constitute Plan assets. Any assets of an insurance company general account which support insurance policies issued to a Plan after December 31, 1998 or issued to Plans on or before December 31, 1998 for which the insurance company does not comply with the 401(c) Regulations may be treated as Plan assets. In addition, because Section 401(c) of ERISA does not relate to insurance company separate accounts, separate account assets are still generally treated as Plan assets of any Plan invested in that separate account. Insurance companies contemplating the investment of general account assets in the Offered Certificates should consult with their counsel with respect to the applicability of Section 401(c) of ERISA.
Due to the complexity of these rules and the penalties imposed upon persons involved in prohibited transactions, it is particularly important that potential investors who are Plan fiduciaries or who are investing Plan assets consult with their counsel regarding the consequences under ERISA and the Code of their acquisition and ownership of certificates.
THE SALE OF OFFERED CERTIFICATES TO A PLAN IS IN NO RESPECT A REPRESENTATION BY THE DEPOSITOR OR ANY OF THE UNDERWRITERS THAT THIS INVESTMENT MEETS ANY RELEVANT LEGAL REQUIREMENTS WITH RESPECT TO INVESTMENTS BY PLANS GENERALLY OR ANY PARTICULAR PLAN, OR THAT THIS INVESTMENT IS APPROPRIATE FOR PLANS GENERALLY OR ANY PARTICULAR PLAN.
LEGAL INVESTMENT
None of the classes of Offered Certificates will constitute “mortgage related securities” for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended (“SMMEA”). Generally, the only classes of Offered Certificates which will qualify as “mortgage related securities” will be those that (1) are rated in one of the two highest rating categories by at least one nationally recognized statistical rating
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organization, as defined in Section 3(a)(62) of the Exchange Act (“NRSRO”); and (2) are part of a series evidencing interests in a trust consisting of loans originated by certain types of originators specified in SMMEA and secured by first liens on real estate.
Although Section 939(e) of the Dodd-Frank Act amended SMMEA, effective July 21, 2012, so as to require the SEC to establish creditworthiness standards by that date in substitution for the foregoing ratings test, the SEC has neither proposed nor adopted a rule establishing new creditworthiness standards for purposes of SMMEA as of the date of this prospectus. However, the SEC has issued a transitional interpretation (Release No. 34-67448 (effective July 20, 2012)), which provides that, until such time as final rules establishing new standards of creditworthiness become effective, the standard of creditworthiness for purposes of the definition of the term “mortgage related security” is a security that is rated in one of the two highest rating categories by at least one NRSRO. Depending on the standards of creditworthiness that are ultimately established by the SEC, it is possible that certain classes of Offered Certificates specified to be “mortgage related securities” for purposes of SMMEA may no longer qualify as such as of the time such new standards are effective.
The appropriate characterization of the Offered Certificates under various legal investment restrictions, and thus the ability of investors subject to those restrictions to purchase the Offered Certificates, are subject to significant interpretive uncertainties. We make no representation as to the proper characterization of the Offered Certificates for legal investment, financial institution regulatory, or other purposes, or as to the ability of particular investors to purchase any Offered Certificates under applicable legal investment restrictions. Further, any ratings downgrade of a class of Offered Certificates by an NRSRO to less than an “investment grade” rating (i.e., lower than the top four rating categories) may adversely affect the ability of an investor to purchase or retain, or otherwise impact the regulatory characteristics of, that class. The uncertainties described above (and any unfavorable future determinations concerning the legal investment or financial institution regulatory characteristics of the Offered Certificates) may adversely affect the liquidity and market value of the Offered Certificates.
Accordingly, if your investment activities are subject to legal investment laws and regulations, regulatory capital requirements, or review by regulatory authorities, you should consult with your own legal advisors in determining whether and to what extent the Offered Certificates constitute legal investments or are subject to investment, capital, or other regulatory restrictions.
The issuing entity will not be registered under the Investment Company Act of 1940, as amended. The issuing entity will be relying on an exclusion or exemption from the definition of “investment company” under the Investment Company Act of 1940, as amended contained in Section 3(c)(5) of the Investment Company Act of 1940, as amended, or Rule 3a-7 under the Investment Company Act of 1940, as amended, although there may be additional exclusions or exemptions available to the issuing entity. The issuing entity is being structured so as not to constitute a “covered fund” for purposes of the Volcker Rule under the Dodd-Frank Act.
LEGAL MATTERS
The validity of the certificates and material federal income tax matters will be passed upon for the depositor by Sidley Austin LLP. Certain legal matters will be passed upon for the underwriters by Cadwalader, Wickersham & Taft LLP.
RATINGS
It is a condition to their issuance that the Offered Certificates receive investment grade credit ratings from each of the Rating Agencies engaged by the Depositor to rate such class of certificates.
We are not obligated to maintain any particular rating with respect to any class of Offered Certificates. Changes affecting the Mortgaged Properties, the parties to the PSA or another person may have an adverse effect on the ratings of the Offered Certificates, and thus on the liquidity, market value and
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regulatory characteristics of the Offered Certificates, although such adverse changes would not necessarily be an event of default under the applicable Mortgage Loan.
The ratings address the likelihood of full and timely receipt by the Certificateholders of all distributions of interest at the applicable Pass-Through Rate on the Offered Certificates to which they are entitled on each distribution date and the ultimate payment in full of the Certificate Balance of each class of Offered Certificates on a date that it not later than the Rated Final Distribution Date with respect to such class of certificates. The Rated Final Distribution Date will be the Distribution Date in April 2055. See “Yield and Maturity Considerations” and “Pooling and Servicing Agreement—Advances”. Any ratings of each Offered Certificates should be evaluated independently from similar ratings on other types of securities.
The ratings are not a recommendation to buy, sell or hold securities, a measure of asset value or an indication of the suitability of an investment, and may be subject to revision or withdrawal at any time by any Rating Agency. In addition, these ratings do not address: (a) the likelihood, timing, or frequency of prepayments (both voluntary and involuntary) and their impact on interest payments or the degree to which such prepayments might differ from those originally anticipated, (b) the possibility that a Certificateholder might suffer a lower than anticipated yield, (c) the likelihood of receipt of yield maintenance charges, prepayment charges, prepayment premiums, prepayment fees or penalties or default interest or post anticipated repayment date additional interest, (d) the likelihood of experiencing any Prepayment Interest Shortfalls, an assessment of whether or to what extent the interest payable on any class of Offered Certificates may be reduced in connection with any Prepayment Interest Shortfalls, or of receiving Compensating Interest Payments, (e) the tax treatment of the Offered Certificates or effect of taxes on the payments received, (f) the likelihood or willingness of the parties to the respective documents to meet their contractual obligations or the likelihood or willingness of any party or court to enforce, or hold enforceable, the documents in whole or in part, (g) an assessment of the yield to maturity that investors may experience, (h) the likelihood, timing or receipt of any payments of interest to the holders of the Offered Certificates resulting from an increase in the interest rate on any Mortgage Loan in connection with a Mortgage Loan modification, waiver or amendment, (i) Excess Interest or (ii) other non-credit risks, including, without limitation, market risks or liquidity.
The
ratings take into consideration the credit quality of the underlying Mortgaged Properties and the Mortgage Loans, structural and
legal aspects associated with the Offered Certificates, and the extent to which the payment stream of the Mortgage Loans is adequate
to make payments required under the Offered Certificates. However, as noted above, the ratings do not represent an assessment
of the likelihood, timing or frequency of principal prepayments (both voluntary and involuntary) by the borrowers, or the degree
to which such prepayments might differ from those originally anticipated. In general, the ratings address credit risk and not
prepayment risk. Ratings are forward-looking opinions about credit risk and express an agency’s opinion about the ability
and willingness of an issuer of securities to meet its financial obligations in full and on time. Ratings are not indications
of investment merit. In addition, the ratings do not represent an assessment of the yield to maturity that investors may experience
or the possibility that investors might not fully recover their initial investment in the event of delinquencies or defaults or
rapid prepayments on the Mortgage Loans (including both voluntary and involuntary prepayments) or the application of any realized
losses. In the event that holders of such certificates do not fully recover their investment as a result of rapid principal prepayments
on the Mortgage Loans, all amounts “due” to such holders will nevertheless have been paid, and such result is consistent
with the ratings assigned to such certificates. As indicated in this prospectus, holders of the certificates with Notional Amounts
are entitled only to payments of interest on the related Mortgage Loans. If the Mortgage Loans were to prepay in the initial month,
with the result that the holders of the certificates with Notional Amounts receive only a single month’s interest and therefore,
suffer a nearly complete loss of their investment, all amounts “due” to such holders will nevertheless have been paid,
and such result is consistent with the rating received on those certificates. The Notional Amounts of the certificates with Notional
Amounts on which interest is calculated may be reduced by the allocation of realized losses and prepayments, whether voluntary
or involuntary. The ratings do not address the timing or magnitude of reductions of such Notional Amount, but only the obligation
to pay interest timely on the Notional Amount, as so reduced from time to time. Therefore, the ratings of the certificates with
Notional Amounts should be evaluated independently from similar ratings on other types of securities. See “Risk Factors—Other
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Risks Relating to the Certificates—Your Yield May Be Affected by Defaults, Prepayments and Other Factors” and “Yield and Maturity Considerations”.
Although the depositor will prepay fees for ongoing rating surveillance by certain of the Rating Agencies, the depositor has no obligation or ability to ensure that any Rating Agency performs ratings surveillance. In addition, a Rating Agency may cease ratings surveillance if the information furnished to that Rating Agency is insufficient to allow it to perform surveillance.
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INDEX OF DEFINED TERMS
| 1986 Act | 459 | |
| 1996 Act | 438 | |
| 401(c) Regulations | 476 | |
| 601 Lexington Avenue Companion Loans | 214 | |
| 601 Lexington Avenue Condominium | 167 | |
| 601 Lexington Avenue Directing Certificateholder | 217 | |
| 601 Lexington Avenue Intercreditor Agreement | 215 | |
| 601 Lexington Avenue Noteholders | 215 | |
| 601 Lexington Avenue Pari Passu Companion Loans | 214 | |
| 601 Lexington Avenue Risk Retention Consultation Parties | 218 | |
| 601 Lexington Avenue Senior Notes | 214 | |
| 601 Lexington Avenue Servicer | 215 | |
| 601 Lexington Avenue Special Servicer | 215 | |
| 601 Lexington Avenue Subordinate Companion Loans | 214 | |
| 601 Lexington Avenue Trustee | 216 | |
| 601 Lexington Avenue Whole Loan | 215 | |
| AB Modified Loan | 352 | |
| AB Whole Loan | 205 | |
| Acceptable Insurance Default | 356 | |
| Acting General Counsel’s Letter | 140 | |
| actual/360 basis | 33 | |
| Actual/360 Basis | 190 | |
| Actual/360 Loans | 329 | |
| ADA | 440 | |
| ADR | 151 | |
| Advances | 325 | |
| Affirmative Asset Review Vote | 390 | |
| Allocated Loan Amount | 151 | |
| AMI | 161 | |
| Annual Debt Service | 151 | |
| Anticipated Repayment Date | 191 | |
| Appraisal Reduction Amount | 348 | |
| Appraisal Reduction Event | 346 | |
| Appraised Value | 151 | |
| Appraised-Out Class | 353 | |
| Approved Exchange | 20 | |
| ARD Loan | 190 | |
| ARD Loans | 190 | |
| ASR Consultation Process | 366 | |
| Assessment of Compliance | 419 | |
| Asset Representations Reviewer Asset Review Fee | 345 | |
| Asset Representations Reviewer Fee Cap | 345 | |
| Asset Representations Reviewer Termination Event | 395 |
| Asset Review | 391 | |
| Asset Review Notice | 390 | |
| Asset Review Quorum | 390 | |
| Asset Review Report | 392 | |
| Asset Review Report Summary | 392 | |
| Asset Review Standard | 392 | |
| Asset Review Trigger | 388 | |
| Asset Review Vote Election | 390 | |
| Asset Status Report | 364 | |
| Attestation Report | 420 | |
| Balloon Balance | 152 | |
| Balloon LTV | 153 | |
| BEAs | 170 | |
| Beds | 157 | |
| Benchmark 2021-B31 PSA | 205 | |
| Benchmark 2022-B32 PSA | 205 | |
| benefit plan investors | 473 | |
| B-piece buyer | 124 | |
| BPLP | 182 | |
| BSCMI | 246 | |
| Business Day | 330 | |
| BXP 2021-601L TSA | 206, 215 | |
| CDTC | 255 | |
| CERCLA | 438 | |
| Certificate Administrator/Trustee Fee | 344 | |
| Certificate Administrator/Trustee Fee Rate | 344 | |
| Certificateholder Quorum | 398 | |
| Certificateholder Repurchase Request | 408 | |
| CGMRC | 228 | |
| Class X certificates | 3 | |
| Class X Certificates | 273 | |
| Closing Date | 150 | |
| CMBS | 144, 261 | |
| Code | 456 | |
| Collateral Deficiency Amount | 352 | |
| Collection Account | 328 | |
| Commercial Unit | 166 | |
| Companion Loan | 149 | |
| Companion Loan Holder | 204 | |
| Computershare | 255 | |
| Computershare Limited | 255 | |
| Computershare Trust Company | 255 | |
| Constant Prepayment Rate | 448 | |
| Consultation Termination Event | 378 | |
| Control Eligible Certificates | 373 | |
| Control Note | 206 | |
| Control Termination Event | 378 | |
| Controlling Class | 373 | |
| Controlling Class Certificateholder | 373 | |
| Controlling Companion Loan | 206 | |
| Controlling Holder | 206 |
480
| Controlling Note | 206 | |
| Corrected Loan | 363 | |
| COVID Modification | 347 | |
| COVID Modification Agreement | 348 | |
| COVID Modified Loan | 348 | |
| COVID-19 | 61 | |
| COVID-19 Emergency | 347 | |
| CPR | 448 | |
| CREFC® Intellectual Property Royalty License Fee | 346 | |
| CREFC® Intellectual Property Royalty License Fee Rate | 346 | |
| CREFI | 149, 228 | |
| CREFI Data File | 229 | |
| CREFI Mortgage Loans | 228 | |
| CREFI Securitization Database | 229 | |
| CRR | 145 | |
| CTS | 255 | |
| Cumulative Appraisal Reduction Amount | 351 | |
| Cure/Contest Period | 392 | |
| Current LTV | 152 | |
| Cut-off Date | 148 | |
| Cut-off Date Balance | 152 | |
| Cut-off Date LTV Ratio | 152 | |
| Cut-off Date UW NCF Debt Yield | 155 | |
| DB Originators | 223 | |
| DBNY | 220 | |
| DBNY Originated Loan | 220 | |
| DBRI | 220 | |
| DBRS Morningstar | 259, 418 | |
| Defaulted Loan | 370 | |
| Defeasance Deposit | 195 | |
| Defeasance Loans | 195 | |
| Defeasance Lock-Out Period | 195 | |
| Defeasance Option | 195 | |
| Delinquent Loan | 390 | |
| Deutsche Bank | 220 | |
| Directing Holder | 372 | |
| Directing Holder Asset Status Report Review Process | 366 | |
| Disclosable Special Servicer Fees | 344 | |
| Discount Rate | 192 | |
| Dispute Resolution Consultation | 411 | |
| Dispute Resolution Cut-off Date | 410 | |
| Distribution Accounts | 328 | |
| DISTRIBUTOR | 15 | |
| DMARC | 221 | |
| Dodd-Frank Act | 147 | |
| DOJ | 220 | |
| DOL | 473 | |
| Due Date | 190 | |
| Due Diligence Questionnaire | 230 | |
| Due Diligence Requirements | 145 | |
| EDGAR | 472 | |
| EEA | 15 |
| Eligible Asset Representations Reviewer | 393 | |
| Eligible Operating Advisor | 384 | |
| Enforcing Party | 408 | |
| Enforcing Servicer | 408 | |
| EPA | 169 | |
| ESA | 169, 225, 250 | |
| Escrow/Reserve Mitigating Circumstances | 227, 253 | |
| EU Due Diligence Requirements | 145 | |
| EU Institutional Investor | 145 | |
| EU PRIIPS REGULATION | 15 | |
| EU PROSPECTUS REGULATION | 15 | |
| EU Securitization Regulation | 145 | |
| EU SECURITIZATION REGULATION | 17 | |
| EU Transparency Requirements | 146 | |
| EUWA | 15, 16 | |
| Excess Interest | 191 | |
| Excess Interest Distribution Account | 328, 329 | |
| Exchange Act | 219, 228 | |
| Excluded Plan | 475 | |
| Excluded Special Servicer | 399 | |
| Excluded Special Servicer Mortgage Loan | 399 | |
| Exemption | 474 | |
| Exemption Rating Agency | 474 | |
| FATCA | 467 | |
| FDIA | 139 | |
| FDIC | 140 | |
| FDIC Safe Harbor | 140 | |
| FETL | 20 | |
| Fiduciary | 476 | |
| FIEL | 20 | |
| Final Asset Status Report | 367 | |
| Final Dispute Resolution Election Notice | 411 | |
| FINANCIAL PROMOTION ORDER | 18 | |
| FIRREA | 141, 224, 250 | |
| Fitch | 259, 418 | |
| FPO PERSONS | 18 | |
| FSCMA | 20 | |
| FSMA | 17 | |
| GACC | 149, 220 | |
| GACC Data Tape | 222 | |
| GACC Deal Team | 221 | |
| GACC Mortgage Loans | 221 | |
| Gain-on-Sale Reserve Account | 329 | |
| Garn Act | 439 | |
| Goldman Originator | 239 | |
| grace period | 190 | |
| Grantor Trust | 56, 457 | |
| GS Bank | 139, 237 | |
| GSA | 182 | |
| GSMC | 149, 237 | |
| GSMC Data Tape | 238 | |
| GSMC Deal Team | 238 | |
| GSMC Mortgage Loans | 237 |
481
| Hard Lockbox | 152 | |
| HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC. | 18 | |
| HSTP Act | 77 | |
| HUD | 173 | |
| Initial Delivery Date | 364 | |
| Initial Pool Balance | 148 | |
| Initial Rate | 191 | |
| Initial Requesting Certificateholder | 408 | |
| In-Place Cash Management | 152 | |
| Institutional Investor | 19 | |
| Institutional Investors | 145 | |
| Insurance and Condemnation Proceeds | 328 | |
| Intercreditor Agreement | 204 | |
| Interest Payment Differential | 192 | |
| Interest Reserve Account | 329 | |
| Interested Person | 371 | |
| intermediary | 467 | |
| Investment Company Act | i | |
| Japanese Retention Requirement | 21 | |
| JFSA | 21 | |
| JPMC | 246 | |
| JPMCB | 149, 246 | |
| JPMCB Data Tape | 247 | |
| JPMCB Deal Team | 247 | |
| JPMCB Mortgage Loans | 247 | |
| JPMCB’s Qualification Criteria | 248 | |
| JPMCCMSC | 246 | |
| JRR Rule | 21 | |
| Kaiser | 159 | |
| Kaiser Work | 159 | |
| KeyBank | 258 | |
| Largest Tenant | 152 | |
| Lease Expiration | 152 | |
| Liquidation Fee | 340 | |
| Liquidation Proceeds | 340 | |
| LNR Partners | 263 | |
| Loan Per Net Rentable Area | 152 | |
| Loan-Specific Directing Holder | 373 | |
| Loan-to-Value Ratio | 152 | |
| Loan-to-Value Ratio at Maturity or ARD | 153 | |
| Lower-Tier Regular Interests | 456 | |
| Lower-Tier REMIC | 55, 456 | |
| Lower-Tier REMIC Distribution Account | 328 | |
| LTV Ratio | 152 | |
| LTV Ratio at Maturity or ARD | 153 | |
| Major Decision | 374 | |
| Major Decision Reporting Package | 374 | |
| market discount | 462 | |
| MAS | 19 | |
| Master Condominium Board | 166 | |
| Master Servicer | 258 | |
| Master Servicer Proposed Course of Action Notice | 409 | |
| Master Servicer Remittance Date | 324 |
| Master Servicing Fee | 337 | |
| Master Servicing Fee Rate | 337 | |
| Maturity Date LTV Ratio | 153 | |
| MBC | 173 | |
| Midland | 261 | |
| Midland Serviced Mortgage Loans | 261 | |
| MIFID II | 15, 16 | |
| MLPA | 309 | |
| Modeling Assumptions | 448 | |
| Modification Fees | 342 | |
| Modified Mortgage Loan | 347 | |
| Moody’s | 259 | |
| Mortgage | 149 | |
| Mortgage File | 309 | |
| Mortgage Loan Sellers | 220 | |
| Mortgage Loans | 148 | |
| Mortgage Note | 149 | |
| Mortgage Pool | 148 | |
| Mortgaged Property | 149 | |
| Most Recent NOI | 153 | |
| MSA | 153 | |
| MSTS | 160, 182 | |
| Net Default Interest | 337 | |
| Net Operating Income | 153 | |
| NFIP | 95 | |
| NI 33-105 | 21 | |
| NNSS | 160, 182 | |
| NOI | 153 | |
| Non-Control Note | 206 | |
| Non-Controlling Holder | 206, 210 | |
| non-offered certificates | 32 | |
| non-qualified intermediary | 467 | |
| Nonrecoverable Advance | 326 | |
| Non-Reduced Certificates | 398 | |
| Non-Serviced Certificate Administrator | 206 | |
| Non-Serviced Companion Loan | 206 | |
| Non-Serviced Custodian | 206 | |
| Non-Serviced Directing Holder | 206 | |
| Non-Serviced Master Servicer | 206 | |
| Non-Serviced Mortgage Loan | 206 | |
| Non-Serviced Pari Passu Companion Loan | 207 | |
| Non-Serviced Pari Passu Whole Loan | 207 | |
| Non-Serviced PSA | 207 | |
| Non-Serviced Securitization Trust | 207 | |
| Non-Serviced Special Servicer | 207 | |
| Non-Serviced Trustee | 207 | |
| Non-Serviced Whole Loan | 47, 207 | |
| Non-U.S. Person | 467 | |
| non-VRR certificates | 32 | |
| Non-VRR Certificates | 273 | |
| Novo Earnout Agreement | 203 | |
| Novo Earnout Obligation | 203 | |
| Novo Earnout Pledge Agreement | 203 | |
| Novo Seller | 203 | |
| Novo Sole Member | 203 |
482
| NRA | 153 | |
| NRSRO | 403, 477 | |
| NYC LPC | 186 | |
| NYCOER | 170, 187 | |
| Occupancy | 153 | |
| Occupancy Date | 154 | |
| offered certificates | 31 | |
| Offered Certificates | 273 | |
| Office Component | 166 | |
| Offsetting Modification Fees | 343 | |
| OID Regulations | 459 | |
| OLA | 140 | |
| Operating Advisor Annual Report | 383 | |
| Operating Advisor Consulting Fee | 344 | |
| Operating Advisor Expenses | 345 | |
| Operating Advisor Fee | 344 | |
| Operating Advisor Fee Rate | 344 | |
| Operating Advisor Standard | 382 | |
| Operating Advisor Termination Event | 386 | |
| Original Balance | 154 | |
| Outside Special Servicer | 258 | |
| P&I Advance | 324 | |
| PAR | 225, 251 | |
| Pari Passu Companion Loan | 149 | |
| Park Bridge Financial | 268 | |
| Park Bridge Lender Services | 268 | |
| Parking Component | 166 | |
| Parties in Interest | 473 | |
| Patriot Act | 441 | |
| PCO | 187 | |
| PCR | 236, 244 | |
| Permitted Special Servicer/Affiliate Fees | 343 | |
| PetCo | 179 | |
| PIPs | 89, 171 | |
| Plans | 473 | |
| PML | 244 | |
| PNC Bank | 263 | |
| PRC | 18 | |
| Preliminary Dispute Resolution Election Notice | 410 | |
| Prepayment Assumption | 461 | |
| Prepayment Provision | 154 | |
| Prime Rate | 328 | |
| principal balance certificates | 3 | |
| Principal Balance Certificates | 273 | |
| Privileged Information | 385 | |
| Privileged Information Exception | 385 | |
| PROMOTION OF COLLECTIVE INVESTMENT SCHEMES EXEMPTIONS ORDER | 18 | |
| Proposed Course of Action | 409 | |
| Proposed Course of Action Notice | 409 | |
| PSA Party Repurchase Request | 409 | |
| PTCE | 476 | |
| qualified intermediary | 467 | |
| Qualified Replacement Special Servicer | 398 |
| RAC No-Response Scenario | 417 | |
| Rating Agencies | 418 | |
| Rating Agency Confirmation | 418 | |
| REA | 73 | |
| REC | 169 | |
| Redmond Community Center Release Parcel | 197 | |
| Redmond Community Center Remaining Property | 197 | |
| Reduced Occupancy Period | 179 | |
| Registration Statement | 472 | |
| Regular Interest Holder | 459 | |
| Regular Interests | 456 | |
| Regulation AB | 420 | |
| Reimbursement Rate | 328 | |
| Reinvestment Yield | 192 | |
| Related Group | 154 | |
| Related Proceeds | 327 | |
| Release Date | 195 | |
| RELEVANT PERSONS | 18 | |
| Relief Act | 440 | |
| REMIC | 456 | |
| REMIC Regulations | 456 | |
| REO Account | 330 | |
| REO Property | 363 | |
| Repurchase Request | 409 | |
| Requesting Certificateholder | 411 | |
| Requesting Holders | 353 | |
| Requesting Party | 417 | |
| Requirements | 441 | |
| Residual Certificates | 273 | |
| Resolution Failure | 409 | |
| Resolved | 409 | |
| Restricted Group | 474 | |
| Restricted Party | 385 | |
| Retail Board of Managers | 166 | |
| Review Materials | 390 | |
| Revised Rate | 191 | |
| RevPAR | 154 | |
| Risk Retention Requirements | 146 | |
| Rooms | 157 | |
| Ross | 180 | |
| Rule 15Ga-1 | 253 | |
| S&P | 259, 418 | |
| SEC | 219, 228 | |
| Securities Act | 419 | |
| Securitization Accounts | 330 | |
| Securitization Regulation | 145 | |
| SEL | 244 | |
| Seller Credit Reserve | 203 | |
| Senior Certificates | 273 | |
| Senior Principal Balance Certificates | 273 | |
| Serviced Companion Loan | 207 | |
| Serviced Mortgage Loan | 207 | |
| Serviced Pari Passu Companion Loan | 207 | |
| Serviced Pari Passu Mortgage Loan | 207 |
483
| Serviced Pari Passu Whole Loan | 208 | |
| Serviced Subordinate Companion Loan | 208 | |
| Serviced Whole Loan | 47, 208 | |
| Serviced Whole Loan Custodial Account | 328 | |
| Servicer Termination Event | 401, 402 | |
| Servicing Advances | 325 | |
| Servicing Compensation | 338 | |
| Servicing Fee | 337 | |
| Servicing Fee Rate | 337 | |
| Servicing Shift Mortgage Loan | 208 | |
| Servicing Shift Pooling and Servicing Agreement | 47 | |
| Servicing Shift PSA | 208 | |
| Servicing Shift Securitization Date | 47, 208 | |
| Servicing Shift Whole Loan | 47, 208 | |
| Servicing Standard | 323 | |
| Servicing Transfer Event | 363 | |
| SF | 154 | |
| SFA | 19 | |
| SFO | 19 | |
| Shearer’s Expansion | 171 | |
| Shutdown Period | 181 | |
| Similar Law | 473 | |
| Small Loan Appraisal Estimate | 349 | |
| SMMEA | 476 | |
| Soft Lockbox | 154 | |
| Soft Springing Hard Lockbox | 154 | |
| Sole Certificateholder | 343 | |
| Special Servicing Fee | 339 | |
| Special Servicing Fee Rate | 339 | |
| Specially Serviced Loans | 362 | |
| Sponsors | 220 | |
| Springing Cash Management | 154 | |
| Springing Lockbox | 154 | |
| Sq. Ft. | 154 | |
| Square Feet | 154 | |
| Startup Day | 457 | |
| static pool data | 100 | |
| STK Chicago Loan REMIC | 456 | |
| STK Chicago Loan REMIC Regular Interest | 456 | |
| STK Chicago REMIC Declaration | 456 | |
| STK Chicago Residual Interest | 456 | |
| STK Condominium Unit | 166 | |
| STWD | 263 | |
| Subject 2020 Wells Fargo CTS CMBS Annual Statement of Compliance | 256 | |
| Subject Loans | 345 | |
| Subordinate Certificates | 273 | |
| Subordinate Companion Loan | 149, 208 | |
| Subsequent Asset Status Report | 364 | |
| Sub-Servicing Agreement | 323 | |
| Sub-Servicing Entity | 402 | |
| T-12 | 154 | |
| TCO | 187 | |
| Term to Maturity | 155 |
| Tests | 391 | |
| TIF Agreement | 189 | |
| Title V | 440 | |
| Trailing 12 NOI | 153 | |
| TRIPRA | 96 | |
| trust directing holder | 27 | |
| Trust Directing Holder | 372 | |
| Trust REMIC | 56 | |
| Trust REMICs | 456 | |
| Trustee | 257 | |
| TTM | 154 | |
| U.S. Obligations | 192 | |
| U.S. Person | 467 | |
| UCC | 428 | |
| UK | 15 | |
| UK Due Diligence Requirements | 145 | |
| UK Institutional Investor | 145 | |
| UK PRIIPS REGULATION | 16 | |
| UK RETAIL INVESTOR | 15 | |
| UK Securitization Regulation | 145 | |
| UK SECURITIZATION REGULATION | 17 | |
| Underwriter Entities | 117 | |
| Underwriting Agreement | 469 | |
| Underwritten EGI | 155, 157 | |
| Underwritten Expenses | 155 | |
| Underwritten NCF | 155 | |
| Underwritten NCF Debt Yield | 155 | |
| Underwritten NCF DSCR | 155 | |
| Underwritten Net Cash Flow | 155 | |
| Underwritten Net Cash Flow DSCR | 155 | |
| Underwritten Net Operating Income | 156 | |
| Underwritten Net Operating Income DSCR | 157 | |
| Underwritten NOI | 156 | |
| Underwritten NOI Debt Yield | 157 | |
| Underwritten NOI DSCR | 157 | |
| Underwritten Revenues | 157 | |
| Units | 157 | |
| Unrelated Property | 175 | |
| Unsolicited Information | 391 | |
| Updated Appraisal | 350 | |
| Upper-Tier REMIC | 56, 456 | |
| Upper-Tier REMIC Distribution Account | 328 | |
| USTs | 171 | |
| UW EGI | 155, 157 | |
| UW Expenses | 155 | |
| UW NCF | 155 | |
| UW NCF Debt Yield | 155 | |
| UW NCF DSCR | 155 | |
| UW NOI | 156 | |
| UW NOI Debt Yield | 157 | |
| UW NOI DSCR | 157 | |
| Vendor | 159 | |
| Volcker Rule | 147 | |
| VRR Interest | 4 | |
| VRR Upper-Tier Regular Interests | 456 |
484
| WAC rate | 3 | |
| Weighted Average Mortgage Rate | 158 | |
| Wells Fargo Bank | 255 | |
| Whole Loan | 148, 208 | |
| Withheld Amounts | 329 |
| Workout Fee | 339 | |
| Workout-Delayed Reimbursement Amount | 327 | |
| WTNA | 257 |
485
(THIS PAGE INTENTIONALLY LEFT BLANK)
ANNEX A-1
CERTAIN
CHARACTERISTICS OF THE MORTGAGE LOANS
AND MORTGAGED PROPERTIES
[THIS PAGE INTENTIONALLY LEFT BLANK]
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | % of Initial Pool Balance | % of Loan Balance | Mortgage Loan Originator | Mortgage Loan Seller | Related Group | Crossed Group | Address |
| 9 | |||||||||||
| 1 | Loan | 9, 10, 20, 24, 26, 28, 29, 32, 33, 34, 35 | 1 | 601 Lexington Avenue | 9.3% | 100.0% | DBRI, MSBNA, CREFI, WFBNA | GACC, CREFI | NAP | NAP | 601 Lexington Avenue |
| 2 | Loan | 10, 14, 24, 28, 29 | 1 | One Wilshire | 9.3% | 100.0% | GSBI | GSMC | NAP | NAP | 624 South Grand Avenue |
| 3 | Loan | 9, 10, 11, 12, 25, 26, 28, 29 | 14 | Bedrock Portfolio | 9.3% | JPMCB, SMC | JPMCB | NAP | NAP | Various | |
| 3.01 | Property | 1 | First National Building | 2.1% | 23.1% | 660 Woodward Avenue | |||||
| 3.02 | Property | 27 | 1 | The Qube | 1.4% | 14.7% | 611 Woodward Avenue | ||||
| 3.03 | Property | 27 | 1 | Chrysler House | 1.1% | 11.5% | 719 Griswold Street and 730 Shelby Street | ||||
| 3.04 | Property | 27 | 1 | 1001 Woodward | 1.1% | 11.4% | 1001-1075 Woodward Avenue | ||||
| 3.05 | Property | 1 | One Woodward | 0.8% | 8.3% | 1 Woodward Avenue | |||||
| 3.06 | Property | 1 | The Z Garage | 0.6% | 6.7% | 1234-1246 Library Street and 1327 Broadway Avenue | |||||
| 3.07 | Property | 1 | Two Detroit Garage | 0.5% | 5.1% | 160 East Congress Street | |||||
| 3.08 | Property | 1 | 1505 & 1515 Woodward | 0.4% | 4.8% | 1505 and 1515-1529 Woodward Avenue | |||||
| 3.09 | Property | 1 | 1001 Brush Street | 0.4% | 4.1% | 1001 Brush Street | |||||
| 3.10 | Property | 12 | 1 | The Assembly | 0.3% | 3.2% | 1700 West Fort Street | ||||
| 3.11 | Property | 1 | 419 Fort Street Garage | 0.3% | 2.9% | 419 East Fort Street | |||||
| 3.12 | Property | 12 | 1 | Vinton | 0.2% | 1.8% | 600 Woodward Avenue | ||||
| 3.13 | Property | 1 | 1401 First Street | 0.2% | 1.7% | 1401 First Street | |||||
| 3.14 | Property | 1 | Lane Bryant Building | 0.1% | 0.9% | 1520 Woodward Avenue | |||||
| 4 | Loan | 19, 36 | 1 | Romaine & Orange Square | 7.4% | 100.0% | DBRI | GACC | NAP | NAP | 7007 Romaine Street and 1009-1023 North Orange Drive |
| 5 | Loan | 26, 28, 29 | 1 | Shoreline Square | 6.1% | 100.0% | CREFI | CREFI | NAP | NAP | 301 East Ocean Boulevard |
| 6 | Loan | 11, 13, 19, 25, 33 | 3 | Millennia Portfolio | 4.4% | DBRI | GACC | NAP | NAP | Various | |
| 6.01 | Property | 1 | Summit Ridge | 2.1% | 48.3% | 1111 Independence Avenue | |||||
| 6.02 | Property | 1 | Lexington Village | 1.3% | 30.8% | 7820 Lexington Avenue | |||||
| 6.03 | Property | 1 | Gateway at the Greene | 0.9% | 20.8% | 3325 East Stroop Road | |||||
| 7 | Loan | 11, 25, 27, 29 | 25 | InCommercial Net Lease Portfolio #5 | 3.8% | CREFI | CREFI | NAP | NAP | Various | |
| 7.01 | Property | 1 | Walgreens, Mount Pleasant, SC | 0.6% | 14.6% | 2903 North US 17 Highway | |||||
| 7.02 | Property | 1 | Walgreens, Meridian, ID | 0.3% | 8.5% | 1570 East Fairview Avenue | |||||
| 7.03 | Property | 1 | Renal Care, Moncks Corner, SC | 0.3% | 7.2% | 422 Drive in Lane | |||||
| 7.04 | Property | 1 | Tractor Supply Co, Ogdensbg, NY | 0.2% | 5.6% | 1051 Park Street | |||||
| 7.05 | Property | 1 | Tractor Supply Co, Lake Ch, LA | 0.2% | 4.6% | 181 US Route 171 | |||||
| 7.06 | Property | 1 | Tractor Supply Co, Oconto, WI | 0.1% | 3.9% | 126 Charles Street | |||||
| 7.07 | Property | 1 | Dollar General, Ghent, WV | 0.1% | 3.9% | 3285 Flat Top Road | |||||
| 7.08 | Property | 1 | Tractor Supply Co, Kewaunee, WI | 0.1% | 3.8% | 802 Main Street | |||||
| 7.09 | Property | 1 | Fresenius, Belzoni, MS | 0.1% | 3.3% | 16451 US Highway 49 | |||||
| 7.10 | Property | 1 | Dollar General, Lenore, WV | 0.1% | 3.2% | 384 West Virginia Highway 65 | |||||
| 7.11 | Property | 1 | Family Dollar, Linden, AL | 0.1% | 3.2% | 303 South Main Street | |||||
| 7.12 | Property | 1 | Fresenius, Rayville, LA | 0.1% | 3.1% | 230 Highway 3048 | |||||
| 7.13 | Property | 1 | Dollar General, Burlington, WV | 0.1% | 3.1% | 2172 Northwestern Turnpike | |||||
| 7.14 | Property | 1 | Family Dollar, Franklinton, LA | 0.1% | 3.1% | 27245 Highway 62 | |||||
| 7.15 | Property | 1 | Dollar General, Hinton, WV | 0.1% | 2.9% | 1089 State Route Highway 3 and 12 | |||||
| 7.16 | Property | 1 | Dollar General, Lerona, WV | 0.1% | 2.9% | 6885 Hinton Road | |||||
| 7.17 | Property | 1 | Dollar General, Rushford, NY | 0.1% | 2.9% | 8874 State Route 243 | |||||
| 7.18 | Property | 1 | Dollar General, Walker, WV | 0.1% | 2.8% | 11494 Staunton-Parkersburg Turnpike | |||||
| 7.19 | Property | 1 | Dollar General, Dixie, WV | 0.1% | 2.8% | 1326 Dixie Highway | |||||
| 7.20 | Property | 1 | Dollar General, Bay Minette, AL | 0.1% | 2.6% | 41711 Alabama Highway 225 | |||||
| 7.21 | Property | 1 | Dollar General, Fruithurst, AL | 0.1% | 2.6% | 15690 Highway 78 | |||||
| 7.22 | Property | 1 | Dollar General, Billingsley, AL | 0.1% | 2.4% | 3362 Highway 82 West | |||||
| 7.23 | Property | 1 | Dollar General, Knox City, TX | 0.1% | 2.4% | 1204 East Main Street | |||||
| 7.24 | Property | 1 | Dollar General, South Dayton, NY | 0.1% | 2.4% | 529 Pine Street | |||||
| 7.25 | Property | 1 | Dollar General, Gaylesville, AL | 0.1% | 2.4% | 5250 Cherokee County 41 | |||||
| 8 | Loan | 11, 25, 29, 30, 40 | 1 | Redmond Community Center | 3.8% | 100.0% | DBNY | GACC | NAP | NAP | 7215-7597 170th Avenue Northeast and 17181-17209 Redmond Way |
| 9 | Loan | 9, 10, 11, 21, 34, 40 | 9 | Shearer’s Industrial Portfolio | 3.3% | GSBI, WFB | GSMC | NAP | NAP | Various | |
| 9.01 | Property | 1 | 800 Northwest 4th Street | 0.6% | 17.1% | 800 Northwest 4th Street | |||||
| 9.02 | Property | 1 | 4100 Millennium Boulevard Southeast | 0.5% | 16.3% | 4100 Millennium Boulevard Southeast | |||||
| 9.03 | Property | 1 | 3000 East Mount Pleasant Street | 0.5% | 14.7% | 3000 East Mount Pleasant Street | |||||
| 9.04 | Property | 1 | 7330 West Sherman Street | 0.4% | 13.0% | 7330 West Sherman Street | |||||
| 9.05 | Property | 12 | 1 | 821 Route 97 | 0.4% | 11.0% | 821 Route 97 | ||||
| 9.06 | Property | 1 | 3200 Northern Cross Boulevard | 0.3% | 10.0% | 3200 Northern Cross Boulevard | |||||
| 9.07 | Property | 1 | 3636 Medallion Avenue | 0.3% | 9.9% | 3636 Medallion Avenue | |||||
| 9.08 | Property | 1 | 692 Wabash Avenue North | 0.1% | 4.1% | 692 Wabash Avenue North | |||||
| 9.09 | Property | 1 | 225 Commonwealth Avenue Extension | 0.1% | 3.7% | 225 Commonwealth Avenue Extension | |||||
| 10 | Loan | 19, 30 | 1 | Hall Road Crossing | 3.1% | 100.0% | CREFI | CREFI | NAP | NAP | 13821-13995 Hall Road |
| 11 | Loan | 10, 17, 19, 24, 26, 28, 36, 39 | 1 | Gem Tower | 3.1% | 100.0% | GSBI | GSMC | NAP | NAP | 44 West 47th Street |
| 12 | Loan | 11, 19 | 2 | 285 & 355 Riverside Ave | 3.1% | CREFI | CREFI | NAP | NAP | Various | |
| 12.01 | Property | 29 | 1 | 285 Riverside Ave | 1.8% | 60.0% | 285 Riverside Avenue | ||||
| 12.02 | Property | 29 | 1 | 355 Riverside Ave | 1.2% | 40.0% | 355 Riverside Avenue | ||||
| 13 | Loan | 27 | 1 | Bala Woods | 3.0% | 100.0% | CREFI | CREFI | NAP | NAP | 23200 Forest North Drive |
| 14 | Loan | 9, 19, 29, 31 | 1 | Prospector Plaza | 2.6% | 100.0% | LCF | GACC | NAP | NAP | 3964 Missouri Flat Road |
| 15 | Loan | 10, 14, 24, 34, 37 | 1 | Novo Nordisk HQ | 2.4% | 100.0% | DBRI | GACC | NAP | NAP | 800 Scudders Mill Road |
| 16 | Loan | 10, 19, 26, 38 | 1 | JW Marriott Desert Springs | 2.2% | 100.0% | GSBI | GSMC | NAP | NAP | 74-855 Country Club Drive |
| 17 | Loan | 11, 25 | 2 | 35 Crosby Street and 70 Carmine Street | 2.1% | CREFI | CREFI | NAP | NAP | Various | |
| 17.01 | Property | 12 | 1 | 35 Crosby Street | 1.4% | 66.2% | 35 Crosby Street | ||||
| 17.02 | Property | 1 | 70 Carmine Street | 0.7% | 33.8% | 70 Carmine Street | |||||
| 18 | Loan | 22 | 1 | 1340 Lafayette | 1.8% | 100.0% | JPMCB | JPMCB | NAP | NAP | 1340 Lafayette Avenue, 747-753 Whittier Street and 743-745 Whittier Street |
| 19 | Loan | 28 | 1 | Townsgate Office | 1.7% | 100.0% | DBRI | GACC | NAP | NAP | 2829 Townsgate Road |
| 20 | Loan | 11, 29, 30, 40 | 6 | Tharp Portfolio | 1.5% | GSBI | GSMC | NAP | NAP | Various | |
| 20.01 | Property | 1 | Jiffy and Dollar | 0.4% | 23.5% | 787 & 839 North US Highway 31 | |||||
| 20.02 | Property | 1 | Main Street Shoppes | 0.3% | 19.6% | 200 South Emerson Avenue | |||||
| 20.03 | Property | 1 | Greensburg Retail Center | 0.3% | 19.4% | 420 East Freeland Road | |||||
| 20.04 | Property | 1 | CSL Plasma | 0.3% | 17.8% | 312 West Highway 20 | |||||
| 20.05 | Property | 1 | FedEx | 0.2% | 15.5% | 6311 Airway Drive | |||||
| 20.06 | Property | 1 | Greenwood Med Spa | 0.1% | 4.1% | 1664 West Smith Valley Road | |||||
| 21 | Loan | 28, 29, 33 | 1 | Santa Barbara Tech Center | 1.5% | 100.0% | DBRI | GACC | NAP | NAP | 5520 and 5540 Ekwill Street |
| 22 | Loan | 33 | 1 | Greenbrier Towers I & II | 1.5% | 100.0% | CREFI | CREFI | NAP | NAP | 860 and 870 Greenbrier Circle |
| 23 | Loan | 19 | 1 | Apple Glen Crossing | 1.4% | 100.0% | GSBI | GSMC | NAP | NAP | 1720-1770 Apple Glen Boulevard |
| 24 | Loan | 13, 20, 28, 33 | 1 | Crossroads Village | 1.4% | 100.0% | JPMCB | JPMCB | NAP | NAP | 47164 Michigan Avenue |
| 25 | Loan | 19 | 1 | 1500 Volta Drive | 1.1% | 100.0% | CREFI | CREFI | NAP | NAP | 1500 Volta Drive |
| 26 | Loan | 19 | 1 | Courtyard Appleton | 1.1% | 100.0% | CREFI | CREFI | NAP | NAP | 101 South Riverheath Way |
A-1-1
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | % of Initial Pool Balance | % of Loan Balance | Mortgage Loan Originator | Mortgage Loan Seller | Related Group | Crossed Group | Address |
| 27 | Loan | 29 | 1 | Lee’s Hill II | 1.0% | 100.0% | CREFI | CREFI | NAP | NAP | 10304 Spotsylvania Avenue |
| 28 | Loan | 10, 11, 19, 25, 27, 28, 36 | 11 | Glen Forest Office Portfolio | 1.0% | CREFI | CREFI | NAP | NAP | Various | |
| 28.01 | Property | 1 | Hillcrest | 0.2% | 19.0% | 1801 Bayberry Court | |||||
| 28.02 | Property | 1 | Arrington | 0.2% | 17.9% | 1802 Bayberry Court | |||||
| 28.03 | Property | 1 | Highland II | 0.1% | 12.4% | 7229 Forest Avenue | |||||
| 28.04 | Property | 29 | 1 | Meridian | 0.1% | 11.7% | 1800 Bayberry Court | ||||
| 28.05 | Property | 29 | 1 | Bayberry | 0.1% | 8.2% | 1700 Bayberry Court | ||||
| 28.06 | Property | 1 | Highland I | 0.1% | 7.6% | 7231 Forest Avenue | |||||
| 28.07 | Property | 29 | 1 | Capstone | 0.1% | 7.2% | 7100 Forest Avenue | ||||
| 28.08 | Property | 1 | Forest Plaza I | 0.1% | 5.9% | 7201 Glen Forest Drive | |||||
| 28.09 | Property | 28, 29 | 1 | Forest Plaza II | 0.0% | 4.9% | 7275 Glen Forest Drive | ||||
| 28.10 | Property | 1 | Utica | 0.0% | 4.0% | 2701 Emerywood Parkway | |||||
| 28.11 | Property | 1 | Willard | 0.0% | 1.2% | 2601 Willard Road | |||||
| 29 | Loan | 19 | 1 | Arlington Green Executive Plaza | 1.0% | 100.0% | CREFI | CREFI | NAP | NAP | 2101 South Arlington Heights Road |
| 30 | Loan | 12, 13, 27, 30, 40 | 1 | 1201 Main | 1.0% | 100.0% | DBRI | GACC | NAP | NAP | 1201 Main Street |
| 31 | Loan | 11 | 2 | Walgreens New Castle & Oneonta | 1.0% | CREFI | CREFI | NAP | NAP | Various | |
| 31.01 | Property | 1 | Walgreens Oneonta | 0.5% | 52.0% | 99 Chestnut Street | |||||
| 31.02 | Property | 1 | Walgreens New Castle | 0.5% | 48.0% | 100 North Memorial Drive | |||||
| 32 | Loan | 11 | 2 | 138 St. Marks & 155 5th Ave | 0.9% | CREFI | CREFI | NAP | NAP | Various | |
| 32.01 | Property | 1 | 155 5th Avenue | 0.6% | 59.1% | 155 5th Avenue | |||||
| 32.02 | Property | 12 | 1 | 138 Saint Marks Place | 0.4% | 40.9% | 138 Saint Marks Place | ||||
| 33 | Loan | 19, 20, 23, 26, 32 | 1 | STK Chicago | 0.8% | 100.0% | DBRI | GACC | NAP | NAP | 9 West Kinzie Street |
| 34 | Loan | 31 | 1 | 905 Medical Park Drive | 0.6% | 100.0% | CREFI | CREFI | NAP | NAP | 905 Medical Park Drive |
| 35 | Loan | 39 | 1 | 3097 E Ana St | 0.6% | 100.0% | CREFI | CREFI | NAP | NAP | 3097 East Ana Street |
| 36 | Loan | 1 | VA Dialysis Center - Philadelphia | 0.5% | 100.0% | CREFI | CREFI | NAP | NAP | 4219 Chestnut Street | |
| 37 | Loan | 19, 39 | 1 | 65 Triangle Industrial | 0.5% | 100.0% | CREFI | CREFI | NAP | NAP | 65 Triangle Boulevard |
A-1-2
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | City | County | State | Zip Code | General Property Type | Detailed Property Type | Year Built | Year Renovated | Number of Units |
| 13 | 12 | ||||||||||||
| 1 | Loan | 9, 10, 20, 24, 26, 28, 29, 32, 33, 34, 35 | 1 | 601 Lexington Avenue | New York | New York | New York | 10022 | Office | CBD | 1977 | 2021 | 1,675,659 |
| 2 | Loan | 10, 14, 24, 28, 29 | 1 | One Wilshire | Los Angeles | Los Angeles | California | 90017 | Office | CBD/Data Center | 1967 | 1992 | 661,553 |
| 3 | Loan | 9, 10, 11, 12, 25, 26, 28, 29 | 14 | Bedrock Portfolio | Detroit | Wayne | Michigan | Various | Various | Various | Various | Various | 2,694,627 |
| 3.01 | Property | 1 | First National Building | Detroit | Wayne | Michigan | 48226 | Office | CBD | 1921 | 2010 | 800,119 | |
| 3.02 | Property | 27 | 1 | The Qube | Detroit | Wayne | Michigan | 48226 | Office | CBD | 1958 | 2011 | 522,702 |
| 3.03 | Property | 27 | 1 | Chrysler House | Detroit | Wayne | Michigan | 48226 | Office | CBD | 1919 | 2013 | 343,488 |
| 3.04 | Property | 27 | 1 | 1001 Woodward | Detroit | Wayne | Michigan | 48226 | Office | CBD | 1965 | 2013 | 319,039 |
| 3.05 | Property | 1 | One Woodward | Detroit | Wayne | Michigan | 48226 | Office | CBD | 1962 | 2013 | 370,257 | |
| 3.06 | Property | 1 | The Z Garage | Detroit | Wayne | Michigan | 48226 | Other | Parking Garage | 2013 | 2015-2016 | 1,351 | |
| 3.07 | Property | 1 | Two Detroit Garage | Detroit | Wayne | Michigan | 48226 | Other | Parking Garage | 2002 | 2015-2016 | 1,106 | |
| 3.08 | Property | 1 | 1505 & 1515 Woodward | Detroit | Wayne | Michigan | 48226 | Office | CBD | 1925 | 2018 | 141,741 | |
| 3.09 | Property | 1 | 1001 Brush Street | Detroit | Wayne | Michigan | 48226 | Other | Parking Garage | 1993 | 2015-2016 | 1,309 | |
| 3.10 | Property | 12 | 1 | The Assembly | Detroit | Wayne | Michigan | 48216 | Mixed Use | Multifamily/Office/Retail | 1913 | 2019 | 32 |
| 3.11 | Property | 1 | 419 Fort Street Garage | Detroit | Wayne | Michigan | 48226 | Other | Parking Garage | 2005 | 2015-2016 | 637 | |
| 3.12 | Property | 12 | 1 | Vinton | Detroit | Wayne | Michigan | 48226 | Mixed Use | Multifamily/Retail | 1917 | 2018 | 21 |
| 3.13 | Property | 1 | 1401 First Street | Detroit | Wayne | Michigan | 48226 | Other | Parking Garage | 1976 | 2017 | 633 | |
| 3.14 | Property | 1 | Lane Bryant Building | Detroit | Wayne | Michigan | 48226 | Office | CBD | 1917 | 2018 | 31,695 | |
| 4 | Loan | 19, 36 | 1 | Romaine & Orange Square | Los Angeles | Los Angeles | California | 90038 | Office | CBD | 1928, 2018 | NAP | 122,411 |
| 5 | Loan | 26, 28, 29 | 1 | Shoreline Square | Long Beach | Los Angeles | California | 90802 | Office | CBD | 1988 | 2008 | 413,801 |
| 6 | Loan | 11, 13, 19, 25, 33 | 3 | Millennia Portfolio | Various | Various | Ohio | Various | Multifamily | Various | Various | Various | 777 |
| 6.01 | Property | 1 | Summit Ridge | Akron | Summit | Ohio | 44310 | Multifamily | Mid Rise | 1969 | 2020-2021 | 397 | |
| 6.02 | Property | 1 | Lexington Village | Cleveland | Cuyahoga | Ohio | 44103 | Multifamily | Garden | 1986, 1990 | 2020-2021 | 277 | |
| 6.03 | Property | 1 | Gateway at the Greene | Kettering | Montgomery | Ohio | 45440 | Multifamily | Garden | 1965 | 2018-2020 | 103 | |
| 7 | Loan | 11, 25, 27, 29 | 25 | InCommercial Net Lease Portfolio #5 | Various | Various | Various | Various | Various | Various | Various | Various | 307,520 |
| 7.01 | Property | 1 | Walgreens, Mount Pleasant, SC | Mount Pleasant | Charleston | South Carolina | 29466 | Retail | Single Tenant | 2011 | NAP | 13,386 | |
| 7.02 | Property | 1 | Walgreens, Meridian, ID | Meridian | Ada | Idaho | 83642 | Retail | Single Tenant | 2000 | NAP | 15,120 | |
| 7.03 | Property | 1 | Renal Care, Moncks Corner, SC | Moncks Corner | Berkeley | South Carolina | 29461 | Office | Medical | 2020 | NAP | 7,490 | |
| 7.04 | Property | 1 | Tractor Supply Co, Ogdensbg, NY | Ogdensburg | Saint Lawrence | New York | 13669 | Retail | Single Tenant | 2011 | NAP | 19,097 | |
| 7.05 | Property | 1 | Tractor Supply Co, Lake Ch, LA | Lake Charles | Calcasieu | Louisiana | 70611 | Retail | Single Tenant | 1995 | 2007 | 21,974 | |
| 7.06 | Property | 1 | Tractor Supply Co, Oconto, WI | Oconto | Oconto | Wisconsin | 54153 | Retail | Single Tenant | 2000 | 2021 | 34,877 | |
| 7.07 | Property | 1 | Dollar General, Ghent, WV | Ghent | Raleigh | West Virginia | 25843 | Retail | Single Tenant | 2017 | NAP | 10,640 | |
| 7.08 | Property | 1 | Tractor Supply Co, Kewaunee, WI | Kewaunee | Kewaunee | Wisconsin | 54216 | Retail | Single Tenant | 2002 | 2021 | 35,330 | |
| 7.09 | Property | 1 | Fresenius, Belzoni, MS | Belzoni | Humphreys | Mississippi | 39038 | Office | Medical | 2018 | NAP | 5,112 | |
| 7.10 | Property | 1 | Dollar General, Lenore, WV | Williamson | Mingo | West Virginia | 25661 | Retail | Single Tenant | 2016 | NAP | 9,100 | |
| 7.11 | Property | 1 | Family Dollar, Linden, AL | Linden | Marengo | Alabama | 36748 | Retail | Single Tenant | 2021 | NAP | 10,500 | |
| 7.12 | Property | 1 | Fresenius, Rayville, LA | Rayville | Richland | Louisiana | 71269 | Office | Medical | 2017 | NAP | 5,588 | |
| 7.13 | Property | 1 | Dollar General, Burlington, WV | Burlington | Mineral | West Virginia | 26710 | Retail | Single Tenant | 2016 | NAP | 9,026 | |
| 7.14 | Property | 1 | Family Dollar, Franklinton, LA | Franklinton | Washington | Louisiana | 70438 | Retail | Single Tenant | 2021 | NAP | 10,500 | |
| 7.15 | Property | 1 | Dollar General, Hinton, WV | Hinton | Summers | West Virginia | 25951 | Retail | Single Tenant | 2016 | NAP | 9,026 | |
| 7.16 | Property | 1 | Dollar General, Lerona, WV | Lerona | Mercer | West Virginia | 25971 | Retail | Single Tenant | 2017 | NAP | 9,100 | |
| 7.17 | Property | 1 | Dollar General, Rushford, NY | Rushford | Allegany | New York | 14777 | Retail | Single Tenant | 2017 | NAP | 9,002 | |
| 7.18 | Property | 1 | Dollar General, Walker, WV | Walker | Wood | West Virginia | 26180 | Retail | Single Tenant | 2017 | NAP | 9,100 | |
| 7.19 | Property | 1 | Dollar General, Dixie, WV | Dixie | Nicholas | West Virginia | 25059 | Retail | Single Tenant | 2017 | NAP | 9,100 | |
| 7.20 | Property | 1 | Dollar General, Bay Minette, AL | Bay Minette | Baldwin | Alabama | 36507 | Retail | Single Tenant | 2017 | NAP | 9,100 | |
| 7.21 | Property | 1 | Dollar General, Fruithurst, AL | Fruithurst | Cleburne | Alabama | 36262 | Retail | Single Tenant | 2017 | NAP | 9,026 | |
| 7.22 | Property | 1 | Dollar General, Billingsley, AL | Billingsley | Autauga | Alabama | 36006 | Retail | Single Tenant | 2017 | NAP | 9,100 | |
| 7.23 | Property | 1 | Dollar General, Knox City, TX | Knox City | Knox | Texas | 79529 | Retail | Single Tenant | 2017 | NAP | 9,100 | |
| 7.24 | Property | 1 | Dollar General, South Dayton, NY | South Dayton | Cattaraugus | New York | 14138 | Retail | Single Tenant | 2017 | NAP | 9,100 | |
| 7.25 | Property | 1 | Dollar General, Gaylesville, AL | Gaylesville | Cherokee | Alabama | 35973 | Retail | Single Tenant | 2018 | NAP | 9,026 | |
| 8 | Loan | 11, 25, 29, 30, 40 | 1 | Redmond Community Center | Redmond | King | Washington | 98052 | Retail | Anchored | 1996, 1998, 1999 | NAP | 109,965 |
| 9 | Loan | 9, 10, 11, 21, 34, 40 | 9 | Shearer’s Industrial Portfolio | Various | Various | Various | Various | Industrial | Various | Various | Various | 2,206,965 |
| 9.01 | Property | 1 | 800 Northwest 4th Street | Perham | Otter Tail | Minnesota | 56573 | Industrial | Manufacturing/Warehouse | 1970 | 1974-2016 | 515,972 | |
| 9.02 | Property | 1 | 4100 Millennium Boulevard Southeast | Massillon | Stark | Ohio | 44646 | Industrial | Manufacturing | 2009 | 2020 | 171,390 | |
| 9.03 | Property | 1 | 3000 East Mount Pleasant Street | Burlington | Des Moines | Iowa | 52601 | Industrial | Manufacturing/Warehouse | 1946, 1978 | 1974-2017 | 444,618 | |
| 9.04 | Property | 1 | 7330 West Sherman Street | Phoenix | Maricopa | Arizona | 85043 | Industrial | Warehouse/Distribution | 2009 | NAP | 207,222 | |
| 9.05 | Property | 12 | 1 | 821 Route 97 | Waterford | Erie | Pennsylvania | 16441 | Industrial | Manufacturing | 1965-1990, 2022 | 2018 | 221,876 |
| 9.06 | Property | 1 | 3200 Northern Cross Boulevard | Fort Worth | Tarrant | Texas | 76137 | Industrial | Warehouse/Distribution | 1993 | 2020 | 121,253 | |
| 9.07 | Property | 1 | 3636 Medallion Avenue | Newport | Jackson | Arkansas | 72112 | Industrial | Manufacturing | 1968 | 2004 | 278,553 | |
| 9.08 | Property | 1 | 692 Wabash Avenue North | Brewster | Stark | Ohio | 44613 | Industrial | Manufacturing | 1969, 1982, 1986, 1998 | 2017 | 141,878 | |
| 9.09 | Property | 1 | 225 Commonwealth Avenue Extension | Bristol | Bristol City | Virginia | 24201 | Industrial | Warehouse/Distribution | 1965 | NAP | 104,203 | |
| 10 | Loan | 19, 30 | 1 | Hall Road Crossing | Shelby Township | Macomb | Michigan | 48315 | Retail | Anchored | 1986 | 2022 | 181,129 |
| 11 | Loan | 10, 17, 19, 24, 26, 28, 36, 39 | 1 | Gem Tower | New York | New York | New York | 10036 | Retail | Unanchored | 2009 | NAP | 7,346 |
| 12 | Loan | 11, 19 | 2 | 285 & 355 Riverside Ave | Westport | Fairfield | Connecticut | 06880 | Office | Suburban | Various | Various | 94,647 |
| 12.01 | Property | 29 | 1 | 285 Riverside Ave | Westport | Fairfield | Connecticut | 06880 | Office | Suburban | 1923, 1981 | 2017 | 55,278 |
| 12.02 | Property | 29 | 1 | 355 Riverside Ave | Westport | Fairfield | Connecticut | 06880 | Office | Suburban | 1970 | 2019 | 39,369 |
| 13 | Loan | 27 | 1 | Bala Woods | Kingwood | Montgomery | Texas | 77339 | Multifamily | Garden | 2000 | 2014 | 262 |
| 14 | Loan | 9, 19, 29, 31 | 1 | Prospector Plaza | Placerville | El Dorado | California | 95667 | Retail | Anchored | 1982 | 2020 | 202,830 |
| 15 | Loan | 10, 14, 24, 34, 37 | 1 | Novo Nordisk HQ | Plainsboro | Middlesex | New Jersey | 08536 | Office | Suburban | 1985, 1989, 1994 | 2013 | 731,104 |
| 16 | Loan | 10, 19, 26, 38 | 1 | JW Marriott Desert Springs | Palm Desert | Riverside | California | 92260 | Hospitality | Full Service | 1987 | 2019 | 884 |
| 17 | Loan | 11, 25 | 2 | 35 Crosby Street and 70 Carmine Street | New York | New York | New York | Various | Various | Various | Various | Various | 21 |
| 17.01 | Property | 12 | 1 | 35 Crosby Street | New York | New York | New York | 10013 | Mixed Use | Multifamily/Retail | 1900 | 2018 | 12 |
| 17.02 | Property | 1 | 70 Carmine Street | New York | New York | New York | 10014 | Multifamily | Mid Rise | 1910 | 2020 | 9 | |
| 18 | Loan | 22 | 1 | 1340 Lafayette | Bronx | Bronx | New York | 10474 | Other | Parking | NAP | NAP | 55,000 |
| 19 | Loan | 28 | 1 | Townsgate Office | Westlake Village | Ventura | California | 91361 | Office | Suburban | 1990 | NAP | 88,334 |
| 20 | Loan | 11, 29, 30, 40 | 6 | Tharp Portfolio | Various | Various | Indiana | Various | Various | Various | Various | NAP | 93,928 |
| 20.01 | Property | 1 | Jiffy and Dollar | Whiteland | Johnson | Indiana | 46184 | Retail | Unanchored | 2021 | NAP | 16,288 | |
| 20.02 | Property | 1 | Main Street Shoppes | Greenwood | Johnson | Indiana | 46143 | Retail | Unanchored | 2007 | NAP | 25,821 | |
| 20.03 | Property | 1 | Greensburg Retail Center | Greensburg | Decatur | Indiana | 47240 | Retail | Shadow Anchored | 2020 | NAP | 8,886 | |
| 20.04 | Property | 1 | CSL Plasma | Michigan City | La Porte | Indiana | 46360 | Retail | Single Tenant | 2021 | NAP | 11,900 | |
| 20.05 | Property | 1 | FedEx | Indianapolis | Marion | Indiana | 46241 | Office | Suburban | 1991 | NAP | 25,983 | |
| 20.06 | Property | 1 | Greenwood Med Spa | Greenwood | Johnson | Indiana | 46142 | Retail | Single Tenant | 1988 | NAP | 5,050 | |
| 21 | Loan | 28, 29, 33 | 1 | Santa Barbara Tech Center | Goleta | Santa Barbara | California | 93111 | Office | Suburban | 1987 | NAP | 84,798 |
| 22 | Loan | 33 | 1 | Greenbrier Towers I & II | Chesapeake | Chesapeake City | Virginia | 23320 | Office | Suburban | 1985 | 2018 | 171,762 |
| 23 | Loan | 19 | 1 | Apple Glen Crossing | Fort Wayne | Allen | Indiana | 46804 | Retail | Anchored | 2000 | NAP | 150,227 |
| 24 | Loan | 13, 20, 28, 33 | 1 | Crossroads Village | Canton | Wayne | Michigan | 48188 | Retail | Anchored | 2007 | NAP | 86,914 |
| 25 | Loan | 19 | 1 | 1500 Volta Drive | Leander | Williamson | Texas | 78641 | Industrial | Flex | 2015 | 2019 | 56,761 |
| 26 | Loan | 19 | 1 | Courtyard Appleton | Appleton | Outagamie | Wisconsin | 54915 | Hospitality | Select Service | 2017 | NAP | 97 |
A-1-3
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | City | County | State | Zip Code | General Property Type | Detailed Property Type | Year Built | Year Renovated | Number of Units |
| 27 | Loan | 29 | 1 | Lee’s Hill II | Fredericksburg | Spotsylvania | Virginia | 22408 | Office | Suburban | 2000 | NAP | 152,245 |
| 28 | Loan | 10, 11, 19, 25, 27, 28, 36 | 11 | Glen Forest Office Portfolio | Richmond | Henrico | Virginia | Various | Office | Suburban | Various | NAP | 559,915 |
| 28.01 | Property | 1 | Hillcrest | Richmond | Henrico | Virginia | 23226 | Office | Suburban | 2000 | NAP | 97,061 | |
| 28.02 | Property | 1 | Arrington | Richmond | Henrico | Virginia | 23226 | Office | Suburban | 2000 | NAP | 93,645 | |
| 28.03 | Property | 1 | Highland II | Richmond | Henrico | Virginia | 23226 | Office | Medical | 1995 | NAP | 67,819 | |
| 28.04 | Property | 29 | 1 | Meridian | Richmond | Henrico | Virginia | 23226 | Office | Suburban | 2001 | NAP | 58,114 |
| 28.05 | Property | 29 | 1 | Bayberry | Richmond | Henrico | Virginia | 23226 | Office | Suburban | 1988 | NAP | 46,052 |
| 28.06 | Property | 1 | Highland I | Richmond | Henrico | Virginia | 23226 | Office | Suburban | 1990 | NAP | 46,768 | |
| 28.07 | Property | 29 | 1 | Capstone | Richmond | Henrico | Virginia | 23226 | Office | Suburban | 1998 | NAP | 39,478 |
| 28.08 | Property | 1 | Forest Plaza I | Richmond | Henrico | Virginia | 23226 | Office | Suburban | 1985 | NAP | 36,288 | |
| 28.09 | Property | 28, 29 | 1 | Forest Plaza II | Richmond | Henrico | Virginia | 23226 | Office | Suburban | 1986 | NAP | 32,139 |
| 28.10 | Property | 1 | Utica | Richmond | Henrico | Virginia | 23294 | Office | Suburban | 1984 | NAP | 29,581 | |
| 28.11 | Property | 1 | Willard | Richmond | Henrico | Virginia | 23294 | Office | Suburban | 1982 | NAP | 12,970 | |
| 29 | Loan | 19 | 1 | Arlington Green Executive Plaza | Arlington Heights | Cook | Illinois | 60005 | Office | Medical | 1984 | 1996 | 62,835 |
| 30 | Loan | 12, 13, 27, 30, 40 | 1 | 1201 Main | Carbondale | Garfield | Colorado | 81623 | Multifamily | Garden | 2021 | NAP | 27 |
| 31 | Loan | 11 | 2 | Walgreens New Castle & Oneonta | Various | Various | Various | Various | Retail | Single Tenant | 2008 | NAP | 26,775 |
| 31.01 | Property | 1 | Walgreens Oneonta | Oneonta | Otsego | New York | 13820 | Retail | Single Tenant | 2008 | NAP | 12,159 | |
| 31.02 | Property | 1 | Walgreens New Castle | New Castle | Henry | Indiana | 47362 | Retail | Single Tenant | 2008 | NAP | 14,616 | |
| 32 | Loan | 11 | 2 | 138 St. Marks & 155 5th Ave | Brooklyn | Kings | New York | 11217 | Mixed Use | Multifamily/Retail | 1920 | 2021 | 15,200 |
| 32.01 | Property | 1 | 155 5th Avenue | Brooklyn | Kings | New York | 11217 | Mixed Use | Multifamily/Retail | 1920 | 2021 | 7,300 | |
| 32.02 | Property | 12 | 1 | 138 Saint Marks Place | Brooklyn | Kings | New York | 11217 | Mixed Use | Multifamily/Retail | 1920 | 2021 | 7,900 |
| 33 | Loan | 19, 20, 23, 26, 32 | 1 | STK Chicago | Chicago | Cook | Illinois | 60654 | Retail | Single Tenant | 1929 | 2015 | 9,254 |
| 34 | Loan | 31 | 1 | 905 Medical Park Drive | Effingham | Effingham | Illinois | 62401 | Office | Medical | 1998 | 2015 | 17,858 |
| 35 | Loan | 39 | 1 | 3097 E Ana St | East Rancho Dominguez | Los Angeles | California | 90221 | Industrial | Manufacturing | 1969 | NAP | 59,302 |
| 36 | Loan | 1 | VA Dialysis Center - Philadelphia | Philadelphia | Philadelphia | Pennsylvania | 19104 | Office | Medical | 2009 | 2013 | 8,762 | |
| 37 | Loan | 19, 39 | 1 | 65 Triangle Industrial | Carlstadt | Bergen | New Jersey | 07072 | Industrial | Warehouse | 1968 | NAP | 36,468 |
A-1-4
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Unit of Measure | Loan Per Unit ($) | Original Balance ($) | Cut-off Date Balance ($) | Maturity/ARD Balance ($) | Interest Rate % | Administrative Fee Rate % | Net Mortgage Rate % | Monthly Debt Service (P&I) ($) | Monthly Debt Service (IO) ($) | Annual Debt Service (P&I) ($) |
| 12, 22 | 11 | 11 | 14 | 1, 15 | 2, 16 | 16 | 2, 16 | ||||||||
| 1 | Loan | 9, 10, 20, 24, 26, 28, 29, 32, 33, 34, 35 | 1 | 601 Lexington Avenue | SF | 431.65 | 85,000,000 | 85,000,000 | 85,000,000 | 2.79196% | 0.01742% | 2.77454% | NAP | 200,510.55 | NAP |
| 2 | Loan | 10, 14, 24, 28, 29 | 1 | One Wilshire | SF | 588.39 | 85,000,000 | 85,000,000 | 85,000,000 | 2.77600% | 0.02367% | 2.75233% | NAP | 199,364.35 | NAP |
| 3 | Loan | 9, 10, 11, 12, 25, 26, 28, 29 | 14 | Bedrock Portfolio | SF | 159.58 | 85,000,000 | 85,000,000 | 85,000,000 | 3.77800% | 0.06242% | 3.71558% | NAP | 271,325.12 | NAP |
| 3.01 | Property | 1 | First National Building | SF | 19,597,600 | 19,597,600 | 19,597,600 | ||||||||
| 3.02 | Property | 27 | 1 | The Qube | SF | 12,461,000 | 12,461,000 | 12,461,000 | |||||||
| 3.03 | Property | 27 | 1 | Chrysler House | SF | 9,741,000 | 9,741,000 | 9,741,000 | |||||||
| 3.04 | Property | 27 | 1 | 1001 Woodward | SF | 9,678,100 | 9,678,100 | 9,678,100 | |||||||
| 3.05 | Property | 1 | One Woodward | SF | 7,015,900 | 7,015,900 | 7,015,900 | ||||||||
| 3.06 | Property | 1 | The Z Garage | Units | 5,734,100 | 5,734,100 | 5,734,100 | ||||||||
| 3.07 | Property | 1 | Two Detroit Garage | Units | 4,340,100 | 4,340,100 | 4,340,100 | ||||||||
| 3.08 | Property | 1 | 1505 & 1515 Woodward | SF | 4,107,200 | 4,107,200 | 4,107,200 | ||||||||
| 3.09 | Property | 1 | 1001 Brush Street | Units | 3,466,300 | 3,466,300 | 3,466,300 | ||||||||
| 3.10 | Property | 12 | 1 | The Assembly | Units | 2,711,500 | 2,711,500 | 2,711,500 | |||||||
| 3.11 | Property | 1 | 419 Fort Street Garage | Units | 2,465,000 | 2,465,000 | 2,465,000 | ||||||||
| 3.12 | Property | 12 | 1 | Vinton | Units | 1,487,500 | 1,487,500 | 1,487,500 | |||||||
| 3.13 | Property | 1 | 1401 First Street | Units | 1,467,100 | 1,467,100 | 1,467,100 | ||||||||
| 3.14 | Property | 1 | Lane Bryant Building | SF | 727,600 | 727,600 | 727,600 | ||||||||
| 4 | Loan | 19, 36 | 1 | Romaine & Orange Square | SF | 555.51 | 68,000,000 | 68,000,000 | 68,000,000 | 4.44000% | 0.01367% | 4.42633% | NAP | 255,094.44 | NAP |
| 5 | Loan | 26, 28, 29 | 1 | Shoreline Square | SF | 134.30 | 55,575,000 | 55,575,000 | 55,575,000 | 3.75000% | 0.01367% | 3.73633% | NAP | 176,083.98 | NAP |
| 6 | Loan | 11, 13, 19, 25, 33 | 3 | Millennia Portfolio | Units | 51,480.05 | 40,000,000 | 40,000,000 | 33,593,491 | 4.81200% | 0.01367% | 4.79833% | 210,156.38 | 162,627.78 | 2,521,876.56 |
| 6.01 | Property | 1 | Summit Ridge | Units | 19,335,793 | 19,335,793 | 16,238,920 | ||||||||
| 6.02 | Property | 1 | Lexington Village | Units | 12,324,723 | 12,324,723 | 10,350,762 | ||||||||
| 6.03 | Property | 1 | Gateway at the Greene | Units | 8,339,484 | 8,339,484 | 7,003,810 | ||||||||
| 7 | Loan | 11, 25, 27, 29 | 25 | InCommercial Net Lease Portfolio #5 | SF | 113.81 | 35,000,000 | 35,000,000 | 28,756,685 | 4.10000% | 0.01367% | 4.08633% | 169,119.43 | 121,244.21 | 2,029,433.16 |
| 7.01 | Property | 1 | Walgreens, Mount Pleasant, SC | SF | 5,100,000 | 5,100,000 | 4,190,260 | ||||||||
| 7.02 | Property | 1 | Walgreens, Meridian, ID | SF | 2,965,000 | 2,965,000 | 2,436,102 | ||||||||
| 7.03 | Property | 1 | Renal Care, Moncks Corner, SC | SF | 2,525,000 | 2,525,000 | 2,074,589 | ||||||||
| 7.04 | Property | 1 | Tractor Supply Co, Ogdensbg, NY | SF | 1,945,000 | 1,945,000 | 1,598,050 | ||||||||
| 7.05 | Property | 1 | Tractor Supply Co, Lake Ch, LA | SF | 1,625,000 | 1,625,000 | 1,335,132 | ||||||||
| 7.06 | Property | 1 | Tractor Supply Co, Oconto, WI | SF | 1,360,000 | 1,360,000 | 1,117,403 | ||||||||
| 7.07 | Property | 1 | Dollar General, Ghent, WV | SF | 1,360,000 | 1,360,000 | 1,117,403 | ||||||||
| 7.08 | Property | 1 | Tractor Supply Co, Kewaunee, WI | SF | 1,335,000 | 1,335,000 | 1,096,862 | ||||||||
| 7.09 | Property | 1 | Fresenius, Belzoni, MS | SF | 1,165,000 | 1,165,000 | 957,187 | ||||||||
| 7.10 | Property | 1 | Dollar General, Lenore, WV | SF | 1,120,000 | 1,120,000 | 920,214 | ||||||||
| 7.11 | Property | 1 | Family Dollar, Linden, AL | SF | 1,120,000 | 1,120,000 | 920,214 | ||||||||
| 7.12 | Property | 1 | Fresenius, Rayville, LA | SF | 1,070,000 | 1,070,000 | 879,133 | ||||||||
| 7.13 | Property | 1 | Dollar General, Burlington, WV | SF | 1,070,000 | 1,070,000 | 879,133 | ||||||||
| 7.14 | Property | 1 | Family Dollar, Franklinton, LA | SF | 1,070,000 | 1,070,000 | 879,133 | ||||||||
| 7.15 | Property | 1 | Dollar General, Hinton, WV | SF | 1,025,000 | 1,025,000 | 842,160 | ||||||||
| 7.16 | Property | 1 | Dollar General, Lerona, WV | SF | 1,020,000 | 1,020,000 | 838,052 | ||||||||
| 7.17 | Property | 1 | Dollar General, Rushford, NY | SF | 1,000,000 | 1,000,000 | 821,620 | ||||||||
| 7.18 | Property | 1 | Dollar General, Walker, WV | SF | 975,000 | 975,000 | 801,079 | ||||||||
| 7.19 | Property | 1 | Dollar General, Dixie, WV | SF | 975,000 | 975,000 | 801,079 | ||||||||
| 7.20 | Property | 1 | Dollar General, Bay Minette, AL | SF | 925,000 | 925,000 | 759,998 | ||||||||
| 7.21 | Property | 1 | Dollar General, Fruithurst, AL | SF | 925,000 | 925,000 | 759,998 | ||||||||
| 7.22 | Property | 1 | Dollar General, Billingsley, AL | SF | 850,000 | 850,000 | 698,377 | ||||||||
| 7.23 | Property | 1 | Dollar General, Knox City, TX | SF | 825,000 | 825,000 | 677,836 | ||||||||
| 7.24 | Property | 1 | Dollar General, South Dayton, NY | SF | 825,000 | 825,000 | 677,836 | ||||||||
| 7.25 | Property | 1 | Dollar General, Gaylesville, AL | SF | 825,000 | 825,000 | 677,836 | ||||||||
| 8 | Loan | 11, 25, 29, 30, 40 | 1 | Redmond Community Center | SF | 313.74 | 34,500,000 | 34,500,000 | 34,500,000 | 4.08900% | 0.01367% | 4.07533% | NAP | 119,191.51 | NAP |
| 9 | Loan | 9, 10, 11, 21, 34, 40 | 9 | Shearer’s Industrial Portfolio | SF | 62.35 | 30,000,000 | 30,000,000 | 30,000,000 | 3.90000% | 0.01367% | 3.88633% | NAP | 98,854.17 | NAP |
| 9.01 | Property | 1 | 800 Northwest 4th Street | SF | 5,132,299 | 5,132,299 | 5,132,299 | ||||||||
| 9.02 | Property | 1 | 4100 Millennium Boulevard Southeast | SF | 4,899,635 | 4,899,635 | 4,899,635 | ||||||||
| 9.03 | Property | 1 | 3000 East Mount Pleasant Street | SF | 4,420,621 | 4,420,621 | 4,420,621 | ||||||||
| 9.04 | Property | 1 | 7330 West Sherman Street | SF | 3,886,861 | 3,886,861 | 3,886,861 | ||||||||
| 9.05 | Property | 12 | 1 | 821 Route 97 | SF | 3,312,044 | 3,312,044 | 3,312,044 | |||||||
| 9.06 | Property | 1 | 3200 Northern Cross Boulevard | SF | 3,010,949 | 3,010,949 | 3,010,949 | ||||||||
| 9.07 | Property | 1 | 3636 Medallion Avenue | SF | 2,983,577 | 2,983,577 | 2,983,577 | ||||||||
| 9.08 | Property | 1 | 692 Wabash Avenue North | SF | 1,231,752 | 1,231,752 | 1,231,752 | ||||||||
| 9.09 | Property | 1 | 225 Commonwealth Avenue Extension | SF | 1,122,263 | 1,122,263 | 1,122,263 | ||||||||
| 10 | Loan | 19, 30 | 1 | Hall Road Crossing | SF | 158.52 | 28,750,000 | 28,712,745 | 22,940,382 | 4.12000% | 0.04367% | 4.07633% | 139,253.29 | NAP | 1,671,039.48 |
| 11 | Loan | 10, 17, 19, 24, 26, 28, 36, 39 | 1 | Gem Tower | SF | 5,445.14 | 28,000,000 | 28,000,000 | 28,000,000 | 3.38800% | 0.01367% | 3.37433% | NAP | 80,151.30 | NAP |
| 12 | Loan | 11, 19 | 2 | 285 & 355 Riverside Ave | SF | 295.84 | 28,000,000 | 28,000,000 | 28,000,000 | 3.97000% | 0.01367% | 3.95633% | NAP | 93,919.91 | NAP |
| 12.01 | Property | 29 | 1 | 285 Riverside Ave | SF | 16,800,000 | 16,800,000 | 16,800,000 | |||||||
| 12.02 | Property | 29 | 1 | 355 Riverside Ave | SF | 11,200,000 | 11,200,000 | 11,200,000 | |||||||
| 13 | Loan | 27 | 1 | Bala Woods | Units | 104,961.83 | 27,500,000 | 27,500,000 | 27,500,000 | 3.86000% | 0.01367% | 3.84633% | NAP | 89,686.92 | NAP |
| 14 | Loan | 9, 19, 29, 31 | 1 | Prospector Plaza | SF | 115.53 | 23,500,000 | 23,432,443 | 18,837,548 | 4.26000% | 0.01367% | 4.24633% | 115,743.49 | NAP | 1,388,921.88 |
| 15 | Loan | 10, 14, 24, 34, 37 | 1 | Novo Nordisk HQ | SF | 288.15 | 22,167,000 | 22,167,000 | 22,167,000 | 2.83800% | 0.01367% | 2.82433% | NAP | 53,153.08 | NAP |
| 16 | Loan | 10, 19, 26, 38 | 1 | JW Marriott Desert Springs | Rooms | 144,796.38 | 20,000,000 | 20,000,000 | 20,000,000 | 4.99500% | 0.01367% | 4.98133% | NAP | 84,406.25 | NAP |
| 17 | Loan | 11, 25 | 2 | 35 Crosby Street and 70 Carmine Street | Units | 916,666.67 | 19,250,000 | 19,250,000 | 19,250,000 | 3.92000% | 0.01367% | 3.90633% | NAP | 63,756.71 | NAP |
| 17.01 | Property | 12 | 1 | 35 Crosby Street | Units | 12,750,000 | 12,750,000 | 12,750,000 | |||||||
| 17.02 | Property | 1 | 70 Carmine Street | Units | 6,500,000 | 6,500,000 | 6,500,000 | ||||||||
| 18 | Loan | 22 | 1 | 1340 Lafayette | SF | 300.00 | 16,500,000 | 16,500,000 | 16,500,000 | 4.89200% | 0.01367% | 4.87833% | NAP | 68,199.24 | NAP |
| 19 | Loan | 28 | 1 | Townsgate Office | SF | 173.21 | 15,300,000 | 15,300,000 | 15,300,000 | 3.82700% | 0.01367% | 3.81333% | NAP | 49,471.95 | NAP |
| 20 | Loan | 11, 29, 30, 40 | 6 | Tharp Portfolio | SF | 148.90 | 14,000,000 | 13,985,759 | 11,581,603 | 5.18400% | 0.01367% | 5.17033% | 76,737.21 | NAP | 920,846.52 |
| 20.01 | Property | 1 | Jiffy and Dollar | SF | 3,292,568 | 3,289,219 | 2,723,801 | ||||||||
| 20.02 | Property | 1 | Main Street Shoppes | SF | 2,746,002 | 2,743,209 | 2,271,650 | ||||||||
| 20.03 | Property | 1 | Greensburg Retail Center | SF | 2,719,661 | 2,716,894 | 2,249,860 | ||||||||
| 20.04 | Property | 1 | CSL Plasma | SF | 2,489,182 | 2,486,650 | 2,059,194 | ||||||||
| 20.05 | Property | 1 | FedEx | SF | 2,173,095 | 2,170,884 | 1,797,709 | ||||||||
| 20.06 | Property | 1 | Greenwood Med Spa | SF | 579,492 | 578,903 | 479,389 | ||||||||
| 21 | Loan | 28, 29, 33 | 1 | Santa Barbara Tech Center | SF | 159.20 | 13,500,000 | 13,500,000 | 13,500,000 | 3.55200% | 0.01367% | 3.53833% | NAP | 40,515.00 | NAP |
| 22 | Loan | 33 | 1 | Greenbrier Towers I & II | SF | 78.60 | 13,500,000 | 13,500,000 | 12,723,422 | 4.50000% | 0.01367% | 4.48633% | 68,402.52 | 51,328.13 | 820,830.24 |
| 23 | Loan | 19 | 1 | Apple Glen Crossing | SF | 86.54 | 13,000,000 | 13,000,000 | 11,606,240 | 4.33600% | 0.05367% | 4.28233% | 64,608.39 | 47,625.74 | 775,300.68 |
| 24 | Loan | 13, 20, 28, 33 | 1 | Crossroads Village | SF | 143.82 | 12,500,000 | 12,500,000 | 10,865,501 | 4.20000% | 0.06242% | 4.13758% | 61,127.15 | 44,357.64 | 733,525.80 |
| 25 | Loan | 19 | 1 | 1500 Volta Drive | SF | 184.99 | 10,500,000 | 10,500,000 | 10,500,000 | 4.85000% | 0.01367% | 4.83633% | NAP | 43,026.91 | NAP |
| 26 | Loan | 19 | 1 | Courtyard Appleton | Rooms | 106,569.54 | 10,350,000 | 10,337,246 | 8,325,993 | 4.35000% | 0.01367% | 4.33633% | 51,523.52 | NAP | 618,282.24 |
A-1-5
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Unit of Measure | Loan Per Unit ($) | Original Balance ($) | Cut-off Date Balance ($) | Maturity/ARD Balance ($) | Interest Rate % | Administrative Fee Rate % | Net Mortgage Rate % | Monthly Debt Service (P&I) ($) | Monthly Debt Service (IO) ($) | Annual Debt Service (P&I) ($) |
| 27 | Loan | 29 | 1 | Lee’s Hill II | SF | 61.09 | 9,300,000 | 9,300,000 | 9,300,000 | 4.13000% | 0.01367% | 4.11633% | NAP | 32,452.05 | NAP |
| 28 | Loan | 10, 11, 19, 25, 27, 28, 36 | 11 | Glen Forest Office Portfolio | SF | 105.37 | 9,000,000 | 9,000,000 | 9,000,000 | 3.48000% | 0.02492% | 3.45508% | NAP | 26,462.50 | NAP |
| 28.01 | Property | 1 | Hillcrest | SF | 1,710,701 | 1,710,701 | 1,710,701 | ||||||||
| 28.02 | Property | 1 | Arrington | SF | 1,608,059 | 1,608,059 | 1,608,059 | ||||||||
| 28.03 | Property | 1 | Highland II | SF | 1,118,799 | 1,118,799 | 1,118,799 | ||||||||
| 28.04 | Property | 29 | 1 | Meridian | SF | 1,052,081 | 1,052,081 | 1,052,081 | |||||||
| 28.05 | Property | 29 | 1 | Bayberry | SF | 735,602 | 735,602 | 735,602 | |||||||
| 28.06 | Property | 1 | Highland I | SF | 683,425 | 683,425 | 683,425 | ||||||||
| 28.07 | Property | 29 | 1 | Capstone | SF | 646,645 | 646,645 | 646,645 | |||||||
| 28.08 | Property | 1 | Forest Plaza I | SF | 530,317 | 530,317 | 530,317 | ||||||||
| 28.09 | Property | 28, 29 | 1 | Forest Plaza II | SF | 444,782 | 444,782 | 444,782 | |||||||
| 28.10 | Property | 1 | Utica | SF | 357,537 | 357,537 | 357,537 | ||||||||
| 28.11 | Property | 1 | Willard | SF | 112,051 | 112,051 | 112,051 | ||||||||
| 29 | Loan | 19 | 1 | Arlington Green Executive Plaza | SF | 143.05 | 9,000,000 | 8,988,538 | 7,201,837 | 4.20000% | 0.01367% | 4.18633% | 44,011.55 | NAP | 528,138.60 |
| 30 | Loan | 12, 13, 27, 30, 40 | 1 | 1201 Main | Units | 332,222.22 | 8,970,000 | 8,970,000 | 8,970,000 | 4.34800% | 0.01367% | 4.33433% | NAP | 32,952.71 | NAP |
| 31 | Loan | 11 | 2 | Walgreens New Castle & Oneonta | SF | 324.93 | 8,700,000 | 8,700,000 | 8,700,000 | 4.01000% | 0.01367% | 3.99633% | NAP | 29,476.28 | NAP |
| 31.01 | Property | 1 | Walgreens Oneonta | SF | 4,525,000 | 4,525,000 | 4,525,000 | ||||||||
| 31.02 | Property | 1 | Walgreens New Castle | SF | 4,175,000 | 4,175,000 | 4,175,000 | ||||||||
| 32 | Loan | 11 | 2 | 138 St. Marks & 155 5th Ave | SF | 562.50 | 8,550,000 | 8,550,000 | 8,550,000 | 4.36000% | 0.01367% | 4.34633% | NAP | 31,496.46 | NAP |
| 32.01 | Property | 1 | 155 5th Avenue | SF | 5,050,000 | 5,050,000 | 5,050,000 | ||||||||
| 32.02 | Property | 12 | 1 | 138 Saint Marks Place | SF | 3,500,000 | 3,500,000 | 3,500,000 | |||||||
| 33 | Loan | 19, 20, 23, 26, 32 | 1 | STK Chicago | SF | 778.04 | 7,200,000 | 7,200,000 | 6,236,360 | 4.05000% | 0.01367% | 4.03633% | 34,581.77 | 24,637.50 | 414,981.24 |
| 34 | Loan | 31 | 1 | 905 Medical Park Drive | SF | 309.11 | 5,520,000 | 5,520,000 | 5,520,000 | 4.41000% | 0.01367% | 4.39633% | NAP | 20,567.75 | NAP |
| 35 | Loan | 39 | 1 | 3097 E Ana St | SF | 90.10 | 5,350,000 | 5,343,202 | 4,282,612 | 4.21000% | 0.01367% | 4.19633% | 26,193.65 | NAP | 314,323.80 |
| 36 | Loan | 1 | VA Dialysis Center - Philadelphia | SF | 542.11 | 4,750,000 | 4,750,000 | 4,750,000 | 4.68000% | 0.01367% | 4.66633% | NAP | 18,782.29 | NAP | |
| 37 | Loan | 19, 39 | 1 | 65 Triangle Industrial | SF | 116.54 | 4,250,000 | 4,250,000 | 3,862,241 | 4.07000% | 0.01367% | 4.05633% | 20,462.04 | 14,614.79 | 245,544.48 |
A-1-6
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Annual Debt Service (IO) ($) | Amortization Type | ARD Loan (Yes / No) | Interest Accrual Method | Original Interest-Only Period (Mos.) | Remaining Interest-Only Period (Mos.) | Original Term To Maturity / ARD (Mos.) | Remaining Term To Maturity / ARD (Mos.) | Original Amortization Term (Mos.) |
| 16 | |||||||||||||
| 1 | Loan | 9, 10, 20, 24, 26, 28, 29, 32, 33, 34, 35 | 1 | 601 Lexington Avenue | 2,406,126.60 | Interest Only | No | Actual/360 | 120 | 117 | 120 | 117 | 0 |
| 2 | Loan | 10, 14, 24, 28, 29 | 1 | One Wilshire | 2,392,372.20 | Interest Only - ARD | Yes | Actual/360 | 120 | 117 | 120 | 117 | 0 |
| 3 | Loan | 9, 10, 11, 12, 25, 26, 28, 29 | 14 | Bedrock Portfolio | 3,255,901.44 | Interest Only | No | Actual/360 | 84 | 81 | 84 | 81 | 0 |
| 3.01 | Property | 1 | First National Building | ||||||||||
| 3.02 | Property | 27 | 1 | The Qube | |||||||||
| 3.03 | Property | 27 | 1 | Chrysler House | |||||||||
| 3.04 | Property | 27 | 1 | 1001 Woodward | |||||||||
| 3.05 | Property | 1 | One Woodward | ||||||||||
| 3.06 | Property | 1 | The Z Garage | ||||||||||
| 3.07 | Property | 1 | Two Detroit Garage | ||||||||||
| 3.08 | Property | 1 | 1505 & 1515 Woodward | ||||||||||
| 3.09 | Property | 1 | 1001 Brush Street | ||||||||||
| 3.10 | Property | 12 | 1 | The Assembly | |||||||||
| 3.11 | Property | 1 | 419 Fort Street Garage | ||||||||||
| 3.12 | Property | 12 | 1 | Vinton | |||||||||
| 3.13 | Property | 1 | 1401 First Street | ||||||||||
| 3.14 | Property | 1 | Lane Bryant Building | ||||||||||
| 4 | Loan | 19, 36 | 1 | Romaine & Orange Square | 3,061,133.28 | Interest Only | No | Actual/360 | 120 | 120 | 120 | 120 | 0 |
| 5 | Loan | 26, 28, 29 | 1 | Shoreline Square | 2,113,007.76 | Interest Only | No | Actual/360 | 60 | 58 | 60 | 58 | 0 |
| 6 | Loan | 11, 13, 19, 25, 33 | 3 | Millennia Portfolio | 1,951,533.36 | Interest Only, Amortizing Balloon | No | Actual/360 | 12 | 11 | 120 | 119 | 360 |
| 6.01 | Property | 1 | Summit Ridge | ||||||||||
| 6.02 | Property | 1 | Lexington Village | ||||||||||
| 6.03 | Property | 1 | Gateway at the Greene | ||||||||||
| 7 | Loan | 11, 25, 27, 29 | 25 | InCommercial Net Lease Portfolio #5 | 1,454,930.52 | Interest Only, Amortizing Balloon | No | Actual/360 | 12 | 12 | 120 | 120 | 360 |
| 7.01 | Property | 1 | Walgreens, Mount Pleasant, SC | ||||||||||
| 7.02 | Property | 1 | Walgreens, Meridian, ID | ||||||||||
| 7.03 | Property | 1 | Renal Care, Moncks Corner, SC | ||||||||||
| 7.04 | Property | 1 | Tractor Supply Co, Ogdensbg, NY | ||||||||||
| 7.05 | Property | 1 | Tractor Supply Co, Lake Ch, LA | ||||||||||
| 7.06 | Property | 1 | Tractor Supply Co, Oconto, WI | ||||||||||
| 7.07 | Property | 1 | Dollar General, Ghent, WV | ||||||||||
| 7.08 | Property | 1 | Tractor Supply Co, Kewaunee, WI | ||||||||||
| 7.09 | Property | 1 | Fresenius, Belzoni, MS | ||||||||||
| 7.10 | Property | 1 | Dollar General, Lenore, WV | ||||||||||
| 7.11 | Property | 1 | Family Dollar, Linden, AL | ||||||||||
| 7.12 | Property | 1 | Fresenius, Rayville, LA | ||||||||||
| 7.13 | Property | 1 | Dollar General, Burlington, WV | ||||||||||
| 7.14 | Property | 1 | Family Dollar, Franklinton, LA | ||||||||||
| 7.15 | Property | 1 | Dollar General, Hinton, WV | ||||||||||
| 7.16 | Property | 1 | Dollar General, Lerona, WV | ||||||||||
| 7.17 | Property | 1 | Dollar General, Rushford, NY | ||||||||||
| 7.18 | Property | 1 | Dollar General, Walker, WV | ||||||||||
| 7.19 | Property | 1 | Dollar General, Dixie, WV | ||||||||||
| 7.20 | Property | 1 | Dollar General, Bay Minette, AL | ||||||||||
| 7.21 | Property | 1 | Dollar General, Fruithurst, AL | ||||||||||
| 7.22 | Property | 1 | Dollar General, Billingsley, AL | ||||||||||
| 7.23 | Property | 1 | Dollar General, Knox City, TX | ||||||||||
| 7.24 | Property | 1 | Dollar General, South Dayton, NY | ||||||||||
| 7.25 | Property | 1 | Dollar General, Gaylesville, AL | ||||||||||
| 8 | Loan | 11, 25, 29, 30, 40 | 1 | Redmond Community Center | 1,430,298.12 | Interest Only | No | Actual/360 | 120 | 119 | 120 | 119 | 0 |
| 9 | Loan | 9, 10, 11, 21, 34, 40 | 9 | Shearer’s Industrial Portfolio | 1,186,250.04 | Interest Only | No | Actual/360 | 120 | 119 | 120 | 119 | 0 |
| 9.01 | Property | 1 | 800 Northwest 4th Street | ||||||||||
| 9.02 | Property | 1 | 4100 Millennium Boulevard Southeast | ||||||||||
| 9.03 | Property | 1 | 3000 East Mount Pleasant Street | ||||||||||
| 9.04 | Property | 1 | 7330 West Sherman Street | ||||||||||
| 9.05 | Property | 12 | 1 | 821 Route 97 | |||||||||
| 9.06 | Property | 1 | 3200 Northern Cross Boulevard | ||||||||||
| 9.07 | Property | 1 | 3636 Medallion Avenue | ||||||||||
| 9.08 | Property | 1 | 692 Wabash Avenue North | ||||||||||
| 9.09 | Property | 1 | 225 Commonwealth Avenue Extension | ||||||||||
| 10 | Loan | 19, 30 | 1 | Hall Road Crossing | NAP | Amortizing Balloon | No | Actual/360 | 0 | 0 | 120 | 119 | 360 |
| 11 | Loan | 10, 17, 19, 24, 26, 28, 36, 39 | 1 | Gem Tower | 961,815.60 | Interest Only | No | Actual/360 | 120 | 116 | 120 | 116 | 0 |
| 12 | Loan | 11, 19 | 2 | 285 & 355 Riverside Ave | 1,127,038.92 | Interest Only | No | Actual/360 | 120 | 119 | 120 | 119 | 0 |
| 12.01 | Property | 29 | 1 | 285 Riverside Ave | |||||||||
| 12.02 | Property | 29 | 1 | 355 Riverside Ave | |||||||||
| 13 | Loan | 27 | 1 | Bala Woods | 1,076,243.04 | Interest Only | No | Actual/360 | 120 | 119 | 120 | 119 | 0 |
| 14 | Loan | 9, 19, 29, 31 | 1 | Prospector Plaza | NAP | Amortizing Balloon | No | Actual/360 | 0 | 0 | 120 | 118 | 360 |
| 15 | Loan | 10, 14, 24, 34, 37 | 1 | Novo Nordisk HQ | 637,836.96 | Interest Only - ARD | Yes | Actual/360 | 60 | 55 | 60 | 55 | 0 |
| 16 | Loan | 10, 19, 26, 38 | 1 | JW Marriott Desert Springs | 1,012,875.00 | Interest Only | No | Actual/360 | 60 | 57 | 60 | 57 | 0 |
| 17 | Loan | 11, 25 | 2 | 35 Crosby Street and 70 Carmine Street | 765,080.52 | Interest Only | No | Actual/360 | 84 | 82 | 84 | 82 | 0 |
| 17.01 | Property | 12 | 1 | 35 Crosby Street | |||||||||
| 17.02 | Property | 1 | 70 Carmine Street | ||||||||||
| 18 | Loan | 22 | 1 | 1340 Lafayette | 818,390.88 | Interest Only | No | Actual/360 | 120 | 119 | 120 | 119 | 0 |
| 19 | Loan | 28 | 1 | Townsgate Office | 593,663.40 | Interest Only | No | Actual/360 | 120 | 120 | 120 | 120 | 0 |
| 20 | Loan | 11, 29, 30, 40 | 6 | Tharp Portfolio | NAP | Amortizing Balloon | No | Actual/360 | 0 | 0 | 120 | 119 | 360 |
| 20.01 | Property | 1 | Jiffy and Dollar | ||||||||||
| 20.02 | Property | 1 | Main Street Shoppes | ||||||||||
| 20.03 | Property | 1 | Greensburg Retail Center | ||||||||||
| 20.04 | Property | 1 | CSL Plasma | ||||||||||
| 20.05 | Property | 1 | FedEx | ||||||||||
| 20.06 | Property | 1 | Greenwood Med Spa | ||||||||||
| 21 | Loan | 28, 29, 33 | 1 | Santa Barbara Tech Center | 486,180.00 | Interest Only | No | Actual/360 | 120 | 119 | 120 | 119 | 0 |
| 22 | Loan | 33 | 1 | Greenbrier Towers I & II | 615,937.56 | Interest Only, Amortizing Balloon | No | Actual/360 | 18 | 17 | 60 | 59 | 360 |
| 23 | Loan | 19 | 1 | Apple Glen Crossing | 571,508.88 | Interest Only, Amortizing Balloon | No | Actual/360 | 12 | 10 | 84 | 82 | 360 |
| 24 | Loan | 13, 20, 28, 33 | 1 | Crossroads Village | 532,291.68 | Interest Only, Amortizing Balloon | No | Actual/360 | 36 | 36 | 120 | 120 | 360 |
| 25 | Loan | 19 | 1 | 1500 Volta Drive | 516,322.92 | Interest Only | No | Actual/360 | 120 | 119 | 120 | 119 | 0 |
| 26 | Loan | 19 | 1 | Courtyard Appleton | NAP | Amortizing Balloon | No | Actual/360 | 0 | 0 | 120 | 119 | 360 |
A-1-7
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Annual Debt Service (IO) ($) | Amortization Type | ARD Loan (Yes / No) | Interest Accrual Method | Original Interest-Only Period (Mos.) | Remaining Interest-Only Period (Mos.) | Original Term To Maturity / ARD (Mos.) | Remaining Term To Maturity / ARD (Mos.) | Original Amortization Term (Mos.) |
| 27 | Loan | 29 | 1 | Lee’s Hill II | 389,424.60 | Interest Only | No | Actual/360 | 120 | 120 | 120 | 120 | 0 |
| 28 | Loan | 10, 11, 19, 25, 27, 28, 36 | 11 | Glen Forest Office Portfolio | 317,550.00 | Interest Only | No | Actual/360 | 60 | 56 | 60 | 56 | 0 |
| 28.01 | Property | 1 | Hillcrest | ||||||||||
| 28.02 | Property | 1 | Arrington | ||||||||||
| 28.03 | Property | 1 | Highland II | ||||||||||
| 28.04 | Property | 29 | 1 | Meridian | |||||||||
| 28.05 | Property | 29 | 1 | Bayberry | |||||||||
| 28.06 | Property | 1 | Highland I | ||||||||||
| 28.07 | Property | 29 | 1 | Capstone | |||||||||
| 28.08 | Property | 1 | Forest Plaza I | ||||||||||
| 28.09 | Property | 28, 29 | 1 | Forest Plaza II | |||||||||
| 28.10 | Property | 1 | Utica | ||||||||||
| 28.11 | Property | 1 | Willard | ||||||||||
| 29 | Loan | 19 | 1 | Arlington Green Executive Plaza | NAP | Amortizing Balloon | No | Actual/360 | 0 | 0 | 120 | 119 | 360 |
| 30 | Loan | 12, 13, 27, 30, 40 | 1 | 1201 Main | 395,432.52 | Interest Only | No | Actual/360 | 120 | 120 | 120 | 120 | 0 |
| 31 | Loan | 11 | 2 | Walgreens New Castle & Oneonta | 353,715.36 | Interest Only | No | Actual/360 | 120 | 119 | 120 | 119 | 0 |
| 31.01 | Property | 1 | Walgreens Oneonta | ||||||||||
| 31.02 | Property | 1 | Walgreens New Castle | ||||||||||
| 32 | Loan | 11 | 2 | 138 St. Marks & 155 5th Ave | 377,957.52 | Interest Only | No | Actual/360 | 120 | 119 | 120 | 119 | 0 |
| 32.01 | Property | 1 | 155 5th Avenue | ||||||||||
| 32.02 | Property | 12 | 1 | 138 Saint Marks Place | |||||||||
| 33 | Loan | 19, 20, 23, 26, 32 | 1 | STK Chicago | 295,650.00 | Interest Only, Amortizing Balloon | No | Actual/360 | 36 | 11 | 120 | 95 | 360 |
| 34 | Loan | 31 | 1 | 905 Medical Park Drive | 246,813.00 | Interest Only | No | Actual/360 | 120 | 119 | 120 | 119 | 0 |
| 35 | Loan | 39 | 1 | 3097 E Ana St | NAP | Amortizing Balloon | No | Actual/360 | 0 | 0 | 120 | 119 | 360 |
| 36 | Loan | 1 | VA Dialysis Center - Philadelphia | 225,387.48 | Interest Only | No | Actual/360 | 120 | 119 | 120 | 119 | 0 | |
| 37 | Loan | 19, 39 | 1 | 65 Triangle Industrial | 175,377.48 | Interest Only, Amortizing Balloon | No | Actual/360 | 60 | 59 | 120 | 119 | 360 |
A-1-8
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Remaining Amortization Term (Mos.) | Origination Date | Seasoning (Mos.) | Payment Due Date | First Payment Date | First P&I Payment Date | Maturity Date or Anticipated Repayment Date | Final Maturity Date | Grace Period - Late Fee (Days) | Grace Period - Default (Days) | Prepayment Provision |
| 20 | 20 | 3, 23, 24, 25 | |||||||||||||
| 1 | Loan | 9, 10, 20, 24, 26, 28, 29, 32, 33, 34, 35 | 1 | 601 Lexington Avenue | 0 | 12/10/2021 | 3 | 9 | 2/9/2022 | NAP | 1/9/2032 | NAP | 0 | 0 | L(27),D(86),O(7) |
| 2 | Loan | 10, 14, 24, 28, 29 | 1 | One Wilshire | 0 | 12/22/2021 | 3 | 6 | 2/6/2022 | NAP | 1/6/2032 | 1/6/2035 | 0 | 0 | L(27),D(86),O(7) |
| 3 | Loan | 9, 10, 11, 12, 25, 26, 28, 29 | 14 | Bedrock Portfolio | 0 | 12/28/2021 | 3 | 1 | 2/1/2022 | NAP | 1/1/2029 | NAP | 0 | 0 | L(25),YM1(55),O(4) |
| 3.01 | Property | 1 | First National Building | ||||||||||||
| 3.02 | Property | 27 | 1 | The Qube | |||||||||||
| 3.03 | Property | 27 | 1 | Chrysler House | |||||||||||
| 3.04 | Property | 27 | 1 | 1001 Woodward | |||||||||||
| 3.05 | Property | 1 | One Woodward | ||||||||||||
| 3.06 | Property | 1 | The Z Garage | ||||||||||||
| 3.07 | Property | 1 | Two Detroit Garage | ||||||||||||
| 3.08 | Property | 1 | 1505 & 1515 Woodward | ||||||||||||
| 3.09 | Property | 1 | 1001 Brush Street | ||||||||||||
| 3.10 | Property | 12 | 1 | The Assembly | |||||||||||
| 3.11 | Property | 1 | 419 Fort Street Garage | ||||||||||||
| 3.12 | Property | 12 | 1 | Vinton | |||||||||||
| 3.13 | Property | 1 | 1401 First Street | ||||||||||||
| 3.14 | Property | 1 | Lane Bryant Building | ||||||||||||
| 4 | Loan | 19, 36 | 1 | Romaine & Orange Square | 0 | 3/11/2022 | 0 | 6 | 5/6/2022 | NAP | 4/6/2032 | NAP | 0 | 0 | L(24),D(89),O(7) |
| 5 | Loan | 26, 28, 29 | 1 | Shoreline Square | 0 | 1/27/2022 | 2 | 6 | 3/6/2022 | NAP | 2/6/2027 | NAP | 0 | 0 | L(26),D(30),O(4) |
| 6 | Loan | 11, 13, 19, 25, 33 | 3 | Millennia Portfolio | 360 | 2/16/2022 | 1 | 6 | 4/6/2022 | 4/6/2023 | 3/6/2032 | NAP | 0 | 0 | L(25),D(91),O(4) |
| 6.01 | Property | 1 | Summit Ridge | ||||||||||||
| 6.02 | Property | 1 | Lexington Village | ||||||||||||
| 6.03 | Property | 1 | Gateway at the Greene | ||||||||||||
| 7 | Loan | 11, 25, 27, 29 | 25 | InCommercial Net Lease Portfolio #5 | 360 | 3/9/2022 | 0 | 6 | 5/6/2022 | 5/6/2023 | 4/6/2032 | NAP | 0 | 0 | L(24),YM1(92),O(4) |
| 7.01 | Property | 1 | Walgreens, Mount Pleasant, SC | ||||||||||||
| 7.02 | Property | 1 | Walgreens, Meridian, ID | ||||||||||||
| 7.03 | Property | 1 | Renal Care, Moncks Corner, SC | ||||||||||||
| 7.04 | Property | 1 | Tractor Supply Co, Ogdensbg, NY | ||||||||||||
| 7.05 | Property | 1 | Tractor Supply Co, Lake Ch, LA | ||||||||||||
| 7.06 | Property | 1 | Tractor Supply Co, Oconto, WI | ||||||||||||
| 7.07 | Property | 1 | Dollar General, Ghent, WV | ||||||||||||
| 7.08 | Property | 1 | Tractor Supply Co, Kewaunee, WI | ||||||||||||
| 7.09 | Property | 1 | Fresenius, Belzoni, MS | ||||||||||||
| 7.10 | Property | 1 | Dollar General, Lenore, WV | ||||||||||||
| 7.11 | Property | 1 | Family Dollar, Linden, AL | ||||||||||||
| 7.12 | Property | 1 | Fresenius, Rayville, LA | ||||||||||||
| 7.13 | Property | 1 | Dollar General, Burlington, WV | ||||||||||||
| 7.14 | Property | 1 | Family Dollar, Franklinton, LA | ||||||||||||
| 7.15 | Property | 1 | Dollar General, Hinton, WV | ||||||||||||
| 7.16 | Property | 1 | Dollar General, Lerona, WV | ||||||||||||
| 7.17 | Property | 1 | Dollar General, Rushford, NY | ||||||||||||
| 7.18 | Property | 1 | Dollar General, Walker, WV | ||||||||||||
| 7.19 | Property | 1 | Dollar General, Dixie, WV | ||||||||||||
| 7.20 | Property | 1 | Dollar General, Bay Minette, AL | ||||||||||||
| 7.21 | Property | 1 | Dollar General, Fruithurst, AL | ||||||||||||
| 7.22 | Property | 1 | Dollar General, Billingsley, AL | ||||||||||||
| 7.23 | Property | 1 | Dollar General, Knox City, TX | ||||||||||||
| 7.24 | Property | 1 | Dollar General, South Dayton, NY | ||||||||||||
| 7.25 | Property | 1 | Dollar General, Gaylesville, AL | ||||||||||||
| 8 | Loan | 11, 25, 29, 30, 40 | 1 | Redmond Community Center | 0 | 2/23/2022 | 1 | 6 | 4/6/2022 | NAP | 3/6/2032 | NAP | 0 | 0 | L(25),D(90),O(5) |
| 9 | Loan | 9, 10, 11, 21, 34, 40 | 9 | Shearer’s Industrial Portfolio | 0 | 2/16/2022 | 1 | 6 | 4/6/2022 | NAP | 3/6/2032 | NAP | 0 | 0 | L(11),YM1(105),O(4) |
| 9.01 | Property | 1 | 800 Northwest 4th Street | ||||||||||||
| 9.02 | Property | 1 | 4100 Millennium Boulevard Southeast | ||||||||||||
| 9.03 | Property | 1 | 3000 East Mount Pleasant Street | ||||||||||||
| 9.04 | Property | 1 | 7330 West Sherman Street | ||||||||||||
| 9.05 | Property | 12 | 1 | 821 Route 97 | |||||||||||
| 9.06 | Property | 1 | 3200 Northern Cross Boulevard | ||||||||||||
| 9.07 | Property | 1 | 3636 Medallion Avenue | ||||||||||||
| 9.08 | Property | 1 | 692 Wabash Avenue North | ||||||||||||
| 9.09 | Property | 1 | 225 Commonwealth Avenue Extension | ||||||||||||
| 10 | Loan | 19, 30 | 1 | Hall Road Crossing | 359 | 2/24/2022 | 1 | 6 | 4/6/2022 | 4/6/2022 | 3/6/2032 | NAP | 0 | 0 | L(25),D(91),O(4) |
| 11 | Loan | 10, 17, 19, 24, 26, 28, 36, 39 | 1 | Gem Tower | 0 | 12/2/2021 | 4 | 1 | 1/1/2022 | NAP | 12/6/2031 | NAP | 0 | 5 | L(28),YM(87),O(5) |
| 12 | Loan | 11, 19 | 2 | 285 & 355 Riverside Ave | 0 | 2/10/2022 | 1 | 6 | 4/6/2022 | NAP | 3/6/2032 | NAP | 0 | 0 | L(25),D(89),O(6) |
| 12.01 | Property | 29 | 1 | 285 Riverside Ave | |||||||||||
| 12.02 | Property | 29 | 1 | 355 Riverside Ave | |||||||||||
| 13 | Loan | 27 | 1 | Bala Woods | 0 | 2/24/2022 | 1 | 6 | 4/6/2022 | NAP | 3/6/2032 | NAP | 0 | 0 | L(25),D(90),O(5) |
| 14 | Loan | 9, 19, 29, 31 | 1 | Prospector Plaza | 358 | 1/12/2022 | 2 | 6 | 3/6/2022 | 3/6/2022 | 2/6/2032 | NAP | 0 | 0 | L(26),D(90),O(4) |
| 15 | Loan | 10, 14, 24, 34, 37 | 1 | Novo Nordisk HQ | 0 | 11/5/2021 | 5 | 6 | 12/6/2021 | NAP | 11/6/2026 | 4/6/2031 | 0 | 0 | L(29),D(26),O(5) |
| 16 | Loan | 10, 19, 26, 38 | 1 | JW Marriott Desert Springs | 0 | 12/22/2021 | 3 | 6 | 2/6/2022 | NAP | 1/6/2027 | NAP | 0 | 0 | L(27),D(28),O(5) |
| 17 | Loan | 11, 25 | 2 | 35 Crosby Street and 70 Carmine Street | 0 | 1/19/2022 | 2 | 6 | 3/6/2022 | NAP | 2/6/2029 | NAP | 0 | 0 | L(26),D(53),O(5) |
| 17.01 | Property | 12 | 1 | 35 Crosby Street | |||||||||||
| 17.02 | Property | 1 | 70 Carmine Street | ||||||||||||
| 18 | Loan | 22 | 1 | 1340 Lafayette | 0 | 2/17/2022 | 1 | 1 | 4/1/2022 | NAP | 3/1/2032 | NAP | 0 | 0 | L(25),YM1(89),O(6) |
| 19 | Loan | 28 | 1 | Townsgate Office | 0 | 3/8/2022 | 0 | 6 | 5/6/2022 | NAP | 4/6/2032 | NAP | 0 | 0 | L(24),D(92),O(4) |
| 20 | Loan | 11, 29, 30, 40 | 6 | Tharp Portfolio | 359 | 3/4/2022 | 1 | 6 | 4/6/2022 | 4/6/2022 | 3/6/2032 | NAP | 0 | 0 | L(25),D(91),O(4) |
| 20.01 | Property | 1 | Jiffy and Dollar | ||||||||||||
| 20.02 | Property | 1 | Main Street Shoppes | ||||||||||||
| 20.03 | Property | 1 | Greensburg Retail Center | ||||||||||||
| 20.04 | Property | 1 | CSL Plasma | ||||||||||||
| 20.05 | Property | 1 | FedEx | ||||||||||||
| 20.06 | Property | 1 | Greenwood Med Spa | ||||||||||||
| 21 | Loan | 28, 29, 33 | 1 | Santa Barbara Tech Center | 0 | 3/4/2022 | 1 | 6 | 4/6/2022 | NAP | 3/6/2032 | NAP | 0 | 0 | L(25),D(90),O(5) |
| 22 | Loan | 33 | 1 | Greenbrier Towers I & II | 360 | 2/10/2022 | 1 | 6 | 4/6/2022 | 10/6/2023 | 3/6/2027 | NAP | 0 | 0 | L(25),YM1(29),O(6) |
| 23 | Loan | 19 | 1 | Apple Glen Crossing | 360 | 2/2/2022 | 2 | 6 | 3/6/2022 | 3/6/2023 | 2/6/2029 | NAP | 0 | 0 | L(26),YM1(54),O(4) |
| 24 | Loan | 13, 20, 28, 33 | 1 | Crossroads Village | 360 | 3/4/2022 | 0 | 1 | 5/1/2022 | 5/1/2025 | 4/1/2032 | NAP | 0 | 5 | L(25),YM1(91),O(4) |
| 25 | Loan | 19 | 1 | 1500 Volta Drive | 0 | 3/1/2022 | 1 | 6 | 4/6/2022 | NAP | 3/6/2032 | NAP | 0 | 0 | L(25),D(91),O(4) |
| 26 | Loan | 19 | 1 | Courtyard Appleton | 359 | 2/23/2022 | 1 | 6 | 4/6/2022 | 4/6/2022 | 3/6/2032 | NAP | 0 | 0 | L(25),D(91),O(4) |
A-1-9
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Remaining Amortization Term (Mos.) | Origination Date | Seasoning (Mos.) | Payment Due Date | First Payment Date | First P&I Payment Date | Maturity Date or Anticipated Repayment Date | Final Maturity Date | Grace Period - Late Fee (Days) | Grace Period - Default (Days) | Prepayment Provision |
| 27 | Loan | 29 | 1 | Lee’s Hill II | 0 | 3/9/2022 | 0 | 6 | 5/6/2022 | NAP | 4/6/2032 | NAP | 0 | 0 | L(24),D(93),O(3) |
| 28 | Loan | 10, 11, 19, 25, 27, 28, 36 | 11 | Glen Forest Office Portfolio | 0 | 12/1/2021 | 4 | 6 | 1/6/2022 | NAP | 12/6/2026 | NAP | 0 | 0 | L(28),D(27),O(5) |
| 28.01 | Property | 1 | Hillcrest | ||||||||||||
| 28.02 | Property | 1 | Arrington | ||||||||||||
| 28.03 | Property | 1 | Highland II | ||||||||||||
| 28.04 | Property | 29 | 1 | Meridian | |||||||||||
| 28.05 | Property | 29 | 1 | Bayberry | |||||||||||
| 28.06 | Property | 1 | Highland I | ||||||||||||
| 28.07 | Property | 29 | 1 | Capstone | |||||||||||
| 28.08 | Property | 1 | Forest Plaza I | ||||||||||||
| 28.09 | Property | 28, 29 | 1 | Forest Plaza II | |||||||||||
| 28.10 | Property | 1 | Utica | ||||||||||||
| 28.11 | Property | 1 | Willard | ||||||||||||
| 29 | Loan | 19 | 1 | Arlington Green Executive Plaza | 359 | 2/17/2022 | 1 | 6 | 4/6/2022 | 4/6/2022 | 3/6/2032 | NAP | 0 | 0 | L(25),D(91),O(4) |
| 30 | Loan | 12, 13, 27, 30, 40 | 1 | 1201 Main | 0 | 3/8/2022 | 0 | 6 | 5/6/2022 | NAP | 4/6/2032 | NAP | 0 | 0 | L(24),D(92),O(4) |
| 31 | Loan | 11 | 2 | Walgreens New Castle & Oneonta | 0 | 3/4/2022 | 1 | 6 | 4/6/2022 | NAP | 3/6/2032 | NAP | 0 | 0 | L(25),D(92),O(3) |
| 31.01 | Property | 1 | Walgreens Oneonta | ||||||||||||
| 31.02 | Property | 1 | Walgreens New Castle | ||||||||||||
| 32 | Loan | 11 | 2 | 138 St. Marks & 155 5th Ave | 0 | 3/1/2022 | 1 | 6 | 4/6/2022 | NAP | 3/6/2032 | NAP | 0 | 0 | L(25),D(91),O(4) |
| 32.01 | Property | 1 | 155 5th Avenue | ||||||||||||
| 32.02 | Property | 12 | 1 | 138 Saint Marks Place | |||||||||||
| 33 | Loan | 19, 20, 23, 26, 32 | 1 | STK Chicago | 360 | 2/7/2020 | 25 | 6 | 4/6/2020 | 4/6/2023 | 3/6/2030 | NAP | 5 | 0 | L(41),D(74),O(5) |
| 34 | Loan | 31 | 1 | 905 Medical Park Drive | 0 | 2/28/2022 | 1 | 6 | 4/6/2022 | NAP | 3/6/2032 | NAP | 0 | 0 | L(25),D(91),O(4) |
| 35 | Loan | 39 | 1 | 3097 E Ana St | 359 | 3/4/2022 | 1 | 6 | 4/6/2022 | 4/6/2022 | 3/6/2032 | NAP | 0 | 0 | L(25),D(91),O(4) |
| 36 | Loan | 1 | VA Dialysis Center - Philadelphia | 0 | 3/3/2022 | 1 | 6 | 4/6/2022 | NAP | 3/6/2032 | NAP | 0 | 0 | L(25),D(88),O(7) | |
| 37 | Loan | 19, 39 | 1 | 65 Triangle Industrial | 360 | 3/4/2022 | 1 | 6 | 4/6/2022 | 4/6/2027 | 3/6/2032 | NAP | 0 | 0 | L(25),D(92),O(3) |
A-1-10
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Most Recent EGI ($) | Most Recent Expenses ($) | Most Recent NOI ($) | Most Recent NOI Date | Most Recent Description | Second Most Recent EGI ($) | Second Most Recent Expenses ($) | Second Most Recent NOI ($) | Second Most Recent NOI Date | Second Most Recent Description |
| 19 | ||||||||||||||
| 1 | Loan | 9, 10, 20, 24, 26, 28, 29, 32, 33, 34, 35 | 1 | 601 Lexington Avenue | 155,075,181 | 65,527,372 | 89,547,809 | 9/30/2021 | T-12 | 155,490,755 | 66,551,536 | 88,939,219 | 12/31/2020 | T-12 |
| 2 | Loan | 10, 14, 24, 28, 29 | 1 | One Wilshire | 52,164,978 | 16,537,821 | 35,627,157 | 9/30/2021 | T-12 | 50,864,916 | 16,294,726 | 34,570,190 | 12/31/2020 | T-12 |
| 3 | Loan | 9, 10, 11, 12, 25, 26, 28, 29 | 14 | Bedrock Portfolio | 94,411,832 | 38,816,129 | 55,595,704 | 9/30/2021 | T-12 | 93,320,219 | 39,225,160 | 54,095,059 | 12/31/2020 | T-12 |
| 3.01 | Property | 1 | First National Building | 22,551,474 | 7,938,854 | 14,612,620 | 9/30/2021 | T-12 | 22,547,728 | 8,456,198 | 14,091,530 | 12/31/2020 | T-12 | |
| 3.02 | Property | 27 | 1 | The Qube | 14,707,641 | 5,790,499 | 8,917,143 | 9/30/2021 | T-12 | 13,634,388 | 5,413,327 | 8,221,061 | 12/31/2020 | T-12 |
| 3.03 | Property | 27 | 1 | Chrysler House | 12,759,457 | 4,680,984 | 8,078,473 | 9/30/2021 | T-12 | 12,740,351 | 4,791,380 | 7,948,971 | 12/31/2020 | T-12 |
| 3.04 | Property | 27 | 1 | 1001 Woodward | 10,555,797 | 4,308,564 | 6,247,232 | 9/30/2021 | T-12 | 10,057,399 | 4,514,822 | 5,542,577 | 12/31/2020 | T-12 |
| 3.05 | Property | 1 | One Woodward | 9,580,713 | 5,058,111 | 4,522,603 | 9/30/2021 | T-12 | 10,265,419 | 5,233,052 | 5,032,367 | 12/31/2020 | T-12 | |
| 3.06 | Property | 1 | The Z Garage | 4,801,718 | 2,228,996 | 2,572,721 | 9/30/2021 | T-12 | 5,379,578 | 2,245,209 | 3,134,369 | 12/31/2020 | T-12 | |
| 3.07 | Property | 1 | Two Detroit Garage | 4,309,151 | 1,354,872 | 2,954,279 | 9/30/2021 | T-12 | 3,516,691 | 1,357,089 | 2,159,602 | 12/31/2020 | T-12 | |
| 3.08 | Property | 1 | 1505 & 1515 Woodward | 3,786,664 | 1,707,296 | 2,079,368 | 9/30/2021 | T-12 | 2,929,868 | 1,191,945 | 1,737,923 | 12/31/2020 | T-12 | |
| 3.09 | Property | 1 | 1001 Brush Street | 3,432,603 | 1,548,603 | 1,883,999 | 9/30/2021 | T-12 | 3,999,913 | 1,642,267 | 2,357,645 | 12/31/2020 | T-12 | |
| 3.10 | Property | 12 | 1 | The Assembly | 2,452,754 | 1,516,450 | 936,305 | 9/30/2021 | T-12 | 2,330,200 | 1,478,237 | 851,963 | 12/31/2020 | T-12 |
| 3.11 | Property | 1 | 419 Fort Street Garage | 2,416,343 | 903,473 | 1,512,869 | 9/30/2021 | T-12 | 2,507,484 | 879,102 | 1,628,382 | 12/31/2020 | T-12 | |
| 3.12 | Property | 12 | 1 | Vinton | 1,153,612 | 860,060 | 293,552 | 9/30/2021 | T-12 | 1,313,531 | 965,501 | 348,031 | 12/31/2020 | T-12 |
| 3.13 | Property | 1 | 1401 First Street | 1,159,626 | 598,814 | 560,813 | 9/30/2021 | T-12 | 1,393,326 | 680,309 | 713,017 | 12/31/2020 | T-12 | |
| 3.14 | Property | 1 | Lane Bryant Building | 744,281 | 320,553 | 423,728 | 9/30/2021 | T-12 | 704,344 | 376,723 | 327,620 | 12/31/2020 | T-12 | |
| 4 | Loan | 19, 36 | 1 | Romaine & Orange Square | 6,486,326 | 1,821,713 | 4,664,614 | 9/30/2021 | T-12 | 5,702,869 | 2,726,942 | 2,975,928 | 12/31/2020 | T-12 |
| 5 | Loan | 26, 28, 29 | 1 | Shoreline Square | 15,044,475 | 8,232,082 | 6,812,393 | 12/31/2021 | T-12 | 14,165,190 | 7,938,711 | 6,226,478 | 12/31/2020 | T-12 |
| 6 | Loan | 11, 13, 19, 25, 33 | 3 | Millennia Portfolio | 6,770,316 | 4,772,824 | 1,997,491 | 12/31/2021 | T-12 | 5,833,207 | 4,011,423 | 1,821,784 | 12/31/2020 | T-12 |
| 6.01 | Property | 1 | Summit Ridge | 3,238,450 | 2,257,795 | 980,655 | 12/31/2021 | T-12 | 2,771,689 | 1,947,536 | 824,153 | 12/31/2020 | T-12 | |
| 6.02 | Property | 1 | Lexington Village | 2,468,797 | 1,831,617 | 637,179 | 12/31/2021 | T-12 | 2,374,383 | 1,523,920 | 850,463 | 12/31/2020 | T-12 | |
| 6.03 | Property | 1 | Gateway at the Greene | 1,063,069 | 683,412 | 379,657 | 12/31/2021 | T-12 | 687,135 | 539,967 | 147,168 | 12/31/2020 | T-12 | |
| 7 | Loan | 11, 25, 27, 29 | 25 | InCommercial Net Lease Portfolio #5 | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV |
| 7.01 | Property | 1 | Walgreens, Mount Pleasant, SC | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 7.02 | Property | 1 | Walgreens, Meridian, ID | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 7.03 | Property | 1 | Renal Care, Moncks Corner, SC | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 7.04 | Property | 1 | Tractor Supply Co, Ogdensbg, NY | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 7.05 | Property | 1 | Tractor Supply Co, Lake Ch, LA | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 7.06 | Property | 1 | Tractor Supply Co, Oconto, WI | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 7.07 | Property | 1 | Dollar General, Ghent, WV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 7.08 | Property | 1 | Tractor Supply Co, Kewaunee, WI | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 7.09 | Property | 1 | Fresenius, Belzoni, MS | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 7.10 | Property | 1 | Dollar General, Lenore, WV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 7.11 | Property | 1 | Family Dollar, Linden, AL | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 7.12 | Property | 1 | Fresenius, Rayville, LA | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 7.13 | Property | 1 | Dollar General, Burlington, WV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 7.14 | Property | 1 | Family Dollar, Franklinton, LA | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 7.15 | Property | 1 | Dollar General, Hinton, WV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 7.16 | Property | 1 | Dollar General, Lerona, WV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 7.17 | Property | 1 | Dollar General, Rushford, NY | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 7.18 | Property | 1 | Dollar General, Walker, WV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 7.19 | Property | 1 | Dollar General, Dixie, WV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 7.20 | Property | 1 | Dollar General, Bay Minette, AL | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 7.21 | Property | 1 | Dollar General, Fruithurst, AL | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 7.22 | Property | 1 | Dollar General, Billingsley, AL | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 7.23 | Property | 1 | Dollar General, Knox City, TX | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 7.24 | Property | 1 | Dollar General, South Dayton, NY | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 7.25 | Property | 1 | Dollar General, Gaylesville, AL | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 8 | Loan | 11, 25, 29, 30, 40 | 1 | Redmond Community Center | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV |
| 9 | Loan | 9, 10, 11, 21, 34, 40 | 9 | Shearer’s Industrial Portfolio | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV |
| 9.01 | Property | 1 | 800 Northwest 4th Street | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 9.02 | Property | 1 | 4100 Millennium Boulevard Southeast | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 9.03 | Property | 1 | 3000 East Mount Pleasant Street | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 9.04 | Property | 1 | 7330 West Sherman Street | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 9.05 | Property | 12 | 1 | 821 Route 97 | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV |
| 9.06 | Property | 1 | 3200 Northern Cross Boulevard | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 9.07 | Property | 1 | 3636 Medallion Avenue | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 9.08 | Property | 1 | 692 Wabash Avenue North | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 9.09 | Property | 1 | 225 Commonwealth Avenue Extension | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 10 | Loan | 19, 30 | 1 | Hall Road Crossing | 2,714,247 | 548,805 | 2,165,442 | 10/31/2021 | T-12 | 2,641,380 | 570,785 | 2,070,595 | 12/31/2020 | T-12 |
| 11 | Loan | 10, 17, 19, 24, 26, 28, 36, 39 | 1 | Gem Tower | 3,367,722 | 1,052,021 | 2,315,701 | 9/30/2021 | T-12 | 2,778,282 | 956,322 | 1,821,960 | 12/31/2020 | T-12 |
| 12 | Loan | 11, 19 | 2 | 285 & 355 Riverside Ave | 3,778,409 | 1,309,285 | 2,469,124 | 10/31/2021 | T-12 | 3,306,910 | 1,300,134 | 2,006,776 | 12/31/2020 | T-12 |
| 12.01 | Property | 29 | 1 | 285 Riverside Ave | 2,297,665 | 717,295 | 1,580,371 | 10/31/2021 | T-12 | 2,487,567 | 693,869 | 1,793,697 | 12/31/2020 | T-12 |
| 12.02 | Property | 29 | 1 | 355 Riverside Ave | 1,480,743 | 591,990 | 888,753 | 10/31/2021 | T-12 | 819,344 | 606,265 | 213,079 | 12/31/2020 | T-12 |
| 13 | Loan | 27 | 1 | Bala Woods | 4,300,793 | 1,706,417 | 2,594,376 | 12/31/2021 | T-12 | 4,109,345 | 1,614,179 | 2,495,166 | 12/31/2020 | T-12 |
| 14 | Loan | 9, 19, 29, 31 | 1 | Prospector Plaza | 2,523,125 | 727,724 | 1,795,402 | 9/30/2021 | T-12 | 2,474,175 | 645,078 | 1,829,096 | 12/31/2020 | T-12 |
| 15 | Loan | 10, 14, 24, 34, 37 | 1 | Novo Nordisk HQ | 32,583,672 | 13,724,187 | 18,859,485 | 9/30/2021 | T-12 | 31,298,297 | 13,037,472 | 18,260,825 | 12/31/2020 | T-12 |
| 16 | Loan | 10, 19, 26, 38 | 1 | JW Marriott Desert Springs | 74,860,661 | 62,239,745 | 12,620,916 | 12/31/2021 | T-12 | 41,784,470 | 41,839,160 | (54,690) | 12/31/2020 | T-12 |
| 17 | Loan | 11, 25 | 2 | 35 Crosby Street and 70 Carmine Street | 1,687,904 | 312,704 | 1,375,200 | 10/31/2021 | T-12 | 1,312,999 | 297,814 | 1,015,185 | 12/31/2020 | T-12 |
| 17.01 | Property | 12 | 1 | 35 Crosby Street | 1,219,472 | 247,501 | 971,971 | 10/31/2021 | T-12 | 1,023,495 | 237,833 | 785,662 | 12/31/2020 | T-12 |
| 17.02 | Property | 1 | 70 Carmine Street | 468,432 | 65,203 | 403,229 | 10/31/2021 | T-12 | 289,504 | 59,981 | 229,523 | 12/31/2020 | T-12 | |
| 18 | Loan | 22 | 1 | 1340 Lafayette | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV |
| 19 | Loan | 28 | 1 | Townsgate Office | 3,189,579 | 928,786 | 2,260,793 | 12/31/2021 | T-12 | 2,143,512 | 903,139 | 1,240,374 | 12/31/2020 | T-12 |
| 20 | Loan | 11, 29, 30, 40 | 6 | Tharp Portfolio | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV |
| 20.01 | Property | 1 | Jiffy and Dollar | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 20.02 | Property | 1 | Main Street Shoppes | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 20.03 | Property | 1 | Greensburg Retail Center | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 20.04 | Property | 1 | CSL Plasma | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 20.05 | Property | 1 | FedEx | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 20.06 | Property | 1 | Greenwood Med Spa | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 21 | Loan | 28, 29, 33 | 1 | Santa Barbara Tech Center | 2,206,858 | 540,564 | 1,666,295 | 12/31/2021 | T-12 | 2,199,942 | 593,148 | 1,606,794 | 12/31/2020 | T-12 |
| 22 | Loan | 33 | 1 | Greenbrier Towers I & II | 3,121,745 | 1,558,237 | 1,563,508 | 12/31/2021 | T-12 | 3,322,499 | 1,542,238 | 1,780,261 | 12/31/2020 | T-12 |
| 23 | Loan | 19 | 1 | Apple Glen Crossing | 2,078,891 | 657,845 | 1,421,046 | 11/30/2021 | T-12 | 2,258,884 | 684,504 | 1,574,380 | 12/31/2020 | T-12 |
| 24 | Loan | 13, 20, 28, 33 | 1 | Crossroads Village | 2,037,249 | 647,162 | 1,390,087 | 12/31/2021 | T-12 | 1,975,823 | 644,329 | 1,331,494 | 12/31/2020 | T-12 |
| 25 | Loan | 19 | 1 | 1500 Volta Drive | 1,524,654 | 647,696 | 876,957 | 12/31/2021 | T-12 | 1,312,130 | 460,707 | 851,423 | 12/31/2020 | T-12 |
| 26 | Loan | 19 | 1 | Courtyard Appleton | 3,770,705 | 2,457,887 | 1,312,819 | 1/31/2022 | T-12 | 3,626,137 | 2,396,840 | 1,229,297 | 12/31/2021 | T-12 |
A-1-11
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Most Recent EGI ($) | Most Recent Expenses ($) | Most Recent NOI ($) | Most Recent NOI Date | Most Recent Description | Second Most Recent EGI ($) | Second Most Recent Expenses ($) | Second Most Recent NOI ($) | Second Most Recent NOI Date | Second Most Recent Description |
| 27 | Loan | 29 | 1 | Lee’s Hill II | 2,906,667 | 968,492 | 1,938,175 | 12/31/2021 | T-12 | 2,878,979 | 990,492 | 1,888,487 | 12/31/2020 | T-12 |
| 28 | Loan | 10, 11, 19, 25, 27, 28, 36 | 11 | Glen Forest Office Portfolio | 10,830,431 | 3,962,431 | 6,868,000 | 9/30/2021 | T-12 | 11,121,027 | 3,753,007 | 7,368,020 | 12/31/2020 | T-12 |
| 28.01 | Property | 1 | Hillcrest | 1,864,069 | 624,737 | 1,239,332 | 9/30/2021 | T-12 | 1,900,361 | 589,720 | 1,310,641 | 12/31/2020 | T-12 | |
| 28.02 | Property | 1 | Arrington | 1,955,196 | 659,263 | 1,295,933 | 9/30/2021 | T-12 | 2,032,018 | 627,573 | 1,404,445 | 12/31/2020 | T-12 | |
| 28.03 | Property | 1 | Highland II | 1,222,061 | 482,575 | 739,486 | 9/30/2021 | T-12 | 1,420,623 | 460,342 | 960,281 | 12/31/2020 | T-12 | |
| 28.04 | Property | 29 | 1 | Meridian | 1,269,782 | 428,106 | 841,677 | 9/30/2021 | T-12 | 1,257,382 | 418,551 | 838,831 | 12/31/2020 | T-12 |
| 28.05 | Property | 29 | 1 | Bayberry | 908,041 | 344,175 | 563,867 | 9/30/2021 | T-12 | 770,263 | 322,298 | 447,965 | 12/31/2020 | T-12 |
| 28.06 | Property | 1 | Highland I | 889,727 | 355,427 | 534,300 | 9/30/2021 | T-12 | 864,407 | 329,766 | 534,641 | 12/31/2020 | T-12 | |
| 28.07 | Property | 29 | 1 | Capstone | 907,421 | 294,977 | 612,444 | 9/30/2021 | T-12 | 1,002,964 | 278,148 | 724,816 | 12/31/2020 | T-12 |
| 28.08 | Property | 1 | Forest Plaza I | 580,982 | 265,183 | 315,799 | 9/30/2021 | T-12 | 618,962 | 238,220 | 380,742 | 12/31/2020 | T-12 | |
| 28.09 | Property | 28, 29 | 1 | Forest Plaza II | 627,677 | 255,470 | 372,207 | 9/30/2021 | T-12 | 598,318 | 242,897 | 355,421 | 12/31/2020 | T-12 |
| 28.10 | Property | 1 | Utica | 443,694 | 201,512 | 242,182 | 9/30/2021 | T-12 | 510,482 | 201,909 | 308,573 | 12/31/2020 | T-12 | |
| 28.11 | Property | 1 | Willard | 161,781 | 51,006 | 110,775 | 9/30/2021 | T-12 | 145,246 | 43,583 | 101,663 | 12/31/2020 | T-12 | |
| 29 | Loan | 19 | 1 | Arlington Green Executive Plaza | 1,057,931 | 626,015 | 431,915 | 11/30/2021 | T-12 | 1,137,670 | 665,970 | 471,699 | 12/31/2020 | T-12 |
| 30 | Loan | 12, 13, 27, 30, 40 | 1 | 1201 Main | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV |
| 31 | Loan | 11 | 2 | Walgreens New Castle & Oneonta | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV |
| 31.01 | Property | 1 | Walgreens Oneonta | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 31.02 | Property | 1 | Walgreens New Castle | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 32 | Loan | 11 | 2 | 138 St. Marks & 155 5th Ave | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV |
| 32.01 | Property | 1 | 155 5th Avenue | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 32.02 | Property | 12 | 1 | 138 Saint Marks Place | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV |
| 33 | Loan | 19, 20, 23, 26, 32 | 1 | STK Chicago | 547,478 | 253,071 | 294,407 | 12/31/2020 | T-12 | 937,535 | 280,380 | 657,155 | 12/31/2019 | T-12 |
| 34 | Loan | 31 | 1 | 905 Medical Park Drive | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV |
| 35 | Loan | 39 | 1 | 3097 E Ana St | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV |
| 36 | Loan | 1 | VA Dialysis Center - Philadelphia | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | |
| 37 | Loan | 19, 39 | 1 | 65 Triangle Industrial | 430,654 | 112,867 | 317,787 | 12/31/2021 | T-12 | 409,220 | 113,519 | 295,701 | 12/31/2020 | T-12 |
A-1-12
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Third Most Recent EGI ($) | Third Most Recent Expenses ($) | Third Most Recent NOI ($) | Third Most Recent NOI Date | Third Most Recent Description | Underwritten Economic Occupancy (%) | Underwritten EGI ($) | Underwritten Expenses ($) | Underwritten Net Operating Income ($) | Underwritten Replacement / FF&E Reserve ($) |
| 19 | ||||||||||||||
| 1 | Loan | 9, 10, 20, 24, 26, 28, 29, 32, 33, 34, 35 | 1 | 601 Lexington Avenue | 147,502,669 | 64,986,057 | 82,516,612 | 12/31/2019 | T-12 | 93.5% | 159,706,334 | 64,433,228 | 95,273,106 | 418,915 |
| 2 | Loan | 10, 14, 24, 28, 29 | 1 | One Wilshire | 47,132,520 | 15,521,713 | 31,610,806 | 12/31/2019 | T-12 | 88.8% | 54,609,882 | 17,099,493 | 37,510,389 | 119,080 |
| 3 | Loan | 9, 10, 11, 12, 25, 26, 28, 29 | 14 | Bedrock Portfolio | 93,601,628 | 46,392,886 | 47,208,742 | 12/31/2019 | T-12 | 87.7% | 97,560,449 | 39,136,450 | 58,423,999 | 660,862 |
| 3.01 | Property | 1 | First National Building | 20,058,038 | 10,571,414 | 9,486,624 | 12/31/2019 | T-12 | 94.7% | 24,218,140 | 8,751,047 | 15,467,092 | 160,024 | |
| 3.02 | Property | 27 | 1 | The Qube | 14,915,740 | 6,855,771 | 8,059,969 | 12/31/2019 | T-12 | 91.4% | 15,190,314 | 5,694,242 | 9,496,072 | 104,540 |
| 3.03 | Property | 27 | 1 | Chrysler House | 12,726,060 | 5,918,699 | 6,807,361 | 12/31/2019 | T-12 | 79.0% | 11,740,667 | 5,139,250 | 6,601,417 | 68,698 |
| 3.04 | Property | 27 | 1 | 1001 Woodward | 11,842,228 | 5,715,799 | 6,126,429 | 12/31/2019 | T-12 | 87.0% | 11,833,265 | 4,506,929 | 7,326,336 | 63,808 |
| 3.05 | Property | 1 | One Woodward | 10,637,962 | 6,451,321 | 4,186,641 | 12/31/2019 | T-12 | 92.4% | 10,421,702 | 4,768,719 | 5,652,984 | 74,051 | |
| 3.06 | Property | 1 | The Z Garage | 7,362,715 | 2,377,053 | 4,985,662 | 12/31/2019 | T-12 | NAP | 4,333,672 | 2,201,877 | 2,131,796 | 38,209 | |
| 3.07 | Property | 1 | Two Detroit Garage | 3,704,406 | 1,425,407 | 2,278,998 | 12/31/2019 | T-12 | NAP | 4,136,711 | 1,180,174 | 2,956,536 | 27,650 | |
| 3.08 | Property | 1 | 1505 & 1515 Woodward | 1,560,258 | 1,126,435 | 433,823 | 12/31/2019 | T-12 | 95.0% | 4,058,229 | 1,375,879 | 2,682,351 | 28,507 | |
| 3.09 | Property | 1 | 1001 Brush Street | 4,094,396 | 1,805,465 | 2,288,931 | 12/31/2019 | T-12 | NAP | 3,237,726 | 1,504,379 | 1,733,347 | 28,100 | |
| 3.10 | Property | 12 | 1 | The Assembly | 585,521 | 928,015 | (342,494) | 12/31/2019 | T-12 | 74.0% | 2,741,081 | 1,292,767 | 1,448,315 | 23,082 |
| 3.11 | Property | 1 | 419 Fort Street Garage | 2,012,448 | 883,296 | 1,129,152 | 12/31/2019 | T-12 | NAP | 2,451,762 | 850,847 | 1,600,915 | 15,925 | |
| 3.12 | Property | 12 | 1 | Vinton | 1,324,511 | 1,064,009 | 260,502 | 12/31/2019 | T-12 | 95.0% | 1,278,493 | 886,306 | 392,187 | 6,104 |
| 3.13 | Property | 1 | 1401 First Street | 2,033,708 | 786,300 | 1,247,408 | 12/31/2019 | T-12 | NAP | 1,131,300 | 613,395 | 517,905 | 15,825 | |
| 3.14 | Property | 1 | Lane Bryant Building | 743,636 | 483,900 | 259,736 | 12/31/2019 | T-12 | 94.8% | 787,387 | 370,639 | 416,748 | 6,339 | |
| 4 | Loan | 19, 36 | 1 | Romaine & Orange Square | 3,192,784 | 1,271,615 | 1,921,169 | 12/31/2019 | T-12 | 95.0% | 7,391,876 | 1,865,708 | 5,526,168 | 20,810 |
| 5 | Loan | 26, 28, 29 | 1 | Shoreline Square | 13,915,028 | 7,703,090 | 6,211,938 | 12/31/2019 | T-12 | 87.1% | 15,249,726 | 8,657,966 | 6,591,759 | 82,760 |
| 6 | Loan | 11, 13, 19, 25, 33 | 3 | Millennia Portfolio | 5,583,318 | 4,244,698 | 1,338,620 | 12/31/2019 | T-12 | 92.5% | 7,800,376 | 4,412,652 | 3,387,724 | 256,572 |
| 6.01 | Property | 1 | Summit Ridge | 2,753,937 | 2,093,999 | 659,938 | 12/31/2019 | T-12 | 95.0% | 3,908,133 | 2,315,941 | 1,592,192 | 134,980 | |
| 6.02 | Property | 1 | Lexington Village | 2,236,394 | 1,629,611 | 606,783 | 12/31/2019 | T-12 | 88.4% | 2,631,372 | 1,568,337 | 1,063,035 | 95,842 | |
| 6.03 | Property | 1 | Gateway at the Greene | 592,987 | 521,088 | 71,899 | 12/31/2019 | T-12 | 94.2% | 1,260,871 | 528,374 | 732,497 | 25,750 | |
| 7 | Loan | 11, 25, 27, 29 | 25 | InCommercial Net Lease Portfolio #5 | NAV | NAV | NAV | NAV | NAV | 98.0% | 4,071,648 | 692,855 | 3,378,793 | 46,128 |
| 7.01 | Property | 1 | Walgreens, Mount Pleasant, SC | NAV | NAV | NAV | NAV | NAV | 98.0% | 602,998 | 111,304 | 491,694 | 2,008 | |
| 7.02 | Property | 1 | Walgreens, Meridian, ID | NAV | NAV | NAV | NAV | NAV | 98.0% | 315,625 | 37,067 | 278,559 | 2,268 | |
| 7.03 | Property | 1 | Renal Care, Moncks Corner, SC | NAV | NAV | NAV | NAV | NAV | 98.0% | 311,322 | 70,151 | 241,170 | 1,124 | |
| 7.04 | Property | 1 | Tractor Supply Co, Ogdensbg, NY | NAV | NAV | NAV | NAV | NAV | 98.0% | 310,713 | 134,654 | 176,059 | 2,865 | |
| 7.05 | Property | 1 | Tractor Supply Co, Lake Ch, LA | NAV | NAV | NAV | NAV | NAV | 98.0% | 194,552 | 36,125 | 158,427 | 3,296 | |
| 7.06 | Property | 1 | Tractor Supply Co, Oconto, WI | NAV | NAV | NAV | NAV | NAV | 98.0% | 175,225 | 47,975 | 127,251 | 5,232 | |
| 7.07 | Property | 1 | Dollar General, Ghent, WV | NAV | NAV | NAV | NAV | NAV | 98.0% | 149,964 | 18,860 | 131,103 | 1,596 | |
| 7.08 | Property | 1 | Tractor Supply Co, Kewaunee, WI | NAV | NAV | NAV | NAV | NAV | 98.0% | 186,164 | 61,285 | 124,878 | 5,300 | |
| 7.09 | Property | 1 | Fresenius, Belzoni, MS | NAV | NAV | NAV | NAV | NAV | 98.0% | 133,936 | 20,067 | 113,869 | 767 | |
| 7.10 | Property | 1 | Dollar General, Lenore, WV | NAV | NAV | NAV | NAV | NAV | 98.0% | 110,283 | 2,586 | 107,697 | 1,365 | |
| 7.11 | Property | 1 | Family Dollar, Linden, AL | NAV | NAV | NAV | NAV | NAV | 98.0% | 127,446 | 8,247 | 119,199 | 1,575 | |
| 7.12 | Property | 1 | Fresenius, Rayville, LA | NAV | NAV | NAV | NAV | NAV | 98.0% | 132,852 | 22,670 | 110,182 | 838 | |
| 7.13 | Property | 1 | Dollar General, Burlington, WV | NAV | NAV | NAV | NAV | NAV | 98.0% | 116,186 | 11,437 | 104,749 | 1,354 | |
| 7.14 | Property | 1 | Family Dollar, Franklinton, LA | NAV | NAV | NAV | NAV | NAV | 98.0% | 128,764 | 18,937 | 109,827 | 1,575 | |
| 7.15 | Property | 1 | Dollar General, Hinton, WV | NAV | NAV | NAV | NAV | NAV | 98.0% | 104,137 | 2,463 | 101,675 | 1,354 | |
| 7.16 | Property | 1 | Dollar General, Lerona, WV | NAV | NAV | NAV | NAV | NAV | 98.0% | 99,655 | 2,373 | 97,282 | 1,365 | |
| 7.17 | Property | 1 | Dollar General, Rushford, NY | NAV | NAV | NAV | NAV | NAV | 98.0% | 110,658 | 14,411 | 96,247 | 1,350 | |
| 7.18 | Property | 1 | Dollar General, Walker, WV | NAV | NAV | NAV | NAV | NAV | 98.0% | 98,440 | 2,349 | 96,091 | 1,365 | |
| 7.19 | Property | 1 | Dollar General, Dixie, WV | NAV | NAV | NAV | NAV | NAV | 98.0% | 104,433 | 11,389 | 93,045 | 1,365 | |
| 7.20 | Property | 1 | Dollar General, Bay Minette, AL | NAV | NAV | NAV | NAV | NAV | 98.0% | 98,529 | 8,429 | 90,101 | 1,365 | |
| 7.21 | Property | 1 | Dollar General, Fruithurst, AL | NAV | NAV | NAV | NAV | NAV | 98.0% | 97,501 | 8,204 | 89,297 | 1,354 | |
| 7.22 | Property | 1 | Dollar General, Billingsley, AL | NAV | NAV | NAV | NAV | NAV | 98.0% | 87,986 | 5,796 | 82,190 | 1,365 | |
| 7.23 | Property | 1 | Dollar General, Knox City, TX | NAV | NAV | NAV | NAV | NAV | 98.0% | 87,871 | 9,782 | 78,089 | 1,365 | |
| 7.24 | Property | 1 | Dollar General, South Dayton, NY | NAV | NAV | NAV | NAV | NAV | 98.0% | 97,975 | 19,619 | 78,357 | 1,365 | |
| 7.25 | Property | 1 | Dollar General, Gaylesville, AL | NAV | NAV | NAV | NAV | NAV | 98.0% | 88,432 | 6,677 | 81,755 | 1,354 | |
| 8 | Loan | 11, 25, 29, 30, 40 | 1 | Redmond Community Center | NAV | NAV | NAV | NAV | NAV | 95.0% | 4,301,918 | 1,042,169 | 3,259,749 | 20,549 |
| 9 | Loan | 9, 10, 11, 21, 34, 40 | 9 | Shearer’s Industrial Portfolio | NAV | NAV | NAV | NAV | NAV | 95.0% | 14,232,335 | 2,846,467 | 11,385,868 | 348,967 |
| 9.01 | Property | 1 | 800 Northwest 4th Street | NAV | NAV | NAV | NAV | NAV | 95.0% | 2,469,022 | 493,804 | 1,975,217 | 81,586 | |
| 9.02 | Property | 1 | 4100 Millennium Boulevard Southeast | NAV | NAV | NAV | NAV | NAV | 95.0% | 2,357,882 | 471,576 | 1,886,306 | 27,100 | |
| 9.03 | Property | 1 | 3000 East Mount Pleasant Street | NAV | NAV | NAV | NAV | NAV | 95.0% | 2,127,579 | 425,516 | 1,702,064 | 70,303 | |
| 9.04 | Property | 1 | 7330 West Sherman Street | NAV | NAV | NAV | NAV | NAV | 95.0% | 1,611,343 | 322,269 | 1,289,074 | 32,766 | |
| 9.05 | Property | 12 | 1 | 821 Route 97 | NAV | NAV | NAV | NAV | NAV | 95.0% | 1,592,577 | 318,515 | 1,274,061 | 35,083 |
| 9.06 | Property | 1 | 3200 Northern Cross Boulevard | NAV | NAV | NAV | NAV | NAV | 95.0% | 1,450,545 | 290,109 | 1,160,436 | 19,173 | |
| 9.07 | Property | 1 | 3636 Medallion Avenue | NAV | NAV | NAV | NAV | NAV | 95.0% | 1,499,544 | 299,909 | 1,199,635 | 44,045 | |
| 9.08 | Property | 1 | 692 Wabash Avenue North | NAV | NAV | NAV | NAV | NAV | 95.0% | 594,048 | 118,810 | 475,239 | 22,434 | |
| 9.09 | Property | 1 | 225 Commonwealth Avenue Extension | NAV | NAV | NAV | NAV | NAV | 95.0% | 529,795 | 105,959 | 423,836 | 16,477 | |
| 10 | Loan | 19, 30 | 1 | Hall Road Crossing | 2,592,655 | 627,069 | 1,965,586 | 12/31/2019 | T-12 | 95.6% | 3,262,416 | 589,162 | 2,673,254 | 27,169 |
| 11 | Loan | 10, 17, 19, 24, 26, 28, 36, 39 | 1 | Gem Tower | 4,814,914 | 993,987 | 3,820,927 | 12/31/2019 | T-12 | 95.0% | 5,065,136 | 1,233,191 | 3,831,944 | 6,979 |
| 12 | Loan | 11, 19 | 2 | 285 & 355 Riverside Ave | 2,906,372 | 1,262,692 | 1,643,681 | 12/31/2019 | T-12 | 87.6% | 3,919,900 | 1,388,238 | 2,531,663 | 18,929 |
| 12.01 | Property | 29 | 1 | 285 Riverside Ave | 2,464,772 | 707,898 | 1,756,875 | 12/31/2019 | T-12 | 85.3% | 2,253,196 | 733,828 | 1,519,368 | 11,056 |
| 12.02 | Property | 29 | 1 | 355 Riverside Ave | 441,600 | 554,794 | (113,194) | 12/31/2019 | T-12 | 90.9% | 1,666,704 | 654,410 | 1,012,295 | 7,874 |
| 13 | Loan | 27 | 1 | Bala Woods | 4,114,587 | 1,649,594 | 2,464,992 | 12/31/2019 | T-12 | 95.0% | 4,476,990 | 2,034,321 | 2,442,670 | 68,382 |
| 14 | Loan | 9, 19, 29, 31 | 1 | Prospector Plaza | 956,638 | 351,892 | 604,746 | 12/31/2019 | T-12 | 95.0% | 2,745,897 | 732,284 | 2,013,613 | 40,566 |
| 15 | Loan | 10, 14, 24, 34, 37 | 1 | Novo Nordisk HQ | 30,760,774 | 13,393,492 | 17,367,282 | 12/31/2019 | T-12 | 78.0% | 32,650,130 | 13,331,718 | 19,318,412 | 146,221 |
| 16 | Loan | 10, 19, 26, 38 | 1 | JW Marriott Desert Springs | 108,844,168 | 88,039,818 | 20,804,350 | 12/31/2019 | T-12 | 63.5% | 126,226,398 | 100,165,283 | 26,061,115 | 5,680,188 |
| 17 | Loan | 11, 25 | 2 | 35 Crosby Street and 70 Carmine Street | NAV | NAV | NAV | NAV | NAV | 95.0% | 1,718,265 | 334,938 | 1,383,328 | 8,949 |
| 17.01 | Property | 12 | 1 | 35 Crosby Street | NAV | NAV | NAV | NAV | NAV | 95.0% | 1,207,904 | 260,973 | 946,932 | 6,699 |
| 17.02 | Property | 1 | 70 Carmine Street | NAV | NAV | NAV | NAV | NAV | 95.0% | 510,361 | 73,965 | 436,396 | 2,250 | |
| 18 | Loan | 22 | 1 | 1340 Lafayette | NAV | NAV | NAV | NAV | NAV | 100.0% | 1,328,006 | 144,881 | 1,183,125 | 0 |
| 19 | Loan | 28 | 1 | Townsgate Office | 1,382,408 | 525,580 | 856,828 | 12/31/2019 | T-12 | 90.0% | 3,193,384 | 1,054,290 | 2,139,094 | 13,250 |
| 20 | Loan | 11, 29, 30, 40 | 6 | Tharp Portfolio | NAV | NAV | NAV | NAV | NAV | 94.8% | 1,750,127 | 410,670 | 1,339,457 | 27,794 |
| 20.01 | Property | 1 | Jiffy and Dollar | NAV | NAV | NAV | NAV | NAV | 95.0% | 255,873 | 26,615 | 229,258 | 977 | |
| 20.02 | Property | 1 | Main Street Shoppes | NAV | NAV | NAV | NAV | NAV | 93.4% | 495,619 | 119,319 | 376,300 | 14,202 | |
| 20.03 | Property | 1 | Greensburg Retail Center | NAV | NAV | NAV | NAV | NAV | 95.6% | 304,080 | 55,743 | 248,336 | 267 | |
| 20.04 | Property | 1 | CSL Plasma | NAV | NAV | NAV | NAV | NAV | 95.0% | 215,297 | 15,912 | 199,385 | 476 | |
| 20.05 | Property | 1 | FedEx | NAV | NAV | NAV | NAV | NAV | 95.7% | 395,073 | 170,114 | 224,959 | 10,913 | |
| 20.06 | Property | 1 | Greenwood Med Spa | NAV | NAV | NAV | NAV | NAV | 95.0% | 84,185 | 22,967 | 61,219 | 960 | |
| 21 | Loan | 28, 29, 33 | 1 | Santa Barbara Tech Center | 1,948,714 | 576,552 | 1,372,162 | 12/31/2019 | T-12 | 93.1% | 2,146,134 | 606,378 | 1,539,757 | 16,960 |
| 22 | Loan | 33 | 1 | Greenbrier Towers I & II | 3,069,359 | 1,487,668 | 1,581,691 | 12/31/2019 | T-12 | 73.5% | 2,787,100 | 1,215,637 | 1,571,464 | 34,352 |
| 23 | Loan | 19 | 1 | Apple Glen Crossing | 2,535,582 | 730,982 | 1,804,600 | 12/31/2019 | T-12 | 89.3% | 2,370,616 | 684,697 | 1,685,920 | 43,579 |
| 24 | Loan | 13, 20, 28, 33 | 1 | Crossroads Village | NAV | NAV | NAV | NAV | NAV | 85.9% | 2,056,292 | 671,431 | 1,384,861 | -36,963 |
| 25 | Loan | 19 | 1 | 1500 Volta Drive | NAV | NAV | NAV | NAV | NAV | 97.9% | 1,690,037 | 667,061 | 1,022,976 | 10,217 |
| 26 | Loan | 19 | 1 | Courtyard Appleton | 1,663,430 | 1,720,817 | (57,387) | 12/31/2020 | T-12 | 71.4% | 4,515,213 | 2,885,965 | 1,629,248 | 180,609 |
A-1-13
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Third Most Recent EGI ($) | Third Most Recent Expenses ($) | Third Most Recent NOI ($) | Third Most Recent NOI Date | Third Most Recent Description | Underwritten Economic Occupancy (%) | Underwritten EGI ($) | Underwritten Expenses ($) | Underwritten Net Operating Income ($) | Underwritten Replacement / FF&E Reserve ($) |
| 27 | Loan | 29 | 1 | Lee’s Hill II | 2,611,046 | 1,061,852 | 1,549,194 | 12/31/2019 | T-12 | 67.2% | 2,164,634 | 994,540 | 1,170,094 | 51,763 |
| 28 | Loan | 10, 11, 19, 25, 27, 28, 36 | 11 | Glen Forest Office Portfolio | NAV | NAV | NAV | NAV | NAV | 84.4% | 10,770,732 | 4,106,628 | 6,664,104 | 147,555 |
| 28.01 | Property | 1 | Hillcrest | NAV | NAV | NAV | NAV | NAV | 91.4% | 2,069,587 | 647,076 | 1,422,511 | 19,730 | |
| 28.02 | Property | 1 | Arrington | NAV | NAV | NAV | NAV | NAV | 95.2% | 2,126,526 | 666,500 | 1,460,025 | 21,856 | |
| 28.03 | Property | 1 | Highland II | NAV | NAV | NAV | NAV | NAV | 42.4% | 693,973 | 475,721 | 218,252 | 7,119 | |
| 28.04 | Property | 29 | 1 | Meridian | NAV | NAV | NAV | NAV | NAV | 100.0% | 1,359,386 | 451,074 | 908,312 | 10,178 |
| 28.05 | Property | 29 | 1 | Bayberry | NAV | NAV | NAV | NAV | NAV | 95.8% | 993,146 | 360,967 | 632,180 | 18,740 |
| 28.06 | Property | 1 | Highland I | NAV | NAV | NAV | NAV | NAV | 91.7% | 982,108 | 370,321 | 611,788 | 14,666 | |
| 28.07 | Property | 29 | 1 | Capstone | NAV | NAV | NAV | NAV | NAV | 83.6% | 789,376 | 317,789 | 471,588 | 18,473 |
| 28.08 | Property | 1 | Forest Plaza I | NAV | NAV | NAV | NAV | NAV | 80.2% | 631,654 | 271,030 | 360,624 | 10,283 | |
| 28.09 | Property | 28, 29 | 1 | Forest Plaza II | NAV | NAV | NAV | NAV | NAV | 100.0% | 687,967 | 274,201 | 413,767 | 5,140 |
| 28.10 | Property | 1 | Utica | NAV | NAV | NAV | NAV | NAV | 47.3% | 266,520 | 209,775 | 56,744 | 20,300 | |
| 28.11 | Property | 1 | Willard | NAV | NAV | NAV | NAV | NAV | 100.0% | 170,488 | 62,175 | 108,313 | 1,071 | |
| 29 | Loan | 19 | 1 | Arlington Green Executive Plaza | 979,977 | 557,039 | 422,938 | 12/31/2019 | T-12 | 93.8% | 1,463,376 | 549,597 | 913,779 | 20,267 |
| 30 | Loan | 12, 13, 27, 30, 40 | 1 | 1201 Main | NAV | NAV | NAV | NAV | NAV | 93.0% | 947,442 | 218,764 | 728,678 | 2,700 |
| 31 | Loan | 11 | 2 | Walgreens New Castle & Oneonta | NAV | NAV | NAV | NAV | NAV | 97.0% | 838,669 | 25,160 | 813,509 | 4,016 |
| 31.01 | Property | 1 | Walgreens Oneonta | NAV | NAV | NAV | NAV | NAV | 97.0% | 433,092 | 12,993 | 420,099 | 1,824 | |
| 31.02 | Property | 1 | Walgreens New Castle | NAV | NAV | NAV | NAV | NAV | 97.0% | 405,577 | 12,167 | 393,410 | 2,192 | |
| 32 | Loan | 11 | 2 | 138 St. Marks & 155 5th Ave | NAV | NAV | NAV | NAV | NAV | 95.0% | 808,323 | 187,825 | 620,498 | 4,435 |
| 32.01 | Property | 1 | 155 5th Avenue | NAV | NAV | NAV | NAV | NAV | 95.0% | 409,752 | 45,730 | 364,022 | 1,695 | |
| 32.02 | Property | 12 | 1 | 138 Saint Marks Place | NAV | NAV | NAV | NAV | NAV | 95.0% | 398,571 | 142,095 | 256,476 | 2,740 |
| 33 | Loan | 19, 20, 23, 26, 32 | 1 | STK Chicago | 730,013 | 209,214 | 520,799 | 12/31/2018 | T-12 | 95.0% | 980,716 | 300,021 | 680,694 | 1,851 |
| 34 | Loan | 31 | 1 | 905 Medical Park Drive | NAV | NAV | NAV | NAV | NAV | 95.0% | 797,930 | 221,537 | 576,393 | 4,286 |
| 35 | Loan | 39 | 1 | 3097 E Ana St | NAV | NAV | NAV | NAV | NAV | 95.0% | 656,607 | 134,965 | 521,642 | 6,405 |
| 36 | Loan | 1 | VA Dialysis Center - Philadelphia | NAV | NAV | NAV | NAV | NAV | 97.3% | 509,803 | 69,641 | 440,162 | 10,125 | |
| 37 | Loan | 19, 39 | 1 | 65 Triangle Industrial | 444,346 | 122,297 | 322,050 | 12/31/2019 | T-12 | 95.0% | 579,527 | 163,000 | 416,527 | 15,217 |
A-1-14
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Underwritten TI / LC ($) | Underwritten Net Cash Flow ($) | Underwritten NOI DSCR (x) | Underwritten NCF DSCR (x) | Underwritten NOI Debt Yield (%) | Underwritten NCF Debt Yield (%) | Appraised Value ($) | Appraised Value Type | Appraisal Date | Cut-off Date LTV Ratio (%) |
| 4, 10, 16 | 4, 10, 16 | 21 | 21 | 10, 21 | ||||||||||
| 1 | Loan | 9, 10, 20, 24, 26, 28, 29, 32, 33, 34, 35 | 1 | 601 Lexington Avenue | 2,743,708 | 92,110,483 | 4.65 | 4.50 | 13.2% | 12.7% | 1,700,000,000 | As Is | 10/1/2021 | 42.5% |
| 2 | Loan | 10, 14, 24, 28, 29 | 1 | One Wilshire | 471,918 | 36,919,391 | 3.42 | 3.37 | 9.6% | 9.5% | 913,000,000 | As Is | 11/5/2021 | 42.6% |
| 3 | Loan | 9, 10, 11, 12, 25, 26, 28, 29 | 14 | Bedrock Portfolio | 3,353,632 | 54,409,505 | 3.55 | 3.30 | 13.6% | 12.7% | 724,300,000 | As Is | Various | 59.4% |
| 3.01 | Property | 1 | First National Building | 1,030,745 | 14,276,324 | 162,000,000 | As Is | 8/30/2021 | ||||||
| 3.02 | Property | 27 | 1 | The Qube | 698,379 | 8,693,152 | 103,000,000 | As Is | 8/30/2021 | |||||
| 3.03 | Property | 27 | 1 | Chrysler House | 389,974 | 6,142,746 | 83,000,000 | As Is | 8/30/2021 | |||||
| 3.04 | Property | 27 | 1 | 1001 Woodward | 375,085 | 6,887,443 | 80,000,000 | As Is | 8/30/2021 | |||||
| 3.05 | Property | 1 | One Woodward | 482,862 | 5,096,070 | 58,000,000 | As Is | 8/30/2021 | ||||||
| 3.06 | Property | 1 | The Z Garage | 14,705 | 2,078,882 | 53,000,000 | As Is | 9/10/2021 | ||||||
| 3.07 | Property | 1 | Two Detroit Garage | 0 | 2,928,886 | 37,000,000 | As Is | 9/10/2021 | ||||||
| 3.08 | Property | 1 | 1505 & 1515 Woodward | 199,255 | 2,454,589 | 35,000,000 | As Is | 8/30/2021 | ||||||
| 3.09 | Property | 1 | 1001 Brush Street | 21,371 | 1,683,875 | 32,000,000 | As Is | 9/10/2021 | ||||||
| 3.10 | Property | 12 | 1 | The Assembly | 90,307 | 1,334,926 | 23,100,000 | As Is | 8/30/2021 | |||||
| 3.11 | Property | 1 | 419 Fort Street Garage | 0 | 1,584,990 | 21,000,000 | As Is | 9/10/2021 | ||||||
| 3.12 | Property | 12 | 1 | Vinton | 8,260 | 377,823 | 17,500,000 | As Is | 8/30/2021 | |||||
| 3.13 | Property | 1 | 1401 First Street | 0 | 502,080 | 13,500,000 | As Is | 9/10/2021 | ||||||
| 3.14 | Property | 1 | Lane Bryant Building | 42,689 | 367,719 | 6,200,000 | As Is | 8/30/2021 | ||||||
| 4 | Loan | 19, 36 | 1 | Romaine & Orange Square | 61,206 | 5,444,153 | 1.81 | 1.78 | 8.1% | 8.0% | 109,000,000 | As Is | 1/11/2022 | 62.4% |
| 5 | Loan | 26, 28, 29 | 1 | Shoreline Square | 312,915 | 6,196,084 | 3.12 | 2.93 | 11.9% | 11.1% | 87,500,000 | As Is | 12/23/2021 | 63.5% |
| 6 | Loan | 11, 13, 19, 25, 33 | 3 | Millennia Portfolio | 0 | 3,131,152 | 1.34 | 1.24 | 8.5% | 7.8% | 54,200,000 | As Is | Various | 73.8% |
| 6.01 | Property | 1 | Summit Ridge | 0 | 1,457,212 | 26,200,000 | As Is | 12/14/2021 | ||||||
| 6.02 | Property | 1 | Lexington Village | 0 | 967,193 | 16,700,000 | As Is | 12/14/2021 | ||||||
| 6.03 | Property | 1 | Gateway at the Greene | 0 | 706,747 | 11,300,000 | As Is | 11/24/2021 | ||||||
| 7 | Loan | 11, 25, 27, 29 | 25 | InCommercial Net Lease Portfolio #5 | 0 | 3,332,665 | 1.66 | 1.64 | 9.7% | 9.5% | 58,855,000 | As Is | Various | 59.5% |
| 7.01 | Property | 1 | Walgreens, Mount Pleasant, SC | 0 | 489,686 | 8,600,000 | As Is | 2/4/2022 | ||||||
| 7.02 | Property | 1 | Walgreens, Meridian, ID | 0 | 276,291 | 5,100,000 | As Is | 2/6/2022 | ||||||
| 7.03 | Property | 1 | Renal Care, Moncks Corner, SC | 0 | 240,047 | 4,100,000 | As Is | 2/4/2022 | ||||||
| 7.04 | Property | 1 | Tractor Supply Co, Ogdensbg, NY | 0 | 173,194 | 3,300,000 | As Is | 2/10/2022 | ||||||
| 7.05 | Property | 1 | Tractor Supply Co, Lake Ch, LA | 0 | 155,131 | 2,750,000 | As Is | 2/4/2022 | ||||||
| 7.06 | Property | 1 | Tractor Supply Co, Oconto, WI | 0 | 122,019 | 2,330,000 | As Is | 2/7/2022 | ||||||
| 7.07 | Property | 1 | Dollar General, Ghent, WV | 0 | 129,507 | 2,300,000 | As Is | 1/27/2022 | ||||||
| 7.08 | Property | 1 | Tractor Supply Co, Kewaunee, WI | 0 | 119,579 | 2,290,000 | As Is | 2/7/2022 | ||||||
| 7.09 | Property | 1 | Fresenius, Belzoni, MS | 0 | 113,103 | 1,950,000 | As Is | 2/2/2022 | ||||||
| 7.10 | Property | 1 | Dollar General, Lenore, WV | 0 | 106,332 | 1,830,000 | As Is | 2/1/2022 | ||||||
| 7.11 | Property | 1 | Family Dollar, Linden, AL | 0 | 117,624 | 1,800,000 | As Is | 2/2/2022 | ||||||
| 7.12 | Property | 1 | Fresenius, Rayville, LA | 0 | 109,344 | 1,800,000 | As Is | 2/2/2022 | ||||||
| 7.13 | Property | 1 | Dollar General, Burlington, WV | 0 | 103,395 | 1,800,000 | As Is | 2/2/2022 | ||||||
| 7.14 | Property | 1 | Family Dollar, Franklinton, LA | 0 | 108,252 | 1,750,000 | As Is | 2/2/2022 | ||||||
| 7.15 | Property | 1 | Dollar General, Hinton, WV | 0 | 100,321 | 1,730,000 | As Is | 2/1/2022 | ||||||
| 7.16 | Property | 1 | Dollar General, Lerona, WV | 0 | 95,917 | 1,660,000 | As Is | 2/8/2022 | ||||||
| 7.17 | Property | 1 | Dollar General, Rushford, NY | 0 | 94,897 | 1,700,000 | As Is | 2/10/2022 | ||||||
| 7.18 | Property | 1 | Dollar General, Walker, WV | 0 | 94,726 | 1,640,000 | As Is | 2/1/2022 | ||||||
| 7.19 | Property | 1 | Dollar General, Dixie, WV | 0 | 91,680 | 1,600,000 | As Is | 1/27/2022 | ||||||
| 7.20 | Property | 1 | Dollar General, Bay Minette, AL | 0 | 88,736 | 1,600,000 | As Is | 2/2/2022 | ||||||
| 7.21 | Property | 1 | Dollar General, Fruithurst, AL | 0 | 87,943 | 1,525,000 | As Is | 2/2/2022 | ||||||
| 7.22 | Property | 1 | Dollar General, Billingsley, AL | 0 | 80,825 | 1,450,000 | As Is | 2/2/2022 | ||||||
| 7.23 | Property | 1 | Dollar General, Knox City, TX | 0 | 76,724 | 1,450,000 | As Is | 2/8/2022 | ||||||
| 7.24 | Property | 1 | Dollar General, South Dayton, NY | 0 | 76,992 | 1,400,000 | As Is | 2/10/2022 | ||||||
| 7.25 | Property | 1 | Dollar General, Gaylesville, AL | 0 | 80,401 | 1,400,000 | As Is | 2/2/2022 | ||||||
| 8 | Loan | 11, 25, 29, 30, 40 | 1 | Redmond Community Center | 87,883 | 3,151,316 | 2.28 | 2.20 | 9.4% | 9.1% | 56,300,000 | As Is | 1/3/2022 | 61.3% |
| 9 | Loan | 9, 10, 11, 21, 34, 40 | 9 | Shearer’s Industrial Portfolio | 441,202 | 10,595,698 | 2.09 | 1.95 | 8.3% | 7.7% | 219,100,000 | Various | Various | 62.8% |
| 9.01 | Property | 1 | 800 Northwest 4th Street | 76,540 | 1,817,092 | 37,500,000 | As Is | 1/26/2022 | ||||||
| 9.02 | Property | 1 | 4100 Millennium Boulevard Southeast | 73,094 | 1,786,111 | 35,800,000 | As Is | 1/21/2022 | ||||||
| 9.03 | Property | 1 | 3000 East Mount Pleasant Street | 65,955 | 1,565,805 | 32,300,000 | As Is | 1/26/2022 | ||||||
| 9.04 | Property | 1 | 7330 West Sherman Street | 49,952 | 1,206,357 | 28,400,000 | As Is | 1/14/2022 | ||||||
| 9.05 | Property | 12 | 1 | 821 Route 97 | 49,370 | 1,189,608 | 24,200,000 | As If Complete | 1/19/2022 | |||||
| 9.06 | Property | 1 | 3200 Northern Cross Boulevard | 44,967 | 1,096,297 | 22,000,000 | As Is | 1/6/2022 | ||||||
| 9.07 | Property | 1 | 3636 Medallion Avenue | 46,486 | 1,109,104 | 21,800,000 | As Is | 1/24/2022 | ||||||
| 9.08 | Property | 1 | 692 Wabash Avenue North | 18,416 | 434,389 | 9,000,000 | As Is | 1/21/2022 | ||||||
| 9.09 | Property | 1 | 225 Commonwealth Avenue Extension | 16,424 | 390,936 | 8,100,000 | As Is | 1/24/2022 | ||||||
| 10 | Loan | 19, 30 | 1 | Hall Road Crossing | 135,025 | 2,511,060 | 1.60 | 1.50 | 9.3% | 8.7% | 42,125,000 | As Is | 2/1/2022 | 68.2% |
| 11 | Loan | 10, 17, 19, 24, 26, 28, 36, 39 | 1 | Gem Tower | 0 | 3,824,965 | 2.79 | 2.78 | 9.6% | 9.6% | 73,400,000 | As Is | 10/14/2021 | 54.5% |
| 12 | Loan | 11, 19 | 2 | 285 & 355 Riverside Ave | 141,971 | 2,370,763 | 2.25 | 2.10 | 9.0% | 8.5% | 43,500,000 | As Is | 12/7/2021 | 64.4% |
| 12.01 | Property | 29 | 1 | 285 Riverside Ave | 82,917 | 1,425,395 | 26,100,000 | As Is | 12/7/2021 | |||||
| 12.02 | Property | 29 | 1 | 355 Riverside Ave | 59,054 | 945,367 | 17,400,000 | As Is | 12/7/2021 | |||||
| 13 | Loan | 27 | 1 | Bala Woods | 0 | 2,374,288 | 2.27 | 2.21 | 8.9% | 8.6% | 59,200,000 | As Is | 1/26/2022 | 46.5% |
| 14 | Loan | 9, 19, 29, 31 | 1 | Prospector Plaza | 101,415 | 1,871,632 | 1.45 | 1.35 | 8.6% | 8.0% | 34,400,000 | As Is | 11/23/2021 | 68.1% |
| 15 | Loan | 10, 14, 24, 34, 37 | 1 | Novo Nordisk HQ | 0 | 19,172,191 | 3.19 | 3.16 | 9.2% | 9.1% | 330,000,000 | As Is | 9/21/2021 | 63.8% |
| 16 | Loan | 10, 19, 26, 38 | 1 | JW Marriott Desert Springs | 0 | 20,380,927 | 4.02 | 3.14 | 20.4% | 15.9% | 306,000,000 | As Is | 11/17/2021 | 41.8% |
| 17 | Loan | 11, 25 | 2 | 35 Crosby Street and 70 Carmine Street | 1,500 | 1,372,879 | 1.81 | 1.79 | 7.2% | 7.1% | 28,900,000 | As Is | 11/10/2021 | 66.6% |
| 17.01 | Property | 12 | 1 | 35 Crosby Street | 1,500 | 938,733 | 19,700,000 | As Is | 11/10/2021 | |||||
| 17.02 | Property | 1 | 70 Carmine Street | 0 | 434,146 | 9,200,000 | As Is | 11/10/2021 | ||||||
| 18 | Loan | 22 | 1 | 1340 Lafayette | 0 | 1,183,125 | 1.45 | 1.45 | 7.2% | 7.2% | 26,000,000 | As Is | 2/2/2022 | 63.5% |
| 19 | Loan | 28 | 1 | Townsgate Office | 13,334 | 2,112,510 | 3.60 | 3.56 | 14.0% | 13.8% | 27,600,000 | As Is | 12/20/2021 | 55.4% |
| 20 | Loan | 11, 29, 30, 40 | 6 | Tharp Portfolio | 41,069 | 1,270,594 | 1.45 | 1.38 | 9.6% | 9.1% | 21,260,000 | As Is | Various | 65.8% |
| 20.01 | Property | 1 | Jiffy and Dollar | 4,438 | 223,842 | 4,170,000 | As Is | 11/22/2021 | ||||||
| 20.02 | Property | 1 | Main Street Shoppes | 9,977 | 352,122 | 5,000,000 | As Is | 11/22/2021 | ||||||
| 20.03 | Property | 1 | Greensburg Retail Center | 2,736 | 245,334 | 4,130,000 | As Is | 11/22/2021 | ||||||
| 20.04 | Property | 1 | CSL Plasma | 4,132 | 194,776 | 3,780,000 | As Is | 12/9/2021 | ||||||
| 20.05 | Property | 1 | FedEx | 18,032 | 196,014 | 3,300,000 | As Is | 11/22/2021 | ||||||
| 20.06 | Property | 1 | Greenwood Med Spa | 1,754 | 58,506 | 880,000 | As Is | 11/22/2021 | ||||||
| 21 | Loan | 28, 29, 33 | 1 | Santa Barbara Tech Center | 34,798 | 1,487,999 | 3.17 | 3.06 | 11.4% | 11.0% | 23,800,000 | As Is | 1/13/2022 | 56.7% |
| 22 | Loan | 33 | 1 | Greenbrier Towers I & II | 181,342 | 1,355,769 | 1.91 | 1.65 | 11.6% | 10.0% | 21,300,000 | As Is | 1/18/2022 | 63.4% |
| 23 | Loan | 19 | 1 | Apple Glen Crossing | 55,436 | 1,586,905 | 2.17 | 2.05 | 13.0% | 12.2% | 20,000,000 | As Is | 11/10/2021 | 65.0% |
| 24 | Loan | 13, 20, 28, 33 | 1 | Crossroads Village | 69,213 | 1,352,612 | 1.89 | 1.84 | 11.1% | 10.8% | 20,700,000 | As Is | 2/11/2022 | 60.4% |
| 25 | Loan | 19 | 1 | 1500 Volta Drive | 0 | 1,012,759 | 1.98 | 1.96 | 9.7% | 9.6% | 21,300,000 | As Is | 2/2/2022 | 49.3% |
| 26 | Loan | 19 | 1 | Courtyard Appleton | 0 | 1,448,639 | 2.64 | 2.34 | 15.8% | 14.0% | 18,800,000 | As Is | 12/14/2021 | 55.0% |
A-1-15
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Underwritten TI / LC ($) | Underwritten Net Cash Flow ($) | Underwritten NOI DSCR (x) | Underwritten NCF DSCR (x) | Underwritten NOI Debt Yield (%) | Underwritten NCF Debt Yield (%) | Appraised Value ($) | Appraised Value Type | Appraisal Date | Cut-off Date LTV Ratio (%) |
| 27 | Loan | 29 | 1 | Lee’s Hill II | 152,541 | 965,790 | 3.00 | 2.48 | 12.6% | 10.4% | 23,000,000 | As Is | 1/19/2022 | 40.4% |
| 28 | Loan | 10, 11, 19, 25, 27, 28, 36 | 11 | Glen Forest Office Portfolio | 575,608 | 5,940,941 | 3.20 | 2.85 | 11.3% | 10.1% | 95,590,000 | As Is | 11/4/2021 | 61.7% |
| 28.01 | Property | 1 | Hillcrest | 120,397 | 1,282,384 | 18,500,000 | As Is | 11/4/2021 | ||||||
| 28.02 | Property | 1 | Arrington | 123,664 | 1,314,505 | 18,800,000 | As Is | 11/4/2021 | ||||||
| 28.03 | Property | 1 | Highland II | 3,794 | 207,339 | 8,450,000 | As Is | 11/4/2021 | ||||||
| 28.04 | Property | 29 | 1 | Meridian | 82,395 | 815,740 | 11,700,000 | As Is | 11/4/2021 | |||||
| 28.05 | Property | 29 | 1 | Bayberry | 60,793 | 552,646 | 8,600,000 | As Is | 11/4/2021 | |||||
| 28.06 | Property | 1 | Highland I | 56,998 | 540,124 | 7,990,000 | As Is | 11/4/2021 | ||||||
| 28.07 | Property | 29 | 1 | Capstone | 41,776 | 411,338 | 6,940,000 | As Is | 11/4/2021 | |||||
| 28.08 | Property | 1 | Forest Plaza I | 34,310 | 316,031 | 5,300,000 | As Is | 11/4/2021 | ||||||
| 28.09 | Property | 28, 29 | 1 | Forest Plaza II | 44,512 | 364,115 | 5,200,000 | As Is | 11/4/2021 | |||||
| 28.10 | Property | 1 | Utica | 4,868 | 31,576 | 2,800,000 | As Is | 11/4/2021 | ||||||
| 28.11 | Property | 1 | Willard | 2,100 | 105,142 | 1,310,000 | As Is | 11/4/2021 | ||||||
| 29 | Loan | 19 | 1 | Arlington Green Executive Plaza | 67,704 | 825,808 | 1.73 | 1.56 | 10.2% | 9.2% | 14,600,000 | As Is | 1/12/2022 | 61.6% |
| 30 | Loan | 12, 13, 27, 30, 40 | 1 | 1201 Main | 1,980 | 723,998 | 1.84 | 1.83 | 8.1% | 8.1% | 13,800,000 | As Is | 1/10/2022 | 65.0% |
| 31 | Loan | 11 | 2 | Walgreens New Castle & Oneonta | 0 | 809,493 | 2.30 | 2.29 | 9.4% | 9.3% | 16,710,000 | As Is | Various | 52.1% |
| 31.01 | Property | 1 | Walgreens Oneonta | 0 | 418,275 | 8,500,000 | As Is | 2/13/2022 | ||||||
| 31.02 | Property | 1 | Walgreens New Castle | 0 | 391,218 | 8,210,000 | As Is | 1/30/2022 | ||||||
| 32 | Loan | 11 | 2 | 138 St. Marks & 155 5th Ave | 7,487 | 608,576 | 1.64 | 1.61 | 7.3% | 7.1% | 13,300,000 | As Is | 1/2/2022 | 64.3% |
| 32.01 | Property | 1 | 155 5th Avenue | 3,430 | 358,897 | 7,800,000 | As Is | 1/2/2022 | ||||||
| 32.02 | Property | 12 | 1 | 138 Saint Marks Place | 4,057 | 249,679 | 5,500,000 | As Is | 1/2/2022 | |||||
| 33 | Loan | 19, 20, 23, 26, 32 | 1 | STK Chicago | 19,956 | 658,887 | 1.64 | 1.59 | 9.5% | 9.2% | 11,050,000 | As Is | 11/5/2019 | 65.2% |
| 34 | Loan | 31 | 1 | 905 Medical Park Drive | 35,716 | 536,392 | 2.34 | 2.17 | 10.4% | 9.7% | 9,300,000 | As Is | 1/24/2022 | 59.4% |
| 35 | Loan | 39 | 1 | 3097 E Ana St | 18,069 | 497,168 | 1.66 | 1.58 | 9.8% | 9.3% | 17,800,000 | As Is | 1/13/2022 | 30.0% |
| 36 | Loan | 1 | VA Dialysis Center - Philadelphia | 6,572 | 423,465 | 1.95 | 1.88 | 9.3% | 8.9% | 8,200,000 | As Is | 1/28/2022 | 57.9% | |
| 37 | Loan | 19, 39 | 1 | 65 Triangle Industrial | 15,325 | 385,986 | 1.70 | 1.57 | 9.8% | 9.1% | 10,500,000 | As Is | 1/24/2022 | 40.5% |
A-1-16
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | LTV Ratio at Maturity / ARD (%) | Leased Occupancy (%) | Occupancy Date | Single Tenant (Y/N) | Largest Tenant | Largest Tenant SF | Largest Tenant % of NRA | Largest Tenant Lease Expiration Date |
| 10, 21 | 5, 12, 27, 30 | 28, 29 | 28, 29 | 28, 29 | 6, 28, 29 | |||||||
| 1 | Loan | 9, 10, 20, 24, 26, 28, 29, 32, 33, 34, 35 | 1 | 601 Lexington Avenue | 42.5% | 96.3% | 11/1/2021 | No | Kirkland & Ellis | 616,139 | 36.8% | 2/28/2039 |
| 2 | Loan | 10, 14, 24, 28, 29 | 1 | One Wilshire | 42.6% | 87.3% | 11/1/2021 | No | CoreSite | 176,685 | 26.7% | 7/31/2029 |
| 3 | Loan | 9, 10, 11, 12, 25, 26, 28, 29 | 14 | Bedrock Portfolio | 59.4% | 88.7% | ||||||
| 3.01 | Property | 1 | First National Building | 94.9% | 11/10/2021 | No | Amrock, Inc | 424,486 | 53.1% | 1/31/2032 | ||
| 3.02 | Property | 27 | 1 | The Qube | 90.6% | 11/10/2021 | No | Quicken Loans Inc. | 407,050 | 77.9% | 7/31/2028 | |
| 3.03 | Property | 27 | 1 | Chrysler House | 79.9% | 11/10/2021 | No | Quicken Loans Inc. | 183,664 | 53.5% | 8/31/2023 | |
| 3.04 | Property | 27 | 1 | 1001 Woodward | 88.9% | 11/10/2021 | No | Quicken Loans Inc. | 122,475 | 38.4% | 4/30/2024 | |
| 3.05 | Property | 1 | One Woodward | 92.9% | 11/10/2021 | No | Quicken Loans Inc. | 171,622 | 46.4% | 3/31/2032 | ||
| 3.06 | Property | 1 | The Z Garage | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 3.07 | Property | 1 | Two Detroit Garage | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 3.08 | Property | 1 | 1505 & 1515 Woodward | 100.0% | 11/10/2021 | No | LinkedIn Corporation | 74,497 | 52.6% | 7/31/2026 | ||
| 3.09 | Property | 1 | 1001 Brush Street | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 3.10 | Property | 12 | 1 | The Assembly | 75.0% | 9/3/2021 | No | Coyote Logistics | 58,192 | 100.0% | 10/31/2030 | |
| 3.11 | Property | 1 | 419 Fort Street Garage | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 3.12 | Property | 12 | 1 | Vinton | 61.9% | 9/3/2021 | No | Besa Partners LLC | 5,693 | 100.0% | 1/31/2026 | |
| 3.13 | Property | 1 | 1401 First Street | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 3.14 | Property | 1 | Lane Bryant Building | 95.2% | 11/10/2021 | No | Detroit Labs, LLC | 17,284 | 54.5% | 1/31/2026 | ||
| 4 | Loan | 19, 36 | 1 | Romaine & Orange Square | 62.4% | 100.0% | 3/10/2022 | No | Kaiser Foundation Health Plan, Inc. | 71,775 | 58.6% | 9/30/2028 |
| 5 | Loan | 26, 28, 29 | 1 | Shoreline Square | 63.5% | 85.0% | 1/24/2022 | No | GSA US Customs | 123,386 | 29.8% | 8/9/2037 |
| 6 | Loan | 11, 13, 19, 25, 33 | 3 | Millennia Portfolio | 62.0% | 93.3% | ||||||
| 6.01 | Property | 1 | Summit Ridge | 97.5% | 2/9/2022 | NAP | NAP | NAP | NAP | NAP | ||
| 6.02 | Property | 1 | Lexington Village | 86.3% | 2/9/2022 | NAP | NAP | NAP | NAP | NAP | ||
| 6.03 | Property | 1 | Gateway at the Greene | 96.1% | 2/9/2022 | NAP | NAP | NAP | NAP | NAP | ||
| 7 | Loan | 11, 25, 27, 29 | 25 | InCommercial Net Lease Portfolio #5 | 48.9% | 100.0% | ||||||
| 7.01 | Property | 1 | Walgreens, Mount Pleasant, SC | 100.0% | 4/6/2022 | Yes | Walgreen Co. | 13,386 | 100.0% | 10/31/2036 | ||
| 7.02 | Property | 1 | Walgreens, Meridian, ID | 100.0% | 4/6/2022 | Yes | Walgreen Co. | 15,120 | 100.0% | 12/31/2030 | ||
| 7.03 | Property | 1 | Renal Care, Moncks Corner, SC | 100.0% | 4/6/2022 | Yes | Renal Care Options, LLC | 7,490 | 100.0% | 1/31/2036 | ||
| 7.04 | Property | 1 | Tractor Supply Co, Ogdensbg, NY | 100.0% | 4/6/2022 | Yes | Tractor Supply Company | 19,097 | 100.0% | 1/31/2036 | ||
| 7.05 | Property | 1 | Tractor Supply Co, Lake Ch, LA | 100.0% | 4/6/2022 | Yes | Tractor Supply Company | 21,974 | 100.0% | 12/31/2033 | ||
| 7.06 | Property | 1 | Tractor Supply Co, Oconto, WI | 100.0% | 4/6/2022 | Yes | Tractor Supply Company | 34,877 | 100.0% | 9/30/2032 | ||
| 7.07 | Property | 1 | Dollar General, Ghent, WV | 100.0% | 4/6/2022 | Yes | Dollar General | 10,640 | 100.0% | 4/30/2032 | ||
| 7.08 | Property | 1 | Tractor Supply Co, Kewaunee, WI | 100.0% | 4/6/2022 | Yes | Tractor Supply Company | 35,330 | 100.0% | 11/30/2032 | ||
| 7.09 | Property | 1 | Fresenius, Belzoni, MS | 100.0% | 4/6/2022 | Yes | Fresenius Kidney Care | 5,112 | 100.0% | 7/31/2033 | ||
| 7.10 | Property | 1 | Dollar General, Lenore, WV | 100.0% | 4/6/2022 | Yes | Dollar General | 9,100 | 100.0% | 9/30/2031 | ||
| 7.11 | Property | 1 | Family Dollar, Linden, AL | 100.0% | 4/6/2022 | Yes | Family Dollar | 10,500 | 100.0% | 8/31/2031 | ||
| 7.12 | Property | 1 | Fresenius, Rayville, LA | 100.0% | 4/6/2022 | Yes | Fresenius Kidney Care | 5,588 | 100.0% | 5/31/2032 | ||
| 7.13 | Property | 1 | Dollar General, Burlington, WV | 100.0% | 4/6/2022 | Yes | Dollar General | 9,026 | 100.0% | 9/30/2031 | ||
| 7.14 | Property | 1 | Family Dollar, Franklinton, LA | 100.0% | 4/6/2022 | Yes | Family Dollar | 10,500 | 100.0% | 12/31/2031 | ||
| 7.15 | Property | 1 | Dollar General, Hinton, WV | 100.0% | 4/6/2022 | Yes | Dollar General | 9,026 | 100.0% | 10/31/2031 | ||
| 7.16 | Property | 1 | Dollar General, Lerona, WV | 100.0% | 4/6/2022 | Yes | Dollar General | 9,100 | 100.0% | 2/29/2032 | ||
| 7.17 | Property | 1 | Dollar General, Rushford, NY | 100.0% | 4/6/2022 | Yes | Dollar General | 9,002 | 100.0% | 11/30/2032 | ||
| 7.18 | Property | 1 | Dollar General, Walker, WV | 100.0% | 4/6/2022 | Yes | Dollar General | 9,100 | 100.0% | 2/29/2032 | ||
| 7.19 | Property | 1 | Dollar General, Dixie, WV | 100.0% | 4/6/2022 | Yes | Dollar General | 9,100 | 100.0% | 5/31/2032 | ||
| 7.20 | Property | 1 | Dollar General, Bay Minette, AL | 100.0% | 4/6/2022 | Yes | Dollar General | 9,100 | 100.0% | 7/31/2032 | ||
| 7.21 | Property | 1 | Dollar General, Fruithurst, AL | 100.0% | 4/6/2022 | Yes | Dollar General | 9,026 | 100.0% | 10/31/2032 | ||
| 7.22 | Property | 1 | Dollar General, Billingsley, AL | 100.0% | 4/6/2022 | Yes | Dollar General | 9,100 | 100.0% | 12/31/2032 | ||
| 7.23 | Property | 1 | Dollar General, Knox City, TX | 100.0% | 4/6/2022 | Yes | Dollar General | 9,100 | 100.0% | 4/30/2032 | ||
| 7.24 | Property | 1 | Dollar General, South Dayton, NY | 100.0% | 4/6/2022 | Yes | Dollar General | 9,100 | 100.0% | 11/30/2032 | ||
| 7.25 | Property | 1 | Dollar General, Gaylesville, AL | 100.0% | 4/6/2022 | Yes | Dollar General | 9,026 | 100.0% | 11/30/2032 | ||
| 8 | Loan | 11, 25, 29, 30, 40 | 1 | Redmond Community Center | 61.3% | 97.3% | 2/15/2022 | No | H-Mart | 37,954 | 34.5% | 8/1/2037 |
| 9 | Loan | 9, 10, 11, 21, 34, 40 | 9 | Shearer’s Industrial Portfolio | 62.8% | 100.0% | ||||||
| 9.01 | Property | 1 | 800 Northwest 4th Street | 100.0% | 3/1/2022 | Yes | Shearer’s Foods LLC | 515,972 | 100.0% | 2/28/2042 | ||
| 9.02 | Property | 1 | 4100 Millennium Boulevard Southeast | 100.0% | 3/1/2022 | Yes | Shearer’s Foods LLC | 171,390 | 100.0% | 2/28/2042 | ||
| 9.03 | Property | 1 | 3000 East Mount Pleasant Street | 100.0% | 3/1/2022 | Yes | Shearer’s Foods LLC | 444,618 | 100.0% | 2/28/2042 | ||
| 9.04 | Property | 1 | 7330 West Sherman Street | 100.0% | 3/1/2022 | Yes | Shearer’s Foods LLC | 207,222 | 100.0% | 2/28/2042 | ||
| 9.05 | Property | 12 | 1 | 821 Route 97 | 100.0% | 3/1/2022 | Yes | Shearer’s Foods LLC | 221,876 | 100.0% | 2/28/2042 | |
| 9.06 | Property | 1 | 3200 Northern Cross Boulevard | 100.0% | 3/1/2022 | Yes | Shearer’s Foods LLC | 121,253 | 100.0% | 2/28/2042 | ||
| 9.07 | Property | 1 | 3636 Medallion Avenue | 100.0% | 3/1/2022 | Yes | Shearer’s Foods LLC | 278,553 | 100.0% | 2/28/2042 | ||
| 9.08 | Property | 1 | 692 Wabash Avenue North | 100.0% | 3/1/2022 | Yes | Shearer’s Foods LLC | 141,878 | 100.0% | 2/28/2042 | ||
| 9.09 | Property | 1 | 225 Commonwealth Avenue Extension | 100.0% | 3/1/2022 | Yes | Shearer’s Foods LLC | 104,203 | 100.0% | 2/28/2042 | ||
| 10 | Loan | 19, 30 | 1 | Hall Road Crossing | 54.5% | 97.9% | 1/11/2022 | No | Amazon Fresh | 36,415 | 20.1% | 1/31/2035 |
| 11 | Loan | 10, 17, 19, 24, 26, 28, 36, 39 | 1 | Gem Tower | 54.5% | 100.0% | 11/1/2021 | No | City’s Property Development Corp. | 530 | 7.2% | 9/30/2031 |
| 12 | Loan | 11, 19 | 2 | 285 & 355 Riverside Ave | 64.4% | 88.0% | ||||||
| 12.01 | Property | 29 | 1 | 285 Riverside Ave | 85.6% | 11/1/2021 | No | Sterling Investment Partners | 9,939 | 18.0% | 5/31/2025 | |
| 12.02 | Property | 29 | 1 | 355 Riverside Ave | 91.3% | 11/1/2021 | No | Verrill Dana LLP | 14,895 | 37.8% | 11/30/2030 | |
| 13 | Loan | 27 | 1 | Bala Woods | 46.5% | 95.8% | 2/5/2022 | NAP | NAP | NAP | NAP | NAP |
| 14 | Loan | 9, 19, 29, 31 | 1 | Prospector Plaza | 54.8% | 98.3% | 11/1/2021 | No | Target Corporation | 86,414 | 42.6% | 3/31/2035 |
| 15 | Loan | 10, 14, 24, 34, 37 | 1 | Novo Nordisk HQ | 63.8% | 77.0% | 4/6/2022 | Yes | Novo Nordisk | 563,289 | 77.0% | 4/30/2031 |
| 16 | Loan | 10, 19, 26, 38 | 1 | JW Marriott Desert Springs | 41.8% | 36.8% | 12/31/2021 | NAP | NAP | NAP | NAP | NAP |
| 17 | Loan | 11, 25 | 2 | 35 Crosby Street and 70 Carmine Street | 66.6% | 100.0% | ||||||
| 17.01 | Property | 12 | 1 | 35 Crosby Street | 100.0% | 1/19/2022 | No | Bonobos, Inc. | 1,500 | 100.0% | 1/31/2023 | |
| 17.02 | Property | 1 | 70 Carmine Street | 100.0% | 1/19/2022 | NAP | NAP | NAP | NAP | NAP | ||
| 18 | Loan | 22 | 1 | 1340 Lafayette | 63.5% | 100.0% | 4/1/2022 | Yes | Amazon | 55,000 | 100.0% | 6/30/2032 |
| 19 | Loan | 28 | 1 | Townsgate Office | 55.4% | 89.7% | 3/7/2022 | No | Wells Fargo Bank | 35,374 | 40.0% | 12/31/2024 |
| 20 | Loan | 11, 29, 30, 40 | 6 | Tharp Portfolio | 54.5% | 98.2% | ||||||
| 20.01 | Property | 1 | Jiffy and Dollar | 100.0% | 3/1/2022 | No | Dollar Tree | 10,000 | 61.4% | 7/31/2031 | ||
| 20.02 | Property | 1 | Main Street Shoppes | 93.3% | 3/1/2022 | No | Puerto Vallarta | 4,800 | 18.6% | 12/31/2025 | ||
| 20.03 | Property | 1 | Greensburg Retail Center | 100.0% | 3/1/2022 | No | Athletico Physical Therapy | 2,320 | 26.1% | 9/30/2031 | ||
| 20.04 | Property | 1 | CSL Plasma | 100.0% | 3/1/2022 | Yes | CSL Plasma | 11,900 | 100.0% | 6/30/2036 | ||
| 20.05 | Property | 1 | FedEx | 100.0% | 3/1/2022 | Yes | FedEx | 25,983 | 100.0% | 5/31/2025 | ||
| 20.06 | Property | 1 | Greenwood Med Spa | 100.0% | 3/1/2022 | Yes | Down to Earth Wellness Center | 5,050 | 100.0% | 9/30/2026 | ||
| 21 | Loan | 28, 29, 33 | 1 | Santa Barbara Tech Center | 56.7% | 100.0% | 3/2/2022 | No | Mission Support and Test Services LLC | 56,660 | 66.8% | 5/31/2025 |
| 22 | Loan | 33 | 1 | Greenbrier Towers I & II | 59.7% | 73.3% | 1/1/2022 | No | Frontier Technology Inc | 15,756 | 9.2% | 4/30/2023 |
| 23 | Loan | 19 | 1 | Apple Glen Crossing | 58.0% | 92.8% | 12/28/2021 | No | Dick’s Sporting Goods | 45,000 | 30.0% | 1/31/2026 |
| 24 | Loan | 13, 20, 28, 33 | 1 | Crossroads Village | 52.5% | 87.7% | 2/1/2022 | No | PetSmart, Inc. | 20,419 | 23.5% | 6/30/2023 |
| 25 | Loan | 19 | 1 | 1500 Volta Drive | 49.3% | 100.0% | 4/6/2022 | Yes | Stewart and Stevenson LLC | 56,761 | 100.0% | 12/31/2034 |
| 26 | Loan | 19 | 1 | Courtyard Appleton | 44.3% | 63.2% | 1/31/2022 | NAP | NAP | NAP | NAP | NAP |
A-1-17
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | LTV Ratio at Maturity / ARD (%) | Leased Occupancy (%) | Occupancy Date | Single Tenant (Y/N) | Largest Tenant | Largest Tenant SF | Largest Tenant % of NRA | Largest Tenant Lease Expiration Date |
| 27 | Loan | 29 | 1 | Lee’s Hill II | 40.4% | 65.4% | 2/1/2022 | No | Providence Service | 34,931 | 22.9% | 12/31/2027 |
| 28 | Loan | 10, 11, 19, 25, 27, 28, 36 | 11 | Glen Forest Office Portfolio | 61.7% | 84.4% | ||||||
| 28.01 | Property | 1 | Hillcrest | 91.6% | 10/31/2021 | No | The Brink’s Company | 36,814 | 37.9% | 11/30/2026 | ||
| 28.02 | Property | 1 | Arrington | 95.3% | 10/31/2021 | No | Mitchell Wiggins & Co, LLP | 15,611 | 16.7% | 10/6/2022 | ||
| 28.03 | Property | 1 | Highland II | 40.7% | 10/31/2021 | No | Freeman & Morgan Architects, P.C. | 4,685 | 6.9% | 9/30/2026 | ||
| 28.04 | Property | 29 | 1 | Meridian | 100.0% | 10/31/2021 | No | The London Company | 20,609 | 35.5% | 6/30/2032 | |
| 28.05 | Property | 29 | 1 | Bayberry | 95.9% | 10/31/2021 | No | Virginia Estate & Trust Law | 10,840 | 23.5% | 4/30/2029 | |
| 28.06 | Property | 1 | Highland I | 91.9% | 10/31/2021 | No | Regions Bank | 6,970 | 14.9% | 9/30/2023 | ||
| 28.07 | Property | 29 | 1 | Capstone | 83.3% | 10/31/2021 | No | CapTech Ventures, Inc. | 21,358 | 54.1% | 6/30/2025 | |
| 28.08 | Property | 1 | Forest Plaza I | 80.5% | 10/31/2021 | No | World Pediatric Project | 5,680 | 15.7% | 12/31/2023 | ||
| 28.09 | Property | 28, 29 | 1 | Forest Plaza II | 100.0% | 10/31/2021 | No | CCA Financial Services, LLC | 8,952 | 27.9% | 7/31/2025 | |
| 28.10 | Property | 1 | Utica | 47.9% | 10/31/2021 | No | Dynamic Brands, LLC | 10,729 | 36.3% | 5/31/2023 | ||
| 28.11 | Property | 1 | Willard | 100.0% | 4/6/2022 | Yes | CPC DYS Holdings, Inc. | 12,970 | 100.0% | 11/30/2025 | ||
| 29 | Loan | 19 | 1 | Arlington Green Executive Plaza | 49.3% | 93.6% | 12/27/2021 | No | Clarity Clinic Arlington | 14,764 | 23.5% | 6/30/2032 |
| 30 | Loan | 12, 13, 27, 30, 40 | 1 | 1201 Main | 65.0% | 100.0% | 3/8/2022 | NAP | NAP | NAP | NAP | NAP |
| 31 | Loan | 11 | 2 | Walgreens New Castle & Oneonta | 52.1% | 100.0% | ||||||
| 31.01 | Property | 1 | Walgreens Oneonta | 100.0% | 4/6/2022 | Yes | Walgreens | 12,159 | 100.0% | 1/31/2035 | ||
| 31.02 | Property | 1 | Walgreens New Castle | 100.0% | 4/6/2022 | Yes | Walgreens | 14,616 | 100.0% | 12/31/2034 | ||
| 32 | Loan | 11 | 2 | 138 St. Marks & 155 5th Ave | 64.3% | 100.0% | ||||||
| 32.01 | Property | 1 | 155 5th Avenue | 100.0% | 2/8/2022 | No | WUS KYU RAMEN | 1,300 | 17.8% | 4/30/2031 | ||
| 32.02 | Property | 12 | 1 | 138 Saint Marks Place | 100.0% | 2/8/2022 | No | Made in Sud Restaurant Inc | 1,600 | 20.3% | 6/30/2028 | |
| 33 | Loan | 19, 20, 23, 26, 32 | 1 | STK Chicago | 56.4% | 100.0% | 4/6/2022 | Yes | STK | 9,254 | 100.0% | 9/30/2025 |
| 34 | Loan | 31 | 1 | 905 Medical Park Drive | 59.4% | 100.0% | 4/6/2022 | Yes | Cancer Care Specialists | 17,858 | 100.0% | 8/31/2028 |
| 35 | Loan | 39 | 1 | 3097 E Ana St | 24.1% | 100.0% | 4/6/2022 | Yes | International Textile Group, Inc. | 59,302 | 100.0% | 2/28/2035 |
| 36 | Loan | 1 | VA Dialysis Center - Philadelphia | 57.9% | 100.0% | 4/6/2022 | Yes | United States Government (dba VA Dialysis Center) | 8,762 | 100.0% | 8/31/2031 | |
| 37 | Loan | 19, 39 | 1 | 65 Triangle Industrial | 36.8% | 100.0% | 2/1/2022 | No | Texima LLC | 22,980 | 63.0% | 1/31/2027 |
A-1-18
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Second Largest Tenant | Second Largest Tenant SF | Second Largest Tenant % of NRA | Second Largest Tenant Lease Expiration Date | Third Largest Tenant | Third Largest Tenant SF | Third Largest Tenant % of NRA |
| 28, 29 | 28, 29 | 28, 29 | 6, 28, 29 | 28, 29 | 28, 29 | 28, 29 | |||||
| 1 | Loan | 9, 10, 20, 24, 26, 28, 29, 32, 33, 34, 35 | 1 | 601 Lexington Avenue | Citibank | 216,256 | 12.9% | 4/30/2032 | NYU | 195,326 | 11.7% |
| 2 | Loan | 10, 14, 24, 28, 29 | 1 | One Wilshire | Musick Peeler | 106,475 | 16.1% | 10/31/2023 | Verizon Global Networks | 61,881 | 9.4% |
| 3 | Loan | 9, 10, 11, 12, 25, 26, 28, 29 | 14 | Bedrock Portfolio | |||||||
| 3.01 | Property | 1 | First National Building | Honigman Miller Schwartz and Cohn LLP | 150,786 | 18.8% | 11/30/2025 | Board of Trustees of Michigan State University | 46,598 | 5.8% | |
| 3.02 | Property | 27 | 1 | The Qube | JPMorgan Chase, National Association | 32,126 | 6.1% | 5/31/2027 | Rock Security LLC | 17,490 | 3.3% |
| 3.03 | Property | 27 | 1 | Chrysler House | Rocket Homes Real Estate LLC | 29,897 | 8.7% | 8/31/2023 | RSM US LLP | 11,894 | 3.5% |
| 3.04 | Property | 27 | 1 | 1001 Woodward | 1001 Woodward Avenue Tenant LLC (WeWork) | 56,352 | 17.7% | 10/31/2033 | Southeast Michigan Council of Governments | 30,240 | 9.5% |
| 3.05 | Property | 1 | One Woodward | Kitch Drutchas Wagner Valitutti & Sherbrook, P.C. | 56,265 | 15.2% | 5/31/2028 | Fifth Third Bank | 31,204 | 8.4% | |
| 3.06 | Property | 1 | The Z Garage | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 3.07 | Property | 1 | Two Detroit Garage | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 3.08 | Property | 1 | 1505 & 1515 Woodward | H & M Hennes & Mauritz L.P. | 25,322 | 17.9% | 1/31/2027 | International Bancard Corporation | 12,082 | 8.5% | |
| 3.09 | Property | 1 | 1001 Brush Street | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 3.10 | Property | 12 | 1 | The Assembly | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 3.11 | Property | 1 | 419 Fort Street Garage | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 3.12 | Property | 12 | 1 | Vinton | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 3.13 | Property | 1 | 1401 First Street | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 3.14 | Property | 1 | Lane Bryant Building | Detroit Venture Partners | 5,761 | 18.2% | MTM | Lisa Spindler Photography, Inc. | 4,384 | 13.8% | |
| 4 | Loan | 19, 36 | 1 | Romaine & Orange Square | Common Grounds | 17,241 | 14.1% | 6/30/2026 | MTI Film | 14,095 | 11.5% |
| 5 | Loan | 26, 28, 29 | 1 | Shoreline Square | State of CA State Lands Commission | 29,492 | 7.1% | 2/28/2027 | Dassault Systemes Americas Corp. | 20,501 | 5.0% |
| 6 | Loan | 11, 13, 19, 25, 33 | 3 | Millennia Portfolio | |||||||
| 6.01 | Property | 1 | Summit Ridge | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 6.02 | Property | 1 | Lexington Village | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 6.03 | Property | 1 | Gateway at the Greene | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7 | Loan | 11, 25, 27, 29 | 25 | InCommercial Net Lease Portfolio #5 | |||||||
| 7.01 | Property | 1 | Walgreens, Mount Pleasant, SC | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.02 | Property | 1 | Walgreens, Meridian, ID | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.03 | Property | 1 | Renal Care, Moncks Corner, SC | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.04 | Property | 1 | Tractor Supply Co, Ogdensbg, NY | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.05 | Property | 1 | Tractor Supply Co, Lake Ch, LA | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.06 | Property | 1 | Tractor Supply Co, Oconto, WI | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.07 | Property | 1 | Dollar General, Ghent, WV | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.08 | Property | 1 | Tractor Supply Co, Kewaunee, WI | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.09 | Property | 1 | Fresenius, Belzoni, MS | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.10 | Property | 1 | Dollar General, Lenore, WV | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.11 | Property | 1 | Family Dollar, Linden, AL | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.12 | Property | 1 | Fresenius, Rayville, LA | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.13 | Property | 1 | Dollar General, Burlington, WV | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.14 | Property | 1 | Family Dollar, Franklinton, LA | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.15 | Property | 1 | Dollar General, Hinton, WV | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.16 | Property | 1 | Dollar General, Lerona, WV | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.17 | Property | 1 | Dollar General, Rushford, NY | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.18 | Property | 1 | Dollar General, Walker, WV | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.19 | Property | 1 | Dollar General, Dixie, WV | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.20 | Property | 1 | Dollar General, Bay Minette, AL | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.21 | Property | 1 | Dollar General, Fruithurst, AL | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.22 | Property | 1 | Dollar General, Billingsley, AL | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.23 | Property | 1 | Dollar General, Knox City, TX | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.24 | Property | 1 | Dollar General, South Dayton, NY | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.25 | Property | 1 | Dollar General, Gaylesville, AL | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 8 | Loan | 11, 25, 29, 30, 40 | 1 | Redmond Community Center | Overlake Medical Clinics | 17,373 | 15.8% | 4/30/2032 | WA Department of License | 11,267 | 10.2% |
| 9 | Loan | 9, 10, 11, 21, 34, 40 | 9 | Shearer’s Industrial Portfolio | |||||||
| 9.01 | Property | 1 | 800 Northwest 4th Street | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 9.02 | Property | 1 | 4100 Millennium Boulevard Southeast | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 9.03 | Property | 1 | 3000 East Mount Pleasant Street | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 9.04 | Property | 1 | 7330 West Sherman Street | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 9.05 | Property | 12 | 1 | 821 Route 97 | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 9.06 | Property | 1 | 3200 Northern Cross Boulevard | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 9.07 | Property | 1 | 3636 Medallion Avenue | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 9.08 | Property | 1 | 692 Wabash Avenue North | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 9.09 | Property | 1 | 225 Commonwealth Avenue Extension | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 10 | Loan | 19, 30 | 1 | Hall Road Crossing | Bob’s Discount Furniture | 33,000 | 18.2% | 5/31/2031 | Michaels | 20,325 | 11.2% |
| 11 | Loan | 10, 17, 19, 24, 26, 28, 36, 39 | 1 | Gem Tower | E&S Creation LLC | 530 | 7.2% | 7/7/2024 | The Laser Booth Corp. | 485 | 6.6% |
| 12 | Loan | 11, 19 | 2 | 285 & 355 Riverside Ave | |||||||
| 12.01 | Property | 29 | 1 | 285 Riverside Ave | Raymond James & Associates | 9,141 | 16.5% | 5/31/2025 | Great Rock Capital Partners | 8,737 | 15.8% |
| 12.02 | Property | 29 | 1 | 355 Riverside Ave | Coldwell Banker | 7,817 | 19.9% | 6/30/2029 | Bluff Point Associates | 5,384 | 13.7% |
| 13 | Loan | 27 | 1 | Bala Woods | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 14 | Loan | 9, 19, 29, 31 | 1 | Prospector Plaza | Save Mart Supermarkets | 48,435 | 23.9% | 1/29/2032 | Ross Dress for Less, Inc. | 25,000 | 12.3% |
| 15 | Loan | 10, 14, 24, 34, 37 | 1 | Novo Nordisk HQ | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 16 | Loan | 10, 19, 26, 38 | 1 | JW Marriott Desert Springs | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 17 | Loan | 11, 25 | 2 | 35 Crosby Street and 70 Carmine Street | |||||||
| 17.01 | Property | 12 | 1 | 35 Crosby Street | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 17.02 | Property | 1 | 70 Carmine Street | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 18 | Loan | 22 | 1 | 1340 Lafayette | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 19 | Loan | 28 | 1 | Townsgate Office | Majestic Workspaces | 13,765 | 15.6% | 3/31/2026 | LTC Properties | 9,953 | 11.3% |
| 20 | Loan | 11, 29, 30, 40 | 6 | Tharp Portfolio | |||||||
| 20.01 | Property | 1 | Jiffy and Dollar | JiffyLube | 6,288 | 38.6% | 2/28/2042 | NAP | NAP | NAP | |
| 20.02 | Property | 1 | Main Street Shoppes | Northwest Bank | 3,600 | 13.9% | 7/31/2025 | AppleTree Staffing | 3,600 | 13.9% | |
| 20.03 | Property | 1 | Greensburg Retail Center | Starbucks Coffee | 2,248 | 25.3% | 2/28/2031 | Jordan’s Fish-N-Chicken | 1,800 | 20.3% | |
| 20.04 | Property | 1 | CSL Plasma | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 20.05 | Property | 1 | FedEx | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 20.06 | Property | 1 | Greenwood Med Spa | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 21 | Loan | 28, 29, 33 | 1 | Santa Barbara Tech Center | CenCal | 22,392 | 26.4% | 6/30/2026 | Gold Crest Sublease | 5,746 | 6.8% |
| 22 | Loan | 33 | 1 | Greenbrier Towers I & II | Gryphon Technologies, L.C. | 13,910 | 8.1% | 5/31/2023 | T-Solutions, Inc. | 11,613 | 6.8% |
| 23 | Loan | 19 | 1 | Apple Glen Crossing | Best Buy | 29,650 | 19.7% | 1/31/2027 | PetSmart | 19,235 | 12.8% |
| 24 | Loan | 13, 20, 28, 33 | 1 | Crossroads Village | Old Navy, LLC | 17,179 | 19.8% | 6/30/2023 | Lane Bryant Brands | 6,600 | 7.6% |
| 25 | Loan | 19 | 1 | 1500 Volta Drive | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 26 | Loan | 19 | 1 | Courtyard Appleton | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
A-1-19
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Second Largest Tenant | Second Largest Tenant SF | Second Largest Tenant % of NRA | Second Largest Tenant Lease Expiration Date | Third Largest Tenant | Third Largest Tenant SF | Third Largest Tenant % of NRA |
| 27 | Loan | 29 | 1 | Lee’s Hill II | TEMACC LLC (Eastern Virginia Career College) | 24,923 | 16.4% | 3/31/2024 | USA - US Army Corp | 19,227 | 12.6% |
| 28 | Loan | 10, 11, 19, 25, 27, 28, 36 | 11 | Glen Forest Office Portfolio | |||||||
| 28.01 | Property | 1 | Hillcrest | SyCom Technologies, LLC | 18,393 | 18.9% | 7/31/2024 | Blue Ridge Bank | 18,032 | 18.6% | |
| 28.02 | Property | 1 | Arrington | Lowe, Brockenbrough & Co. | 13,213 | 14.1% | 1/31/2024 | Meadows Urquhart Acree & Cook | 11,050 | 11.8% | |
| 28.03 | Property | 1 | Highland II | Norman, Obeck & Foy Dentistry Partnership | 3,780 | 5.6% | 12/31/2023 | Robert W. DeConti, M.D., Inc. | 3,395 | 5.0% | |
| 28.04 | Property | 29 | 1 | Meridian | Sedgwick Claims Management Service, Inc. | 12,698 | 21.9% | 6/30/2024 | Wells Fargo Advisors, LLC | 9,160 | 15.8% |
| 28.05 | Property | 29 | 1 | Bayberry | GrayCo, Inc. | 9,672 | 21.0% | 10/31/2026 | Breeden Construction, LLC | 8,032 | 17.4% |
| 28.06 | Property | 1 | Highland I | Ivy Ventures, LLC | 5,310 | 11.4% | 3/31/2023 | Equitable Financial Life Insurance Company | 5,150 | 11.0% | |
| 28.07 | Property | 29 | 1 | Capstone | The Colony Group, LLC | 5,077 | 12.9% | 7/31/2026 | 1752 Financial, Inc./Chesapeake Group, LLC | 2,843 | 7.2% |
| 28.08 | Property | 1 | Forest Plaza I | Kanawha Capital Management, LLC | 4,989 | 13.7% | 5/31/2027 | Thomas Innes, Inc. T/A Re/Max Commonwealth | 4,959 | 13.7% | |
| 28.09 | Property | 28, 29 | 1 | Forest Plaza II | Carrell Blanton Ferris & Associates, PLC | 8,907 | 27.7% | 4/30/2026 | Nationwide Mutual Insurance Company | 4,270 | 13.3% |
| 28.10 | Property | 1 | Utica | Braley & Thompson, Inc. | 3,440 | 11.6% | 11/30/2022 | NAP | NAP | NAP | |
| 28.11 | Property | 1 | Willard | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 29 | Loan | 19 | 1 | Arlington Green Executive Plaza | Place for Children w Autism | 8,600 | 13.7% | 12/31/2027 | Northwest United Urology | 8,375 | 13.3% |
| 30 | Loan | 12, 13, 27, 30, 40 | 1 | 1201 Main | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 31 | Loan | 11 | 2 | Walgreens New Castle & Oneonta | |||||||
| 31.01 | Property | 1 | Walgreens Oneonta | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 31.02 | Property | 1 | Walgreens New Castle | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 32 | Loan | 11 | 2 | 138 St. Marks & 155 5th Ave | |||||||
| 32.01 | Property | 1 | 155 5th Avenue | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 32.02 | Property | 12 | 1 | 138 Saint Marks Place | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 33 | Loan | 19, 20, 23, 26, 32 | 1 | STK Chicago | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 34 | Loan | 31 | 1 | 905 Medical Park Drive | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 35 | Loan | 39 | 1 | 3097 E Ana St | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 36 | Loan | 1 | VA Dialysis Center - Philadelphia | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 37 | Loan | 19, 39 | 1 | 65 Triangle Industrial | Owner Occupied | 13,488 | 37.0% | 1/31/2037 | NAP | NAP | NAP |
A-1-20
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Third Largest Tenant Lease Expiration Date | Fourth Largest Tenant | Fourth Largest Tenant SF | Fourth Largest Tenant % of NRA | Fourth Largest Tenant Lease Expiration Date | Fifth Largest Tenant | Fifth Largest Tenant SF |
| 6, 28, 29 | 28, 29 | 28, 29 | 28, 29 | 6, 28, 29 | 28, 29 | 28, 29 | |||||
| 1 | Loan | 9, 10, 20, 24, 26, 28, 29, 32, 33, 34, 35 | 1 | 601 Lexington Avenue | 10/31/2049 | Citadel | 144,193 | 8.6% | 8/31/2022 | Freshfields | 139,243 |
| 2 | Loan | 10, 14, 24, 28, 29 | 1 | One Wilshire | 7/31/2029 | CenturyLink Communications, LLC | 56,251 | 8.5% | 12/31/2025 | Crowell, Weedon | 43,301 |
| 3 | Loan | 9, 10, 11, 12, 25, 26, 28, 29 | 14 | Bedrock Portfolio | |||||||
| 3.01 | Property | 1 | First National Building | 9/30/2031 | Bedrock Management Services LLC | 39,087 | 4.9% | 1/31/2032 | Mediabrands Worldwide, INC | 23,132 | |
| 3.02 | Property | 27 | 1 | The Qube | 6/30/2022 | Compass Group USA, Inc. | 9,930 | 1.9% | 9/30/2023 | JP Morgan Chase Bank NA | 5,544 |
| 3.03 | Property | 27 | 1 | Chrysler House | 5/31/2023 | Metro-West Appraisal Co., LLC | 7,848 | 2.3% | 1/31/2027 | Office of the Chapter 13 Trustee Detroit | 7,591 |
| 3.04 | Property | 27 | 1 | 1001 Woodward | 7/31/2025 | GalaxE Solutions, Inc. | 27,000 | 8.5% | MTM | CVS Pharmacy | 9,814 |
| 3.05 | Property | 1 | One Woodward | 10/31/2025 | Detroit Regional Chamber | 27,218 | 7.4% | 6/30/2023 | RFS Business Funding LLC | 15,602 | |
| 3.06 | Property | 1 | The Z Garage | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 3.07 | Property | 1 | Two Detroit Garage | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 3.08 | Property | 1 | 1505 & 1515 Woodward | 2/28/2023 | Mastronardi-USA Distribution Services, INC | 6,052 | 4.3% | 8/31/2025 | Quikly, Inc. | 6,035 | |
| 3.09 | Property | 1 | 1001 Brush Street | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 3.10 | Property | 12 | 1 | The Assembly | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 3.11 | Property | 1 | 419 Fort Street Garage | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 3.12 | Property | 12 | 1 | Vinton | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 3.13 | Property | 1 | 1401 First Street | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 3.14 | Property | 1 | Lane Bryant Building | MTM | Twitter, Inc. | 2,734 | 8.6% | 1/31/2024 | NAP | NAP | |
| 4 | Loan | 19, 36 | 1 | Romaine & Orange Square | 1/31/2030 | Funny or Die / Posterized | 6,553 | 5.4% | 12/31/2023 | Stella Adler Studio of Acting | 6,370 |
| 5 | Loan | 26, 28, 29 | 1 | Shoreline Square | 12/31/2022 | Department of Defense | 20,250 | 4.9% | 9/5/2024 | Tesoro Refining & Marketing Company LLC | 17,883 |
| 6 | Loan | 11, 13, 19, 25, 33 | 3 | Millennia Portfolio | |||||||
| 6.01 | Property | 1 | Summit Ridge | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 6.02 | Property | 1 | Lexington Village | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 6.03 | Property | 1 | Gateway at the Greene | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7 | Loan | 11, 25, 27, 29 | 25 | InCommercial Net Lease Portfolio #5 | |||||||
| 7.01 | Property | 1 | Walgreens, Mount Pleasant, SC | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.02 | Property | 1 | Walgreens, Meridian, ID | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.03 | Property | 1 | Renal Care, Moncks Corner, SC | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.04 | Property | 1 | Tractor Supply Co, Ogdensbg, NY | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.05 | Property | 1 | Tractor Supply Co, Lake Ch, LA | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.06 | Property | 1 | Tractor Supply Co, Oconto, WI | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.07 | Property | 1 | Dollar General, Ghent, WV | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.08 | Property | 1 | Tractor Supply Co, Kewaunee, WI | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.09 | Property | 1 | Fresenius, Belzoni, MS | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.10 | Property | 1 | Dollar General, Lenore, WV | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.11 | Property | 1 | Family Dollar, Linden, AL | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.12 | Property | 1 | Fresenius, Rayville, LA | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.13 | Property | 1 | Dollar General, Burlington, WV | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.14 | Property | 1 | Family Dollar, Franklinton, LA | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.15 | Property | 1 | Dollar General, Hinton, WV | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.16 | Property | 1 | Dollar General, Lerona, WV | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.17 | Property | 1 | Dollar General, Rushford, NY | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.18 | Property | 1 | Dollar General, Walker, WV | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.19 | Property | 1 | Dollar General, Dixie, WV | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.20 | Property | 1 | Dollar General, Bay Minette, AL | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.21 | Property | 1 | Dollar General, Fruithurst, AL | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.22 | Property | 1 | Dollar General, Billingsley, AL | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.23 | Property | 1 | Dollar General, Knox City, TX | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.24 | Property | 1 | Dollar General, South Dayton, NY | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 7.25 | Property | 1 | Dollar General, Gaylesville, AL | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 8 | Loan | 11, 25, 29, 30, 40 | 1 | Redmond Community Center | 11/30/2029 | PetCo | 10,479 | 9.5% | 1/31/2024 | Mayuri Grocer | 9,195 |
| 9 | Loan | 9, 10, 11, 21, 34, 40 | 9 | Shearer’s Industrial Portfolio | |||||||
| 9.01 | Property | 1 | 800 Northwest 4th Street | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 9.02 | Property | 1 | 4100 Millennium Boulevard Southeast | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 9.03 | Property | 1 | 3000 East Mount Pleasant Street | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 9.04 | Property | 1 | 7330 West Sherman Street | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 9.05 | Property | 12 | 1 | 821 Route 97 | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 9.06 | Property | 1 | 3200 Northern Cross Boulevard | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 9.07 | Property | 1 | 3636 Medallion Avenue | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 9.08 | Property | 1 | 692 Wabash Avenue North | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 9.09 | Property | 1 | 225 Commonwealth Avenue Extension | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 10 | Loan | 19, 30 | 1 | Hall Road Crossing | 2/29/2024 | Old Navy | 17,330 | 9.6% | 1/31/2023 | Foot Locker | 12,047 |
| 11 | Loan | 10, 17, 19, 24, 26, 28, 36, 39 | 1 | Gem Tower | 7/31/2024 | Diamond Scene of New York Corp. | 445 | 6.1% | 9/22/2024 | Pristine Jewelers NY Inc. | 415 |
| 12 | Loan | 11, 19 | 2 | 285 & 355 Riverside Ave | |||||||
| 12.01 | Property | 29 | 1 | 285 Riverside Ave | 3/31/2027 | Balance Point Capital Advisors | 8,324 | 15.1% | 2/28/2023 | RBC Capital Markets, LLC | 7,205 |
| 12.02 | Property | 29 | 1 | 355 Riverside Ave | 9/30/2027 | IXM Trading, LLC | 5,082 | 12.9% | 3/31/2026 | BHMS Investments LP | 2,750 |
| 13 | Loan | 27 | 1 | Bala Woods | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 14 | Loan | 9, 19, 29, 31 | 1 | Prospector Plaza | 1/31/2025 | O’Reilly Auto Enterprises | 8,800 | 4.3% | 1/31/2025 | First Light Fitness Corporation | 4,267 |
| 15 | Loan | 10, 14, 24, 34, 37 | 1 | Novo Nordisk HQ | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 16 | Loan | 10, 19, 26, 38 | 1 | JW Marriott Desert Springs | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 17 | Loan | 11, 25 | 2 | 35 Crosby Street and 70 Carmine Street | |||||||
| 17.01 | Property | 12 | 1 | 35 Crosby Street | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 17.02 | Property | 1 | 70 Carmine Street | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 18 | Loan | 22 | 1 | 1340 Lafayette | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 19 | Loan | 28 | 1 | Townsgate Office | 2/29/2024 | InPayments Inc | 8,375 | 9.5% | 11/30/2025 | Lebow & Co | 3,347 |
| 20 | Loan | 11, 29, 30, 40 | 6 | Tharp Portfolio | |||||||
| 20.01 | Property | 1 | Jiffy and Dollar | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 20.02 | Property | 1 | Main Street Shoppes | 4/30/2022 | Jashan Indian Cuisine | 3,078 | 11.9% | 4/30/2028 | Main St. Grille | 3,021 | |
| 20.03 | Property | 1 | Greensburg Retail Center | 4/30/2031 | AT&T | 1,360 | 15.3% | 1/31/2027 | Sports Clips | 1,158 | |
| 20.04 | Property | 1 | CSL Plasma | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 20.05 | Property | 1 | FedEx | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 20.06 | Property | 1 | Greenwood Med Spa | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 21 | Loan | 28, 29, 33 | 1 | Santa Barbara Tech Center | 3/31/2025 | NAP | NAP | NAP | NAP | NAP | NAP |
| 22 | Loan | 33 | 1 | Greenbrier Towers I & II | 5/31/2025 | System Technology Forum, Ltd. | 10,498 | 6.1% | 12/31/2022 | Tidewater Communications, LLC | 10,490 |
| 23 | Loan | 19 | 1 | Apple Glen Crossing | 1/31/2026 | Shoe Carnival | 10,000 | 6.7% | 1/31/2029 | Ulta | 9,298 |
| 24 | Loan | 13, 20, 28, 33 | 1 | Crossroads Village | 1/31/2024 | BG Retail, Inc. | 6,062 | 7.0% | 6/30/2026 | Bath & Body Works, LLC | 4,528 |
| 25 | Loan | 19 | 1 | 1500 Volta Drive | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 26 | Loan | 19 | 1 | Courtyard Appleton | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
A-1-21
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Third Largest Tenant Lease Expiration Date | Fourth Largest Tenant | Fourth Largest Tenant SF | Fourth Largest Tenant % of NRA | Fourth Largest Tenant Lease Expiration Date | Fifth Largest Tenant | Fifth Largest Tenant SF |
| 27 | Loan | 29 | 1 | Lee’s Hill II | 4/30/2023 | Bay Consortium Work | 8,828 | 5.8% | 10/31/2031 | Bankser Insurance | 5,731 |
| 28 | Loan | 10, 11, 19, 25, 27, 28, 36 | 11 | Glen Forest Office Portfolio | |||||||
| 28.01 | Property | 1 | Hillcrest | 7/31/2022 | Mason McDuffie Mortgage Corporation | 3,339 | 3.4% | 11/30/2022 | Pruitt Associates, LLC | 3,331 | |
| 28.02 | Property | 1 | Arrington | 11/30/2027 | Meyer Goergen P.C. | 9,423 | 10.1% | 1/31/2023 | Bryan Brothers, Inc. | 8,151 | |
| 28.03 | Property | 1 | Highland II | 9/30/2027 | Laboratory Corporation of America Holdings | 2,847 | 4.2% | 8/31/2026 | Grace Hospital of Virginia, LLC | 2,601 | |
| 28.04 | Property | 29 | 1 | Meridian | MTM | Old Republic National Insurance Company | 6,353 | 10.9% | 1/31/2025 | Pfizer Inc. | 3,451 |
| 28.05 | Property | 29 | 1 | Bayberry | 2/28/2025 | Kane, Jeffries & Carollo | 6,487 | 14.1% | 8/31/2030 | The Richmond Group USA, Inc. | 6,341 |
| 28.06 | Property | 1 | Highland I | 7/31/2023 | Herbert & Satterwhite, P.C. | 4,637 | 9.9% | 11/30/2026 | Cordell LLC | 4,236 | |
| 28.07 | Property | 29 | 1 | Capstone | 7/31/2023 | Kismet New Vision Holdings, LLC | 2,700 | 6.8% | 12/31/2026 | Blanchard Group, LLC | 911 |
| 28.08 | Property | 1 | Forest Plaza I | 5/31/2022 | Burns & McDonnell Engineering | 4,435 | 12.2% | 9/30/2022 | Baronian & Associates, P.C. | 1,913 | |
| 28.09 | Property | 28, 29 | 1 | Forest Plaza II | 8/31/2024 | Pineno Levin & Ford Asset Management | 2,700 | 8.4% | 6/30/2022 | Richmond Hearing Doctors, PLLC | 2,688 |
| 28.10 | Property | 1 | Utica | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 28.11 | Property | 1 | Willard | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 29 | Loan | 19 | 1 | Arlington Green Executive Plaza | 6/30/2027 | Suburban Endocrinology & Diabetes Center | 7,606 | 12.1% | 11/30/2028 | Northwest Community Health | 5,344 |
| 30 | Loan | 12, 13, 27, 30, 40 | 1 | 1201 Main | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 31 | Loan | 11 | 2 | Walgreens New Castle & Oneonta | |||||||
| 31.01 | Property | 1 | Walgreens Oneonta | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 31.02 | Property | 1 | Walgreens New Castle | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 32 | Loan | 11 | 2 | 138 St. Marks & 155 5th Ave | |||||||
| 32.01 | Property | 1 | 155 5th Avenue | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 32.02 | Property | 12 | 1 | 138 Saint Marks Place | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 33 | Loan | 19, 20, 23, 26, 32 | 1 | STK Chicago | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 34 | Loan | 31 | 1 | 905 Medical Park Drive | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 35 | Loan | 39 | 1 | 3097 E Ana St | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 36 | Loan | 1 | VA Dialysis Center - Philadelphia | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 37 | Loan | 19, 39 | 1 | 65 Triangle Industrial | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
A-1-22
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Fifth Largest Tenant % of NRA | Fifth Largest Tenant Lease Expiration Date | Environmental Phase I Report Date | Environmental Phase II Report Date | Engineering Report Date | Seismic Report Date | PML or SEL (%) | Flood Zone | Ownership Interest |
| 28, 29 | 6, 28, 29 | ||||||||||||
| 1 | Loan | 9, 10, 20, 24, 26, 28, 29, 32, 33, 34, 35 | 1 | 601 Lexington Avenue | 8.3% | 6/30/2026 | 11/12/2021 | NAP | 11/12/2021 | NAP | NAP | No | Fee / Leasehold |
| 2 | Loan | 10, 14, 24, 28, 29 | 1 | One Wilshire | 6.5% | 12/31/2024 | 12/3/2021 | NAP | 12/3/2021 | 12/3/2021 | 18% | Yes - AE | Fee |
| 3 | Loan | 9, 10, 11, 12, 25, 26, 28, 29 | 14 | Bedrock Portfolio | |||||||||
| 3.01 | Property | 1 | First National Building | 2.9% | 11/30/2024 | 9/28/2021 | NAP | 9/28/2021 | NAP | NAP | No | Fee | |
| 3.02 | Property | 27 | 1 | The Qube | 1.1% | 12/31/2026 | 9/29/2021 | NAP | 9/28/2021 | NAP | NAP | No | Fee |
| 3.03 | Property | 27 | 1 | Chrysler House | 2.2% | 8/31/2024 | 9/28/2021 | NAP | 9/28/2021 | NAP | NAP | No | Fee |
| 3.04 | Property | 27 | 1 | 1001 Woodward | 3.1% | 3/31/2026 | 9/28/2021 | NAP | 9/28/2021 | NAP | NAP | No | Fee |
| 3.05 | Property | 1 | One Woodward | 4.2% | 6/30/2022 | 9/28/2021 | NAP | 9/28/2021 | NAP | NAP | No | Leasehold | |
| 3.06 | Property | 1 | The Z Garage | NAP | NAP | 9/29/2021 | NAP | 9/28/2021 | NAP | NAP | No | Fee | |
| 3.07 | Property | 1 | Two Detroit Garage | NAP | NAP | 9/29/2021 | NAP | 9/28/2021 | NAP | NAP | No | Fee | |
| 3.08 | Property | 1 | 1505 & 1515 Woodward | 4.3% | MTM | 9/28/2021 | NAP | 9/28/2021 | NAP | NAP | No | Fee | |
| 3.09 | Property | 1 | 1001 Brush Street | NAP | NAP | 9/28/2021 | NAP | 9/28/2021 | NAP | NAP | No | Fee | |
| 3.10 | Property | 12 | 1 | The Assembly | NAP | NAP | 9/28/2021 | NAP | 9/28/2021 | NAP | NAP | No | Fee |
| 3.11 | Property | 1 | 419 Fort Street Garage | NAP | NAP | 10/3/2021 | NAP | 9/28/2021 | NAP | NAP | No | Fee | |
| 3.12 | Property | 12 | 1 | Vinton | NAP | NAP | 10/4/2021 | NAP | 9/28/2021 | NAP | NAP | No | Fee |
| 3.13 | Property | 1 | 1401 First Street | NAP | NAP | 9/28/2021 | NAP | 9/28/2021 | NAP | NAP | No | Fee | |
| 3.14 | Property | 1 | Lane Bryant Building | NAP | NAP | 10/3/2021 | NAP | 9/28/2021 | NAP | NAP | No | Fee | |
| 4 | Loan | 19, 36 | 1 | Romaine & Orange Square | 5.2% | 7/31/2030 | 1/7/2022 | NAP | 1/7/2022 | 1/7/2022 | 14% | No | Fee |
| 5 | Loan | 26, 28, 29 | 1 | Shoreline Square | 4.3% | 10/31/2025 | 1/19/2022 | NAP | 1/19/2022 | 1/19/2022 | 16% | No | Leasehold |
| 6 | Loan | 11, 13, 19, 25, 33 | 3 | Millennia Portfolio | |||||||||
| 6.01 | Property | 1 | Summit Ridge | NAP | NAP | 12/17/2021 | NAP | 12/16/2021 | NAP | NAP | No | Fee | |
| 6.02 | Property | 1 | Lexington Village | NAP | NAP | 12/17/2021 | NAP | 12/17/2021 | NAP | NAP | No | Fee | |
| 6.03 | Property | 1 | Gateway at the Greene | NAP | NAP | 12/17/2021 | NAP | 12/17/2021 | NAP | NAP | No | Fee | |
| 7 | Loan | 11, 25, 27, 29 | 25 | InCommercial Net Lease Portfolio #5 | |||||||||
| 7.01 | Property | 1 | Walgreens, Mount Pleasant, SC | NAP | NAP | 12/13/2021 | NAP | 12/13/2021 | NAP | NAP | No | Fee | |
| 7.02 | Property | 1 | Walgreens, Meridian, ID | NAP | NAP | 12/15/2021 | NAP | 12/15/2021 | NAP | NAP | No | Fee | |
| 7.03 | Property | 1 | Renal Care, Moncks Corner, SC | NAP | NAP | 12/11/2021 | NAP | 12/13/2021 | NAP | NAP | No | Fee | |
| 7.04 | Property | 1 | Tractor Supply Co, Ogdensbg, NY | NAP | NAP | 12/10/2021 | NAP | 12/13/2021 | NAP | NAP | No | Fee | |
| 7.05 | Property | 1 | Tractor Supply Co, Lake Ch, LA | NAP | NAP | 12/13/2021 | NAP | 12/14/2021 | NAP | NAP | No | Fee | |
| 7.06 | Property | 1 | Tractor Supply Co, Oconto, WI | NAP | NAP | 2/21/2022 | NAP | 2/22/2022 | NAP | NAP | No | Fee | |
| 7.07 | Property | 1 | Dollar General, Ghent, WV | NAP | NAP | 1/17/2022 | NAP | 1/20/2022 | NAP | NAP | No | Fee | |
| 7.08 | Property | 1 | Tractor Supply Co, Kewaunee, WI | NAP | NAP | 2/20/2022 | NAP | 2/22/2022 | NAP | NAP | No | Fee | |
| 7.09 | Property | 1 | Fresenius, Belzoni, MS | NAP | NAP | 2/22/2022 | NAP | 2/22/2022 | NAP | NAP | No | Fee | |
| 7.10 | Property | 1 | Dollar General, Lenore, WV | NAP | NAP | 1/20/2022 | NAP | 1/20/2022 | NAP | NAP | No | Fee | |
| 7.11 | Property | 1 | Family Dollar, Linden, AL | NAP | NAP | 9/20/2021 | NAP | 9/20/2021 | NAP | NAP | No | Fee | |
| 7.12 | Property | 1 | Fresenius, Rayville, LA | NAP | NAP | 9/20/2021 | NAP | 9/20/2021 | NAP | NAP | No | Fee | |
| 7.13 | Property | 1 | Dollar General, Burlington, WV | NAP | NAP | 1/17/2022 | NAP | 1/20/2022 | NAP | NAP | No | Fee | |
| 7.14 | Property | 1 | Family Dollar, Franklinton, LA | NAP | NAP | 10/4/2021 | NAP | 10/4/2021 | NAP | NAP | No | Fee | |
| 7.15 | Property | 1 | Dollar General, Hinton, WV | NAP | NAP | 1/19/2022 | NAP | 1/20/2022 | NAP | NAP | No | Fee | |
| 7.16 | Property | 1 | Dollar General, Lerona, WV | NAP | NAP | 1/18/2022 | NAP | 1/20/2022 | NAP | NAP | No | Fee | |
| 7.17 | Property | 1 | Dollar General, Rushford, NY | NAP | NAP | 1/14/2022 | NAP | 1/20/2022 | NAP | NAP | No | Fee | |
| 7.18 | Property | 1 | Dollar General, Walker, WV | NAP | NAP | 1/18/2022 | NAP | 1/20/2022 | NAP | NAP | No | Fee | |
| 7.19 | Property | 1 | Dollar General, Dixie, WV | NAP | NAP | 1/19/2022 | NAP | 1/20/2022 | NAP | NAP | Yes - A | Fee | |
| 7.20 | Property | 1 | Dollar General, Bay Minette, AL | NAP | NAP | 1/11/2022 | NAP | 1/20/2022 | NAP | NAP | No | Fee | |
| 7.21 | Property | 1 | Dollar General, Fruithurst, AL | NAP | NAP | 1/20/2022 | NAP | 1/20/2022 | NAP | NAP | No | Fee | |
| 7.22 | Property | 1 | Dollar General, Billingsley, AL | NAP | NAP | 1/10/2022 | NAP | 1/20/2022 | NAP | NAP | No | Fee | |
| 7.23 | Property | 1 | Dollar General, Knox City, TX | NAP | NAP | 1/13/2022 | NAP | 1/20/2022 | NAP | NAP | No | Fee | |
| 7.24 | Property | 1 | Dollar General, South Dayton, NY | NAP | NAP | 1/14/2022 | NAP | 1/20/2022 | NAP | NAP | No | Fee | |
| 7.25 | Property | 1 | Dollar General, Gaylesville, AL | NAP | NAP | 1/4/2022 | NAP | 1/20/2022 | NAP | NAP | No | Fee | |
| 8 | Loan | 11, 25, 29, 30, 40 | 1 | Redmond Community Center | 8.4% | 7/31/2031 | 11/30/2021, 1/7/2022 | NAP | 1/7/2022, 1/13/2022 | 12/20/2021, 1/10/2022 | 11%, 9% | Yes - AE | Fee |
| 9 | Loan | 9, 10, 11, 21, 34, 40 | 9 | Shearer’s Industrial Portfolio | |||||||||
| 9.01 | Property | 1 | 800 Northwest 4th Street | NAP | NAP | 11/4/2021 | NAP | 2/10/2022 | NAP | NAP | No | Fee | |
| 9.02 | Property | 1 | 4100 Millennium Boulevard Southeast | NAP | NAP | 10/22/2021 | NAP | 2/10/2022 | NAP | NAP | No | Fee | |
| 9.03 | Property | 1 | 3000 East Mount Pleasant Street | NAP | NAP | 11/10/2021 | NAP | 2/10/2022 | NAP | NAP | No | Fee | |
| 9.04 | Property | 1 | 7330 West Sherman Street | NAP | NAP | 11/8/2021 | NAP | 2/10/2022 | NAP | NAP | No | Fee | |
| 9.05 | Property | 12 | 1 | 821 Route 97 | NAP | NAP | 11/3/2021 | NAP | 2/10/2022 | NAP | NAP | No | Fee |
| 9.06 | Property | 1 | 3200 Northern Cross Boulevard | NAP | NAP | 10/21/2021 | NAP | 2/10/2022 | NAP | NAP | No | Fee | |
| 9.07 | Property | 1 | 3636 Medallion Avenue | NAP | NAP | 11/3/2021 | NAP | 2/10/2022 | NAP | NAP | No | Fee | |
| 9.08 | Property | 1 | 692 Wabash Avenue North | NAP | NAP | 11/2/2021 | NAP | 2/10/2022 | NAP | NAP | No | Fee | |
| 9.09 | Property | 1 | 225 Commonwealth Avenue Extension | NAP | NAP | 11/11/2021 | NAP | 2/10/2022 | NAP | NAP | Yes - AE | Fee | |
| 10 | Loan | 19, 30 | 1 | Hall Road Crossing | 6.7% | 11/30/2031 | 12/20/2021 | NAP | 12/20/2021 | NAP | NAP | No | Fee |
| 11 | Loan | 10, 17, 19, 24, 26, 28, 36, 39 | 1 | Gem Tower | 5.6% | 7/7/2024 | 10/21/2021 | NAP | 10/25/2021 | NAP | NAP | No | Fee |
| 12 | Loan | 11, 19 | 2 | 285 & 355 Riverside Ave | |||||||||
| 12.01 | Property | 29 | 1 | 285 Riverside Ave | 13.0% | 5/31/2032 | 12/3/2021 | NAP | 12/2/2021 | NAP | NAP | Yes - AE | Fee |
| 12.02 | Property | 29 | 1 | 355 Riverside Ave | 7.0% | 4/30/2026 | 12/3/2021 | NAP | 12/2/2021 | NAP | NAP | Yes - AE | Fee |
| 13 | Loan | 27 | 1 | Bala Woods | NAP | NAP | 1/18/2022 | NAP | 1/28/2022 | NAP | NAP | No | Fee |
| 14 | Loan | 9, 19, 29, 31 | 1 | Prospector Plaza | 2.1% | 12/31/2031 | 11/24/2021 | NAP | 11/24/2021 | 11/24/2021 | 4% | No | Fee |
| 15 | Loan | 10, 14, 24, 34, 37 | 1 | Novo Nordisk HQ | NAP | NAP | 9/20/2021 | NAP | 9/20/2021 | NAP | NAP | No | Fee |
| 16 | Loan | 10, 19, 26, 38 | 1 | JW Marriott Desert Springs | NAP | NAP | 12/10/2021 | NAP | 12/6/2021 | 12/6/2021 | 16% | No | Fee / Leasehold |
| 17 | Loan | 11, 25 | 2 | 35 Crosby Street and 70 Carmine Street | |||||||||
| 17.01 | Property | 12 | 1 | 35 Crosby Street | NAP | NAP | 12/10/2021 | NAP | 12/9/2021 | NAP | NAP | No | Fee |
| 17.02 | Property | 1 | 70 Carmine Street | NAP | NAP | 12/10/2021 | NAP | 12/9/2021 | NAP | NAP | No | Fee | |
| 18 | Loan | 22 | 1 | 1340 Lafayette | NAP | NAP | 2/8/2022 | NAP | 2/8/2022 | NAP | NAP | No | Fee |
| 19 | Loan | 28 | 1 | Townsgate Office | 3.8% | 7/31/2025 | 2/8/2022 | NAP | 12/2/2021 | 11/24/2021 | 14% | No | Fee |
| 20 | Loan | 11, 29, 30, 40 | 6 | Tharp Portfolio | |||||||||
| 20.01 | Property | 1 | Jiffy and Dollar | NAP | NAP | 12/16/2021 | NAP | 12/10/2021 | NAP | NAP | No | Fee | |
| 20.02 | Property | 1 | Main Street Shoppes | 11.7% | 9/30/2024 | 12/17/2021 | NAP | 12/10/2021 | NAP | NAP | No | Fee | |
| 20.03 | Property | 1 | Greensburg Retail Center | 13.0% | 6/30/2029 | 12/16/2021 | NAP | 12/10/2021 | NAP | NAP | No | Fee | |
| 20.04 | Property | 1 | CSL Plasma | NAP | NAP | 12/16/2021 | NAP | 12/16/2021 | NAP | NAP | No | Fee | |
| 20.05 | Property | 1 | FedEx | NAP | NAP | 12/10/2021 | NAP | 12/10/2021 | NAP | NAP | No | Fee | |
| 20.06 | Property | 1 | Greenwood Med Spa | NAP | NAP | 12/16/2021 | NAP | 12/10/2021 | NAP | NAP | No | Fee | |
| 21 | Loan | 28, 29, 33 | 1 | Santa Barbara Tech Center | NAP | NAP | 1/20/2022 | NAP | 1/20/2022 | 1/20/2022 | 15% | No | Fee |
| 22 | Loan | 33 | 1 | Greenbrier Towers I & II | 6.1% | 10/31/2024 | 12/8/2021 | NAP | 1/3/2022 | NAP | NAP | No | Fee |
| 23 | Loan | 19 | 1 | Apple Glen Crossing | 6.2% | 2/28/2032 | 11/19/2021 | NAP | 11/19/2021 | NAP | NAP | No | Fee |
| 24 | Loan | 13, 20, 28, 33 | 1 | Crossroads Village | 5.2% | 1/31/2029 | 2/16/2022 | NAP | 2/16/2022 | NAP | NAP | No | Fee |
| 25 | Loan | 19 | 1 | 1500 Volta Drive | NAP | NAP | 2/8/2022 | NAP | 2/8/2022 | NAP | NAP | No | Fee |
| 26 | Loan | 19 | 1 | Courtyard Appleton | NAP | NAP | 1/5/2022 | NAP | 1/4/2022 | NAP | NAP | No | Fee |
A-1-23
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Fifth Largest Tenant % of NRA | Fifth Largest Tenant Lease Expiration Date | Environmental Phase I Report Date | Environmental Phase II Report Date | Engineering Report Date | Seismic Report Date | PML or SEL (%) | Flood Zone | Ownership Interest |
| 27 | Loan | 29 | 1 | Lee’s Hill II | 3.8% | 6/30/2024 | 1/19/2022 | NAP | 1/19/2022 | NAP | NAP | No | Fee |
| 28 | Loan | 10, 11, 19, 25, 27, 28, 36 | 11 | Glen Forest Office Portfolio | |||||||||
| 28.01 | Property | 1 | Hillcrest | 3.4% | 10/31/2022 | 11/29/2021 | NAP | 11/29/2021 | NAP | NAP | No | Fee | |
| 28.02 | Property | 1 | Arrington | 8.7% | 1/31/2024 | 11/29/2021 | NAP | 11/29/2021 | NAP | NAP | No | Fee | |
| 28.03 | Property | 1 | Highland II | 3.8% | 6/30/2022 | 11/29/2021 | NAP | 11/29/2021 | NAP | NAP | No | Fee | |
| 28.04 | Property | 29 | 1 | Meridian | 5.9% | 6/30/2025 | 11/29/2021 | NAP | 11/29/2021 | NAP | NAP | No | Fee |
| 28.05 | Property | 29 | 1 | Bayberry | 13.8% | MTM | 11/29/2021 | NAP | 11/29/2021 | NAP | NAP | No | Fee |
| 28.06 | Property | 1 | Highland I | 9.1% | 6/30/2023 | 11/29/2021 | NAP | 11/29/2021 | NAP | NAP | No | Fee | |
| 28.07 | Property | 29 | 1 | Capstone | 2.3% | 8/31/2024 | 11/29/2021 | NAP | 11/29/2021 | NAP | NAP | No | Fee |
| 28.08 | Property | 1 | Forest Plaza I | 5.3% | 6/30/2023 | 11/29/2021 | NAP | 11/29/2021 | NAP | NAP | No | Fee | |
| 28.09 | Property | 28, 29 | 1 | Forest Plaza II | 8.4% | 11/30/2027 | 11/29/2021 | NAP | 11/29/2021 | NAP | NAP | No | Fee |
| 28.10 | Property | 1 | Utica | NAP | NAP | 11/29/2021 | NAP | 11/29/2021 | NAP | NAP | No | Fee | |
| 28.11 | Property | 1 | Willard | NAP | NAP | 11/29/2021 | NAP | 11/29/2021 | NAP | NAP | No | Fee | |
| 29 | Loan | 19 | 1 | Arlington Green Executive Plaza | 8.5% | 12/15/2023 | 1/17/2022 | NAP | 1/17/2022 | NAP | NAP | No | Fee |
| 30 | Loan | 12, 13, 27, 30, 40 | 1 | 1201 Main | NAP | NAP | 1/31/2022 | NAP | 1/31/2022 | NAP | NAP | No | Fee |
| 31 | Loan | 11 | 2 | Walgreens New Castle & Oneonta | |||||||||
| 31.01 | Property | 1 | Walgreens Oneonta | NAP | NAP | 2/22/2022 | NAP | 2/22/2022 | NAP | NAP | No | Fee | |
| 31.02 | Property | 1 | Walgreens New Castle | NAP | NAP | 2/22/2022 | NAP | 2/22/2022 | NAP | NAP | No | Fee | |
| 32 | Loan | 11 | 2 | 138 St. Marks & 155 5th Ave | |||||||||
| 32.01 | Property | 1 | 155 5th Avenue | NAP | NAP | 2/16/2022 | NAP | 2/16/2022 | NAP | NAP | No | Fee | |
| 32.02 | Property | 12 | 1 | 138 Saint Marks Place | NAP | NAP | 2/16/2022 | NAP | 2/16/2022 | NAP | NAP | No | Fee |
| 33 | Loan | 19, 20, 23, 26, 32 | 1 | STK Chicago | NAP | NAP | 12/26/2019 | NAP | 12/26/2019 | NAP | NAP | No | Fee |
| 34 | Loan | 31 | 1 | 905 Medical Park Drive | NAP | NAP | 1/26/2022 | NAP | 2/1/2022 | NAP | NAP | No | Fee |
| 35 | Loan | 39 | 1 | 3097 E Ana St | NAP | NAP | 1/28/2022 | NAP | 1/26/2022 | 2/8/2022 | 18% | No | Fee |
| 36 | Loan | 1 | VA Dialysis Center - Philadelphia | NAP | NAP | 1/31/2022 | NAP | 1/26/2022 | NAP | NAP | No | Fee | |
| 37 | Loan | 19, 39 | 1 | 65 Triangle Industrial | NAP | NAP | 2/2/2022 | NAP | 1/31/2022 | NAP | NAP | Yes - AE | Fee |
A-1-24
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Ground Lease Expiration Date | Ground Lease Extension Terms | Annual Ground Lease Payment as of the Cut-off Date ($) | Annual Ground Rent Increases (Y/N) | Upfront RE Tax Reserve ($) | Monthly RE Tax Reserve ($) | Upfront Insurance Reserve ($) | Monthly Insurance Reserve ($) | Upfront Replacement / PIP Reserve ($) |
| 26 | 26 | 26 | 26 | ||||||||||
| 1 | Loan | 9, 10, 20, 24, 26, 28, 29, 32, 33, 34, 35 | 1 | 601 Lexington Avenue | 4/30/2036 | None | 901,254 | Yes | 0 | Springing | 0 | Springing | 0 |
| 2 | Loan | 10, 14, 24, 28, 29 | 1 | One Wilshire | NAP | NAP | NAP | NAP | 0 | Springing | 0 | Springing | 0 |
| 3 | Loan | 9, 10, 11, 12, 25, 26, 28, 29 | 14 | Bedrock Portfolio | 1,696,002 | 424,000 | 0 | Springing | 62,336 | ||||
| 3.01 | Property | 1 | First National Building | NAP | NAP | NAP | NAP | ||||||
| 3.02 | Property | 27 | 1 | The Qube | NAP | NAP | NAP | NAP | |||||
| 3.03 | Property | 27 | 1 | Chrysler House | NAP | NAP | NAP | NAP | |||||
| 3.04 | Property | 27 | 1 | 1001 Woodward | NAP | NAP | NAP | NAP | |||||
| 3.05 | Property | 1 | One Woodward | 4/30/2040 | 5, 25-year extension options | 43,775 | No | ||||||
| 3.06 | Property | 1 | The Z Garage | NAP | NAP | NAP | NAP | ||||||
| 3.07 | Property | 1 | Two Detroit Garage | NAP | NAP | NAP | NAP | ||||||
| 3.08 | Property | 1 | 1505 & 1515 Woodward | NAP | NAP | NAP | NAP | ||||||
| 3.09 | Property | 1 | 1001 Brush Street | NAP | NAP | NAP | NAP | ||||||
| 3.10 | Property | 12 | 1 | The Assembly | NAP | NAP | NAP | NAP | |||||
| 3.11 | Property | 1 | 419 Fort Street Garage | NAP | NAP | NAP | NAP | ||||||
| 3.12 | Property | 12 | 1 | Vinton | NAP | NAP | NAP | NAP | |||||
| 3.13 | Property | 1 | 1401 First Street | NAP | NAP | NAP | NAP | ||||||
| 3.14 | Property | 1 | Lane Bryant Building | NAP | NAP | NAP | NAP | ||||||
| 4 | Loan | 19, 36 | 1 | Romaine & Orange Square | NAP | NAP | NAP | NAP | 99,759 | 33,253 | 0 | Springing | 0 |
| 5 | Loan | 26, 28, 29 | 1 | Shoreline Square | 3/31/2113 | None | 2,985,131 | Yes | 253,034 | 126,517 | 50,600 | 25,300 | 3,000,000 |
| 6 | Loan | 11, 13, 19, 25, 33 | 3 | Millennia Portfolio | 102,174 | 34,058 | 350,988 | 38,999 | 0 | ||||
| 6.01 | Property | 1 | Summit Ridge | NAP | NAP | NAP | NAP | ||||||
| 6.02 | Property | 1 | Lexington Village | NAP | NAP | NAP | NAP | ||||||
| 6.03 | Property | 1 | Gateway at the Greene | NAP | NAP | NAP | NAP | ||||||
| 7 | Loan | 11, 25, 27, 29 | 25 | InCommercial Net Lease Portfolio #5 | 49,723 | 16,574 | 28,293 | 2,176 | 308,654 | ||||
| 7.01 | Property | 1 | Walgreens, Mount Pleasant, SC | NAP | NAP | NAP | NAP | ||||||
| 7.02 | Property | 1 | Walgreens, Meridian, ID | NAP | NAP | NAP | NAP | ||||||
| 7.03 | Property | 1 | Renal Care, Moncks Corner, SC | NAP | NAP | NAP | NAP | ||||||
| 7.04 | Property | 1 | Tractor Supply Co, Ogdensbg, NY | NAP | NAP | NAP | NAP | ||||||
| 7.05 | Property | 1 | Tractor Supply Co, Lake Ch, LA | NAP | NAP | NAP | NAP | ||||||
| 7.06 | Property | 1 | Tractor Supply Co, Oconto, WI | NAP | NAP | NAP | NAP | ||||||
| 7.07 | Property | 1 | Dollar General, Ghent, WV | NAP | NAP | NAP | NAP | ||||||
| 7.08 | Property | 1 | Tractor Supply Co, Kewaunee, WI | NAP | NAP | NAP | NAP | ||||||
| 7.09 | Property | 1 | Fresenius, Belzoni, MS | NAP | NAP | NAP | NAP | ||||||
| 7.10 | Property | 1 | Dollar General, Lenore, WV | NAP | NAP | NAP | NAP | ||||||
| 7.11 | Property | 1 | Family Dollar, Linden, AL | NAP | NAP | NAP | NAP | ||||||
| 7.12 | Property | 1 | Fresenius, Rayville, LA | NAP | NAP | NAP | NAP | ||||||
| 7.13 | Property | 1 | Dollar General, Burlington, WV | NAP | NAP | NAP | NAP | ||||||
| 7.14 | Property | 1 | Family Dollar, Franklinton, LA | NAP | NAP | NAP | NAP | ||||||
| 7.15 | Property | 1 | Dollar General, Hinton, WV | NAP | NAP | NAP | NAP | ||||||
| 7.16 | Property | 1 | Dollar General, Lerona, WV | NAP | NAP | NAP | NAP | ||||||
| 7.17 | Property | 1 | Dollar General, Rushford, NY | NAP | NAP | NAP | NAP | ||||||
| 7.18 | Property | 1 | Dollar General, Walker, WV | NAP | NAP | NAP | NAP | ||||||
| 7.19 | Property | 1 | Dollar General, Dixie, WV | NAP | NAP | NAP | NAP | ||||||
| 7.20 | Property | 1 | Dollar General, Bay Minette, AL | NAP | NAP | NAP | NAP | ||||||
| 7.21 | Property | 1 | Dollar General, Fruithurst, AL | NAP | NAP | NAP | NAP | ||||||
| 7.22 | Property | 1 | Dollar General, Billingsley, AL | NAP | NAP | NAP | NAP | ||||||
| 7.23 | Property | 1 | Dollar General, Knox City, TX | NAP | NAP | NAP | NAP | ||||||
| 7.24 | Property | 1 | Dollar General, South Dayton, NY | NAP | NAP | NAP | NAP | ||||||
| 7.25 | Property | 1 | Dollar General, Gaylesville, AL | NAP | NAP | NAP | NAP | ||||||
| 8 | Loan | 11, 25, 29, 30, 40 | 1 | Redmond Community Center | NAP | NAP | NAP | NAP | 0 | 38,829 | 0 | Springing | 374,315 |
| 9 | Loan | 9, 10, 11, 21, 34, 40 | 9 | Shearer’s Industrial Portfolio | 0 | Springing | 0 | Springing | 0 | ||||
| 9.01 | Property | 1 | 800 Northwest 4th Street | NAP | NAP | NAP | NAP | ||||||
| 9.02 | Property | 1 | 4100 Millennium Boulevard Southeast | NAP | NAP | NAP | NAP | ||||||
| 9.03 | Property | 1 | 3000 East Mount Pleasant Street | NAP | NAP | NAP | NAP | ||||||
| 9.04 | Property | 1 | 7330 West Sherman Street | NAP | NAP | NAP | NAP | ||||||
| 9.05 | Property | 12 | 1 | 821 Route 97 | NAP | NAP | NAP | NAP | |||||
| 9.06 | Property | 1 | 3200 Northern Cross Boulevard | NAP | NAP | NAP | NAP | ||||||
| 9.07 | Property | 1 | 3636 Medallion Avenue | NAP | NAP | NAP | NAP | ||||||
| 9.08 | Property | 1 | 692 Wabash Avenue North | NAP | NAP | NAP | NAP | ||||||
| 9.09 | Property | 1 | 225 Commonwealth Avenue Extension | NAP | NAP | NAP | NAP | ||||||
| 10 | Loan | 19, 30 | 1 | Hall Road Crossing | NAP | NAP | NAP | NAP | 90,580 | 22,645 | 0 | Springing | 0 |
| 11 | Loan | 10, 17, 19, 24, 26, 28, 36, 39 | 1 | Gem Tower | NAP | NAP | NAP | NAP | 0 | Springing | 0 | Springing | 0 |
| 12 | Loan | 11, 19 | 2 | 285 & 355 Riverside Ave | 30,785 | 30,785 | 0 | Springing | 0 | ||||
| 12.01 | Property | 29 | 1 | 285 Riverside Ave | NAP | NAP | NAP | NAP | |||||
| 12.02 | Property | 29 | 1 | 355 Riverside Ave | NAP | NAP | NAP | NAP | |||||
| 13 | Loan | 27 | 1 | Bala Woods | NAP | NAP | NAP | NAP | 159,396 | 53,132 | 73,391 | 18,348 | 0 |
| 14 | Loan | 9, 19, 29, 31 | 1 | Prospector Plaza | NAP | NAP | NAP | NAP | 38,732 | 6,455 | 40,704 | 4,523 | 0 |
| 15 | Loan | 10, 14, 24, 34, 37 | 1 | Novo Nordisk HQ | NAP | NAP | NAP | NAP | 525,310 | 525,310 | 90,983 | 22,746 | 0 |
| 16 | Loan | 10, 19, 26, 38 | 1 | JW Marriott Desert Springs | 12/31/2031 | 3, 10-year extension options | 100,000 | No | 0 | Springing | 0 | Springing | 0 |
| 17 | Loan | 11, 25 | 2 | 35 Crosby Street and 70 Carmine Street | 57,913 | 19,304 | 18,078 | 1,808 | 0 | ||||
| 17.01 | Property | 12 | 1 | 35 Crosby Street | NAP | NAP | NAP | NAP | |||||
| 17.02 | Property | 1 | 70 Carmine Street | NAP | NAP | NAP | NAP | ||||||
| 18 | Loan | 22 | 1 | 1340 Lafayette | NAP | NAP | NAP | NAP | 10,367 | 10,367 | 0 | Springing | 458 |
| 19 | Loan | 28 | 1 | Townsgate Office | NAP | NAP | NAP | NAP | 17,501 | 17,501 | 6,205 | 3,103 | 565,000 |
| 20 | Loan | 11, 29, 30, 40 | 6 | Tharp Portfolio | 78,600 | 12,274 | 4,963 | 2,481 | 0 | ||||
| 20.01 | Property | 1 | Jiffy and Dollar | NAP | NAP | NAP | NAP | ||||||
| 20.02 | Property | 1 | Main Street Shoppes | NAP | NAP | NAP | NAP | ||||||
| 20.03 | Property | 1 | Greensburg Retail Center | NAP | NAP | NAP | NAP | ||||||
| 20.04 | Property | 1 | CSL Plasma | NAP | NAP | NAP | NAP | ||||||
| 20.05 | Property | 1 | FedEx | NAP | NAP | NAP | NAP | ||||||
| 20.06 | Property | 1 | Greenwood Med Spa | NAP | NAP | NAP | NAP | ||||||
| 21 | Loan | 28, 29, 33 | 1 | Santa Barbara Tech Center | NAP | NAP | NAP | NAP | 0 | 18,425 | 0 | Springing | 0 |
| 22 | Loan | 33 | 1 | Greenbrier Towers I & II | NAP | NAP | NAP | NAP | 21,362 | 21,362 | 0 | Springing | 152,000 |
| 23 | Loan | 19 | 1 | Apple Glen Crossing | NAP | NAP | NAP | NAP | 164,376 | 25,913 | 0 | Springing | 0 |
| 24 | Loan | 13, 20, 28, 33 | 1 | Crossroads Village | NAP | NAP | NAP | NAP | 84,067 | 28,022 | 0 | Springing | 1,086 |
| 25 | Loan | 19 | 1 | 1500 Volta Drive | NAP | NAP | NAP | NAP | 0 | 24,191 | 0 | 19,743 | 0 |
| 26 | Loan | 19 | 1 | Courtyard Appleton | NAP | NAP | NAP | NAP | 20,807 | 20,807 | 29,325 | 3,666 | 0 |
A-1-25
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Ground Lease Expiration Date | Ground Lease Extension Terms | Annual Ground Lease Payment as of the Cut-off Date ($) | Annual Ground Rent Increases (Y/N) | Upfront RE Tax Reserve ($) | Monthly RE Tax Reserve ($) | Upfront Insurance Reserve ($) | Monthly Insurance Reserve ($) | Upfront Replacement / PIP Reserve ($) |
| 27 | Loan | 29 | 1 | Lee’s Hill II | NAP | NAP | NAP | NAP | 74,802 | 12,467 | 0 | Springing | 630,140 |
| 28 | Loan | 10, 11, 19, 25, 27, 28, 36 | 11 | Glen Forest Office Portfolio | 62,266 | 62,266 | 22,796 | 11,398 | 0 | ||||
| 28.01 | Property | 1 | Hillcrest | NAP | NAP | NAP | NAP | ||||||
| 28.02 | Property | 1 | Arrington | NAP | NAP | NAP | NAP | ||||||
| 28.03 | Property | 1 | Highland II | NAP | NAP | NAP | NAP | ||||||
| 28.04 | Property | 29 | 1 | Meridian | NAP | NAP | NAP | NAP | |||||
| 28.05 | Property | 29 | 1 | Bayberry | NAP | NAP | NAP | NAP | |||||
| 28.06 | Property | 1 | Highland I | NAP | NAP | NAP | NAP | ||||||
| 28.07 | Property | 29 | 1 | Capstone | NAP | NAP | NAP | NAP | |||||
| 28.08 | Property | 1 | Forest Plaza I | NAP | NAP | NAP | NAP | ||||||
| 28.09 | Property | 28, 29 | 1 | Forest Plaza II | NAP | NAP | NAP | NAP | |||||
| 28.10 | Property | 1 | Utica | NAP | NAP | NAP | NAP | ||||||
| 28.11 | Property | 1 | Willard | NAP | NAP | NAP | NAP | ||||||
| 29 | Loan | 19 | 1 | Arlington Green Executive Plaza | NAP | NAP | NAP | NAP | 66,301 | 33,150 | 3,150 | 1,575 | 0 |
| 30 | Loan | 12, 13, 27, 30, 40 | 1 | 1201 Main | NAP | NAP | NAP | NAP | 0 | 2,083 | 15,791 | 1,755 | 0 |
| 31 | Loan | 11 | 2 | Walgreens New Castle & Oneonta | 0 | Springing | 0 | Springing | 0 | ||||
| 31.01 | Property | 1 | Walgreens Oneonta | NAP | NAP | NAP | NAP | ||||||
| 31.02 | Property | 1 | Walgreens New Castle | NAP | NAP | NAP | NAP | ||||||
| 32 | Loan | 11 | 2 | 138 St. Marks & 155 5th Ave | 38,505 | 9,626 | 6,006 | 1,201 | 0 | ||||
| 32.01 | Property | 1 | 155 5th Avenue | NAP | NAP | NAP | NAP | ||||||
| 32.02 | Property | 12 | 1 | 138 Saint Marks Place | NAP | NAP | NAP | NAP | |||||
| 33 | Loan | 19, 20, 23, 26, 32 | 1 | STK Chicago | NAP | NAP | NAP | NAP | 24,390 | 17,421 | 0 | Springing | 0 |
| 34 | Loan | 31 | 1 | 905 Medical Park Drive | NAP | NAP | NAP | NAP | 0 | Springing | 2,600 | 1,300 | 0 |
| 35 | Loan | 39 | 1 | 3097 E Ana St | NAP | NAP | NAP | NAP | 4,479 | 4,479 | 21,637 | 2,404 | 0 |
| 36 | Loan | 1 | VA Dialysis Center - Philadelphia | NAP | NAP | NAP | NAP | 311 | 311 | 0 | Springing | 0 | |
| 37 | Loan | 19, 39 | 1 | 65 Triangle Industrial | NAP | NAP | NAP | NAP | 6,370 | 6,370 | 1,580 | 1,580 | 0 |
A-1-26
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Monthly Replacement / FF&E Reserve ($) | Replacement Reserve Caps ($) | Upfront TI/LC Reserve ($) | Monthly TI/LC Reserve ($) | TI/LC Caps ($) | Upfront Debt Service Reserve ($) | Monthly Debt Service Reserve ($) | Debt Service Reserve Cap ($) | Upfront Deferred Maintenance Reserve ($) |
| 1 | Loan | 9, 10, 20, 24, 26, 28, 29, 32, 33, 34, 35 | 1 | 601 Lexington Avenue | Springing | 837,829 | 0 | Springing | 10,053,948 | 0 | 0 | 0 | 0 |
| 2 | Loan | 10, 14, 24, 28, 29 | 1 | One Wilshire | Springing | 0 | 0 | Springing | 0 | 0 | 0 | 0 | 0 |
| 3 | Loan | 9, 10, 11, 12, 25, 26, 28, 29 | 14 | Bedrock Portfolio | 62,336 | 1,469,568 | 280,690 | 280,690 | 5,000,000 | 0 | 0 | 0 | 241,558 |
| 3.01 | Property | 1 | First National Building | ||||||||||
| 3.02 | Property | 27 | 1 | The Qube | |||||||||
| 3.03 | Property | 27 | 1 | Chrysler House | |||||||||
| 3.04 | Property | 27 | 1 | 1001 Woodward | |||||||||
| 3.05 | Property | 1 | One Woodward | ||||||||||
| 3.06 | Property | 1 | The Z Garage | ||||||||||
| 3.07 | Property | 1 | Two Detroit Garage | ||||||||||
| 3.08 | Property | 1 | 1505 & 1515 Woodward | ||||||||||
| 3.09 | Property | 1 | 1001 Brush Street | ||||||||||
| 3.10 | Property | 12 | 1 | The Assembly | |||||||||
| 3.11 | Property | 1 | 419 Fort Street Garage | ||||||||||
| 3.12 | Property | 12 | 1 | Vinton | |||||||||
| 3.13 | Property | 1 | 1401 First Street | ||||||||||
| 3.14 | Property | 1 | Lane Bryant Building | ||||||||||
| 4 | Loan | 19, 36 | 1 | Romaine & Orange Square | 1,734 | 0 | 0 | 5,100 | 275,425 | 0 | 0 | 0 | 0 |
| 5 | Loan | 26, 28, 29 | 1 | Shoreline Square | 6,897 | 0 | 3,500,000 | Springing | 3,500,000 | 0 | 0 | 0 | 0 |
| 6 | Loan | 11, 13, 19, 25, 33 | 3 | Millennia Portfolio | 21,403 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 531,675 |
| 6.01 | Property | 1 | Summit Ridge | ||||||||||
| 6.02 | Property | 1 | Lexington Village | ||||||||||
| 6.03 | Property | 1 | Gateway at the Greene | ||||||||||
| 7 | Loan | 11, 25, 27, 29 | 25 | InCommercial Net Lease Portfolio #5 | Springing | 0 | 0 | Springing | 0 | 0 | 0 | 0 | 14,955 |
| 7.01 | Property | 1 | Walgreens, Mount Pleasant, SC | ||||||||||
| 7.02 | Property | 1 | Walgreens, Meridian, ID | ||||||||||
| 7.03 | Property | 1 | Renal Care, Moncks Corner, SC | ||||||||||
| 7.04 | Property | 1 | Tractor Supply Co, Ogdensbg, NY | ||||||||||
| 7.05 | Property | 1 | Tractor Supply Co, Lake Ch, LA | ||||||||||
| 7.06 | Property | 1 | Tractor Supply Co, Oconto, WI | ||||||||||
| 7.07 | Property | 1 | Dollar General, Ghent, WV | ||||||||||
| 7.08 | Property | 1 | Tractor Supply Co, Kewaunee, WI | ||||||||||
| 7.09 | Property | 1 | Fresenius, Belzoni, MS | ||||||||||
| 7.10 | Property | 1 | Dollar General, Lenore, WV | ||||||||||
| 7.11 | Property | 1 | Family Dollar, Linden, AL | ||||||||||
| 7.12 | Property | 1 | Fresenius, Rayville, LA | ||||||||||
| 7.13 | Property | 1 | Dollar General, Burlington, WV | ||||||||||
| 7.14 | Property | 1 | Family Dollar, Franklinton, LA | ||||||||||
| 7.15 | Property | 1 | Dollar General, Hinton, WV | ||||||||||
| 7.16 | Property | 1 | Dollar General, Lerona, WV | ||||||||||
| 7.17 | Property | 1 | Dollar General, Rushford, NY | ||||||||||
| 7.18 | Property | 1 | Dollar General, Walker, WV | ||||||||||
| 7.19 | Property | 1 | Dollar General, Dixie, WV | ||||||||||
| 7.20 | Property | 1 | Dollar General, Bay Minette, AL | ||||||||||
| 7.21 | Property | 1 | Dollar General, Fruithurst, AL | ||||||||||
| 7.22 | Property | 1 | Dollar General, Billingsley, AL | ||||||||||
| 7.23 | Property | 1 | Dollar General, Knox City, TX | ||||||||||
| 7.24 | Property | 1 | Dollar General, South Dayton, NY | ||||||||||
| 7.25 | Property | 1 | Dollar General, Gaylesville, AL | ||||||||||
| 8 | Loan | 11, 25, 29, 30, 40 | 1 | Redmond Community Center | 1,712 | 41,098 | 611,698 | 13,746 | 329,895 | 0 | 0 | 0 | 0 |
| 9 | Loan | 9, 10, 11, 21, 34, 40 | 9 | Shearer’s Industrial Portfolio | Springing | 0 | 0 | Springing | 0 | 0 | 0 | 0 | 0 |
| 9.01 | Property | 1 | 800 Northwest 4th Street | ||||||||||
| 9.02 | Property | 1 | 4100 Millennium Boulevard Southeast | ||||||||||
| 9.03 | Property | 1 | 3000 East Mount Pleasant Street | ||||||||||
| 9.04 | Property | 1 | 7330 West Sherman Street | ||||||||||
| 9.05 | Property | 12 | 1 | 821 Route 97 | |||||||||
| 9.06 | Property | 1 | 3200 Northern Cross Boulevard | ||||||||||
| 9.07 | Property | 1 | 3636 Medallion Avenue | ||||||||||
| 9.08 | Property | 1 | 692 Wabash Avenue North | ||||||||||
| 9.09 | Property | 1 | 225 Commonwealth Avenue Extension | ||||||||||
| 10 | Loan | 19, 30 | 1 | Hall Road Crossing | 2,264 | 135,847 | 0 | 9,045 | 550,000 | 0 | 0 | 0 | 204,688 |
| 11 | Loan | 10, 17, 19, 24, 26, 28, 36, 39 | 1 | Gem Tower | Springing | 0 | 0 | Springing | 73,460 | 0 | 0 | 0 | 0 |
| 12 | Loan | 11, 19 | 2 | 285 & 355 Riverside Ave | 1,577 | 0 | 0 | 11,831 | 0 | 0 | 0 | 0 | 0 |
| 12.01 | Property | 29 | 1 | 285 Riverside Ave | |||||||||
| 12.02 | Property | 29 | 1 | 355 Riverside Ave | |||||||||
| 13 | Loan | 27 | 1 | Bala Woods | 5,699 | 0 | 0 | 0 | 0 | 88,458 | 0 | 0 | 0 |
| 14 | Loan | 9, 19, 29, 31 | 1 | Prospector Plaza | 3,381 | 0 | 253,595 | 8,451 | 253,595 | 0 | 0 | 0 | 17,875 |
| 15 | Loan | 10, 14, 24, 34, 37 | 1 | Novo Nordisk HQ | 1,218 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 16 | Loan | 10, 19, 26, 38 | 1 | JW Marriott Desert Springs | Springing | 0 | 0 | 0 | 0 | 6,482,400 | 0 | 0 | 0 |
| 17 | Loan | 11, 25 | 2 | 35 Crosby Street and 70 Carmine Street | 507 | 0 | 250,000 | 0 | 0 | 0 | 0 | 0 | 0 |
| 17.01 | Property | 12 | 1 | 35 Crosby Street | |||||||||
| 17.02 | Property | 1 | 70 Carmine Street | ||||||||||
| 18 | Loan | 22 | 1 | 1340 Lafayette | 458 | 16,500 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 19 | Loan | 28 | 1 | Townsgate Office | 1,104 | 0 | 750,000 | 7,361 | 353,336 | 0 | 0 | 0 | 0 |
| 20 | Loan | 11, 29, 30, 40 | 6 | Tharp Portfolio | 2,348 | 0 | 120,000 | 5,833 | 280,000 | 0 | 0 | 0 | 20,119 |
| 20.01 | Property | 1 | Jiffy and Dollar | ||||||||||
| 20.02 | Property | 1 | Main Street Shoppes | ||||||||||
| 20.03 | Property | 1 | Greensburg Retail Center | ||||||||||
| 20.04 | Property | 1 | CSL Plasma | ||||||||||
| 20.05 | Property | 1 | FedEx | ||||||||||
| 20.06 | Property | 1 | Greenwood Med Spa | ||||||||||
| 21 | Loan | 28, 29, 33 | 1 | Santa Barbara Tech Center | 1,413 | 50,879 | 500,000 | 7,067 | 755,000 | 0 | 0 | 0 | 0 |
| 22 | Loan | 33 | 1 | Greenbrier Towers I & II | 2,863 | 0 | 300,000 | 21,470 | 500,000 | 0 | 0 | 0 | 0 |
| 23 | Loan | 19 | 1 | Apple Glen Crossing | 3,632 | 100,000 | 200,000 | 15,167 | 750,000 | 0 | 0 | 0 | 0 |
| 24 | Loan | 13, 20, 28, 33 | 1 | Crossroads Village | 1,086 | 0 | 500,000 | 10,864 | 391,104 | 0 | 0 | 0 | 76,313 |
| 25 | Loan | 19 | 1 | 1500 Volta Drive | 851 | 30,651 | 0 | Springing | 0 | 0 | 0 | 0 | 0 |
| 26 | Loan | 19 | 1 | Courtyard Appleton | 15,051 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
A-1-27
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Monthly Replacement / FF&E Reserve ($) | Replacement Reserve Caps ($) | Upfront TI/LC Reserve ($) | Monthly TI/LC Reserve ($) | TI/LC Caps ($) | Upfront Debt Service Reserve ($) | Monthly Debt Service Reserve ($) | Debt Service Reserve Cap ($) | Upfront Deferred Maintenance Reserve ($) |
| 27 | Loan | 29 | 1 | Lee’s Hill II | 4,314 | 0 | 808,000 | 12,687 | 1,000,000 | 0 | 0 | 0 | 4,063 |
| 28 | Loan | 10, 11, 19, 25, 27, 28, 36 | 11 | Glen Forest Office Portfolio | 12,296 | 0 | 2,500,000 | Springing | 2,500,000 | 0 | 0 | 0 | 128,054 |
| 28.01 | Property | 1 | Hillcrest | ||||||||||
| 28.02 | Property | 1 | Arrington | ||||||||||
| 28.03 | Property | 1 | Highland II | ||||||||||
| 28.04 | Property | 29 | 1 | Meridian | |||||||||
| 28.05 | Property | 29 | 1 | Bayberry | |||||||||
| 28.06 | Property | 1 | Highland I | ||||||||||
| 28.07 | Property | 29 | 1 | Capstone | |||||||||
| 28.08 | Property | 1 | Forest Plaza I | ||||||||||
| 28.09 | Property | 28, 29 | 1 | Forest Plaza II | |||||||||
| 28.10 | Property | 1 | Utica | ||||||||||
| 28.11 | Property | 1 | Willard | ||||||||||
| 29 | Loan | 19 | 1 | Arlington Green Executive Plaza | 1,689 | 0 | 0 | 5,236 | 0 | 0 | 0 | 0 | 10,625 |
| 30 | Loan | 12, 13, 27, 30, 40 | 1 | 1201 Main | 188 | 0 | 0 | 165 | 0 | 0 | 0 | 0 | 0 |
| 31 | Loan | 11 | 2 | Walgreens New Castle & Oneonta | Springing | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 31.01 | Property | 1 | Walgreens Oneonta | ||||||||||
| 31.02 | Property | 1 | Walgreens New Castle | ||||||||||
| 32 | Loan | 11 | 2 | 138 St. Marks & 155 5th Ave | 370 | 0 | 0 | 624 | 0 | 0 | 0 | 0 | 0 |
| 32.01 | Property | 1 | 155 5th Avenue | ||||||||||
| 32.02 | Property | 12 | 1 | 138 Saint Marks Place | |||||||||
| 33 | Loan | 19, 20, 23, 26, 32 | 1 | STK Chicago | 154 | 0 | 200,000 | 1,663 | 0 | 0 | 0 | 0 | 0 |
| 34 | Loan | 31 | 1 | 905 Medical Park Drive | Springing | 14,620 | 0 | Springing | 89,291 | 0 | 0 | 0 | 0 |
| 35 | Loan | 39 | 1 | 3097 E Ana St | Springing | 0 | 0 | Springing | 0 | 0 | 0 | 0 | 0 |
| 36 | Loan | 1 | VA Dialysis Center - Philadelphia | 844 | 0 | 0 | 548 | 0 | 0 | 0 | 0 | 0 | |
| 37 | Loan | 19, 39 | 1 | 65 Triangle Industrial | Springing | 0 | 0 | Springing | 0 | 0 | 0 | 0 | 0 |
A-1-28
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Upfront Other Reserve ($) | Monthly Other Reserve ($) | Other Reserve Description |
| 1 | Loan | 9, 10, 20, 24, 26, 28, 29, 32, 33, 34, 35 | 1 | 601 Lexington Avenue | 61,289,797 | 0 | Outstanding TI/LC Reserve ($52,315,328) and Free Rent Reserve ($8,974,469) |
| 2 | Loan | 10, 14, 24, 28, 29 | 1 | One Wilshire | 0 | 0 | NAP |
| 3 | Loan | 9, 10, 11, 12, 25, 26, 28, 29 | 14 | Bedrock Portfolio | 8,870,595 | 0 | Outstanding TI/LC Reserve (Upfront: $8,392,690), Outstanding Free Rent Reserve (Upfront: $477,905) |
| 3.01 | Property | 1 | First National Building | ||||
| 3.02 | Property | 27 | 1 | The Qube | |||
| 3.03 | Property | 27 | 1 | Chrysler House | |||
| 3.04 | Property | 27 | 1 | 1001 Woodward | |||
| 3.05 | Property | 1 | One Woodward | ||||
| 3.06 | Property | 1 | The Z Garage | ||||
| 3.07 | Property | 1 | Two Detroit Garage | ||||
| 3.08 | Property | 1 | 1505 & 1515 Woodward | ||||
| 3.09 | Property | 1 | 1001 Brush Street | ||||
| 3.10 | Property | 12 | 1 | The Assembly | |||
| 3.11 | Property | 1 | 419 Fort Street Garage | ||||
| 3.12 | Property | 12 | 1 | Vinton | |||
| 3.13 | Property | 1 | 1401 First Street | ||||
| 3.14 | Property | 1 | Lane Bryant Building | ||||
| 4 | Loan | 19, 36 | 1 | Romaine & Orange Square | 325,050 | 0 | Free Rent Reserve (Upfront: $290,049.74), Unfunded Obligations Reserve (Upfront: $35,000) |
| 5 | Loan | 26, 28, 29 | 1 | Shoreline Square | 9,174,047 | 0 | U.S. Customs Lease Work Reserve (Upfront: $7,144,299), Unfunded Obligations Reserve (Upfront: $1,787,748), Ground Lease Reserve (Upfront: $242,000) |
| 6 | Loan | 11, 13, 19, 25, 33 | 3 | Millennia Portfolio | 0 | 0 | NAP |
| 6.01 | Property | 1 | Summit Ridge | ||||
| 6.02 | Property | 1 | Lexington Village | ||||
| 6.03 | Property | 1 | Gateway at the Greene | ||||
| 7 | Loan | 11, 25, 27, 29 | 25 | InCommercial Net Lease Portfolio #5 | 0 | 0 | NAP |
| 7.01 | Property | 1 | Walgreens, Mount Pleasant, SC | ||||
| 7.02 | Property | 1 | Walgreens, Meridian, ID | ||||
| 7.03 | Property | 1 | Renal Care, Moncks Corner, SC | ||||
| 7.04 | Property | 1 | Tractor Supply Co, Ogdensbg, NY | ||||
| 7.05 | Property | 1 | Tractor Supply Co, Lake Ch, LA | ||||
| 7.06 | Property | 1 | Tractor Supply Co, Oconto, WI | ||||
| 7.07 | Property | 1 | Dollar General, Ghent, WV | ||||
| 7.08 | Property | 1 | Tractor Supply Co, Kewaunee, WI | ||||
| 7.09 | Property | 1 | Fresenius, Belzoni, MS | ||||
| 7.10 | Property | 1 | Dollar General, Lenore, WV | ||||
| 7.11 | Property | 1 | Family Dollar, Linden, AL | ||||
| 7.12 | Property | 1 | Fresenius, Rayville, LA | ||||
| 7.13 | Property | 1 | Dollar General, Burlington, WV | ||||
| 7.14 | Property | 1 | Family Dollar, Franklinton, LA | ||||
| 7.15 | Property | 1 | Dollar General, Hinton, WV | ||||
| 7.16 | Property | 1 | Dollar General, Lerona, WV | ||||
| 7.17 | Property | 1 | Dollar General, Rushford, NY | ||||
| 7.18 | Property | 1 | Dollar General, Walker, WV | ||||
| 7.19 | Property | 1 | Dollar General, Dixie, WV | ||||
| 7.20 | Property | 1 | Dollar General, Bay Minette, AL | ||||
| 7.21 | Property | 1 | Dollar General, Fruithurst, AL | ||||
| 7.22 | Property | 1 | Dollar General, Billingsley, AL | ||||
| 7.23 | Property | 1 | Dollar General, Knox City, TX | ||||
| 7.24 | Property | 1 | Dollar General, South Dayton, NY | ||||
| 7.25 | Property | 1 | Dollar General, Gaylesville, AL | ||||
| 8 | Loan | 11, 25, 29, 30, 40 | 1 | Redmond Community Center | 3,551,271 | 0 | H-Mart TI Allowance Reserve (Upfront: $2,877,691), Free Rent Reserve (Upfront: $634,763), Petco Reserve (Upfront: $38,817) |
| 9 | Loan | 9, 10, 11, 21, 34, 40 | 9 | Shearer’s Industrial Portfolio | 12,243,079 | 0 | Shearer Expansion Allowance Reserve |
| 9.01 | Property | 1 | 800 Northwest 4th Street | ||||
| 9.02 | Property | 1 | 4100 Millennium Boulevard Southeast | ||||
| 9.03 | Property | 1 | 3000 East Mount Pleasant Street | ||||
| 9.04 | Property | 1 | 7330 West Sherman Street | ||||
| 9.05 | Property | 12 | 1 | 821 Route 97 | |||
| 9.06 | Property | 1 | 3200 Northern Cross Boulevard | ||||
| 9.07 | Property | 1 | 3636 Medallion Avenue | ||||
| 9.08 | Property | 1 | 692 Wabash Avenue North | ||||
| 9.09 | Property | 1 | 225 Commonwealth Avenue Extension | ||||
| 10 | Loan | 19, 30 | 1 | Hall Road Crossing | 1,667,565 | 0 | Free Rent Reserve (Upfront: $849,909), Unfunded Obligations Reserve (Upfront: $817,656) |
| 11 | Loan | 10, 17, 19, 24, 26, 28, 36, 39 | 1 | Gem Tower | 1,551,668 | 0 | Rent Stabilization Reserve ($1,000,000), Rent Deferral Reserve ($551,667.79) |
| 12 | Loan | 11, 19 | 2 | 285 & 355 Riverside Ave | 54,036 | 0 | Free Rent Reserve |
| 12.01 | Property | 29 | 1 | 285 Riverside Ave | |||
| 12.02 | Property | 29 | 1 | 355 Riverside Ave | |||
| 13 | Loan | 27 | 1 | Bala Woods | 0 | 0 | NAP |
| 14 | Loan | 9, 19, 29, 31 | 1 | Prospector Plaza | 387,704 | 0 | Outstanding TI/LC Reserve (Upfront: $330,163), Free Rent Reserve (Upfront: $50,837), Unfunded Obligations Reserve (Upfront: $6,704.07) |
| 15 | Loan | 10, 14, 24, 34, 37 | 1 | Novo Nordisk HQ | 27,146,846 | 0 | Expansion Reserve (Upfront: $14,146,846.45), Seller Credit Reserve (Upfront: $13,000,000) |
| 16 | Loan | 10, 19, 26, 38 | 1 | JW Marriott Desert Springs | 0 | Springing | Ground Rent Reserve |
| 17 | Loan | 11, 25 | 2 | 35 Crosby Street and 70 Carmine Street | 0 | 0 | NAP |
| 17.01 | Property | 12 | 1 | 35 Crosby Street | |||
| 17.02 | Property | 1 | 70 Carmine Street | ||||
| 18 | Loan | 22 | 1 | 1340 Lafayette | 0 | 0 | NAP |
| 19 | Loan | 28 | 1 | Townsgate Office | 70,075 | 0 | Rent Abatement Reserve |
| 20 | Loan | 11, 29, 30, 40 | 6 | Tharp Portfolio | 67,101 | 0 | Unfunded Obligations Reserve |
| 20.01 | Property | 1 | Jiffy and Dollar | ||||
| 20.02 | Property | 1 | Main Street Shoppes | ||||
| 20.03 | Property | 1 | Greensburg Retail Center | ||||
| 20.04 | Property | 1 | CSL Plasma | ||||
| 20.05 | Property | 1 | FedEx | ||||
| 20.06 | Property | 1 | Greenwood Med Spa | ||||
| 21 | Loan | 28, 29, 33 | 1 | Santa Barbara Tech Center | 150,000 | 0 | MSTS Reserve |
| 22 | Loan | 33 | 1 | Greenbrier Towers I & II | 0 | 0 | NAP |
| 23 | Loan | 19 | 1 | Apple Glen Crossing | 199,717 | 0 | Unfunded Obligations Reserve |
| 24 | Loan | 13, 20, 28, 33 | 1 | Crossroads Village | 0 | 0 | NAP |
| 25 | Loan | 19 | 1 | 1500 Volta Drive | 191,667 | 15,972 | Security Deposit Reserve |
| 26 | Loan | 19 | 1 | Courtyard Appleton | 0 | 0 | NAP |
A-1-29
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Upfront Other Reserve ($) | Monthly Other Reserve ($) | Other Reserve Description |
| 27 | Loan | 29 | 1 | Lee’s Hill II | 141,440 | 0 | Rent Credit Reserve |
| 28 | Loan | 10, 11, 19, 25, 27, 28, 36 | 11 | Glen Forest Office Portfolio | 2,047,481 | 0 | Unfunded Obligations Reserve |
| 28.01 | Property | 1 | Hillcrest | ||||
| 28.02 | Property | 1 | Arrington | ||||
| 28.03 | Property | 1 | Highland II | ||||
| 28.04 | Property | 29 | 1 | Meridian | |||
| 28.05 | Property | 29 | 1 | Bayberry | |||
| 28.06 | Property | 1 | Highland I | ||||
| 28.07 | Property | 29 | 1 | Capstone | |||
| 28.08 | Property | 1 | Forest Plaza I | ||||
| 28.09 | Property | 28, 29 | 1 | Forest Plaza II | |||
| 28.10 | Property | 1 | Utica | ||||
| 28.11 | Property | 1 | Willard | ||||
| 29 | Loan | 19 | 1 | Arlington Green Executive Plaza | 704,596 | 0 | Unfunded Obligations Reserve (Upfront: $501,000), Free Rent Reserve (Upfront: $203,596) |
| 30 | Loan | 12, 13, 27, 30, 40 | 1 | 1201 Main | 0 | 0 | NAP |
| 31 | Loan | 11 | 2 | Walgreens New Castle & Oneonta | 0 | 0 | NAP |
| 31.01 | Property | 1 | Walgreens Oneonta | ||||
| 31.02 | Property | 1 | Walgreens New Castle | ||||
| 32 | Loan | 11 | 2 | 138 St. Marks & 155 5th Ave | 0 | 0 | NAP |
| 32.01 | Property | 1 | 155 5th Avenue | ||||
| 32.02 | Property | 12 | 1 | 138 Saint Marks Place | |||
| 33 | Loan | 19, 20, 23, 26, 32 | 1 | STK Chicago | 12,903 | 0 | Static Condo Charges Reserve |
| 34 | Loan | 31 | 1 | 905 Medical Park Drive | 0 | 0 | NAP |
| 35 | Loan | 39 | 1 | 3097 E Ana St | 196,000 | 0 | Roof Replacement Reserve |
| 36 | Loan | 1 | VA Dialysis Center - Philadelphia | 0 | 0 | NAP | |
| 37 | Loan | 19, 39 | 1 | 65 Triangle Industrial | 0 | 0 | NAP |
A-1-30
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Other Reserve Cap ($) | Holdback/ Earnout Amount ($) | Holdback/ Earnout Description | Lockbox Type | Cash Management | Excess Cash Trap Triggered by DSCR and/or Debt Yield Test (Y/N) | Tenant Specific Excess Cash Trap Trigger (Y/N) | Pari Passu (Y/N) | Pari Passu in Trust Controlling (Y/N) |
| 17 | 18 | ||||||||||||
| 1 | Loan | 9, 10, 20, 24, 26, 28, 29, 32, 33, 34, 35 | 1 | 601 Lexington Avenue | 0 | 0 | NAP | Hard | Springing | Yes | No | Yes | No |
| 2 | Loan | 10, 14, 24, 28, 29 | 1 | One Wilshire | 0 | 0 | NAP | Hard | Springing | Yes | No | Yes | No |
| 3 | Loan | 9, 10, 11, 12, 25, 26, 28, 29 | 14 | Bedrock Portfolio | 0 | 0 | NAP | Springing (Residential); Hard (Commercial) | Springing | Yes | No | Yes | No |
| 3.01 | Property | 1 | First National Building | ||||||||||
| 3.02 | Property | 27 | 1 | The Qube | |||||||||
| 3.03 | Property | 27 | 1 | Chrysler House | |||||||||
| 3.04 | Property | 27 | 1 | 1001 Woodward | |||||||||
| 3.05 | Property | 1 | One Woodward | ||||||||||
| 3.06 | Property | 1 | The Z Garage | ||||||||||
| 3.07 | Property | 1 | Two Detroit Garage | ||||||||||
| 3.08 | Property | 1 | 1505 & 1515 Woodward | ||||||||||
| 3.09 | Property | 1 | 1001 Brush Street | ||||||||||
| 3.10 | Property | 12 | 1 | The Assembly | |||||||||
| 3.11 | Property | 1 | 419 Fort Street Garage | ||||||||||
| 3.12 | Property | 12 | 1 | Vinton | |||||||||
| 3.13 | Property | 1 | 1401 First Street | ||||||||||
| 3.14 | Property | 1 | Lane Bryant Building | ||||||||||
| 4 | Loan | 19, 36 | 1 | Romaine & Orange Square | 0 | 0 | NAP | Hard | Springing | Yes | Yes | No | NAP |
| 5 | Loan | 26, 28, 29 | 1 | Shoreline Square | 0 | 0 | NAP | Hard | Springing | Yes | Yes | No | NAP |
| 6 | Loan | 11, 13, 19, 25, 33 | 3 | Millennia Portfolio | 0 | 0 | NAP | Soft | Springing | Yes | No | No | NAP |
| 6.01 | Property | 1 | Summit Ridge | ||||||||||
| 6.02 | Property | 1 | Lexington Village | ||||||||||
| 6.03 | Property | 1 | Gateway at the Greene | ||||||||||
| 7 | Loan | 11, 25, 27, 29 | 25 | InCommercial Net Lease Portfolio #5 | 0 | 0 | NAP | Hard | Springing | Yes | Yes | No | NAP |
| 7.01 | Property | 1 | Walgreens, Mount Pleasant, SC | ||||||||||
| 7.02 | Property | 1 | Walgreens, Meridian, ID | ||||||||||
| 7.03 | Property | 1 | Renal Care, Moncks Corner, SC | ||||||||||
| 7.04 | Property | 1 | Tractor Supply Co, Ogdensbg, NY | ||||||||||
| 7.05 | Property | 1 | Tractor Supply Co, Lake Ch, LA | ||||||||||
| 7.06 | Property | 1 | Tractor Supply Co, Oconto, WI | ||||||||||
| 7.07 | Property | 1 | Dollar General, Ghent, WV | ||||||||||
| 7.08 | Property | 1 | Tractor Supply Co, Kewaunee, WI | ||||||||||
| 7.09 | Property | 1 | Fresenius, Belzoni, MS | ||||||||||
| 7.10 | Property | 1 | Dollar General, Lenore, WV | ||||||||||
| 7.11 | Property | 1 | Family Dollar, Linden, AL | ||||||||||
| 7.12 | Property | 1 | Fresenius, Rayville, LA | ||||||||||
| 7.13 | Property | 1 | Dollar General, Burlington, WV | ||||||||||
| 7.14 | Property | 1 | Family Dollar, Franklinton, LA | ||||||||||
| 7.15 | Property | 1 | Dollar General, Hinton, WV | ||||||||||
| 7.16 | Property | 1 | Dollar General, Lerona, WV | ||||||||||
| 7.17 | Property | 1 | Dollar General, Rushford, NY | ||||||||||
| 7.18 | Property | 1 | Dollar General, Walker, WV | ||||||||||
| 7.19 | Property | 1 | Dollar General, Dixie, WV | ||||||||||
| 7.20 | Property | 1 | Dollar General, Bay Minette, AL | ||||||||||
| 7.21 | Property | 1 | Dollar General, Fruithurst, AL | ||||||||||
| 7.22 | Property | 1 | Dollar General, Billingsley, AL | ||||||||||
| 7.23 | Property | 1 | Dollar General, Knox City, TX | ||||||||||
| 7.24 | Property | 1 | Dollar General, South Dayton, NY | ||||||||||
| 7.25 | Property | 1 | Dollar General, Gaylesville, AL | ||||||||||
| 8 | Loan | 11, 25, 29, 30, 40 | 1 | Redmond Community Center | 0 | 0 | NAP | Springing | Springing | Yes | Yes | No | NAP |
| 9 | Loan | 9, 10, 11, 21, 34, 40 | 9 | Shearer’s Industrial Portfolio | 0 | 0 | NAP | Hard | In Place | Yes | Yes | Yes | No |
| 9.01 | Property | 1 | 800 Northwest 4th Street | ||||||||||
| 9.02 | Property | 1 | 4100 Millennium Boulevard Southeast | ||||||||||
| 9.03 | Property | 1 | 3000 East Mount Pleasant Street | ||||||||||
| 9.04 | Property | 1 | 7330 West Sherman Street | ||||||||||
| 9.05 | Property | 12 | 1 | 821 Route 97 | |||||||||
| 9.06 | Property | 1 | 3200 Northern Cross Boulevard | ||||||||||
| 9.07 | Property | 1 | 3636 Medallion Avenue | ||||||||||
| 9.08 | Property | 1 | 692 Wabash Avenue North | ||||||||||
| 9.09 | Property | 1 | 225 Commonwealth Avenue Extension | ||||||||||
| 10 | Loan | 19, 30 | 1 | Hall Road Crossing | 0 | 0 | NAP | Springing | Springing | Yes | Yes | No | NAP |
| 11 | Loan | 10, 17, 19, 24, 26, 28, 36, 39 | 1 | Gem Tower | 0 | 0 | NAP | Soft | Springing | Yes | No | Yes | Yes |
| 12 | Loan | 11, 19 | 2 | 285 & 355 Riverside Ave | 0 | 0 | NAP | Hard | Springing | Yes | Yes | No | NAP |
| 12.01 | Property | 29 | 1 | 285 Riverside Ave | |||||||||
| 12.02 | Property | 29 | 1 | 355 Riverside Ave | |||||||||
| 13 | Loan | 27 | 1 | Bala Woods | 0 | 0 | NAP | Springing | Springing | Yes | No | No | NAP |
| 14 | Loan | 9, 19, 29, 31 | 1 | Prospector Plaza | 0 | 0 | NAP | Hard | Springing | Yes | Yes | No | NAP |
| 15 | Loan | 10, 14, 24, 34, 37 | 1 | Novo Nordisk HQ | 0 | 0 | NAP | Hard | Springing | Yes | Yes | Yes | No |
| 16 | Loan | 10, 19, 26, 38 | 1 | JW Marriott Desert Springs | 0 | 0 | NAP | Soft | Springing | Yes | No | Yes | No |
| 17 | Loan | 11, 25 | 2 | 35 Crosby Street and 70 Carmine Street | 0 | 0 | NAP | Springing | Springing | Yes | No | No | NAP |
| 17.01 | Property | 12 | 1 | 35 Crosby Street | |||||||||
| 17.02 | Property | 1 | 70 Carmine Street | ||||||||||
| 18 | Loan | 22 | 1 | 1340 Lafayette | 0 | 0 | NAP | Hard | Springing | No | Yes | No | NAP |
| 19 | Loan | 28 | 1 | Townsgate Office | 0 | 0 | NAP | Hard | Springing | Yes | Yes | No | NAP |
| 20 | Loan | 11, 29, 30, 40 | 6 | Tharp Portfolio | 0 | 0 | NAP | Springing | Springing | Yes | Yes | No | NAP |
| 20.01 | Property | 1 | Jiffy and Dollar | ||||||||||
| 20.02 | Property | 1 | Main Street Shoppes | ||||||||||
| 20.03 | Property | 1 | Greensburg Retail Center | ||||||||||
| 20.04 | Property | 1 | CSL Plasma | ||||||||||
| 20.05 | Property | 1 | FedEx | ||||||||||
| 20.06 | Property | 1 | Greenwood Med Spa | ||||||||||
| 21 | Loan | 28, 29, 33 | 1 | Santa Barbara Tech Center | 0 | 0 | NAP | Hard | Springing | Yes | Yes | No | NAP |
| 22 | Loan | 33 | 1 | Greenbrier Towers I & II | 0 | 0 | NAP | Springing | Springing | Yes | No | No | NAP |
| 23 | Loan | 19 | 1 | Apple Glen Crossing | 0 | 0 | NAP | Hard | Springing | Yes | Yes | No | NAP |
| 24 | Loan | 13, 20, 28, 33 | 1 | Crossroads Village | 0 | 0 | NAP | Hard | Springing | Yes | Yes | No | NAP |
| 25 | Loan | 19 | 1 | 1500 Volta Drive | 383,333 | 0 | NAP | Hard | Springing | Yes | Yes | No | NAP |
| 26 | Loan | 19 | 1 | Courtyard Appleton | 0 | 0 | NAP | Hard | Springing | Yes | No | No | NAP |
A-1-31
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Other Reserve Cap ($) | Holdback/ Earnout Amount ($) | Holdback/ Earnout Description | Lockbox Type | Cash Management | Excess Cash Trap Triggered by DSCR and/or Debt Yield Test (Y/N) | Tenant Specific Excess Cash Trap Trigger (Y/N) | Pari Passu (Y/N) | Pari Passu in Trust Controlling (Y/N) |
| 27 | Loan | 29 | 1 | Lee’s Hill II | 0 | 0 | NAP | Hard | Springing | Yes | Yes | No | NAP |
| 28 | Loan | 10, 11, 19, 25, 27, 28, 36 | 11 | Glen Forest Office Portfolio | 0 | 0 | NAP | Hard | Springing | Yes | No | Yes | No |
| 28.01 | Property | 1 | Hillcrest | ||||||||||
| 28.02 | Property | 1 | Arrington | ||||||||||
| 28.03 | Property | 1 | Highland II | ||||||||||
| 28.04 | Property | 29 | 1 | Meridian | |||||||||
| 28.05 | Property | 29 | 1 | Bayberry | |||||||||
| 28.06 | Property | 1 | Highland I | ||||||||||
| 28.07 | Property | 29 | 1 | Capstone | |||||||||
| 28.08 | Property | 1 | Forest Plaza I | ||||||||||
| 28.09 | Property | 28, 29 | 1 | Forest Plaza II | |||||||||
| 28.10 | Property | 1 | Utica | ||||||||||
| 28.11 | Property | 1 | Willard | ||||||||||
| 29 | Loan | 19 | 1 | Arlington Green Executive Plaza | 0 | 0 | NAP | Hard | Springing | Yes | Yes | No | NAP |
| 30 | Loan | 12, 13, 27, 30, 40 | 1 | 1201 Main | 0 | 0 | NAP | Springing | Springing | Yes | No | No | NAP |
| 31 | Loan | 11 | 2 | Walgreens New Castle & Oneonta | 0 | 0 | NAP | Hard | Springing | Yes | Yes | No | NAP |
| 31.01 | Property | 1 | Walgreens Oneonta | ||||||||||
| 31.02 | Property | 1 | Walgreens New Castle | ||||||||||
| 32 | Loan | 11 | 2 | 138 St. Marks & 155 5th Ave | 0 | 0 | NAP | Springing | Springing | Yes | Yes | No | NAP |
| 32.01 | Property | 1 | 155 5th Avenue | ||||||||||
| 32.02 | Property | 12 | 1 | 138 Saint Marks Place | |||||||||
| 33 | Loan | 19, 20, 23, 26, 32 | 1 | STK Chicago | 0 | 0 | NAP | Hard | Springing | Yes | Yes | No | NAP |
| 34 | Loan | 31 | 1 | 905 Medical Park Drive | 0 | 0 | NAP | Springing | Springing | Yes | Yes | No | NAP |
| 35 | Loan | 39 | 1 | 3097 E Ana St | 0 | 0 | NAP | Hard | Springing | Yes | Yes | No | NAP |
| 36 | Loan | 1 | VA Dialysis Center - Philadelphia | 0 | 0 | NAP | Hard | Springing | Yes | Yes | No | NAP | |
| 37 | Loan | 19, 39 | 1 | 65 Triangle Industrial | 0 | 0 | NAP | Springing | Springing | Yes | Yes | No | NAP |
A-1-32
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Trust Pari Passu Cut-off Date Balance ($) | Non-Trust Pari Passu Companion Loan Cut-off Date Balance ($) | Non-Trust Pari Passu Companion Loan Monthly Debt Service ($) | Total Trust and Non-Trust Pari Passu Companion Loan Monthly Debt Service ($) | Subordinate Companion Loan Cut-off Date Balance ($) | Subordinate Companion Loan Interest Rate | Whole Loan Cut-off Date Balance ($) | Whole Loan Monthly Debt Service ($) | Whole Loan Cut-off Date LTV Ratio (%) | Whole Loan Underwritten NCF DSCR (x) |
| 4 | ||||||||||||||
| 1 | Loan | 9, 10, 20, 24, 26, 28, 29, 32, 33, 34, 35 | 1 | 601 Lexington Avenue | 85,000,000 | 638,300,000 | 1,505,716.31 | 1,706,226.86 | 276,700,000 | 2.79196% | 1,000,000,000 | 2,358,947.68 | 58.8% | 3.25 |
| 2 | Loan | 10, 14, 24, 28, 29 | 1 | One Wilshire | 85,000,000 | 304,250,000 | 713,607.11 | 912,971.46 | NAP | NAP | 389,250,000 | 912,971.46 | 42.6% | 3.37 |
| 3 | Loan | 9, 10, 11, 12, 25, 26, 28, 29 | 14 | Bedrock Portfolio | 85,000,000 | 345,000,000 | 1,101,260.76 | 1,372,585.88 | NAP | NAP | 430,000,000 | 1,372,585.88 | 59.4% | 3.30 |
| 3.01 | Property | 1 | First National Building | |||||||||||
| 3.02 | Property | 27 | 1 | The Qube | ||||||||||
| 3.03 | Property | 27 | 1 | Chrysler House | ||||||||||
| 3.04 | Property | 27 | 1 | 1001 Woodward | ||||||||||
| 3.05 | Property | 1 | One Woodward | |||||||||||
| 3.06 | Property | 1 | The Z Garage | |||||||||||
| 3.07 | Property | 1 | Two Detroit Garage | |||||||||||
| 3.08 | Property | 1 | 1505 & 1515 Woodward | |||||||||||
| 3.09 | Property | 1 | 1001 Brush Street | |||||||||||
| 3.10 | Property | 12 | 1 | The Assembly | ||||||||||
| 3.11 | Property | 1 | 419 Fort Street Garage | |||||||||||
| 3.12 | Property | 12 | 1 | Vinton | ||||||||||
| 3.13 | Property | 1 | 1401 First Street | |||||||||||
| 3.14 | Property | 1 | Lane Bryant Building | |||||||||||
| 4 | Loan | 19, 36 | 1 | Romaine & Orange Square | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 5 | Loan | 26, 28, 29 | 1 | Shoreline Square | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 6 | Loan | 11, 13, 19, 25, 33 | 3 | Millennia Portfolio | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 6.01 | Property | 1 | Summit Ridge | |||||||||||
| 6.02 | Property | 1 | Lexington Village | |||||||||||
| 6.03 | Property | 1 | Gateway at the Greene | |||||||||||
| 7 | Loan | 11, 25, 27, 29 | 25 | InCommercial Net Lease Portfolio #5 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 7.01 | Property | 1 | Walgreens, Mount Pleasant, SC | |||||||||||
| 7.02 | Property | 1 | Walgreens, Meridian, ID | |||||||||||
| 7.03 | Property | 1 | Renal Care, Moncks Corner, SC | |||||||||||
| 7.04 | Property | 1 | Tractor Supply Co, Ogdensbg, NY | |||||||||||
| 7.05 | Property | 1 | Tractor Supply Co, Lake Ch, LA | |||||||||||
| 7.06 | Property | 1 | Tractor Supply Co, Oconto, WI | |||||||||||
| 7.07 | Property | 1 | Dollar General, Ghent, WV | |||||||||||
| 7.08 | Property | 1 | Tractor Supply Co, Kewaunee, WI | |||||||||||
| 7.09 | Property | 1 | Fresenius, Belzoni, MS | |||||||||||
| 7.10 | Property | 1 | Dollar General, Lenore, WV | |||||||||||
| 7.11 | Property | 1 | Family Dollar, Linden, AL | |||||||||||
| 7.12 | Property | 1 | Fresenius, Rayville, LA | |||||||||||
| 7.13 | Property | 1 | Dollar General, Burlington, WV | |||||||||||
| 7.14 | Property | 1 | Family Dollar, Franklinton, LA | |||||||||||
| 7.15 | Property | 1 | Dollar General, Hinton, WV | |||||||||||
| 7.16 | Property | 1 | Dollar General, Lerona, WV | |||||||||||
| 7.17 | Property | 1 | Dollar General, Rushford, NY | |||||||||||
| 7.18 | Property | 1 | Dollar General, Walker, WV | |||||||||||
| 7.19 | Property | 1 | Dollar General, Dixie, WV | |||||||||||
| 7.20 | Property | 1 | Dollar General, Bay Minette, AL | |||||||||||
| 7.21 | Property | 1 | Dollar General, Fruithurst, AL | |||||||||||
| 7.22 | Property | 1 | Dollar General, Billingsley, AL | |||||||||||
| 7.23 | Property | 1 | Dollar General, Knox City, TX | |||||||||||
| 7.24 | Property | 1 | Dollar General, South Dayton, NY | |||||||||||
| 7.25 | Property | 1 | Dollar General, Gaylesville, AL | |||||||||||
| 8 | Loan | 11, 25, 29, 30, 40 | 1 | Redmond Community Center | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 9 | Loan | 9, 10, 11, 21, 34, 40 | 9 | Shearer’s Industrial Portfolio | 30,000,000 | 107,598,000 | 354,550.35 | 453,404.52 | NAP | NAP | 137,598,000 | 453,404.52 | 62.8% | 1.95 |
| 9.01 | Property | 1 | 800 Northwest 4th Street | |||||||||||
| 9.02 | Property | 1 | 4100 Millennium Boulevard Southeast | |||||||||||
| 9.03 | Property | 1 | 3000 East Mount Pleasant Street | |||||||||||
| 9.04 | Property | 1 | 7330 West Sherman Street | |||||||||||
| 9.05 | Property | 12 | 1 | 821 Route 97 | ||||||||||
| 9.06 | Property | 1 | 3200 Northern Cross Boulevard | |||||||||||
| 9.07 | Property | 1 | 3636 Medallion Avenue | |||||||||||
| 9.08 | Property | 1 | 692 Wabash Avenue North | |||||||||||
| 9.09 | Property | 1 | 225 Commonwealth Avenue Extension | |||||||||||
| 10 | Loan | 19, 30 | 1 | Hall Road Crossing | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 11 | Loan | 10, 17, 19, 24, 26, 28, 36, 39 | 1 | Gem Tower | 28,000,000 | 12,000,000 | 34,350.55 | 114,501.85 | NAP | NAP | 40,000,000 | 114,501.85 | 54.5% | 2.78 |
| 12 | Loan | 11, 19 | 2 | 285 & 355 Riverside Ave | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 12.01 | Property | 29 | 1 | 285 Riverside Ave | ||||||||||
| 12.02 | Property | 29 | 1 | 355 Riverside Ave | ||||||||||
| 13 | Loan | 27 | 1 | Bala Woods | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 14 | Loan | 9, 19, 29, 31 | 1 | Prospector Plaza | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 15 | Loan | 10, 14, 24, 34, 37 | 1 | Novo Nordisk HQ | 22,167,000 | 188,500,000 | 451,994.20 | 505,147.28 | NAP | NAP | 210,667,000 | 505,147.28 | 63.8% | 3.16 |
| 16 | Loan | 10, 19, 26, 38 | 1 | JW Marriott Desert Springs | 20,000,000 | 108,000,000 | 455,793.75 | 540,200.00 | NAP | NAP | 128,000,000 | 540,200.00 | 41.8% | 3.14 |
| 17 | Loan | 11, 25 | 2 | 35 Crosby Street and 70 Carmine Street | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 17.01 | Property | 12 | 1 | 35 Crosby Street | ||||||||||
| 17.02 | Property | 1 | 70 Carmine Street | |||||||||||
| 18 | Loan | 22 | 1 | 1340 Lafayette | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 19 | Loan | 28 | 1 | Townsgate Office | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 20 | Loan | 11, 29, 30, 40 | 6 | Tharp Portfolio | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 20.01 | Property | 1 | Jiffy and Dollar | |||||||||||
| 20.02 | Property | 1 | Main Street Shoppes | |||||||||||
| 20.03 | Property | 1 | Greensburg Retail Center | |||||||||||
| 20.04 | Property | 1 | CSL Plasma | |||||||||||
| 20.05 | Property | 1 | FedEx | |||||||||||
| 20.06 | Property | 1 | Greenwood Med Spa | |||||||||||
| 21 | Loan | 28, 29, 33 | 1 | Santa Barbara Tech Center | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 22 | Loan | 33 | 1 | Greenbrier Towers I & II | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 23 | Loan | 19 | 1 | Apple Glen Crossing | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 24 | Loan | 13, 20, 28, 33 | 1 | Crossroads Village | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 25 | Loan | 19 | 1 | 1500 Volta Drive | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 26 | Loan | 19 | 1 | Courtyard Appleton | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
A-1-33
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Trust Pari Passu Cut-off Date Balance ($) | Non-Trust Pari Passu Companion Loan Cut-off Date Balance ($) | Non-Trust Pari Passu Companion Loan Monthly Debt Service ($) | Total Trust and Non-Trust Pari Passu Companion Loan Monthly Debt Service ($) | Subordinate Companion Loan Cut-off Date Balance ($) | Subordinate Companion Loan Interest Rate | Whole Loan Cut-off Date Balance ($) | Whole Loan Monthly Debt Service ($) | Whole Loan Cut-off Date LTV Ratio (%) | Whole Loan Underwritten NCF DSCR (x) |
| 27 | Loan | 29 | 1 | Lee’s Hill II | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 28 | Loan | 10, 11, 19, 25, 27, 28, 36 | 11 | Glen Forest Office Portfolio | 9,000,000 | 50,000,000 | 147,013.89 | 173,476.39 | NAP | NAP | 59,000,000 | 173,476.39 | 61.7% | 2.85 |
| 28.01 | Property | 1 | Hillcrest | |||||||||||
| 28.02 | Property | 1 | Arrington | |||||||||||
| 28.03 | Property | 1 | Highland II | |||||||||||
| 28.04 | Property | 29 | 1 | Meridian | ||||||||||
| 28.05 | Property | 29 | 1 | Bayberry | ||||||||||
| 28.06 | Property | 1 | Highland I | |||||||||||
| 28.07 | Property | 29 | 1 | Capstone | ||||||||||
| 28.08 | Property | 1 | Forest Plaza I | |||||||||||
| 28.09 | Property | 28, 29 | 1 | Forest Plaza II | ||||||||||
| 28.10 | Property | 1 | Utica | |||||||||||
| 28.11 | Property | 1 | Willard | |||||||||||
| 29 | Loan | 19 | 1 | Arlington Green Executive Plaza | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 30 | Loan | 12, 13, 27, 30, 40 | 1 | 1201 Main | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 31 | Loan | 11 | 2 | Walgreens New Castle & Oneonta | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 31.01 | Property | 1 | Walgreens Oneonta | |||||||||||
| 31.02 | Property | 1 | Walgreens New Castle | |||||||||||
| 32 | Loan | 11 | 2 | 138 St. Marks & 155 5th Ave | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 32.01 | Property | 1 | 155 5th Avenue | |||||||||||
| 32.02 | Property | 12 | 1 | 138 Saint Marks Place | ||||||||||
| 33 | Loan | 19, 20, 23, 26, 32 | 1 | STK Chicago | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 34 | Loan | 31 | 1 | 905 Medical Park Drive | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 35 | Loan | 39 | 1 | 3097 E Ana St | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 36 | Loan | 1 | VA Dialysis Center - Philadelphia | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |
| 37 | Loan | 19, 39 | 1 | 65 Triangle Industrial | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
A-1-34
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Whole Loan Underwritten NOI Debt Yield (%) | Mezzanine Debt Cut-off Date Balance($) | Mezzanine Debt Interest Rate (%) | Total Debt Cut-off Date Balance ($) | Total Debt Monthly Debt Service ($) | Total Debt Cut-off Date LTV Ratio (%) | Total Debt Underwritten NCF DSCR (x) | Total Debt Underwritten NOI Debt Yield (%) | Future Additional Debt Permitted (Y/N) |
| 4 | 36 | ||||||||||||
| 1 | Loan | 9, 10, 20, 24, 26, 28, 29, 32, 33, 34, 35 | 1 | 601 Lexington Avenue | 9.5% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 2 | Loan | 10, 14, 24, 28, 29 | 1 | One Wilshire | 9.6% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 3 | Loan | 9, 10, 11, 12, 25, 26, 28, 29 | 14 | Bedrock Portfolio | 13.6% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | Yes |
| 3.01 | Property | 1 | First National Building | ||||||||||
| 3.02 | Property | 27 | 1 | The Qube | |||||||||
| 3.03 | Property | 27 | 1 | Chrysler House | |||||||||
| 3.04 | Property | 27 | 1 | 1001 Woodward | |||||||||
| 3.05 | Property | 1 | One Woodward | ||||||||||
| 3.06 | Property | 1 | The Z Garage | ||||||||||
| 3.07 | Property | 1 | Two Detroit Garage | ||||||||||
| 3.08 | Property | 1 | 1505 & 1515 Woodward | ||||||||||
| 3.09 | Property | 1 | 1001 Brush Street | ||||||||||
| 3.10 | Property | 12 | 1 | The Assembly | |||||||||
| 3.11 | Property | 1 | 419 Fort Street Garage | ||||||||||
| 3.12 | Property | 12 | 1 | Vinton | |||||||||
| 3.13 | Property | 1 | 1401 First Street | ||||||||||
| 3.14 | Property | 1 | Lane Bryant Building | ||||||||||
| 4 | Loan | 19, 36 | 1 | Romaine & Orange Square | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | Yes |
| 5 | Loan | 26, 28, 29 | 1 | Shoreline Square | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 6 | Loan | 11, 13, 19, 25, 33 | 3 | Millennia Portfolio | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 6.01 | Property | 1 | Summit Ridge | ||||||||||
| 6.02 | Property | 1 | Lexington Village | ||||||||||
| 6.03 | Property | 1 | Gateway at the Greene | ||||||||||
| 7 | Loan | 11, 25, 27, 29 | 25 | InCommercial Net Lease Portfolio #5 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 7.01 | Property | 1 | Walgreens, Mount Pleasant, SC | ||||||||||
| 7.02 | Property | 1 | Walgreens, Meridian, ID | ||||||||||
| 7.03 | Property | 1 | Renal Care, Moncks Corner, SC | ||||||||||
| 7.04 | Property | 1 | Tractor Supply Co, Ogdensbg, NY | ||||||||||
| 7.05 | Property | 1 | Tractor Supply Co, Lake Ch, LA | ||||||||||
| 7.06 | Property | 1 | Tractor Supply Co, Oconto, WI | ||||||||||
| 7.07 | Property | 1 | Dollar General, Ghent, WV | ||||||||||
| 7.08 | Property | 1 | Tractor Supply Co, Kewaunee, WI | ||||||||||
| 7.09 | Property | 1 | Fresenius, Belzoni, MS | ||||||||||
| 7.10 | Property | 1 | Dollar General, Lenore, WV | ||||||||||
| 7.11 | Property | 1 | Family Dollar, Linden, AL | ||||||||||
| 7.12 | Property | 1 | Fresenius, Rayville, LA | ||||||||||
| 7.13 | Property | 1 | Dollar General, Burlington, WV | ||||||||||
| 7.14 | Property | 1 | Family Dollar, Franklinton, LA | ||||||||||
| 7.15 | Property | 1 | Dollar General, Hinton, WV | ||||||||||
| 7.16 | Property | 1 | Dollar General, Lerona, WV | ||||||||||
| 7.17 | Property | 1 | Dollar General, Rushford, NY | ||||||||||
| 7.18 | Property | 1 | Dollar General, Walker, WV | ||||||||||
| 7.19 | Property | 1 | Dollar General, Dixie, WV | ||||||||||
| 7.20 | Property | 1 | Dollar General, Bay Minette, AL | ||||||||||
| 7.21 | Property | 1 | Dollar General, Fruithurst, AL | ||||||||||
| 7.22 | Property | 1 | Dollar General, Billingsley, AL | ||||||||||
| 7.23 | Property | 1 | Dollar General, Knox City, TX | ||||||||||
| 7.24 | Property | 1 | Dollar General, South Dayton, NY | ||||||||||
| 7.25 | Property | 1 | Dollar General, Gaylesville, AL | ||||||||||
| 8 | Loan | 11, 25, 29, 30, 40 | 1 | Redmond Community Center | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 9 | Loan | 9, 10, 11, 21, 34, 40 | 9 | Shearer’s Industrial Portfolio | 8.3% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 9.01 | Property | 1 | 800 Northwest 4th Street | ||||||||||
| 9.02 | Property | 1 | 4100 Millennium Boulevard Southeast | ||||||||||
| 9.03 | Property | 1 | 3000 East Mount Pleasant Street | ||||||||||
| 9.04 | Property | 1 | 7330 West Sherman Street | ||||||||||
| 9.05 | Property | 12 | 1 | 821 Route 97 | |||||||||
| 9.06 | Property | 1 | 3200 Northern Cross Boulevard | ||||||||||
| 9.07 | Property | 1 | 3636 Medallion Avenue | ||||||||||
| 9.08 | Property | 1 | 692 Wabash Avenue North | ||||||||||
| 9.09 | Property | 1 | 225 Commonwealth Avenue Extension | ||||||||||
| 10 | Loan | 19, 30 | 1 | Hall Road Crossing | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 11 | Loan | 10, 17, 19, 24, 26, 28, 36, 39 | 1 | Gem Tower | 9.6% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | Yes |
| 12 | Loan | 11, 19 | 2 | 285 & 355 Riverside Ave | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 12.01 | Property | 29 | 1 | 285 Riverside Ave | |||||||||
| 12.02 | Property | 29 | 1 | 355 Riverside Ave | |||||||||
| 13 | Loan | 27 | 1 | Bala Woods | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 14 | Loan | 9, 19, 29, 31 | 1 | Prospector Plaza | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 15 | Loan | 10, 14, 24, 34, 37 | 1 | Novo Nordisk HQ | 9.2% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 16 | Loan | 10, 19, 26, 38 | 1 | JW Marriott Desert Springs | 20.4% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 17 | Loan | 11, 25 | 2 | 35 Crosby Street and 70 Carmine Street | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 17.01 | Property | 12 | 1 | 35 Crosby Street | |||||||||
| 17.02 | Property | 1 | 70 Carmine Street | ||||||||||
| 18 | Loan | 22 | 1 | 1340 Lafayette | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 19 | Loan | 28 | 1 | Townsgate Office | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 20 | Loan | 11, 29, 30, 40 | 6 | Tharp Portfolio | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 20.01 | Property | 1 | Jiffy and Dollar | ||||||||||
| 20.02 | Property | 1 | Main Street Shoppes | ||||||||||
| 20.03 | Property | 1 | Greensburg Retail Center | ||||||||||
| 20.04 | Property | 1 | CSL Plasma | ||||||||||
| 20.05 | Property | 1 | FedEx | ||||||||||
| 20.06 | Property | 1 | Greenwood Med Spa | ||||||||||
| 21 | Loan | 28, 29, 33 | 1 | Santa Barbara Tech Center | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 22 | Loan | 33 | 1 | Greenbrier Towers I & II | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 23 | Loan | 19 | 1 | Apple Glen Crossing | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 24 | Loan | 13, 20, 28, 33 | 1 | Crossroads Village | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 25 | Loan | 19 | 1 | 1500 Volta Drive | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 26 | Loan | 19 | 1 | Courtyard Appleton | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
A-1-35
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Whole Loan Underwritten NOI Debt Yield (%) | Mezzanine Debt Cut-off Date Balance($) | Mezzanine Debt Interest Rate (%) | Total Debt Cut-off Date Balance ($) | Total Debt Monthly Debt Service ($) | Total Debt Cut-off Date LTV Ratio (%) | Total Debt Underwritten NCF DSCR (x) | Total Debt Underwritten NOI Debt Yield (%) | Future Additional Debt Permitted (Y/N) |
| 27 | Loan | 29 | 1 | Lee’s Hill II | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 28 | Loan | 10, 11, 19, 25, 27, 28, 36 | 11 | Glen Forest Office Portfolio | 11.3% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | Yes |
| 28.01 | Property | 1 | Hillcrest | ||||||||||
| 28.02 | Property | 1 | Arrington | ||||||||||
| 28.03 | Property | 1 | Highland II | ||||||||||
| 28.04 | Property | 29 | 1 | Meridian | |||||||||
| 28.05 | Property | 29 | 1 | Bayberry | |||||||||
| 28.06 | Property | 1 | Highland I | ||||||||||
| 28.07 | Property | 29 | 1 | Capstone | |||||||||
| 28.08 | Property | 1 | Forest Plaza I | ||||||||||
| 28.09 | Property | 28, 29 | 1 | Forest Plaza II | |||||||||
| 28.10 | Property | 1 | Utica | ||||||||||
| 28.11 | Property | 1 | Willard | ||||||||||
| 29 | Loan | 19 | 1 | Arlington Green Executive Plaza | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 30 | Loan | 12, 13, 27, 30, 40 | 1 | 1201 Main | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 31 | Loan | 11 | 2 | Walgreens New Castle & Oneonta | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 31.01 | Property | 1 | Walgreens Oneonta | ||||||||||
| 31.02 | Property | 1 | Walgreens New Castle | ||||||||||
| 32 | Loan | 11 | 2 | 138 St. Marks & 155 5th Ave | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 32.01 | Property | 1 | 155 5th Avenue | ||||||||||
| 32.02 | Property | 12 | 1 | 138 Saint Marks Place | |||||||||
| 33 | Loan | 19, 20, 23, 26, 32 | 1 | STK Chicago | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 34 | Loan | 31 | 1 | 905 Medical Park Drive | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 35 | Loan | 39 | 1 | 3097 E Ana St | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
| 36 | Loan | 1 | VA Dialysis Center - Philadelphia | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No | |
| 37 | Loan | 19, 39 | 1 | 65 Triangle Industrial | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | No |
A-1-36
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Future Debt Permitted Type |
| 36 | |||||
| 1 | Loan | 9, 10, 20, 24, 26, 28, 29, 32, 33, 34, 35 | 1 | 601 Lexington Avenue | NAP |
| 2 | Loan | 10, 14, 24, 28, 29 | 1 | One Wilshire | NAP |
| 3 | Loan | 9, 10, 11, 12, 25, 26, 28, 29 | 14 | Bedrock Portfolio | Unsecured |
| 3.01 | Property | 1 | First National Building | ||
| 3.02 | Property | 27 | 1 | The Qube | |
| 3.03 | Property | 27 | 1 | Chrysler House | |
| 3.04 | Property | 27 | 1 | 1001 Woodward | |
| 3.05 | Property | 1 | One Woodward | ||
| 3.06 | Property | 1 | The Z Garage | ||
| 3.07 | Property | 1 | Two Detroit Garage | ||
| 3.08 | Property | 1 | 1505 & 1515 Woodward | ||
| 3.09 | Property | 1 | 1001 Brush Street | ||
| 3.10 | Property | 12 | 1 | The Assembly | |
| 3.11 | Property | 1 | 419 Fort Street Garage | ||
| 3.12 | Property | 12 | 1 | Vinton | |
| 3.13 | Property | 1 | 1401 First Street | ||
| 3.14 | Property | 1 | Lane Bryant Building | ||
| 4 | Loan | 19, 36 | 1 | Romaine & Orange Square | Mezzanine (Max Combined LTV of 62.4%; Min Combined DSCR of 1.78x; Intercreditor Agreement is required) |
| 5 | Loan | 26, 28, 29 | 1 | Shoreline Square | NAP |
| 6 | Loan | 11, 13, 19, 25, 33 | 3 | Millennia Portfolio | NAP |
| 6.01 | Property | 1 | Summit Ridge | ||
| 6.02 | Property | 1 | Lexington Village | ||
| 6.03 | Property | 1 | Gateway at the Greene | ||
| 7 | Loan | 11, 25, 27, 29 | 25 | InCommercial Net Lease Portfolio #5 | NAP |
| 7.01 | Property | 1 | Walgreens, Mount Pleasant, SC | ||
| 7.02 | Property | 1 | Walgreens, Meridian, ID | ||
| 7.03 | Property | 1 | Renal Care, Moncks Corner, SC | ||
| 7.04 | Property | 1 | Tractor Supply Co, Ogdensbg, NY | ||
| 7.05 | Property | 1 | Tractor Supply Co, Lake Ch, LA | ||
| 7.06 | Property | 1 | Tractor Supply Co, Oconto, WI | ||
| 7.07 | Property | 1 | Dollar General, Ghent, WV | ||
| 7.08 | Property | 1 | Tractor Supply Co, Kewaunee, WI | ||
| 7.09 | Property | 1 | Fresenius, Belzoni, MS | ||
| 7.10 | Property | 1 | Dollar General, Lenore, WV | ||
| 7.11 | Property | 1 | Family Dollar, Linden, AL | ||
| 7.12 | Property | 1 | Fresenius, Rayville, LA | ||
| 7.13 | Property | 1 | Dollar General, Burlington, WV | ||
| 7.14 | Property | 1 | Family Dollar, Franklinton, LA | ||
| 7.15 | Property | 1 | Dollar General, Hinton, WV | ||
| 7.16 | Property | 1 | Dollar General, Lerona, WV | ||
| 7.17 | Property | 1 | Dollar General, Rushford, NY | ||
| 7.18 | Property | 1 | Dollar General, Walker, WV | ||
| 7.19 | Property | 1 | Dollar General, Dixie, WV | ||
| 7.20 | Property | 1 | Dollar General, Bay Minette, AL | ||
| 7.21 | Property | 1 | Dollar General, Fruithurst, AL | ||
| 7.22 | Property | 1 | Dollar General, Billingsley, AL | ||
| 7.23 | Property | 1 | Dollar General, Knox City, TX | ||
| 7.24 | Property | 1 | Dollar General, South Dayton, NY | ||
| 7.25 | Property | 1 | Dollar General, Gaylesville, AL | ||
| 8 | Loan | 11, 25, 29, 30, 40 | 1 | Redmond Community Center | NAP |
| 9 | Loan | 9, 10, 11, 21, 34, 40 | 9 | Shearer’s Industrial Portfolio | NAP |
| 9.01 | Property | 1 | 800 Northwest 4th Street | ||
| 9.02 | Property | 1 | 4100 Millennium Boulevard Southeast | ||
| 9.03 | Property | 1 | 3000 East Mount Pleasant Street | ||
| 9.04 | Property | 1 | 7330 West Sherman Street | ||
| 9.05 | Property | 12 | 1 | 821 Route 97 | |
| 9.06 | Property | 1 | 3200 Northern Cross Boulevard | ||
| 9.07 | Property | 1 | 3636 Medallion Avenue | ||
| 9.08 | Property | 1 | 692 Wabash Avenue North | ||
| 9.09 | Property | 1 | 225 Commonwealth Avenue Extension | ||
| 10 | Loan | 19, 30 | 1 | Hall Road Crossing | NAP |
| 11 | Loan | 10, 17, 19, 24, 26, 28, 36, 39 | 1 | Gem Tower | Mezzanine (Max Combined LTV of 55.0%; Min Combined DSCR of 2.97x; Min Combined Debt Yield of 10.15%; Intercreditor Agreement is required) |
| 12 | Loan | 11, 19 | 2 | 285 & 355 Riverside Ave | NAP |
| 12.01 | Property | 29 | 1 | 285 Riverside Ave | |
| 12.02 | Property | 29 | 1 | 355 Riverside Ave | |
| 13 | Loan | 27 | 1 | Bala Woods | NAP |
| 14 | Loan | 9, 19, 29, 31 | 1 | Prospector Plaza | NAP |
| 15 | Loan | 10, 14, 24, 34, 37 | 1 | Novo Nordisk HQ | NAP |
| 16 | Loan | 10, 19, 26, 38 | 1 | JW Marriott Desert Springs | NAP |
| 17 | Loan | 11, 25 | 2 | 35 Crosby Street and 70 Carmine Street | NAP |
| 17.01 | Property | 12 | 1 | 35 Crosby Street | |
| 17.02 | Property | 1 | 70 Carmine Street | ||
| 18 | Loan | 22 | 1 | 1340 Lafayette | NAP |
| 19 | Loan | 28 | 1 | Townsgate Office | NAP |
| 20 | Loan | 11, 29, 30, 40 | 6 | Tharp Portfolio | NAP |
| 20.01 | Property | 1 | Jiffy and Dollar | ||
| 20.02 | Property | 1 | Main Street Shoppes | ||
| 20.03 | Property | 1 | Greensburg Retail Center | ||
| 20.04 | Property | 1 | CSL Plasma | ||
| 20.05 | Property | 1 | FedEx | ||
| 20.06 | Property | 1 | Greenwood Med Spa | ||
| 21 | Loan | 28, 29, 33 | 1 | Santa Barbara Tech Center | NAP |
| 22 | Loan | 33 | 1 | Greenbrier Towers I & II | NAP |
| 23 | Loan | 19 | 1 | Apple Glen Crossing | NAP |
| 24 | Loan | 13, 20, 28, 33 | 1 | Crossroads Village | NAP |
| 25 | Loan | 19 | 1 | 1500 Volta Drive | NAP |
| 26 | Loan | 19 | 1 | Courtyard Appleton | NAP |
A-1-37
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Future Debt Permitted Type |
| 27 | Loan | 29 | 1 | Lee’s Hill II | NAP |
| 28 | Loan | 10, 11, 19, 25, 27, 28, 36 | 11 | Glen Forest Office Portfolio | Mezzanine (Max Combined LTV of 75.0%; Min Combined DSCR of 2.00x; Min Combined DY of 10.0%; Intercreditor Agreement is required) |
| 28.01 | Property | 1 | Hillcrest | ||
| 28.02 | Property | 1 | Arrington | ||
| 28.03 | Property | 1 | Highland II | ||
| 28.04 | Property | 29 | 1 | Meridian | |
| 28.05 | Property | 29 | 1 | Bayberry | |
| 28.06 | Property | 1 | Highland I | ||
| 28.07 | Property | 29 | 1 | Capstone | |
| 28.08 | Property | 1 | Forest Plaza I | ||
| 28.09 | Property | 28, 29 | 1 | Forest Plaza II | |
| 28.10 | Property | 1 | Utica | ||
| 28.11 | Property | 1 | Willard | ||
| 29 | Loan | 19 | 1 | Arlington Green Executive Plaza | NAP |
| 30 | Loan | 12, 13, 27, 30, 40 | 1 | 1201 Main | NAP |
| 31 | Loan | 11 | 2 | Walgreens New Castle & Oneonta | NAP |
| 31.01 | Property | 1 | Walgreens Oneonta | ||
| 31.02 | Property | 1 | Walgreens New Castle | ||
| 32 | Loan | 11 | 2 | 138 St. Marks & 155 5th Ave | NAP |
| 32.01 | Property | 1 | 155 5th Avenue | ||
| 32.02 | Property | 12 | 1 | 138 Saint Marks Place | |
| 33 | Loan | 19, 20, 23, 26, 32 | 1 | STK Chicago | NAP |
| 34 | Loan | 31 | 1 | 905 Medical Park Drive | NAP |
| 35 | Loan | 39 | 1 | 3097 E Ana St | NAP |
| 36 | Loan | 1 | VA Dialysis Center - Philadelphia | NAP | |
| 37 | Loan | 19, 39 | 1 | 65 Triangle Industrial | NAP |
A-1-38
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Sponsor |
| 1 | Loan | 9, 10, 20, 24, 26, 28, 29, 32, 33, 34, 35 | 1 | 601 Lexington Avenue | BP/CG Center MM LLC |
| 2 | Loan | 10, 14, 24, 28, 29 | 1 | One Wilshire | TechCore, LLC |
| 3 | Loan | 9, 10, 11, 12, 25, 26, 28, 29 | 14 | Bedrock Portfolio | Bedrock Detroit |
| 3.01 | Property | 1 | First National Building | ||
| 3.02 | Property | 27 | 1 | The Qube | |
| 3.03 | Property | 27 | 1 | Chrysler House | |
| 3.04 | Property | 27 | 1 | 1001 Woodward | |
| 3.05 | Property | 1 | One Woodward | ||
| 3.06 | Property | 1 | The Z Garage | ||
| 3.07 | Property | 1 | Two Detroit Garage | ||
| 3.08 | Property | 1 | 1505 & 1515 Woodward | ||
| 3.09 | Property | 1 | 1001 Brush Street | ||
| 3.10 | Property | 12 | 1 | The Assembly | |
| 3.11 | Property | 1 | 419 Fort Street Garage | ||
| 3.12 | Property | 12 | 1 | Vinton | |
| 3.13 | Property | 1 | 1401 First Street | ||
| 3.14 | Property | 1 | Lane Bryant Building | ||
| 4 | Loan | 19, 36 | 1 | Romaine & Orange Square | Richard Scott Ressler, Avraham Shemesh, and Shaul Kuba |
| 5 | Loan | 26, 28, 29 | 1 | Shoreline Square | Jack Sitt and Ezak Assa |
| 6 | Loan | 11, 13, 19, 25, 33 | 3 | Millennia Portfolio | Frank T. Sinito |
| 6.01 | Property | 1 | Summit Ridge | ||
| 6.02 | Property | 1 | Lexington Village | ||
| 6.03 | Property | 1 | Gateway at the Greene | ||
| 7 | Loan | 11, 25, 27, 29 | 25 | InCommercial Net Lease Portfolio #5 | Erik Conrad |
| 7.01 | Property | 1 | Walgreens, Mount Pleasant, SC | ||
| 7.02 | Property | 1 | Walgreens, Meridian, ID | ||
| 7.03 | Property | 1 | Renal Care, Moncks Corner, SC | ||
| 7.04 | Property | 1 | Tractor Supply Co, Ogdensbg, NY | ||
| 7.05 | Property | 1 | Tractor Supply Co, Lake Ch, LA | ||
| 7.06 | Property | 1 | Tractor Supply Co, Oconto, WI | ||
| 7.07 | Property | 1 | Dollar General, Ghent, WV | ||
| 7.08 | Property | 1 | Tractor Supply Co, Kewaunee, WI | ||
| 7.09 | Property | 1 | Fresenius, Belzoni, MS | ||
| 7.10 | Property | 1 | Dollar General, Lenore, WV | ||
| 7.11 | Property | 1 | Family Dollar, Linden, AL | ||
| 7.12 | Property | 1 | Fresenius, Rayville, LA | ||
| 7.13 | Property | 1 | Dollar General, Burlington, WV | ||
| 7.14 | Property | 1 | Family Dollar, Franklinton, LA | ||
| 7.15 | Property | 1 | Dollar General, Hinton, WV | ||
| 7.16 | Property | 1 | Dollar General, Lerona, WV | ||
| 7.17 | Property | 1 | Dollar General, Rushford, NY | ||
| 7.18 | Property | 1 | Dollar General, Walker, WV | ||
| 7.19 | Property | 1 | Dollar General, Dixie, WV | ||
| 7.20 | Property | 1 | Dollar General, Bay Minette, AL | ||
| 7.21 | Property | 1 | Dollar General, Fruithurst, AL | ||
| 7.22 | Property | 1 | Dollar General, Billingsley, AL | ||
| 7.23 | Property | 1 | Dollar General, Knox City, TX | ||
| 7.24 | Property | 1 | Dollar General, South Dayton, NY | ||
| 7.25 | Property | 1 | Dollar General, Gaylesville, AL | ||
| 8 | Loan | 11, 25, 29, 30, 40 | 1 | Redmond Community Center | Collin P. Madden |
| 9 | Loan | 9, 10, 11, 21, 34, 40 | 9 | Shearer’s Industrial Portfolio | USRA Institutional Net Lease Fund IV, LLC |
| 9.01 | Property | 1 | 800 Northwest 4th Street | ||
| 9.02 | Property | 1 | 4100 Millennium Boulevard Southeast | ||
| 9.03 | Property | 1 | 3000 East Mount Pleasant Street | ||
| 9.04 | Property | 1 | 7330 West Sherman Street | ||
| 9.05 | Property | 12 | 1 | 821 Route 97 | |
| 9.06 | Property | 1 | 3200 Northern Cross Boulevard | ||
| 9.07 | Property | 1 | 3636 Medallion Avenue | ||
| 9.08 | Property | 1 | 692 Wabash Avenue North | ||
| 9.09 | Property | 1 | 225 Commonwealth Avenue Extension | ||
| 10 | Loan | 19, 30 | 1 | Hall Road Crossing | Daniel Kukes, Nikolaos Moschouris, Daniel Kukes Living Trust and Nikolaos A. Moschouris Trust Under Agreement Dated July 13, 2009 |
| 11 | Loan | 10, 17, 19, 24, 26, 28, 36, 39 | 1 | Gem Tower | Prime Real Estate Holding Corp. |
| 12 | Loan | 11, 19 | 2 | 285 & 355 Riverside Ave | Jeffrey J. Feil |
| 12.01 | Property | 29 | 1 | 285 Riverside Ave | |
| 12.02 | Property | 29 | 1 | 355 Riverside Ave | |
| 13 | Loan | 27 | 1 | Bala Woods | CF Real Estate Holdings, LLC |
| 14 | Loan | 9, 19, 29, 31 | 1 | Prospector Plaza | Joseph W. Rich and Christopher D. Shane |
| 15 | Loan | 10, 14, 24, 34, 37 | 1 | Novo Nordisk HQ | Hana Alternative Asset Management Co., Ltd. |
| 16 | Loan | 10, 19, 26, 38 | 1 | JW Marriott Desert Springs | Tiffany Lam |
| 17 | Loan | 11, 25 | 2 | 35 Crosby Street and 70 Carmine Street | Alfred Sabetfard |
| 17.01 | Property | 12 | 1 | 35 Crosby Street | |
| 17.02 | Property | 1 | 70 Carmine Street | ||
| 18 | Loan | 22 | 1 | 1340 Lafayette | Wildflower Ltd. LLC |
| 19 | Loan | 28 | 1 | Townsgate Office | Louis Edward Mellman and Garry Collett |
| 20 | Loan | 11, 29, 30, 40 | 6 | Tharp Portfolio | Donald J. Tharp |
| 20.01 | Property | 1 | Jiffy and Dollar | ||
| 20.02 | Property | 1 | Main Street Shoppes | ||
| 20.03 | Property | 1 | Greensburg Retail Center | ||
| 20.04 | Property | 1 | CSL Plasma | ||
| 20.05 | Property | 1 | FedEx | ||
| 20.06 | Property | 1 | Greenwood Med Spa | ||
| 21 | Loan | 28, 29, 33 | 1 | Santa Barbara Tech Center | Jeffrey C. Bermant |
| 22 | Loan | 33 | 1 | Greenbrier Towers I & II | Daniel Stuzin |
| 23 | Loan | 19 | 1 | Apple Glen Crossing | Berengaria GW, LLC, Marcus RE Fund I, LP, Jay Peirick and Dan Sisel |
| 24 | Loan | 13, 20, 28, 33 | 1 | Crossroads Village | Grand Sakwa Properties and Lormax Stern Development |
| 25 | Loan | 19 | 1 | 1500 Volta Drive | Mariano Weil, Federico Weil and Federico Wilensky |
| 26 | Loan | 19 | 1 | Courtyard Appleton | Mark Geall |
A-1-39
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Sponsor |
| 27 | Loan | 29 | 1 | Lee’s Hill II | Haim Joseph |
| 28 | Loan | 10, 11, 19, 25, 27, 28, 36 | 11 | Glen Forest Office Portfolio | Glen Forest Venture LLC |
| 28.01 | Property | 1 | Hillcrest | ||
| 28.02 | Property | 1 | Arrington | ||
| 28.03 | Property | 1 | Highland II | ||
| 28.04 | Property | 29 | 1 | Meridian | |
| 28.05 | Property | 29 | 1 | Bayberry | |
| 28.06 | Property | 1 | Highland I | ||
| 28.07 | Property | 29 | 1 | Capstone | |
| 28.08 | Property | 1 | Forest Plaza I | ||
| 28.09 | Property | 28, 29 | 1 | Forest Plaza II | |
| 28.10 | Property | 1 | Utica | ||
| 28.11 | Property | 1 | Willard | ||
| 29 | Loan | 19 | 1 | Arlington Green Executive Plaza | Moshe Rothman |
| 30 | Loan | 12, 13, 27, 30, 40 | 1 | 1201 Main | Jack Schrager and Riley Soderquist |
| 31 | Loan | 11 | 2 | Walgreens New Castle & Oneonta | Leonard Levy, Lawrence Levy and Eric Levy |
| 31.01 | Property | 1 | Walgreens Oneonta | ||
| 31.02 | Property | 1 | Walgreens New Castle | ||
| 32 | Loan | 11 | 2 | 138 St. Marks & 155 5th Ave | Abe Cohen |
| 32.01 | Property | 1 | 155 5th Avenue | ||
| 32.02 | Property | 12 | 1 | 138 Saint Marks Place | |
| 33 | Loan | 19, 20, 23, 26, 32 | 1 | STK Chicago | Fred S. Latsko |
| 34 | Loan | 31 | 1 | 905 Medical Park Drive | Elizabeth G Frazier Revocable Trust, Elizabeth Frazier and Bradley Grausz |
| 35 | Loan | 39 | 1 | 3097 E Ana St | Mehdi Farid |
| 36 | Loan | 1 | VA Dialysis Center - Philadelphia | Arizona Lipnob Estates, LLC | |
| 37 | Loan | 19, 39 | 1 | 65 Triangle Industrial | Ching Man Wong |
A-1-40
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Non-Recourse Carveout Guarantor | Delaware Statutory Trust (Y/N) |
Tenants-in-common (Y/N) |
Loan Purpose | Property Located Within a Qualified Opportunity Zone (Y/N) |
| 7 | |||||||||
| 1 | Loan | 9, 10, 20, 24, 26, 28, 29, 32, 33, 34, 35 | 1 | 601 Lexington Avenue | NAP | No | No | Refinance | No |
| 2 | Loan | 10, 14, 24, 28, 29 | 1 | One Wilshire | TechCore, LLC | No | No | Refinance | No |
| 3 | Loan | 9, 10, 11, 12, 25, 26, 28, 29 | 14 | Bedrock Portfolio | Rock Backer LLC | No | No | Refinance | |
| 3.01 | Property | 1 | First National Building | Yes | |||||
| 3.02 | Property | 27 | 1 | The Qube | Yes | ||||
| 3.03 | Property | 27 | 1 | Chrysler House | Yes | ||||
| 3.04 | Property | 27 | 1 | 1001 Woodward | Yes | ||||
| 3.05 | Property | 1 | One Woodward | Yes | |||||
| 3.06 | Property | 1 | The Z Garage | Yes | |||||
| 3.07 | Property | 1 | Two Detroit Garage | Yes | |||||
| 3.08 | Property | 1 | 1505 & 1515 Woodward | Yes | |||||
| 3.09 | Property | 1 | 1001 Brush Street | Yes | |||||
| 3.10 | Property | 12 | 1 | The Assembly | Yes | ||||
| 3.11 | Property | 1 | 419 Fort Street Garage | Yes | |||||
| 3.12 | Property | 12 | 1 | Vinton | Yes | ||||
| 3.13 | Property | 1 | 1401 First Street | Yes | |||||
| 3.14 | Property | 1 | Lane Bryant Building | Yes | |||||
| 4 | Loan | 19, 36 | 1 | Romaine & Orange Square | SKR Holdings, LLC | No | No | Refinance | No |
| 5 | Loan | 26, 28, 29 | 1 | Shoreline Square | Jack Sitt and Ezak Assa | No | No | Acquisition | No |
| 6 | Loan | 11, 13, 19, 25, 33 | 3 | Millennia Portfolio | Frank T. Sinito | No | No | Refinance | |
| 6.01 | Property | 1 | Summit Ridge | Yes | |||||
| 6.02 | Property | 1 | Lexington Village | No | |||||
| 6.03 | Property | 1 | Gateway at the Greene | No | |||||
| 7 | Loan | 11, 25, 27, 29 | 25 | InCommercial Net Lease Portfolio #5 | Erik Conrad | Yes | No | Recapitalization | |
| 7.01 | Property | 1 | Walgreens, Mount Pleasant, SC | No | |||||
| 7.02 | Property | 1 | Walgreens, Meridian, ID | No | |||||
| 7.03 | Property | 1 | Renal Care, Moncks Corner, SC | No | |||||
| 7.04 | Property | 1 | Tractor Supply Co, Ogdensbg, NY | Yes | |||||
| 7.05 | Property | 1 | Tractor Supply Co, Lake Ch, LA | No | |||||
| 7.06 | Property | 1 | Tractor Supply Co, Oconto, WI | No | |||||
| 7.07 | Property | 1 | Dollar General, Ghent, WV | No | |||||
| 7.08 | Property | 1 | Tractor Supply Co, Kewaunee, WI | No | |||||
| 7.09 | Property | 1 | Fresenius, Belzoni, MS | No | |||||
| 7.10 | Property | 1 | Dollar General, Lenore, WV | No | |||||
| 7.11 | Property | 1 | Family Dollar, Linden, AL | No | |||||
| 7.12 | Property | 1 | Fresenius, Rayville, LA | Yes | |||||
| 7.13 | Property | 1 | Dollar General, Burlington, WV | No | |||||
| 7.14 | Property | 1 | Family Dollar, Franklinton, LA | No | |||||
| 7.15 | Property | 1 | Dollar General, Hinton, WV | No | |||||
| 7.16 | Property | 1 | Dollar General, Lerona, WV | No | |||||
| 7.17 | Property | 1 | Dollar General, Rushford, NY | No | |||||
| 7.18 | Property | 1 | Dollar General, Walker, WV | No | |||||
| 7.19 | Property | 1 | Dollar General, Dixie, WV | No | |||||
| 7.20 | Property | 1 | Dollar General, Bay Minette, AL | No | |||||
| 7.21 | Property | 1 | Dollar General, Fruithurst, AL | No | |||||
| 7.22 | Property | 1 | Dollar General, Billingsley, AL | No | |||||
| 7.23 | Property | 1 | Dollar General, Knox City, TX | No | |||||
| 7.24 | Property | 1 | Dollar General, South Dayton, NY | No | |||||
| 7.25 | Property | 1 | Dollar General, Gaylesville, AL | No | |||||
| 8 | Loan | 11, 25, 29, 30, 40 | 1 | Redmond Community Center | Collin P. Madden, Lynda Rae Collins, Robert D. Butler and Daryl Vander Pol | No | No | Acquisition | No |
| 9 | Loan | 9, 10, 11, 21, 34, 40 | 9 | Shearer’s Industrial Portfolio | USRA Net Lease IV Capital Corp. | No | No | Acquisition | |
| 9.01 | Property | 1 | 800 Northwest 4th Street | No | |||||
| 9.02 | Property | 1 | 4100 Millennium Boulevard Southeast | No | |||||
| 9.03 | Property | 1 | 3000 East Mount Pleasant Street | No | |||||
| 9.04 | Property | 1 | 7330 West Sherman Street | No | |||||
| 9.05 | Property | 12 | 1 | 821 Route 97 | No | ||||
| 9.06 | Property | 1 | 3200 Northern Cross Boulevard | No | |||||
| 9.07 | Property | 1 | 3636 Medallion Avenue | Yes | |||||
| 9.08 | Property | 1 | 692 Wabash Avenue North | No | |||||
| 9.09 | Property | 1 | 225 Commonwealth Avenue Extension | No | |||||
| 10 | Loan | 19, 30 | 1 | Hall Road Crossing | Daniel Kukes, Nikolaos Moschouris, Daniel Kukes Living Trust and Nikolaos A. Moschouris Trust Under Agreement Dated July 13, 2009 | No | No | Refinance | No |
| 11 | Loan | 10, 17, 19, 24, 26, 28, 36, 39 | 1 | Gem Tower | Ihsan Gulay | No | No | Refinance | No |
| 12 | Loan | 11, 19 | 2 | 285 & 355 Riverside Ave | Jeffrey J. Feil | No | No | Acquisition | |
| 12.01 | Property | 29 | 1 | 285 Riverside Ave | No | ||||
| 12.02 | Property | 29 | 1 | 355 Riverside Ave | No | ||||
| 13 | Loan | 27 | 1 | Bala Woods | CF Real Estate Holdings, LLC | Yes | No | Acquisition | No |
| 14 | Loan | 9, 19, 29, 31 | 1 | Prospector Plaza | Joseph W. Rich and Christopher D. Shane | No | Yes | Refinance | No |
| 15 | Loan | 10, 14, 24, 34, 37 | 1 | Novo Nordisk HQ | NAP | No | No | Refinance | No |
| 16 | Loan | 10, 19, 26, 38 | 1 | JW Marriott Desert Springs | Tiffany Lam | No | No | Refinance | No |
| 17 | Loan | 11, 25 | 2 | 35 Crosby Street and 70 Carmine Street | Alfred Sabetfard | No | No | Refinance | |
| 17.01 | Property | 12 | 1 | 35 Crosby Street | No | ||||
| 17.02 | Property | 1 | 70 Carmine Street | No | |||||
| 18 | Loan | 22 | 1 | 1340 Lafayette | Matthew A. Dicker, Adam I Gordon and David M. Johnson | No | No | Refinance | Yes |
| 19 | Loan | 28 | 1 | Townsgate Office | LG TC Holdings LP | No | No | Refinance | No |
| 20 | Loan | 11, 29, 30, 40 | 6 | Tharp Portfolio | Donald J. Tharp | No | No | Refinance | |
| 20.01 | Property | 1 | Jiffy and Dollar | No | |||||
| 20.02 | Property | 1 | Main Street Shoppes | No | |||||
| 20.03 | Property | 1 | Greensburg Retail Center | No | |||||
| 20.04 | Property | 1 | CSL Plasma | No | |||||
| 20.05 | Property | 1 | FedEx | Yes | |||||
| 20.06 | Property | 1 | Greenwood Med Spa | No | |||||
| 21 | Loan | 28, 29, 33 | 1 | Santa Barbara Tech Center | Jeffrey C. Bermant | No | No | Refinance | No |
| 22 | Loan | 33 | 1 | Greenbrier Towers I & II | Daniel Stuzin | No | No | Acquisition | No |
| 23 | Loan | 19 | 1 | Apple Glen Crossing | Berengaria GW, LLC, Marcus RE Fund I, LP, Jay Peirick and Dan Sisel | No | No | Acquisition | No |
| 24 | Loan | 13, 20, 28, 33 | 1 | Crossroads Village | Gary R. Sakwa, Christopher G. Brochert and Daniel L. Stern | No | No | Refinance | No |
| 25 | Loan | 19 | 1 | 1500 Volta Drive | Mariano Weil, Federico Weil and Federico Wilensky | No | No | Refinance | No |
| 26 | Loan | 19 | 1 | Courtyard Appleton | Mark Geall | No | No | Refinance | No |
A-1-41
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Non-Recourse Carveout Guarantor | Delaware Statutory Trust (Y/N) |
Tenants-in-common (Y/N) |
Loan Purpose | Property Located Within a Qualified Opportunity Zone (Y/N) |
| 27 | Loan | 29 | 1 | Lee’s Hill II | Haim Joseph | No | No | Refinance | No |
| 28 | Loan | 10, 11, 19, 25, 27, 28, 36 | 11 | Glen Forest Office Portfolio | Jack Sitt | No | No | Acquisition | |
| 28.01 | Property | 1 | Hillcrest | Yes | |||||
| 28.02 | Property | 1 | Arrington | Yes | |||||
| 28.03 | Property | 1 | Highland II | Yes | |||||
| 28.04 | Property | 29 | 1 | Meridian | Yes | ||||
| 28.05 | Property | 29 | 1 | Bayberry | Yes | ||||
| 28.06 | Property | 1 | Highland I | Yes | |||||
| 28.07 | Property | 29 | 1 | Capstone | Yes | ||||
| 28.08 | Property | 1 | Forest Plaza I | Yes | |||||
| 28.09 | Property | 28, 29 | 1 | Forest Plaza II | Yes | ||||
| 28.10 | Property | 1 | Utica | No | |||||
| 28.11 | Property | 1 | Willard | No | |||||
| 29 | Loan | 19 | 1 | Arlington Green Executive Plaza | Moshe Rothman | No | No | Acquisition | No |
| 30 | Loan | 12, 13, 27, 30, 40 | 1 | 1201 Main | Jack Schrager and Riley Soderquist | No | No | Refinance | No |
| 31 | Loan | 11 | 2 | Walgreens New Castle & Oneonta | Leonard Levy, Lawrence Levy and Eric Levy | No | No | Acquisition | |
| 31.01 | Property | 1 | Walgreens Oneonta | Yes | |||||
| 31.02 | Property | 1 | Walgreens New Castle | No | |||||
| 32 | Loan | 11 | 2 | 138 St. Marks & 155 5th Ave | Abe Cohen | No | No | Refinance | |
| 32.01 | Property | 1 | 155 5th Avenue | No | |||||
| 32.02 | Property | 12 | 1 | 138 Saint Marks Place | No | ||||
| 33 | Loan | 19, 20, 23, 26, 32 | 1 | STK Chicago | Fred S. Latsko | No | No | Refinance | No |
| 34 | Loan | 31 | 1 | 905 Medical Park Drive | Elizabeth G Frazier Revocable Trust, Elizabeth Frazier and Bradley Grausz | No | Yes | Acquisition | No |
| 35 | Loan | 39 | 1 | 3097 E Ana St | Mehdi Farid | No | No | Refinance | No |
| 36 | Loan | 1 | VA Dialysis Center - Philadelphia | Arizona Lipnob Estates, LLC | No | No | Recapitalization | No | |
| 37 | Loan | 19, 39 | 1 | 65 Triangle Industrial | Ching Man Wong | No | No | Recapitalization | No |
A-1-42
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Sources: Loan Amount ($) | Sources: Principal’s New Cash Contribution ($) | Sources: Subordinate Debt ($) | Sources: Other Sources ($) | Sources: Total Sources ($) | Uses: Loan Payoff ($) | Uses: Purchase Price ($) | Uses: Closing Costs ($) | Uses: Reserves ($) | Uses: Principal Equity Distribution ($) |
| 8 | ||||||||||||||
| 1 | Loan | 9, 10, 20, 24, 26, 28, 29, 32, 33, 34, 35 | 1 | 601 Lexington Avenue | 723,300,000 | 0 | 276,700,000 | 0 | 1,000,000,000 | 618,492,902 | 0 | 13,156,127 | 0 | 368,350,972 |
| 2 | Loan | 10, 14, 24, 28, 29 | 1 | One Wilshire | 389,250,000 | 0 | 0 | 0 | 389,250,000 | 190,909,806 | 0 | 781,598 | 0 | 197,558,597 |
| 3 | Loan | 9, 10, 11, 12, 25, 26, 28, 29 | 14 | Bedrock Portfolio | 430,000,000 | 0 | 0 | 0 | 430,000,000 | 331,057,990 | 0 | 4,355,049 | 11,401,181 | 83,185,780 |
| 3.01 | Property | 1 | First National Building | |||||||||||
| 3.02 | Property | 27 | 1 | The Qube | ||||||||||
| 3.03 | Property | 27 | 1 | Chrysler House | ||||||||||
| 3.04 | Property | 27 | 1 | 1001 Woodward | ||||||||||
| 3.05 | Property | 1 | One Woodward | |||||||||||
| 3.06 | Property | 1 | The Z Garage | |||||||||||
| 3.07 | Property | 1 | Two Detroit Garage | |||||||||||
| 3.08 | Property | 1 | 1505 & 1515 Woodward | |||||||||||
| 3.09 | Property | 1 | 1001 Brush Street | |||||||||||
| 3.10 | Property | 12 | 1 | The Assembly | ||||||||||
| 3.11 | Property | 1 | 419 Fort Street Garage | |||||||||||
| 3.12 | Property | 12 | 1 | Vinton | ||||||||||
| 3.13 | Property | 1 | 1401 First Street | |||||||||||
| 3.14 | Property | 1 | Lane Bryant Building | |||||||||||
| 4 | Loan | 19, 36 | 1 | Romaine & Orange Square | 68,000,000 | 0 | 0 | 0 | 68,000,000 | 56,147,345 | 0 | 648,730 | 424,808 | 10,779,117 |
| 5 | Loan | 26, 28, 29 | 1 | Shoreline Square | 55,575,000 | 35,958,174 | 0 | 12,432,048 | 103,965,221 | 0 | 85,500,000 | 2,487,540 | 15,977,682 | 0 |
| 6 | Loan | 11, 13, 19, 25, 33 | 3 | Millennia Portfolio | 40,000,000 | 0 | 0 | 0 | 40,000,000 | 26,174,432 | 0 | 1,709,054 | 989,237 | 11,127,277 |
| 6.01 | Property | 1 | Summit Ridge | |||||||||||
| 6.02 | Property | 1 | Lexington Village | |||||||||||
| 6.03 | Property | 1 | Gateway at the Greene | |||||||||||
| 7 | Loan | 11, 25, 27, 29 | 25 | InCommercial Net Lease Portfolio #5 | 35,000,000 | 25,064,960 | 0 | 0 | 60,064,960 | 0 | 58,401,676 | 1,261,659 | 401,625 | 0 |
| 7.01 | Property | 1 | Walgreens, Mount Pleasant, SC | |||||||||||
| 7.02 | Property | 1 | Walgreens, Meridian, ID | |||||||||||
| 7.03 | Property | 1 | Renal Care, Moncks Corner, SC | |||||||||||
| 7.04 | Property | 1 | Tractor Supply Co, Ogdensbg, NY | |||||||||||
| 7.05 | Property | 1 | Tractor Supply Co, Lake Ch, LA | |||||||||||
| 7.06 | Property | 1 | Tractor Supply Co, Oconto, WI | |||||||||||
| 7.07 | Property | 1 | Dollar General, Ghent, WV | |||||||||||
| 7.08 | Property | 1 | Tractor Supply Co, Kewaunee, WI | |||||||||||
| 7.09 | Property | 1 | Fresenius, Belzoni, MS | |||||||||||
| 7.10 | Property | 1 | Dollar General, Lenore, WV | |||||||||||
| 7.11 | Property | 1 | Family Dollar, Linden, AL | |||||||||||
| 7.12 | Property | 1 | Fresenius, Rayville, LA | |||||||||||
| 7.13 | Property | 1 | Dollar General, Burlington, WV | |||||||||||
| 7.14 | Property | 1 | Family Dollar, Franklinton, LA | |||||||||||
| 7.15 | Property | 1 | Dollar General, Hinton, WV | |||||||||||
| 7.16 | Property | 1 | Dollar General, Lerona, WV | |||||||||||
| 7.17 | Property | 1 | Dollar General, Rushford, NY | |||||||||||
| 7.18 | Property | 1 | Dollar General, Walker, WV | |||||||||||
| 7.19 | Property | 1 | Dollar General, Dixie, WV | |||||||||||
| 7.20 | Property | 1 | Dollar General, Bay Minette, AL | |||||||||||
| 7.21 | Property | 1 | Dollar General, Fruithurst, AL | |||||||||||
| 7.22 | Property | 1 | Dollar General, Billingsley, AL | |||||||||||
| 7.23 | Property | 1 | Dollar General, Knox City, TX | |||||||||||
| 7.24 | Property | 1 | Dollar General, South Dayton, NY | |||||||||||
| 7.25 | Property | 1 | Dollar General, Gaylesville, AL | |||||||||||
| 8 | Loan | 11, 25, 29, 30, 40 | 1 | Redmond Community Center | 34,500,000 | 8,193,329 | 0 | 0 | 42,693,329 | 0 | 37,200,000 | 956,045 | 4,537,284 | 0 |
| 9 | Loan | 9, 10, 11, 21, 34, 40 | 9 | Shearer’s Industrial Portfolio | 137,598,000 | 78,997,416 | 0 | 3,898,500 | 220,493,916 | 0 | 199,447,281 | 8,803,556 | 12,243,079 | 0 |
| 9.01 | Property | 1 | 800 Northwest 4th Street | |||||||||||
| 9.02 | Property | 1 | 4100 Millennium Boulevard Southeast | |||||||||||
| 9.03 | Property | 1 | 3000 East Mount Pleasant Street | |||||||||||
| 9.04 | Property | 1 | 7330 West Sherman Street | |||||||||||
| 9.05 | Property | 12 | 1 | 821 Route 97 | ||||||||||
| 9.06 | Property | 1 | 3200 Northern Cross Boulevard | |||||||||||
| 9.07 | Property | 1 | 3636 Medallion Avenue | |||||||||||
| 9.08 | Property | 1 | 692 Wabash Avenue North | |||||||||||
| 9.09 | Property | 1 | 225 Commonwealth Avenue Extension | |||||||||||
| 10 | Loan | 19, 30 | 1 | Hall Road Crossing | 28,750,000 | 1,978,980 | 0 | 0 | 30,728,980 | 27,334,337 | 0 | 1,431,810 | 1,962,833 | 0 |
| 11 | Loan | 10, 17, 19, 24, 26, 28, 36, 39 | 1 | Gem Tower | 40,000,000 | 1,712,393 | 0 | 0 | 41,712,393 | 40,000,341 | 0 | 160,385 | 1,551,668 | 0 |
| 12 | Loan | 11, 19 | 2 | 285 & 355 Riverside Ave | 28,000,000 | 15,102,959 | 0 | 536,665 | 43,639,625 | 0 | 43,057,500 | 497,304 | 84,821 | 0 |
| 12.01 | Property | 29 | 1 | 285 Riverside Ave | ||||||||||
| 12.02 | Property | 29 | 1 | 355 Riverside Ave | ||||||||||
| 13 | Loan | 27 | 1 | Bala Woods | 27,500,000 | 32,273,638 | 0 | 231,057 | 60,004,695 | 0 | 59,000,000 | 683,449 | 321,245 | 0 |
| 14 | Loan | 9, 19, 29, 31 | 1 | Prospector Plaza | 23,500,000 | 0 | 0 | 0 | 23,500,000 | 20,634,319 | 0 | 427,236 | 738,610 | 1,699,835 |
| 15 | Loan | 10, 14, 24, 34, 37 | 1 | Novo Nordisk HQ | 210,667,000 | 0 | 0 | 0 | 210,667,000 | 169,240,404 | 0 | 1,860,338 | 27,763,140 | 11,803,118 |
| 16 | Loan | 10, 19, 26, 38 | 1 | JW Marriott Desert Springs | ||||||||||
| 17 | Loan | 11, 25 | 2 | 35 Crosby Street and 70 Carmine Street | ||||||||||
| 17.01 | Property | 12 | 1 | 35 Crosby Street | ||||||||||
| 17.02 | Property | 1 | 70 Carmine Street | |||||||||||
| 18 | Loan | 22 | 1 | 1340 Lafayette | ||||||||||
| 19 | Loan | 28 | 1 | Townsgate Office | ||||||||||
| 20 | Loan | 11, 29, 30, 40 | 6 | Tharp Portfolio | ||||||||||
| 20.01 | Property | 1 | Jiffy and Dollar | |||||||||||
| 20.02 | Property | 1 | Main Street Shoppes | |||||||||||
| 20.03 | Property | 1 | Greensburg Retail Center | |||||||||||
| 20.04 | Property | 1 | CSL Plasma | |||||||||||
| 20.05 | Property | 1 | FedEx | |||||||||||
| 20.06 | Property | 1 | Greenwood Med Spa | |||||||||||
| 21 | Loan | 28, 29, 33 | 1 | Santa Barbara Tech Center | ||||||||||
| 22 | Loan | 33 | 1 | Greenbrier Towers I & II | ||||||||||
| 23 | Loan | 19 | 1 | Apple Glen Crossing | ||||||||||
| 24 | Loan | 13, 20, 28, 33 | 1 | Crossroads Village | ||||||||||
| 25 | Loan | 19 | 1 | 1500 Volta Drive | ||||||||||
| 26 | Loan | 19 | 1 | Courtyard Appleton |
A-1-43
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Sources: Loan Amount ($) | Sources: Principal’s New Cash Contribution ($) | Sources: Subordinate Debt ($) | Sources: Other Sources ($) | Sources: Total Sources ($) | Uses: Loan Payoff ($) | Uses: Purchase Price ($) | Uses: Closing Costs ($) | Uses: Reserves ($) | Uses: Principal Equity Distribution ($) |
| 27 | Loan | 29 | 1 | Lee’s Hill II | ||||||||||
| 28 | Loan | 10, 11, 19, 25, 27, 28, 36 | 11 | Glen Forest Office Portfolio | ||||||||||
| 28.01 | Property | 1 | Hillcrest | |||||||||||
| 28.02 | Property | 1 | Arrington | |||||||||||
| 28.03 | Property | 1 | Highland II | |||||||||||
| 28.04 | Property | 29 | 1 | Meridian | ||||||||||
| 28.05 | Property | 29 | 1 | Bayberry | ||||||||||
| 28.06 | Property | 1 | Highland I | |||||||||||
| 28.07 | Property | 29 | 1 | Capstone | ||||||||||
| 28.08 | Property | 1 | Forest Plaza I | |||||||||||
| 28.09 | Property | 28, 29 | 1 | Forest Plaza II | ||||||||||
| 28.10 | Property | 1 | Utica | |||||||||||
| 28.11 | Property | 1 | Willard | |||||||||||
| 29 | Loan | 19 | 1 | Arlington Green Executive Plaza | ||||||||||
| 30 | Loan | 12, 13, 27, 30, 40 | 1 | 1201 Main | ||||||||||
| 31 | Loan | 11 | 2 | Walgreens New Castle & Oneonta | ||||||||||
| 31.01 | Property | 1 | Walgreens Oneonta | |||||||||||
| 31.02 | Property | 1 | Walgreens New Castle | |||||||||||
| 32 | Loan | 11 | 2 | 138 St. Marks & 155 5th Ave | ||||||||||
| 32.01 | Property | 1 | 155 5th Avenue | |||||||||||
| 32.02 | Property | 12 | 1 | 138 Saint Marks Place | ||||||||||
| 33 | Loan | 19, 20, 23, 26, 32 | 1 | STK Chicago | ||||||||||
| 34 | Loan | 31 | 1 | 905 Medical Park Drive | ||||||||||
| 35 | Loan | 39 | 1 | 3097 E Ana St | ||||||||||
| 36 | Loan | 1 | VA Dialysis Center - Philadelphia | |||||||||||
| 37 | Loan | 19, 39 | 1 | 65 Triangle Industrial |
A-1-44
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Uses: Other Uses ($) | Uses: Total Uses ($) | Franchise Agreement Expiration | Underwritten ADR ($) | Underwritten RevPAR ($) | Underwritten Hotel Occupancy (%) | Most Recent ADR ($) | Most Recent RevPAR ($) | Most Recent Hotel Occupancy (%) | Second Most Recent ADR ($) |
| 1 | Loan | 9, 10, 20, 24, 26, 28, 29, 32, 33, 34, 35 | 1 | 601 Lexington Avenue | 0 | 1,000,000,000 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 2 | Loan | 10, 14, 24, 28, 29 | 1 | One Wilshire | 0 | 389,250,000 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 3 | Loan | 9, 10, 11, 12, 25, 26, 28, 29 | 14 | Bedrock Portfolio | 0 | 430,000,000 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 3.01 | Property | 1 | First National Building | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 3.02 | Property | 27 | 1 | The Qube | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 3.03 | Property | 27 | 1 | Chrysler House | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 3.04 | Property | 27 | 1 | 1001 Woodward | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 3.05 | Property | 1 | One Woodward | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 3.06 | Property | 1 | The Z Garage | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 3.07 | Property | 1 | Two Detroit Garage | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 3.08 | Property | 1 | 1505 & 1515 Woodward | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 3.09 | Property | 1 | 1001 Brush Street | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 3.10 | Property | 12 | 1 | The Assembly | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 3.11 | Property | 1 | 419 Fort Street Garage | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 3.12 | Property | 12 | 1 | Vinton | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 3.13 | Property | 1 | 1401 First Street | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 3.14 | Property | 1 | Lane Bryant Building | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 4 | Loan | 19, 36 | 1 | Romaine & Orange Square | 0 | 68,000,000 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 5 | Loan | 26, 28, 29 | 1 | Shoreline Square | 0 | 103,965,221 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 6 | Loan | 11, 13, 19, 25, 33 | 3 | Millennia Portfolio | 0 | 40,000,000 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 6.01 | Property | 1 | Summit Ridge | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 6.02 | Property | 1 | Lexington Village | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 6.03 | Property | 1 | Gateway at the Greene | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 7 | Loan | 11, 25, 27, 29 | 25 | InCommercial Net Lease Portfolio #5 | 0 | 60,064,960 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 7.01 | Property | 1 | Walgreens, Mount Pleasant, SC | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 7.02 | Property | 1 | Walgreens, Meridian, ID | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 7.03 | Property | 1 | Renal Care, Moncks Corner, SC | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 7.04 | Property | 1 | Tractor Supply Co, Ogdensbg, NY | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 7.05 | Property | 1 | Tractor Supply Co, Lake Ch, LA | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 7.06 | Property | 1 | Tractor Supply Co, Oconto, WI | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 7.07 | Property | 1 | Dollar General, Ghent, WV | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 7.08 | Property | 1 | Tractor Supply Co, Kewaunee, WI | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 7.09 | Property | 1 | Fresenius, Belzoni, MS | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 7.10 | Property | 1 | Dollar General, Lenore, WV | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 7.11 | Property | 1 | Family Dollar, Linden, AL | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 7.12 | Property | 1 | Fresenius, Rayville, LA | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 7.13 | Property | 1 | Dollar General, Burlington, WV | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 7.14 | Property | 1 | Family Dollar, Franklinton, LA | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 7.15 | Property | 1 | Dollar General, Hinton, WV | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 7.16 | Property | 1 | Dollar General, Lerona, WV | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 7.17 | Property | 1 | Dollar General, Rushford, NY | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 7.18 | Property | 1 | Dollar General, Walker, WV | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 7.19 | Property | 1 | Dollar General, Dixie, WV | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 7.20 | Property | 1 | Dollar General, Bay Minette, AL | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 7.21 | Property | 1 | Dollar General, Fruithurst, AL | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 7.22 | Property | 1 | Dollar General, Billingsley, AL | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 7.23 | Property | 1 | Dollar General, Knox City, TX | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 7.24 | Property | 1 | Dollar General, South Dayton, NY | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 7.25 | Property | 1 | Dollar General, Gaylesville, AL | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 8 | Loan | 11, 25, 29, 30, 40 | 1 | Redmond Community Center | 0 | 42,693,329 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 9 | Loan | 9, 10, 11, 21, 34, 40 | 9 | Shearer’s Industrial Portfolio | 0 | 220,493,916 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 9.01 | Property | 1 | 800 Northwest 4th Street | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 9.02 | Property | 1 | 4100 Millennium Boulevard Southeast | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 9.03 | Property | 1 | 3000 East Mount Pleasant Street | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 9.04 | Property | 1 | 7330 West Sherman Street | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 9.05 | Property | 12 | 1 | 821 Route 97 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 9.06 | Property | 1 | 3200 Northern Cross Boulevard | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 9.07 | Property | 1 | 3636 Medallion Avenue | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 9.08 | Property | 1 | 692 Wabash Avenue North | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 9.09 | Property | 1 | 225 Commonwealth Avenue Extension | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 10 | Loan | 19, 30 | 1 | Hall Road Crossing | 0 | 30,728,980 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 11 | Loan | 10, 17, 19, 24, 26, 28, 36, 39 | 1 | Gem Tower | 0 | 41,712,393 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 12 | Loan | 11, 19 | 2 | 285 & 355 Riverside Ave | 0 | 43,639,625 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 12.01 | Property | 29 | 1 | 285 Riverside Ave | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 12.02 | Property | 29 | 1 | 355 Riverside Ave | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 13 | Loan | 27 | 1 | Bala Woods | 0 | 60,004,695 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 14 | Loan | 9, 19, 29, 31 | 1 | Prospector Plaza | 0 | 23,500,000 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 15 | Loan | 10, 14, 24, 34, 37 | 1 | Novo Nordisk HQ | 0 | 210,667,000 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| 16 | Loan | 10, 19, 26, 38 | 1 | JW Marriott Desert Springs | NAP | 267.71 | 170.00 | 63.5% | 273.74 | 100.71 | 36.8% | 250.16 | ||
| 17 | Loan | 11, 25 | 2 | 35 Crosby Street and 70 Carmine Street | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 17.01 | Property | 12 | 1 | 35 Crosby Street | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 17.02 | Property | 1 | 70 Carmine Street | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 18 | Loan | 22 | 1 | 1340 Lafayette | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 19 | Loan | 28 | 1 | Townsgate Office | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 20 | Loan | 11, 29, 30, 40 | 6 | Tharp Portfolio | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 20.01 | Property | 1 | Jiffy and Dollar | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 20.02 | Property | 1 | Main Street Shoppes | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 20.03 | Property | 1 | Greensburg Retail Center | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 20.04 | Property | 1 | CSL Plasma | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 20.05 | Property | 1 | FedEx | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 20.06 | Property | 1 | Greenwood Med Spa | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 21 | Loan | 28, 29, 33 | 1 | Santa Barbara Tech Center | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 22 | Loan | 33 | 1 | Greenbrier Towers I & II | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 23 | Loan | 19 | 1 | Apple Glen Crossing | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 24 | Loan | 13, 20, 28, 33 | 1 | Crossroads Village | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 25 | Loan | 19 | 1 | 1500 Volta Drive | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 26 | Loan | 19 | 1 | Courtyard Appleton | 9/12/2037 | 164.05 | 117.08 | 71.4% | 155.07 | 98.06 | 63.2% | 153.65 |
A-1-45
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Uses: Other Uses ($) | Uses: Total Uses ($) | Franchise Agreement Expiration | Underwritten ADR ($) | Underwritten RevPAR ($) | Underwritten Hotel Occupancy (%) | Most Recent ADR ($) | Most Recent RevPAR ($) | Most Recent Hotel Occupancy (%) | Second Most Recent ADR ($) |
| 27 | Loan | 29 | 1 | Lee’s Hill II | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 28 | Loan | 10, 11, 19, 25, 27, 28, 36 | 11 | Glen Forest Office Portfolio | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 28.01 | Property | 1 | Hillcrest | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 28.02 | Property | 1 | Arrington | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 28.03 | Property | 1 | Highland II | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 28.04 | Property | 29 | 1 | Meridian | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 28.05 | Property | 29 | 1 | Bayberry | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 28.06 | Property | 1 | Highland I | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 28.07 | Property | 29 | 1 | Capstone | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 28.08 | Property | 1 | Forest Plaza I | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 28.09 | Property | 28, 29 | 1 | Forest Plaza II | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 28.10 | Property | 1 | Utica | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 28.11 | Property | 1 | Willard | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 29 | Loan | 19 | 1 | Arlington Green Executive Plaza | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 30 | Loan | 12, 13, 27, 30, 40 | 1 | 1201 Main | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 31 | Loan | 11 | 2 | Walgreens New Castle & Oneonta | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 31.01 | Property | 1 | Walgreens Oneonta | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 31.02 | Property | 1 | Walgreens New Castle | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 32 | Loan | 11 | 2 | 138 St. Marks & 155 5th Ave | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 32.01 | Property | 1 | 155 5th Avenue | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 32.02 | Property | 12 | 1 | 138 Saint Marks Place | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 33 | Loan | 19, 20, 23, 26, 32 | 1 | STK Chicago | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 34 | Loan | 31 | 1 | 905 Medical Park Drive | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 35 | Loan | 39 | 1 | 3097 E Ana St | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||
| 36 | Loan | 1 | VA Dialysis Center - Philadelphia | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||
| 37 | Loan | 19, 39 | 1 | 65 Triangle Industrial | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
A-1-46
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Second Most Recent RevPAR ($) | Second Most Recent Hotel Occupancy (%) | Third Most Recent ADR ($) | Third Most Recent RevPAR ($) | Third Most Recent Hotel Occupancy (%) |
| 1 | Loan | 9, 10, 20, 24, 26, 28, 29, 32, 33, 34, 35 | 1 | 601 Lexington Avenue | NAP | NAP | NAP | NAP | NAP |
| 2 | Loan | 10, 14, 24, 28, 29 | 1 | One Wilshire | NAP | NAP | NAP | NAP | NAP |
| 3 | Loan | 9, 10, 11, 12, 25, 26, 28, 29 | 14 | Bedrock Portfolio | NAP | NAP | NAP | NAP | NAP |
| 3.01 | Property | 1 | First National Building | NAP | NAP | NAP | NAP | NAP | |
| 3.02 | Property | 27 | 1 | The Qube | NAP | NAP | NAP | NAP | NAP |
| 3.03 | Property | 27 | 1 | Chrysler House | NAP | NAP | NAP | NAP | NAP |
| 3.04 | Property | 27 | 1 | 1001 Woodward | NAP | NAP | NAP | NAP | NAP |
| 3.05 | Property | 1 | One Woodward | NAP | NAP | NAP | NAP | NAP | |
| 3.06 | Property | 1 | The Z Garage | NAP | NAP | NAP | NAP | NAP | |
| 3.07 | Property | 1 | Two Detroit Garage | NAP | NAP | NAP | NAP | NAP | |
| 3.08 | Property | 1 | 1505 & 1515 Woodward | NAP | NAP | NAP | NAP | NAP | |
| 3.09 | Property | 1 | 1001 Brush Street | NAP | NAP | NAP | NAP | NAP | |
| 3.10 | Property | 12 | 1 | The Assembly | NAP | NAP | NAP | NAP | NAP |
| 3.11 | Property | 1 | 419 Fort Street Garage | NAP | NAP | NAP | NAP | NAP | |
| 3.12 | Property | 12 | 1 | Vinton | NAP | NAP | NAP | NAP | NAP |
| 3.13 | Property | 1 | 1401 First Street | NAP | NAP | NAP | NAP | NAP | |
| 3.14 | Property | 1 | Lane Bryant Building | NAP | NAP | NAP | NAP | NAP | |
| 4 | Loan | 19, 36 | 1 | Romaine & Orange Square | NAP | NAP | NAP | NAP | NAP |
| 5 | Loan | 26, 28, 29 | 1 | Shoreline Square | NAP | NAP | NAP | NAP | NAP |
| 6 | Loan | 11, 13, 19, 25, 33 | 3 | Millennia Portfolio | NAP | NAP | NAP | NAP | NAP |
| 6.01 | Property | 1 | Summit Ridge | NAP | NAP | NAP | NAP | NAP | |
| 6.02 | Property | 1 | Lexington Village | NAP | NAP | NAP | NAP | NAP | |
| 6.03 | Property | 1 | Gateway at the Greene | NAP | NAP | NAP | NAP | NAP | |
| 7 | Loan | 11, 25, 27, 29 | 25 | InCommercial Net Lease Portfolio #5 | NAP | NAP | NAP | NAP | NAP |
| 7.01 | Property | 1 | Walgreens, Mount Pleasant, SC | NAP | NAP | NAP | NAP | NAP | |
| 7.02 | Property | 1 | Walgreens, Meridian, ID | NAP | NAP | NAP | NAP | NAP | |
| 7.03 | Property | 1 | Renal Care, Moncks Corner, SC | NAP | NAP | NAP | NAP | NAP | |
| 7.04 | Property | 1 | Tractor Supply Co, Ogdensbg, NY | NAP | NAP | NAP | NAP | NAP | |
| 7.05 | Property | 1 | Tractor Supply Co, Lake Ch, LA | NAP | NAP | NAP | NAP | NAP | |
| 7.06 | Property | 1 | Tractor Supply Co, Oconto, WI | NAP | NAP | NAP | NAP | NAP | |
| 7.07 | Property | 1 | Dollar General, Ghent, WV | NAP | NAP | NAP | NAP | NAP | |
| 7.08 | Property | 1 | Tractor Supply Co, Kewaunee, WI | NAP | NAP | NAP | NAP | NAP | |
| 7.09 | Property | 1 | Fresenius, Belzoni, MS | NAP | NAP | NAP | NAP | NAP | |
| 7.10 | Property | 1 | Dollar General, Lenore, WV | NAP | NAP | NAP | NAP | NAP | |
| 7.11 | Property | 1 | Family Dollar, Linden, AL | NAP | NAP | NAP | NAP | NAP | |
| 7.12 | Property | 1 | Fresenius, Rayville, LA | NAP | NAP | NAP | NAP | NAP | |
| 7.13 | Property | 1 | Dollar General, Burlington, WV | NAP | NAP | NAP | NAP | NAP | |
| 7.14 | Property | 1 | Family Dollar, Franklinton, LA | NAP | NAP | NAP | NAP | NAP | |
| 7.15 | Property | 1 | Dollar General, Hinton, WV | NAP | NAP | NAP | NAP | NAP | |
| 7.16 | Property | 1 | Dollar General, Lerona, WV | NAP | NAP | NAP | NAP | NAP | |
| 7.17 | Property | 1 | Dollar General, Rushford, NY | NAP | NAP | NAP | NAP | NAP | |
| 7.18 | Property | 1 | Dollar General, Walker, WV | NAP | NAP | NAP | NAP | NAP | |
| 7.19 | Property | 1 | Dollar General, Dixie, WV | NAP | NAP | NAP | NAP | NAP | |
| 7.20 | Property | 1 | Dollar General, Bay Minette, AL | NAP | NAP | NAP | NAP | NAP | |
| 7.21 | Property | 1 | Dollar General, Fruithurst, AL | NAP | NAP | NAP | NAP | NAP | |
| 7.22 | Property | 1 | Dollar General, Billingsley, AL | NAP | NAP | NAP | NAP | NAP | |
| 7.23 | Property | 1 | Dollar General, Knox City, TX | NAP | NAP | NAP | NAP | NAP | |
| 7.24 | Property | 1 | Dollar General, South Dayton, NY | NAP | NAP | NAP | NAP | NAP | |
| 7.25 | Property | 1 | Dollar General, Gaylesville, AL | NAP | NAP | NAP | NAP | NAP | |
| 8 | Loan | 11, 25, 29, 30, 40 | 1 | Redmond Community Center | NAP | NAP | NAP | NAP | NAP |
| 9 | Loan | 9, 10, 11, 21, 34, 40 | 9 | Shearer’s Industrial Portfolio | NAP | NAP | NAP | NAP | NAP |
| 9.01 | Property | 1 | 800 Northwest 4th Street | NAP | NAP | NAP | NAP | NAP | |
| 9.02 | Property | 1 | 4100 Millennium Boulevard Southeast | NAP | NAP | NAP | NAP | NAP | |
| 9.03 | Property | 1 | 3000 East Mount Pleasant Street | NAP | NAP | NAP | NAP | NAP | |
| 9.04 | Property | 1 | 7330 West Sherman Street | NAP | NAP | NAP | NAP | NAP | |
| 9.05 | Property | 12 | 1 | 821 Route 97 | NAP | NAP | NAP | NAP | NAP |
| 9.06 | Property | 1 | 3200 Northern Cross Boulevard | NAP | NAP | NAP | NAP | NAP | |
| 9.07 | Property | 1 | 3636 Medallion Avenue | NAP | NAP | NAP | NAP | NAP | |
| 9.08 | Property | 1 | 692 Wabash Avenue North | NAP | NAP | NAP | NAP | NAP | |
| 9.09 | Property | 1 | 225 Commonwealth Avenue Extension | NAP | NAP | NAP | NAP | NAP | |
| 10 | Loan | 19, 30 | 1 | Hall Road Crossing | NAP | NAP | NAP | NAP | NAP |
| 11 | Loan | 10, 17, 19, 24, 26, 28, 36, 39 | 1 | Gem Tower | NAP | NAP | NAP | NAP | NAP |
| 12 | Loan | 11, 19 | 2 | 285 & 355 Riverside Ave | NAP | NAP | NAP | NAP | NAP |
| 12.01 | Property | 29 | 1 | 285 Riverside Ave | NAP | NAP | NAP | NAP | NAP |
| 12.02 | Property | 29 | 1 | 355 Riverside Ave | NAP | NAP | NAP | NAP | NAP |
| 13 | Loan | 27 | 1 | Bala Woods | NAP | NAP | NAP | NAP | NAP |
| 14 | Loan | 9, 19, 29, 31 | 1 | Prospector Plaza | NAP | NAP | NAP | NAP | NAP |
| 15 | Loan | 10, 14, 24, 34, 37 | 1 | Novo Nordisk HQ | NAP | NAP | NAP | NAP | NAP |
| 16 | Loan | 10, 19, 26, 38 | 1 | JW Marriott Desert Springs | 48.91 | 19.6% | 225.66 | 132.61 | 58.8% |
| 17 | Loan | 11, 25 | 2 | 35 Crosby Street and 70 Carmine Street | NAP | NAP | NAP | NAP | NAP |
| 17.01 | Property | 12 | 1 | 35 Crosby Street | NAP | NAP | NAP | NAP | NAP |
| 17.02 | Property | 1 | 70 Carmine Street | NAP | NAP | NAP | NAP | NAP | |
| 18 | Loan | 22 | 1 | 1340 Lafayette | NAP | NAP | NAP | NAP | NAP |
| 19 | Loan | 28 | 1 | Townsgate Office | NAP | NAP | NAP | NAP | NAP |
| 20 | Loan | 11, 29, 30, 40 | 6 | Tharp Portfolio | NAP | NAP | NAP | NAP | NAP |
| 20.01 | Property | 1 | Jiffy and Dollar | NAP | NAP | NAP | NAP | NAP | |
| 20.02 | Property | 1 | Main Street Shoppes | NAP | NAP | NAP | NAP | NAP | |
| 20.03 | Property | 1 | Greensburg Retail Center | NAP | NAP | NAP | NAP | NAP | |
| 20.04 | Property | 1 | CSL Plasma | NAP | NAP | NAP | NAP | NAP | |
| 20.05 | Property | 1 | FedEx | NAP | NAP | NAP | NAP | NAP | |
| 20.06 | Property | 1 | Greenwood Med Spa | NAP | NAP | NAP | NAP | NAP | |
| 21 | Loan | 28, 29, 33 | 1 | Santa Barbara Tech Center | NAP | NAP | NAP | NAP | NAP |
| 22 | Loan | 33 | 1 | Greenbrier Towers I & II | NAP | NAP | NAP | NAP | NAP |
| 23 | Loan | 19 | 1 | Apple Glen Crossing | NAP | NAP | NAP | NAP | NAP |
| 24 | Loan | 13, 20, 28, 33 | 1 | Crossroads Village | NAP | NAP | NAP | NAP | NAP |
| 25 | Loan | 19 | 1 | 1500 Volta Drive | NAP | NAP | NAP | NAP | NAP |
| 26 | Loan | 19 | 1 | Courtyard Appleton | 94.30 | 61.4% | 136.49 | 43.21 | 31.7% |
A-1-47
Benchmark 2022-B34 Annex A-1
| Loan ID Number | Loan / Property Flag | Footnotes (for Loan and Property Information) | # of Properties | Property Name | Second Most Recent RevPAR ($) | Second Most Recent Hotel Occupancy (%) | Third Most Recent ADR ($) | Third Most Recent RevPAR ($) | Third Most Recent Hotel Occupancy (%) |
| 27 | Loan | 29 | 1 | Lee’s Hill II | NAP | NAP | NAP | NAP | NAP |
| 28 | Loan | 10, 11, 19, 25, 27, 28, 36 | 11 | Glen Forest Office Portfolio | NAP | NAP | NAP | NAP | NAP |
| 28.01 | Property | 1 | Hillcrest | NAP | NAP | NAP | NAP | NAP | |
| 28.02 | Property | 1 | Arrington | NAP | NAP | NAP | NAP | NAP | |
| 28.03 | Property | 1 | Highland II | NAP | NAP | NAP | NAP | NAP | |
| 28.04 | Property | 29 | 1 | Meridian | NAP | NAP | NAP | NAP | NAP |
| 28.05 | Property | 29 | 1 | Bayberry | NAP | NAP | NAP | NAP | NAP |
| 28.06 | Property | 1 | Highland I | NAP | NAP | NAP | NAP | NAP | |
| 28.07 | Property | 29 | 1 | Capstone | NAP | NAP | NAP | NAP | NAP |
| 28.08 | Property | 1 | Forest Plaza I | NAP | NAP | NAP | NAP | NAP | |
| 28.09 | Property | 28, 29 | 1 | Forest Plaza II | NAP | NAP | NAP | NAP | NAP |
| 28.10 | Property | 1 | Utica | NAP | NAP | NAP | NAP | NAP | |
| 28.11 | Property | 1 | Willard | NAP | NAP | NAP | NAP | NAP | |
| 29 | Loan | 19 | 1 | Arlington Green Executive Plaza | NAP | NAP | NAP | NAP | NAP |
| 30 | Loan | 12, 13, 27, 30, 40 | 1 | 1201 Main | NAP | NAP | NAP | NAP | NAP |
| 31 | Loan | 11 | 2 | Walgreens New Castle & Oneonta | NAP | NAP | NAP | NAP | NAP |
| 31.01 | Property | 1 | Walgreens Oneonta | NAP | NAP | NAP | NAP | NAP | |
| 31.02 | Property | 1 | Walgreens New Castle | NAP | NAP | NAP | NAP | NAP | |
| 32 | Loan | 11 | 2 | 138 St. Marks & 155 5th Ave | NAP | NAP | NAP | NAP | NAP |
| 32.01 | Property | 1 | 155 5th Avenue | NAP | NAP | NAP | NAP | NAP | |
| 32.02 | Property | 12 | 1 | 138 Saint Marks Place | NAP | NAP | NAP | NAP | NAP |
| 33 | Loan | 19, 20, 23, 26, 32 | 1 | STK Chicago | NAP | NAP | NAP | NAP | NAP |
| 34 | Loan | 31 | 1 | 905 Medical Park Drive | NAP | NAP | NAP | NAP | NAP |
| 35 | Loan | 39 | 1 | 3097 E Ana St | NAP | NAP | NAP | NAP | NAP |
| 36 | Loan | 1 | VA Dialysis Center - Philadelphia | NAP | NAP | NAP | NAP | NAP | |
| 37 | Loan | 19, 39 | 1 | 65 Triangle Industrial | NAP | NAP | NAP | NAP | NAP |
A-1-48
Footnotes to Annex A-1
| (1) | The Administrative Fee Rate % includes the Servicing Fee Rate, the Operating Advisor Fee Rate, the Certificate Administrator/Trustee Fee Rate, the Asset Representations Reviewer Fee Rate and the CREFC® Intellectual Property Royalty License Fee Rate applicable to each Mortgage Loan. |
| (2) | The Monthly Debt Service (P&I) and Annual Debt Service (P&I) ($) shown for Mortgage Loans with a partial interest-only period reflects the amount payable after the expiration of the interest-only period. |
| (3) | The open period is inclusive of the Maturity Date or Anticipated Repayment Date. |
| (4) | Underwritten NOI DSCR (x), Underwritten NCF DSCR (x), Whole Loan Underwritten NCF DSCR (x) and Total Debt Underwritten NCF DSCR (x) is calculated based on amortizing debt service payments (except for interest-only loans). |
| (5) | Leased Occupancy (%) reflects tenants that have signed leases, but are not yet in occupancy or may not be paying rent. |
| (6) | The lease expirations shown are based on full lease terms; however, in some instances, the tenant may have the option to terminate its lease prior to the expiration date shown. In addition, in some instances, a tenant may have the right to assign its lease or sublease the leased premises and be released from its obligations under the lease. |
| (7) | Property Located Within a Qualified Opportunity Zone (Y/N) reflects Mortgaged Properties that are located in qualified opportunity zones (“QOZs”) under Internal Revenue Code § 1400Z-2 - Notice 2018-48 and Notice 2019-42. According to the Internal Revenue Service, (1) a QOZ is an economically distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment, and (2) localities qualify as QOZs if they have been nominated for that designation by a state, the District of Columbia, or a U.S. territory and that nomination has been certified by the Secretary of the Treasury via his delegation of authority to the Internal Revenue Service. No representation is made as to whether any Mortgaged Properties located in QOZs or the related borrowers are eligible for such preferential tax treatment or whether any qualifying investment has been made in a QOZ. |
| (8) | If the purpose of the Mortgage Loan was to finance an acquisition of the Mortgaged Property, the field “Sources: Principal’s New Cash Contribution ($)” reflects the cash investment by one or more of the equity owners in the borrower in connection with such acquisition. If the purpose of the Mortgage Loan was to refinance the Mortgaged Property, the field “Sources: Principal’s New Cash Contribution ($)” reflects the cash contributed to the borrower by one or more of the equity owners at the time the Mortgage Loan was originated. |
| (9) | GACC—German American Capital Corporation or one of its affiliates; JPMCB—JPMorgan Chase Bank, National Association or one of its affiliates; CREFI—Citi Real Estate Funding Inc. or one of its affiliates; GSMC—Goldman Sachs Mortgage Company or one of its affiliates. With respect to Loan No. 1, 601 Lexington Avenue, the mortgage loan is part of a whole loan that was co-originated by DBR Investments Co. Limited, Morgan Stanley Bank, National Association, Wells Fargo Bank, National Association and Citi Real Estate Funding Inc. GACC is contributing note A-2-C2-1, with a Cut-off Date principal balance of $43,479,070 and CREFI is contributing note A-4-C2-1, with a Cut-off Date principal balance of $41,520,930. With respect to Loan No. 3, Bedrock Portfolio, the Mortgage Loan is part of a whole loan that was co-originated by JPMorgan Chase Bank, National Association and Starwood Mortgage Capital LLC. With respect to Loan No. 9, Shearer’s Industrial Portfolio, the Mortgage Loan is part of a whole loan that was co-originated by Goldman Sachs Bank USA and Wells Fargo Bank, National Association. With respect to Loan No. 14, Prospector Plaza, as to which German American Capital Corporation is the Mortgage Loan Seller, such Mortgage Loan was originated by Ladder Capital Finance LLC, an unaffiliated third party. |
| (10) | With respect to the pari passu loans referenced below, the Underwritten NOI DSCR, Underwritten NCF DSCR, Cut–off Date LTV Ratio, LTV Ratio at Maturity or ARD, Underwritten NOI Debt Yield, Underwritten NCF Debt Yield and Loan per Net Rentable Area (SF/Units/Rooms) ($) are calculated based on the Mortgage Loan included in the issuing entity and the related pari passu companion loans in the aggregate and exclude the mezzanine debt and, in |
A-1-49
| the case of any loans structured with A/B Notes, the secured subordinate debt. For additional information see the table titled “Whole Loan Control Notes and Non–Control Notes” under “Description of the Mortgage Pool—The Whole Loans—General” in this Preliminary Prospectus. ● Loan No. 1 – 601 Lexington Avenue ● Loan No. 2 – One Wilshire ● Loan No. 3 – Bedrock Portfolio ● Loan No. 9 – Shearer’s Industrial Portfolio ● Loan No. 11 – Gem Tower ● Loan No. 15 – Novo Nordisk HQ ● Loan No. 16 – JW Marriott Desert Springs ● Loan No. 28 – Glen Forest Office Portfolio | |
| (11) | With respect to any Mortgaged Property securing a multi–property Mortgage Loan, the amounts listed under the headings “Original Balance ($)” and “Cut–off Date Balance ($)” reflect the Allocated Loan Amount related to such Mortgaged Property. ● Loan No. 3 – Bedrock Portfolio ● Loan No. 6 – Millennia Portfolio ● Loan No. 7 – InCommercial Net Lease Portfolio #5 ● Loan No. 9 – Shearer’s Industrial Portfolio ● Loan No. 12 – 285 & 355 Riverside Ave ● Loan No. 17 – 35 Crosby Street and 70 Carmine Street ● Loan No. 20 – Tharp Portfolio ● Loan No. 28 – Glen Forest Office Portfolio ● Loan No. 31 – Walgreens New Castle & Oneonta ● Loan No. 32 – 138 St. Marks & 155 5th Ave With respect to Loan No. 8, Redmond Community Center, the collateral totals 109,965 sq. ft. and consists of a portion of Redmond community center and the Creekside Crossing property. The allocated loan amounts for the portion of Redmond community center and the Creekside Crossing property are $21,360,450 and $13,139,550, respectively. The total purchase price of $44,200,000 includes a non-collateral parcel. The allocated price to the collateral parcels is $37,200,000. |
| (12) | With respect to Loan No. 3, Bedrock Portfolio, the portfolio is comprised of five parking garage properties that include 5,036 parking stalls and two mixed use properties that include 53 multifamily units. With respect to Loan No. 3, Bedrock Portfolio, the portfolio includes 7,258 total parking stalls and 53 total multifamily units not presented in the Number of Units. With respect to Loan No. 3, Bedrock Portfolio, The Assembly Mortgaged Property is comprised of 58,192 sq. ft. of office space and 22,955 sq. ft. of retail space. The Vinton Mortgaged Property is comprised of 5,693 sq. ft. of retail space and 21 multifamily units. With respect to Loan No. 3, Bedrock Portfolio, the parking utilization for all parking garage properties has averaged over 100% since the first quarter of 2019. This data is not reflected in Annex A-1. With respect to Loan No. 9, Shearer’s Industrial Portfolio – 821 Route 97, the Mortgaged Property is currently expected to undergo an expansion increasing the square footage of the related improvements from 145,485 sq. ft. to 221,876 sq. ft. The expansion is expected to be completed by August 2022. At origination, the borrower funded a Shearer’s expansion allowance reserve in an amount equal to $12,243,079 in connection with the anticipated expansion. We cannot assure you that the expansion at the 821 Route 97 Mortgaged Property will be completed as expected or at all. With respect to Loan No. 17, 35 Crosby Street and 70 Carmine Street - 35 Crosby Street, the Mortgaged Property includes (i) 12 multifamily units totaling 7,500 sq. ft. and (ii) 1,500 sq. ft. of retail space. With respect to Loan No. 30, 1201 Main, the Mortgaged Property is a three-story apartment building containing 27 multifamily units with 3,959 sq. ft. of ground floor retail space divided between two suites, both leased to Curated Provisions, Inc. under a single lease. With respect to Loan No. 32, 138 St. Marks & 155 5th Ave - 138 Saint Marks Place, the Mortgaged Property |
A-1-50
| includes (i) 10 multifamily units totaling 6,300 sq. ft. and (ii) 1,600 sq. ft. of retail space. The Mortgaged Property, 155 5th Avenue, includes (i) six multifamily units totaling 6,000 sq. ft. and (ii) 1,300 sq. ft. of retail space. | |
| (13) | With respect to Loan No. 6, Millennia Portfolio, as to the Gateway at the Greene Mortgaged Property, pursuant to a recorded restrictive covenant with the Ohio Housing Finance Agency related to low income housing tax credits, until 2038, 30% of the 103 units at such Mortgaged Property are required to be leased to tenants with income restricted to not more than 80% of area median gross income, and at rents restricted to rents affordable to tenants who earn 80% of area median gross income, as determined in accordance with federal regulations. With respect to Loan No. 24, Crossroads Village, an unimproved portion of the Mortgaged Property is subject to an agreement for conservation easement which prohibits the borrower from altering the surface of the easement area. See “Description of the Mortgage Pool – Use Restrictions” in the preliminary prospectus for additional information. With respect to Loan No. 30, 1201 Main, five of the 27 units at the Mortgaged Property are deed-restricted affordable units. Such affordable units must be rented to so-called “Qualified Tenants” (two units restricted to tenants at lease rates affordable to less than 80% area median income (“AMI”), two units restricted to tenants at lease rates affordable to less than 100% AMI, and one unit restricted to a tenant at a lease rate affordable to less than 120% AMI) in accordance with a declaration of deed restriction agreement entered into by the property owner with the Board of Trustees of the Town of Carbondale, Colorado and the Garfield County Housing Authority. The affordable rent restriction on such units runs with the land. |
| (14) | With respect to Loan No. 2, One Wilshire, the Mortgage Loan is structured with an anticipated repayment date (“ARD”) of January 6, 2032 and a final maturity date of January 6, 2035. After the ARD, the interest rate will increase by 3.0% over the greater of (x) 2.77600% and (y) the term SOFR rate in effect on the ARD, pursuant to the One Wilshire Whole Loan documents. With respect to Loan No. 15, Novo Nordisk HQ, the whole loan is structured with an ARD of November 6, 2026 and a final maturity date of April 6, 2031. The initial interest rate for the Novo Nordisk HQ Whole Loan is 2.83800% per annum. From and after the ARD, the per annum interest rate will be equal to the greater of (i) the initial interest rate plus 2.5000% and (ii) the swap rate in effect on the ARD plus 4.19000%. |
| (15) | The Administrative Cost Rate includes the respective per annum rates applicable to the calculation of the servicing fee, any sub–servicing fee, trustee/certificate administrator fee, operating advisor fee, and CREFC® license fee with respect to each Mortgage Loan. For purposes of this annex A–1, the definition of Administrative Fee Rate as it relates to any Non–Serviced Mortgage Loan includes the related Pari Passu Loan Primary Servicing Fee Rate which includes the “primary servicing fee rate” (as defined or set forth in the applicable pooling and servicing agreement) and any other related servicing or any sub–servicing fee rate (other than those payable to the applicable special servicer) applicable to such Non–Serviced Mortgage Loan that constitutes a portion of the “servicing fee rate” applicable to the other master servicer under the applicable other pooling and servicing agreement. See the table titled “Non–Serviced Whole Loans” under “Summary of Terms—Offered Certificates—Servicing and Administration Fees” in this Preliminary Prospectus. |
| (16) | Annual Debt Service ($), Monthly Debt Service ($), Underwritten NOI DSCR and Underwritten NCF DSCR for Mortgage Loans (i) with partial interest only periods are shown based on the monthly debt service payment immediately following the expiration of the interest only period and (ii) that are interest only until the related maturity date are shown based on the interest only payments during the 12-month period following the Cut-off Date (or, in the case of Monthly Debt Service ($), the average of such interest only payments) without regard to leap year adjustments. |
| (17) | “Hard” generally means each tenant is required to transfer its rent directly to the lender–controlled lockbox account. However, with respect to hospitality properties, “Hard” means all credit card receipts are deposited directly into the lockbox by the card processing company and all over–the–counter cash and equivalents are required to be deposited by the property manager or borrower into the lockbox. “Soft” means the borrower has established a lockbox account that will be under lender control and the borrower or property manager is required to collect rents from the tenants and then deposit those rents into such lockbox account. “Springing Soft” means that upon the occurrence of a trigger event (as specified in the related Mortgage Loan Documents), the borrower is required to establish a lockbox account that will be under lender control and the borrower or property manager is required to collect rents from the tenants and then deposit those rents into such lockbox account. “Springing Hard” means that upon a trigger event (as specified in the related Mortgage Loan Documents), each tenant will be required to transfer its rent directly to a lender–controlled lockbox. “Soft Springing Hard” means the borrower has established a lockbox account that will be under lender control and the borrower or property manager is required to collect rents from the tenants and then deposit those rents into such lockbox account, but upon a trigger event (as specified in the related Mortgage Loan Documents), each tenant will |
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| be required to transfer its rent directly to a lender–controlled lockbox. With respect to Loan No. 11, Gem Tower, the lockbox account is initially Soft; provided, however, during the continuance of a cash management period, the Gem Tower Whole Loan documents permit the lender to deliver notices to each tenant instructing them to directly deposit all rents into the lender-controlled lockbox account. | |
| (18) | “In Place” means that related property cash flows go through a waterfall of required reserve or other payment amounts due before the lender either (i) disburses excess cash to the related borrower or (ii) retains excess cash as additional collateral for the Mortgage Loan. “Springing” means that upon the occurrence of a trigger event, as defined in the related Mortgage Loan documents, In Place cash management (as described above) will take effect, and will generally continue until all trigger events are cured (to the extent a cure is permitted under the related Mortgage Loan documents). |
| (19) | With respect to Loan No. 4, Romaine & Orange Square, the increase in Underwritten Net Operating Income ($) of more than 10% over the Most Recent NOI ($) is primarily driven by recent leasing activity, timing of reimbursements, and several tenants paying full unabated rent after receiving COVID-19 related rent abatements or deferrals. With respect to Loan No. 6, Millennia Portfolio, the increase in Underwritten Net Operating Income ($) of more than 10% over the Most Recent NOI ($) is primarily driven by conversion of Summit Ridge from senior housing, post-renovation lease-up of Summit Ridge and Lexington Village, and reduction in expenses and concessions. With respect to Loan No. 10, Hall Road Crossing, the increase from Most Recent NOI ($) to Underwritten Net Operating Income ($) is primarily attributed to the recent Amazon Fresh lease and rent steps. With respect to Loan No. 11, Gem Tower, the increase from the Most Recent NOI ($) to Underwritten Net Operating Income ($) is primarily attributable to the expiration of rent discounts and arrears related to the COVID-19 pandemic. In connection with the COVID-19 pandemic, the borrower granted rent deferrals in the amount of approximately $3,266,000 in the aggregate to the tenants at the Mortgaged Property, of which approximately (i) $2,673,000 has been forgiven and (ii) $593,000 remains unpaid. In addition, the Gem Tower Whole Loan documents permit the borrower to grant to any tenant on an ongoing basis, without the lender’s prior consent, deferral of up to four months’ of rent in the aggregate, provided that such deferred rent is required to be repaid prior to the expiration of the term of the related lease and the borrower delivers notice to the lender of any such deferral. At origination, the borrower deposited with the lender (i) approximately $551,668 in a rent deferral reserve in connection with any deferred rent as of the origination date and (ii) $1,000,000 in a rent stabilization reserve, to be held as additional collateral until the debt yield at the Mortgaged Property is no less than 9.6% for four consecutive fiscal quarters. We cannot assure you that the Mortgaged Property will become stabilized as expected or at all. With respect to Loan No. 12, 285 & 355 Riverside Ave, the increase from the Most Recent NOI ($) to Underwritten Net Operating Income ($) at the 355 Riverside Ave Mortgaged Property is primarily attributable to rent steps. With respect to Loan No. 14, Prospector Plaza, the increase in Underwritten Net Operating Income ($) of more than 10% over the Most Recent NOI ($) is primarily driven by recent leasing activity. |
| With respect to Loan No. 16, JW Marriott Desert Springs, the increase from the Most Recent NOI ($) to Underwritten Net Operating Income ($) is primarily attributable to underwriting to average occupancy levels prior to the 2019 renovation and COVID-19 pandemic at the post-renovation ADR observed between June 2021 and November 2021. The Mortgaged Property’s 2021 performance reflects recovery from the COVID-19 pandemic as stay-at-home orders were lifted and travel began to rebound. We cannot assure you that the JW Marriott Desert Springs Mortgaged Property will revert to pre-COVID-19 performance. With respect to Loan No. 23, Apple Glen Crossing, the increase from the Most Recent NOI ($) to Underwritten Net Operating Income ($) is primarily attributable to two new tenants, Ulta and America’s Best Contacts & Eyeglasses, both of which executed recent leases in November 2021 and September 2021, respectively. These two tenants account for $248,644 in underwritten base rent. With respect to Loan No. 25, 1500 Volta Drive, the increase from the Most Recent NOI ($) to Underwritten Net Operating Income ($) is primarily attributable to rent steps. With respect to Loan No. 26, Courtyard Appleton, the increase from the Most Recent NOI ($) to Underwritten Net Operating Income ($) is primarily attributable to the fact that the most recent period reflects months impacted by the COVID-19 pandemic. With respect to Loan No. 28, Glen Forest Office Portfolio, the increase from the Most Recent NOI ($) to Underwritten | |
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| Net Operating Income ($) at the Hillcrest, Arrington, Bayberry, Highland I, Forest Plaza I and Forest Plaza II Mortgaged Properties is primarily attributable to rent steps. With respect to Loan No. 29, Arlington Green Executive Plaza, the increase from the Most Recent NOI ($) to Underwritten Net Operating Income ($) is primarily attributable to recent leasing and rent steps. With respect to Loan No. 33, STK Chicago, the increase in Underwritten Net Operating Income ($) of more than 10% over the Most Recent NOI ($) is primarily driven by the single tenant paying full unabated rent after receiving COVID-19 related rent abatements and deferrals. With respect to Loan No. 37, 65 Triangle Industrial, the increase from the Most Recent NOI ($) to Underwritten Net Operating Income ($) is primarily attributable to rent steps. | |
| (20) | The grace periods noted under “Grace Period – Late Fee (Days)” and Grace Period – Default (Days) reflect the number of days of grace before a payment default is an event of default. Certain jurisdictions impose a statutorily longer grace period. Certain of the Mortgage Loans may additionally be subject to grace periods with respect to the occurrence of an event of default (other than a payment default) and/or commencement of late charges which are not addressed in Annex A–1 to this Preliminary Prospectus. With respect to Loan No. 1, 601 Lexington Avenue, monthly debt service payments are due on the 9th of each month, with a monetary default grace period of two business days, which grace period extensions are exercisable only once in any 12-month period. With respect to Loan No. 24, Crossroads Village, the Mortgage Loan documents provide the Mortgagor with one, five-day grace period in any 12-month period for any monthly debt service payment amount or deposits to the reserve funds. With respect to Loan No. 33, STK Chicago, the loan documents provide the borrower with one five-day grace period in which no late fee is required to be paid during the term of the loan for any payments due on a payment date, other than the payment due on the maturity date. |
| (21) | In certain cases, in addition to an “as–is” value, the appraisal states an “as complete”, “as–stabilized” or “hypothetical” value for the related Mortgaged Property that assumes that certain events will occur with respect to retenanting, construction, renovation or repairs at such Mortgaged Property. The Appraised Value set forth on Annex A–1 is the “as–is” value unless otherwise specified in this Preliminary Prospectus. With respect to the Mortgaged Properties that secure the Mortgage Loans listed in the following table, the respective Cut–off Date LTV Ratio was calculated using the related “as complete”, “as–stabilized” or “hypothetical” Appraised Values, as opposed to the “as–is” Appraised Values, each as set forth in the following table: |
| Mortgage Loan | %
of Initial Pool Balance | Mortgage Loan Cut-off Date LTV Ratio (Other Than “As-ls”) | Mortgage
Loan LTV Ratio at Maturity (Other Than “As-ls”) | Appraised
Value (Other Than “As-Is”) | Mortgage
Loan Cut-off Date LTV Ratio (“As-ls”) | Mortgage
Loan LTV Ratio at Maturity(“As-ls”) | Appraised
Value (“As-Is”)(1) | |||||||
| Shearers Industrial Portfolio(1) | 3.3% | 62.8% | 62.8% | $219,100,000 | 66.7% | 66.7% | $206,300,000 |
| (1) | The aggregate Appraised Value ($) for the Shearer’s Industrial Portfolio Mortgage Loan includes the “Hypothetical Market Value As If Complete” value of $24,200,000 as of January 19, 2022 for the 821 Route 97 Mortgaged Property, which is based on the assumption that the proposed building expansion is completed as described in the building plans, on January 19, 2022. The expansion is expected to increase the square footage of the 821 Route 97 Mortgaged Property from 145,485 sq. ft. to 221,876 sq. ft., and be completed by August 2022. At origination, the borrower funded a Shearer’s expansion allowance reserve in connection with the expansion of the improvements at the 821 Route 97 Mortgaged Property, in an amount equal to $12,243,079. We cannot assure you that the expansion at the 821 Route 97 Mortgaged Property will be completed as expected or at all. The aggregate ‘as-is” value of the Shearer’s Industrial Portfolio Mortgage Loan is $206,300,000 as of various dates between January 6, 2022 and January 26, 2022, which results in a Cut-off Date LTV Ratio (%) and LTV Ratio at Maturity / ARD (%) of 66.7%. |
| (22) | With respect to Loan No. 18, 1340 Lafayette, the Number of Units reflects square footage attributable to the parcel of land (including an outdoor parking facility) which serves as collateral for the 1340 Lafayette Loan. |
| (23) | Prepayment Provisions are shown from the respective Mortgage Loan First Payment Date. “L(x)” means lock–out for x payments. “D(x)” means may be defeased for x payments. “YM(x)” means may be prepaid for x payments with payment of a yield maintenance charge. |
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| “YM1(x)” means may be prepaid for x payments with payment of the greater of a yield maintenance charge and 1% of the amount prepaid. “DorYM1(x)” means may be prepaid for x payments with either defeasance or a yield maintenance charge or 1% of the amount prepaid. “O(x)” means freely prepayable for x payments, including the maturity date. Certain of the Mortgage Loans permit the release of a portion of a Mortgaged Property (or an individual Mortgaged Property, in connection with a portfolio Mortgage Loan) under various circumstances, as described in this Preliminary Prospectus. See “Description of the Mortgage Pool—Certain Terms of the Mortgage Loans—Partial Releases” in this Preliminary Prospectus. In addition, certain of the Mortgage Loans permit the borrower to prepay a portion of the Mortgage Loan to avoid or cure a cash sweep period due to a low debt yield or debt service coverage ratio trigger. With respect to Loan. 33, STK Chicago, pursuant to the first amendment to loan agreement dated as of March 22, 2022, the defeasance lockout expiration date was extended to August 27, 2023. Accordingly, the lockout period is approximately 41 periods. | |
| (24) | With respect to Loan No. 1, 601 Lexington Avenue, the lockout period will be at least 27 payment dates beginning with and including the first payment date in February 2022. Defeasance of the 601 Lexington Avenue Whole Loan in full is permitted at any time after the first payment date following the earlier to occur of (i) December 10, 2024 or (ii) the date that is two years from the closing date of the securitization that includes the last note to be securitized. The assumed lockout period of 27 payments is based on the expected Benchmark 2022-B34 securitization closing date in April 2022. The actual lockout period may be longer. With respect to Loan No. 2, One Wilshire, the lockout period will be at least 27 payment dates beginning with and including the first payment date in February 2022. Defeasance of the One Wilshire Whole Loan in full is permitted at any time after the earlier to occur of (i) December 22, 2024 or (ii) the date that is two years from the closing date of the securitization that includes the last pari passu note to be securitized. The assumed lockout period of 27 payments is based on the expected Benchmark 2022-B34 securitization closing date in April 2022. The actual lockout period may be longer. With respect to Loan No. 11, Gem Tower, the lockout period will be at least 28 payment dates beginning with and including the first payment date in January 2022. Prepayment of the Gem Tower Whole Loan in full is permitted at any time on or after the sixth day of the month that first occurs after the earlier to occur of (i) December 2, 2024 or (ii) the date that is two years from the closing date of the securitization that includes the last pari passu note to be securitized. The assumed lockout period of 28 payments is based on the expected Benchmark 2022-B34 securitization closing date in April 2022. The actual lockout period may be longer. With respect to Loan No. 15, Novo Nordisk HQ, the lockout period will be at least 29 payment dates beginning with and including the first payment date in December 2021. Defeasance of the Novo Nordisk HQ Whole Loan in full is permitted at any time after the earlier to occur of (i) November 5, 2024 or (ii) the date that is two years from the closing date of the securitization that includes the last note to be securitized. The assumed lockout period of 29 payments is based on the expected Benchmark 2022-B34 securitization closing date in April 2022. The actual lockout period may be longer. |
| (25) | Partial release in connection with a partial prepayment or partial defeasance or substitution or a free release is permitted for the following loans. See “Description of the Mortgage Pool—Certain Terms of the Mortgage Loans—Partial Releases” in this Preliminary Prospectus for the terms of the releases. ● Loan No. 3 – Bedrock Portfolio ● Loan No. 6 – Millennia Portfolio ● Loan No. 7 – InCommercial Net Lease Portfolio #5 ● Loan No. 8 – Redmond Community Center ● Loan No. 17 – 35 Crosby Street and 70 Carmine Street ● Loan No. 28 – Glen Forest Office Portfolio (only for Mortgaged Property No. 28.03 Highland II, Mortgaged Property No. 28.10 Utica and Mortgaged Property No. 28.11 Willard) |
| (26) | The following Mortgaged Properties consist, in whole or in part, of the related borrower’s interest in one or more ground leases, space leases, air rights leases or other similar leasehold interests: With respect to Loan No. 1, 601 Lexington Avenue, the mortgaged property is subject to a condominium regime |
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| known as the 601 Lexington Avenue condominium. The condominium is comprised of four units. The borrowers own three of the four units in fee simple (which include 94.4% of the common elements) and a leasehold interest in a portion of the fourth unit, known as the “Church Unit.” The units owned by the borrowers include 94.4% of the common elements, which entitles them to 94 of the 100 votes in the condominium regime (together with the right to appoint 6 of 7 board members). With respect to Loan No. 3, Bedrock Portfolio, the One Woodward Avenue individual Mortgaged Property contains two separate leasehold parcels. Parcel B covers the southwest portion of the building and patio. Parcel C is covered by a lease with the City of Detroit and contains the sidewalk area around the building, including the ramp to the underground parking. With respect to Loan No. 5, Shoreline Square, the Mortgaged Property consists of a leasehold interest under a 99-year ground lease that is in place through March 2113. Terra Funding – Shoreline Square, LP is the ground lessor. The current annual ground rent is equal to approximately $2,985,131 which increases at (i) 3% annually until April 2044 and (ii) 1.5% thereafter. With respect to Loan No. 11, Gem Tower, the Mortgage Loan is secured by both the fee interest owned by Manhattan Property Development Corp. and the leasehold interest owned by IGT-City’s Property Development LLC in a retail condominium unit. The Mortgaged Property is leased in its entirety from the fee owner, Manhattan Property Development Corp., to IGT-City’s Property Development LLC pursuant to an operating lease. These two entities are the co-borrowers for the Mortgage Loan. With respect to Loan No. 16, JW Marriott Desert Springs, a portion of the collateral is held as a leasehold interest. The ground lease expires in December 2031 and has three, 10-year extension options for a fully extended expiration date in December 2061. Annual ground rent under the ground lease is fixed at $100,000. With respect to Loan No. 33, STK Chicago, the related Mortgaged Property is a commercial condominium building represented by the Kinzie State Commercial Condominium Association, which is comprised of five total units (each, an “STK Condominium Unit”). The Museum of Broadcast Communications owns four STK Condominium Units, representing an approximately 62.74% share. Pursuant to the condominium association documents, decisions are to be made by majority votes present at any meeting, with 44% unit representation and at least 2 units constituting a quorum. The related borrower owns one STK Condominium Unit, representing an approximately 37.26% share and therefore does not control the condominium board. | |
| (27) | With respect to Loan No. 3, Bedrock Portfolio, three individual Mortgaged Properties, identified as The Qube, Chrysler House, and 1001 Woodward, are subject to master leases that were originally entered into for the purpose of securing historic tax credit investors. None of the historic tax credit investors remain in the ownership of the master tenants, which are now wholly owned indirectly by Detroit Real Estate Holdings Company I LLC, which directly owns each of the borrowers. Each master tenant is required to comply with single purpose entity covenants in the Bedrock Portfolio Whole Loan documents, including having independent directors. Each master tenant granted the lender a Mortgage and an Assignment of Leases and Rents on its individual property. See “Description of the Mortgage Pool—Tenant Issues—Affiliated Leases” for additional information. With respect to Loan No. 7, InCommercial Net Lease Portfolio #5, the borrower (property owner and master landlord) entered into a master lease and master leased the entire portfolio to an affiliate SPE entity, InCommercial Net Lease MT 5, LLC. The master lessee is structured as an SPE entity with 1 independent manager. The master lease is fully subordinate to the mortgage loan and is terminable by the lender upon a foreclosure or deed-in-lieu, or upon a material default under the master lease. The master lessee’s interest in the leases and rents is collaterally assigned to the borrower. For so long as the master lease is in effect, the borrower is entitled to receive only rents from the master lease, and not the underlying rents and other receipts from the InCommercial Net Lease Portfolio #5 Properties. With respect to Loan No. 13, Bala Woods, the borrower, CF Bala Woods Multifamily DST, master leases the Bala Woods property to an affiliate, CF Bala Woods Master Tenant, LLC. The Bala Woods Mortgage Loan documents require that the borrower require the master lessee be structured as an SPE entity with one independent director. The master lease is fully subordinate to the mortgage loan and is terminable by the lender upon a foreclosure or deed-in-lieu thereof, or upon a material default under the master lease. The master lessee’s interest in the leases and rents is collaterally assigned to the borrower. For so long as the master lease is in effect, the borrower is entitled to receive only rents from the master lease, and not the underlying rents and other receipts from the Bala Woods property. With respect to Loan No. 28, Glen Forest Office Portfolio, the borrowers (property owner and master lessor) entered into a master lease with Glen Forest Holdings LLC, as master lessee, which is 100% owned by Glen Forest Venture LLC. Glen Forest Venture |
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| LLC is 5% owned by Glen Forest JS Member LLC as managing member and 95% owned by Glen Forest Investors Corp. Glen Forest JS Member LLC is 0.5% owned by Jack Sitt as managing member and 99.5% owned by Glen Forest JS Investors LLC. Glen Forest JS Investors LLC is 0.5% owned by Jack Sitt and 99.5% owned by various investors with no entity or individual directly or indirectly controlling more than 5% in the master lessee and Jack Sitt as sole manager. With respect to No. 30, 1201 Main, of the 27 multifamily units, 15 units are under a long term master lease to Basalt Orthopedic Surgery Center with various lease maturities from 2025 through 2027. | |
| (28) | With respect to Loan No. 1, 601 Lexington Avenue, the Largest Tenant, Kirkland & Ellis (“K&E”) (36.8% of NRA), had $4,062,504 of outstanding free rent at origination. Boston Properties Limited Partnership, a Delaware limited partnership (“BPLP”), an affiliate of the borrower sponsor, provided a payment guaranty for the outstanding free rent at origination. The Third Largest Tenant, NYU (11.7% of NRA), has not yet taken occupancy of its full space, which is expected in April or May of 2022. In addition, Citadel, the Fourth Largest Tenant (8.6% of NRA), has provided notice it intends to vacate its space at its lease expiration in August 2022. With respect to Loan No. 1, 601 Lexington Avenue, the Second Largest Tenant, Citibank, is currently subleasing suites 1900 and 2100 totaling 59,978 sq. ft. (3.6% of NRA). The Fifth Largest Tenant, Freshfields, is currently subleasing suite 5510 totaling 15,932 sq. ft. (1.0% of NRA). As of the origination date, Freshfields was also publicly marketing the remainder of its leased space for sublet. With respect to Loan No. 1, 601 Lexington Avenue, the Second Largest Tenant, Citibank, has leases that expire as follows (i) floors 18 and 20 (59,978 sq. ft.) expire in December 2022, (ii) floors 19 and 21 (59,978 sq. ft.) expire in August 2023, (iii) floor 23 (29,989 sq. ft.) expires in April 2027 and (iv) floors 24 and 25 (59,978 sq. ft.) expire in April 2032. With respect to Loan No. 2, One Wilshire, the Largest Tenant, CoreSite, subleases 10,848 sq. ft. expiring on July 31, 2029 ($105.88 per sq. ft.) from GI TC One Wilshire Services, a borrower sponsor affiliate, which brings its total footprint at the Mortgaged Property to 187,533 sq. ft.. With respect to Loan No. 2, One Wilshire, the Third Largest Tenant, Verizon Global Networks (inclusive of affiliated tenant leases), leases (i) 24,283 sq. ft. expiring July 31, 2029, (ii) 18,835 sq. ft. expiring December 14, 2026, (iii) 7,905 sq. ft. expiring December 14, 2023, (iv) 4,698 sq. ft. expiring August 21, 2030, (v) 3,907 sq. ft. expiring July 15, 2025, (vi) 2,253 sq. ft. expiring April 30, 2025 and (vii) antenna space expiring July 31, 2022. The Fourth Largest Tenant, CenturyLink Communications, LLC (inclusive of affiliated tenant leases), leases (i) 35,925 sq. ft. expiring December 31, 2025, (ii) 10,318 sq. ft. expiring April 30, 2023 and (iii) 10,008 sq. ft. expiring November 30, 2026. |
| With respect to Loan No. 3, Bedrock Portfolio, the Largest Tenant, Quicken Loans Inc., leases 407,050 sq. ft. of space that expire on July 31, 2028, 183,664 sq. ft. of space that expire on August 31, 2023, 156,020 sq. ft. of space that expire on March 31, 2032, 122,475 sq. ft. of space that expire on April 30, 2024 and 21,124 sq. ft. of space that expire on January 7, 2030 and 15,602 sq. ft. of space that expire on October 31, 2025. With respect to Loan No. 5, Shoreline Square, the Largest Tenant, GSA US Customs, has two leases. The lease currently in effect expires on August 9, 2022 and demises approximately 143,732 sq. ft. The second lease was entered into for the purpose of renewing a majority of the space leased to GSA US Customs (approximately 123,386 sq. ft.) and expires on August 9, 2037. The second lease will become effective upon GSA US Customs accepting its tenant improvements. There can be no assurance as to whether, or when, the second lease will come into effect. With respect to Loan No. 11, Gem Tower, the Fourth Largest Tenant, Diamond Scene of New York Corp., leases 315 sq. ft. expiring September 22, 2024 and 130 sq. ft. expiring January 20, 2025. With respect to Loan No. 19, Townsgate Office, the mortgaged property has two leases totaling 35,374 sq. ft. to Wells Fargo that are co-terminous to Wells Fargo Bank, N.A. and to Wells Fargo Clearing Services, LLC dba Wells Fargo Advisors. With respect to Loan No. 21, Santa Barbara Tech Center, the mortgaged property has two leases to Mission Support and Test Services, LLC (“MSTS”) which leases two spaces for a combined total of 56,660 sq. ft. or 66.8% of total NRA, with the 14,195 sq. ft. lease expiring in 2027 and the 42,465 sq. ft. lease expiring in 2025. With respect to Loan No. 21, Santa Barbara Tech Center, the Third Largest Tenant, Gold Crest, is currently subleasing its space totaling 5,746 sq. ft. (6.8% of NRA). The tenant is currently paying rent; however, the lender is underwriting this space as vacant. |
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| With respect to Loan No. 24, Crossroads Village, the Fifth Largest Tenant, Bath & Body Works, LLC, leases 3,200 sq. ft. of space that expire on January 31, 2029 and 1,328 sq. ft. of space that is month-to-month. With respect to Loan No. 28, Glen Forest Office Portfolio - Forest Plaza II, the Second Largest Tenant, Carrell Blanton Ferris & Associates, PLC, has two leases. The lease that is currently month to month demises 582 sq. ft. The second lease that expires April 30, 2026 demises 8,325 sq. ft. | |
| (29) | The lease expiration dates shown are based on full lease terms. However, in certain cases, a tenant may have the option to terminate its lease or abate rent prior to the stated lease expiration date for no reason after a specified period of time and/or upon notice to the landlord or upon the occurrence of certain contingencies including, without limitation, if the landlord violates the lease or fails to provide utilities or certain essential services for a specified period or allows certain restricted uses, upon interference with such tenant’s use of access or parking, upon casualty or condemnation, for zoning violations, if certain anchor or key tenants (including at an adjacent property) or a certain number of tenants go dark or cease operations, if a certain percentage of the net rentable area at the Mortgaged Property is not occupied, if the tenant fails to meet sales targets or business objectives, or, in the case of a government tenant, for lack of appropriations or other reasons. In addition, in some instances, a tenant may have the right to assign its lease and be released from its obligations under the subject lease. Furthermore, some tenants may have the option to downsize their rented space without terminating the lease completely. With respect to Loan No. 1, 601 Lexington Avenue, the Largest Tenant, K&E has a June 30, 2027 termination option on the 32nd floor with notice by March 31, 2026 and the payment of unamortized leasing costs. Additionally, as of February 28, 2034, K&E can terminate either its highest or lowest odd number floor other than the 51st floor (one floor only). With respect to Loan No. 2, One Wilshire, the Fourth Largest Tenant, CenturyLink Communications, LLC, has the one-time right to reduce its space by 7,445 sq. ft. on June 30, 2023 with nine months’ notice and payment of a reduction fee. With respect to Loan No. 3, Bedrock Portfolio, the Fifth Largest Tenant, Coyote Logistics, has a one-time right to terminate its lease, effective as of the last day of the 70th full calendar month of its lease term, with at least nine months’ prior written notice and the payment of a termination fee in an amount equal to the sum of (i) the then unamortized brokerage commissions, tenant improvement allowance, the abatement of base rental and attorneys’ fees incurred by landlord in negotiating the lease, amortized on a straight-line basis over the initial term of the lease with interest on the unamortized balance at a rate of 6% per annum, plus (ii) an amount equal to three full calendar months’ rent at the then existing rates. With respect to Loan No. 5, Shoreline Square, the Second Largest Tenant, State of CA State Lands Commission, has the option to terminate the lease on or after February 2023 with 30-day notice. |
| With respect to Loan No. 7, InCommercial Net Lease Portfolio #5, the Sole Tenant at the Walgreens, Meridian, ID Mortgaged Property, Walgreen Co., has the right to terminate its lease every five years commencing on December 31, 2030 and ending on December 31, 2055 upon six months’ prior written notice to the related landlord. With respect to Loan No. 8, Redmond Community Center, the Fourth Largest Tenant, PetCo, is paying reduced rent (equal to the lesser of 3% of the tenant’s gross sales and 50% of fixed rent, plus in either case all other charges) due to a co-tenancy triggered by Bed, Bath & Beyond in May 2021. PetCo agreed in a lease amendment to resume paying rent on May 16, 2022, in exchange for a $1.00 per sq. ft. discount on rent per year through the expiration of PetCo’s current lease term. With respect to Loan No. 12, 285 & 355 Riverside Ave – as to the 285 Riverside Ave Mortgaged Property, the Fifth Largest Tenant, RBC Capital Markets, LLC, has a one-time option to terminate its lease effective May 12, 2029 upon 365 days’ notice to the related landlord and payment of a termination fee. With respect to Loan No. 12, 285 & 355 Riverside Ave – as to the 355 Riverside Ave Mortgaged Property, (i) the Third Largest Tenant, Bluff Point Associates, has a one-time termination option effective October 1, 2024 with no earlier than 270 days’ and no later than 180 days’ notice and payment of a termination fee, (ii) the Fourth Largest Tenant, IXM Trading, LLC, has a one-time termination option effective May 31, 2024 upon 365 days’ notice and payment of a termination fee and (iii) the Fifth Largest Tenant, BHMS Investments LP, has a one-time termination option effective May 1, 2024 with no earlier than 365 days’ and no later than 270 days’ notice and payment of a $40,000 termination fee. With respect to Loan No. 14, Prospector Plaza, the Third Largest Tenant, Ross Dress for Less, Inc., has a co-tenancy tied to at least two of three stores, including a CVS store which is no longer part of the collateral, or |
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| replacement stores which satisfy certain criteria, remaining open in a specified amount of space. Because the borrower does not own the CVS pad, it will not be able to control any renewal or replacement of the CVS store. | |
| With respect to Loan No. 14, Prospector Plaza, the Fifth Largest Tenant, First Light Fitness Corporation (dba Anytime Fitness), which leases approximately 2.1% of the net rentable square footage, the use of the mortgaged property as a gym/fitness center violates use restrictions under a declaration of restrictions relating to the mortgaged property and under certain other leases at the mortgaged property. The Anytime Fitness lease provides that if the landlord receives a notice of default from any tenant at the mortgaged property, or from an adjacent property owner, on the grounds that the use by Anytime Fitness violates the foregoing use restrictions, the landlord will have the right to terminate the lease upon 20 days’ notice and payment of a termination fee not to exceed $100,000 to the tenant. With respect to Loan No. 20, Tharp Portfolio – as to the Greensburg Retail Center Mortgaged Property, (i) the Largest Tenant, Athletico Physical Therapy, has the one-time right to terminate its lease effective on September 30, 2026 with 12 months’ notice provided between June 2025 and September 2025, and payment of a termination fee and (ii) the Second Largest Tenant, Starbucks Coffee, has the right to terminate its lease effective on or after September 30, 2025 with 120 days’ notice. With respect to Loan No. 21, Santa Barbara Tech Center, the Largest Tenant, MSTS, has an ongoing termination right with respect to its 14,195 sq. ft. premises in Building 5540 Ekwill upon no less than 360 days’ notice of termination, and without payment of a termination fee. With respect to Loan No. 27, Lee’s Hill II, the Largest Tenant, Providence Service, may terminate its lease effective December 31, 2024 upon 12-month notice and payment of $325,000 termination fee. With respect to Loan No. 28, Glen Forest Office Portfolio – as to the Meridian Mortgaged Property, the Largest Tenant, The London Company may terminate its lease on November 30, 2029 upon nine (9) months’ prior notice to the related landlord. With respect to Loan No. 28, Glen Forest Office Portfolio – as to the Bayberry Mortgaged Property, the Largest Tenant, Virginia Estate & Trust Law has the one-time right to terminate its lease effective April 30, 2026 upon notice delivered by July 31, 2025 and payment of a termination fee. The Third Largest Tenant, Breeden Construction, LLC, has the option to terminate its least effective February 28, 2023. The termination option must be exercised no later than six months prior to termination date. With respect to Loan No. 28, Glen Forest Office Portfolio – as to the Capstone Mortgaged Property, the Fourth Largest Tenant, Kismet New Vision Holdings, LLC, has the option to terminate its lease effective December 2024 with a written notice no later than 12-month prior and payment of termination fee. With respect to Loan No. 28, Glen Forest Office Portfolio – as to the Forest Plaza II Mortgaged Property, the Fifth Largest Tenant, Richmond Hearing Doctors, PLLC, has the option to terminate its lease any time following the 62nd month anniversary of the commencement date (November 2024) by giving nine months’ notice. | |
| (30) | Tenants under certain leases included in the Underwritten Net Cash Flow, Underwritten NOI and/or Occupancy may not be in physical occupancy, may not have begun paying rent or may be in negotiation. With respect to the largest 15 Mortgage Loans and certain tenants representing more than 25% of the net rentable area of a Mortgaged Property, see “Description of the Mortgage Pool—Tenant Issues—Lease Expirations and Terminations¬—Other” in this Preliminary Prospectus. The tenants shown in Annex A–1 have signed leases but may or may not be open for business as of the Cut–off Date. With respect to Loan No. 8, Redmond Community Center, the Largest Tenant, H-Mart, is not yet in occupancy, and has a 5-month free rent period. H-Mart is permitted to extend its required opening date up to an additional 120 days if tenant is not permitted to open in any capacity due to regulations affecting its premises related to the COVID-19 pandemic or similar event. The Second Largest Tenant, Overlake Medical Clinics, is not yet in occupancy of an 11,069 sq. ft. expansion suite, which is expected to open in April 2022, as to which the tenant has a 2-month free rent period. With respect to Loan No. 10, Hall Road Crossing, the Largest Tenant, Amazon Fresh, has not yet commenced paying rent under such tenant’s lease. The rent commencement date will be the earlier of (i) the date on which Amazon Fresh opens for business with the public, and (ii) January 31, 2023. We cannot assure you that such tenant will take occupancy of its space and/or begin paying rent pursuant to its lease. |
A-1-58
| With respect to Loan No. 20, Tharp Portfolio – Greensburg Retail Center, the Fifth Largest Tenant, Sports Clips, has signed a lease and taken possession of its space, but is not yet open for business. We cannot assure you that Sports Clips will open for business as expected or at all. With respect to Loan No. 30, 1201 Main, the commercial tenant occupying the ground floor retail portion of the collateral, Curated Provisions Inc., has accepted its space with no outs, is currently paying full rent, and pursuant to their estoppel will be fully open for business April 1, 2022. | |
| (31) | The following Mortgage Loans have one or more borrowers that own all or a portion of the related Mortgaged Property as tenants–in–common. See “Description of the Mortgage Pool—Mortgage Pool Characteristics—– Tenancies–in–Common or Diversified Ownership” in this Preliminary Prospectus for further information. ● Loan No. 14, Prospector Plaza ● Loan No. 34 – 905 Medical Park Drive |
| (32) | With respect to Loan No. 1, 601 Lexington Avenue, if the current balance of the TI/LC reserve less the outstanding TI/LC reserve and free rent reserve is equal to or greater than the TI/LC Caps ($), then no monthly deposit into the TI/LC reserve is required pursuant to the loan documents. With respect to Loan No. 33, STK Chicago, during the COVID-19 pandemic, the sole tenant, a restaurant, defaulted on payment of its rent, and three separate lease modifications were entered into deferring payment of the tenant’s rent. Pursuant to the final lease modification, rent deferrals were continued through March 2021, and approximately $472,000 in deferred rent was required to be repaid in 18 equal monthly installments commencing in October 2021. The tenant has been current on payment of its rent, including repayment of deferred rent, since October 2021 through March 2022. On May 6, 2020 a loan modification to the STK Chicago Mortgage Loan was executed, which permitted the lender to apply funds in a rollover reserve of up to $98,428 towards payment of interest on the Mortgage Loan from the payment date in May 2020 to the payment date in August 2020. The amendment further provided that a cash flow sweep would commence and excess cash flow would be deposited into the rollover reserve until all funds withdrawn from such reserve to pay interest were replenished. As of July 2021, all such funds withdrawn from the rollover reserve were replenished. In addition, during the first quarter of 2020, the STK Chicago Mortgage Loan entered into a cash management trigger period due to the debt service coverage ratio falling below 1.20x. With respect to the four most recent quarterly periods under the STK Chicago Mortgage Loan documents, ended December 31, 2021, the debt service coverage ratio calculated in accordance with the STK Chicago Mortgage Loan documents has been 0.74x, 1.21x, 1.31x, and 1.48x. Such debt service coverage ratio has been calculated on an amortizing basis. |
| (33) | With respect to Loan No. 1, 601 Lexington Avenue, at origination, BPLP provided a guaranty in lieu of (i) depositing $52,315,328 into a reserve for approved leasing expenses outstanding at the time of origination and (ii) depositing $8,974,469 into a reserve for outstanding free and gap rent for six tenants. The aggregate amount guaranteed under any BPLP guaranty (when aggregated with the full amount of any letter of credit and/or cash on deposit) will be reduced as the borrowers expend funds for the purposes for which such funds would have otherwise been deposited in the applicable reserve account. With respect to Loan No. 1, 601 Lexington Avenue, the borrowers are permitted to provide a guaranty from BPLP, an affiliate of the borrowers, in lieu of all reserves, subject to certain conditions, including BPLP maintaining a senior unsecured credit rating of at least “BBB” by S&P and “Baa3” by Moody’s. The aggregate amount guaranteed under any BPLP Guaranty (when aggregated with the full amount of any letter of credit and/or cash on deposit) will be reduced as the borrowers expend funds for the purposes for which such funds would have otherwise been deposited in the applicable reserve account. With respect to Loan No. 6, Millennia Portfolio, on each payment date prior to March 2028 the borrower is required to deposit into the replacement reserve account a Monthly Replacement / FF&E Reserve ($) amount equal to approximately $21,403. On each payment date beginning in March 2028 the borrower is required to deposit approximately $32,417. With respect to Loan No. 21, Santa Barbara Tech Center, the TI/LC Caps ($) will be $755,000 prior to April 6, 2025, and will decrease to $255,000 from and after April 6, 2025. The borrower is permitted to deliver a letter of credit for the full cap amount in lieu of monthly deposits or for $500,000 to replace the $500,000 initial deposit. The letter of credit in either case is not permitted to be reduced once the cap decreases even if the cap drops below the value of the letter of credit. With respect to Loan No. 22, Greenbrier Towers I & II, the ongoing monthly leasing reserve is equal to (i) $21,470.25 until the date that is 12 months after the closing date and (ii) $14,313.50 thereafter. |
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| With respect to Loan No. 24, Crossroads Village, the TI/LC Caps ($) of $391,104.00 excludes the amount deposited by the borrower at loan origination into the Upfront TI/LC Reserve ($) or any lease termination fees or other payments received by the borrower in connection with the termination of any lease at the Mortgaged Property. | |
| (34) | With respect to the Mortgage Loans identified below, the lender is insured under an environmental insurance policy obtained (i) in lieu of obtaining a Phase II Environmental Site Assessment, (ii) in lieu of providing an indemnity or guaranty from a sponsor or (iii) to address environmental conditions or concerns. For additional information, see “Risk Factors—Risks Related to the Mortgage Loans—Adverse Environmental Conditions at or Near Mortgaged Properties May Result in Losses” and “Description of the Mortgage Pool—Mortgage Pool Characteristics—Environmental Considerations” in this Preliminary Prospectus. |
| Loan No. | Mortgage Loan | Mortgage
Loan Cut-off Date Balance | %
of Initial Outstanding Pool Balance | Maximum Policy Amount | Premium
Paid in Full | Expiration Date | ||||||
| 1 | 601 Lexington Avenue | $85,000,000 | 9.3% | $40,000,000 | Yes | 9/15/2023 | ||||||
| 9 | Shearer’s Industrial Portfolio | $30,000,000 | 3.3% | $10,000,000 | Yes | 2/16/2035(1) | ||||||
| 15 | Novo Nordisk HQ | $22,167,000 | 2.4% | $15,000,000 | Yes | 8/11/2024 |
| (1) | At origination, the borrower obtained an environmental insurance policy issued by the Great American E & S Insurance Company that names the lender as an additional insured and has a term expiring on February 16, 2032 with respect to the borrower and February 16, 2035 with respect to the lender. |
| (35) |
| Loan No. | Mortgage Loan | Senior Notes Cut-off Date Balance | Subordinate Notes Cut-off Date Balance | Total Mortgage Debt Cut-off Date Balance(1) | Total Senior Notes U/W NCF DSCR | Total Mortgage Debt U/W NCF DSCR(1) | Total Senior Notes Cut-off Date LTV | Total Mortgage Debt Cut-off Date LTV Ratio(1) | Total Senior Notes U/W NOI Debt Yield | Total Mortgage Debt U/W NOI Debt Yield(1) | ||||||||||
| 1 | 601 Lexington Avenue | $723,300,000 | $276,700,000 | $1,000,000,000 | 4.50x | 3.25x | 42.5% | 58.8% | 13.2% | 9.5% |
| (1) | Includes any related pari passu companion loan(s) and subordinate secured companion loan(s), and excludes any related mezzanine loan(s). |
| (36) | With respect to Loan No. 4, Romaine & Orange Square, the borrower has the right to pledge 100% of its direct equity interest subject to certain restrictions set forth in the loan documents, including, but not limited to: (1) a combined maximum LTV ratio of 62.4%, (2) a combined minimum DSCR ratio of 1.78x, (3) the maturity date is coterminous with that of the Romaine & Orange Square Loan, (4) an intercreditor agreement reasonably satisfactory to the lender, and (5) lender’s receipt of a rating agency confirmation with respect to the additional mezzanine debt. With respect to Loan No. 11, Gem Tower, an indirect owner of the borrowers is permitted to obtain mezzanine financing secured by a pledge of direct or indirect equity interests in the borrowers subject to certain conditions, including, without limitation: (i) a combined maximum loan to value ratio of 55.0%, inclusive of the additional mezzanine debt, (ii) a debt service coverage ratio at the closing of the mezzanine loan at least equal to 2.97x, inclusive of the additional mezzanine debt, (iii) the debt yield at the closing of the mezzanine loan at least equal to 10.15%, inclusive of the additional mezzanine debt and (iv) a subordination and intercreditor agreement reasonably satisfactory to the lender. With respect to Loan No. 28, Glen Forest Office Portfolio, the borrower has the right to borrow a mezzanine loan subordinate to the Glen Forest Office Portfolio Whole Loan, subject to credit and legal criteria specified in the Glen Forest Office Portfolio loan documents, including, without limitation: (i) a combined maximum loan to value ratio (based on appraisals ordered by the lender in connection with the origination of the mezzanine loan and calculated based on the outstanding principal balance of the Glen Forest Office Portfolio Whole Loan and the initial principal amount of the mezzanine loan) of 75.0%, (ii) a debt service coverage ratio at the origination of the mezzanine loan at least equal to 2.00x, in each case, inclusive of the additional mezzanine debt, (iii) the debt yield at the origination of the mezzanine loan is at least 10.0%; and (iv) an intercreditor agreement reasonably satisfactory to the lender. The lender’s receipt of a rating agency confirmation will be required in connection with the mezzanine loan. |
| Mortgage Loan Name | Mortgage
Loan Cut-off Date Balance | Combined Maximum LTV Ratio | Combined Minimum DSCR | Combined Minimum Debt Yield | Intercreditor Agreement Required | |||||
| Romaine & Orange Square | $68,000,000 | 62.4% | 1.78x | NAP | Yes | |||||
| Gem Tower | $28,000,000 | 55.0% | 2.97x | 10.15% | Yes | |||||
| Glen Forest Office Portfolio | $9,000.000 | 75.0% | 2.00x | 10.0% | Yes |
| (37) | With respect to Loan No. 15, Novo Nordisk HQ, in connection with the sale of the property to the related borrower, such borrower’s sole member (the “Novo Sole Member”) entered into an earnout agreement (the “Novo Earnout |
A-1-60
| Agreement”) with the prior owner of the property (the “Novo Seller”) whereby the Novo Sole Member agreed to make a payment to the Novo Seller if the tenant at the property ever exercised its third expansion option under its lease (the “Novo Earnout Obligation”). The Novo Earnout Obligation is secured by a pledge of the Novo Sole Member’s 100% ownership interest in the borrower pursuant to a pledge agreement (the “Novo Earnout Pledge Agreement”). At origination, (i) the related lender funded a reserve equal to the Novo Earnout Obligation, which amount is required to be released to the Novo Seller, provided no event of default is continuing under the loan documents, as and when such amounts are due and payable under the Novo Earnout Agreement and (ii) the lender entered into a recognition agreement with the Novo Seller pursuant to which the lender agreed, among other things, (w) to send all notices under the loan documents to the Novo Seller, (x) to allow the Novo Seller to foreclose on the pledge and take over the borrower so long as a preapproved control party will own/control such borrower after foreclosure and so long as the permitted transfer provisions of the loan agreement and recognition agreement are satisfied, (y) to allow the Novo Seller to purchase the senior loan upon notice to the Novo Seller that an event of default under the loan is continuing (for payment of the full outstanding amount of the debt, including all default interest, fees and expenses) and (z) to accept payment of the monthly interest payment or any other payment obligation by the Novo Seller (as and when such payment is due and payable by the borrower) but no more than two times during the term of the Mortgage Loan. | |
| (38) | With respect to Loan No. 16, JW Marriott Desert Springs, the Mortgaged Property is operated by Marriott Hotel Services, Inc. under a hotel management agreement that expires December 31, 2032 and may be automatically renewed for four successive 10-year periods. |
| (39) | With respect to Loan No. 35, 3097 E Ana St, the Sole Tenant at the Mortgaged Property, International Textile Group, Inc., is an affiliate of the borrower sponsor. With respect to Loan No. 37, 65 Triangle Industrial, the Second Largest Tenant is owner occupied and occupies 13,488 sq. ft., 37.0% of net rentable area, at the Mortgaged Property. |
| (40) | With respect to Loan No. 8, Redmond Community Center, historical 2019-TTM operating statements include revenues from the non-collateral parcel in the community center, therefore, historical financials are not presented. With respect to Loan No. 9, Shearer’s Industrial Portfolio, and Loan No. 20, Tharp Portfolio, one or more of the respective Mortgaged Properties are subject to a triple-net or modified gross lease with the related sole tenant and, therefore, have no or limited prior operating history and/or lack historical financial figures and information. With respect to Loan No. 20, Tharp Portfolio, one or more of the respective Mortgaged Properties were constructed, in a lease-up period or the subject of a major renovation that was completed within 12 calendar months prior to the Cut-off Date and, therefore, such Mortgaged Properties have no or limited prior operating history or the related Mortgage Loan Seller did not take the operating history into account in the underwriting of the related Mortgage Loan. With respect to Loan No. 20, Tharp Portfolio, one or more of the respective Mortgaged Properties were acquired by the related borrower or an affiliate of the borrower within 12 calendar months prior to the Cut-off Date and such borrower or affiliate was unable to provide the related Mortgage Loan Seller with historical financial information (or provided limited historical financial information) for such acquired Mortgaged Property. With respect to Loan No. 30, 1201 Main, the mortgaged property was completed in 2021 with leasing beginning in July 2021. Accordingly, historical financials are not presented. |
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(THIS PAGE INTENTIONALLY LEFT BLANK)
ANNEX A-2
CERTAIN POOL CHARACTERISTICS OF THE MORTGAGE
LOANS
AND MORTGAGED PROPERTIES
(THIS PAGE INTENTIONALLY LEFT BLANK)
Annex A-2
| Range of Cut-off Date Balances - All Mortgage Loans(1) | ||||||||||
| Weighted Averages | ||||||||||
| Range of Cut-off Date Balances | Number
of Mortgage Loans |
Aggregate
Cut-off Date Balance |
%
of Outstanding Initial Pool Balance |
Mortgage Rate | Stated
Remaining Term (Mos.)(2) |
U/W NCF DSCR | Cut-off
Date LTV Ratio(3) |
Maturity
Date or ARD LTV Ratio(2)(3) | ||
| $4,250,000 | - | $9,999,999 | 11 | $80,571,740 | 8.8% | 4.1475% | 110 | 1.99x | 55.5% | 52.8% |
| $10,000,000 | - | $19,999,999 | 10 | $138,373,005 | 15.1% | 4.3411% | 105 | 2.10x | 60.7% | 57.1% |
| $20,000,000 | - | $29,999,999 | 7 | $177,812,189 | 19.4% | 3.8979% | 103 | 2.28x | 58.6% | 54.6% |
| $30,000,000 | - | $39,999,999 | 3 | $99,500,000 | 10.9% | 4.0359% | 119 | 1.93x | 61.1% | 57.4% |
| $40,000,000 | - | $85,000,000 | 6 | $418,575,000 | 45.8% | 3.5769% | 103 | 3.06x | 55.0% | 53.8% |
| Total/Weighted Average | 37 | $914,831,933 | 100.0% | 3.8551% | 106 | 2.55x | 57.3% | 54.8% | ||
| Range of Mortgage Rates as of the Cut-off Date - All Mortgage Loans(1) | ||||||||||
| Weighted Averages | ||||||||||
| Range of Mortgage Rates as of the Cut-off Date | Number
of Mortgage Loans |
Aggregate
Cut-off Date Balance |
%
of Outstanding Initial Pool Balance |
Mortgage Rate | Stated
Remaining Term (Mos.)(2) |
U/W NCF DSCR | Cut-off
Date LTV Ratio(3) |
Maturity
Date or ARD LTV Ratio(2)(3) | ||
| 2.7760% | - | 2.9999% | 3 | $192,167,000 | 21.0% | 2.7902% | 110 | 3.85x | 45.0% | 45.0% |
| 3.0000% | - | 3.4999% | 2 | $37,000,000 | 4.0% | 3.4104% | 101 | 2.80x | 56.3% | 56.3% |
| 3.5000% | - | 3.9999% | 8 | $274,125,000 | 30.0% | 3.8151% | 92 | 2.74x | 60.0% | 60.0% |
| 4.0000% | - | 5.1840% | 24 | $411,539,933 | 45.0% | 4.4189% | 113 | 1.79x | 61.3% | 55.7% |
| Total/Weighted Average | 37 | $914,831,933 | 100.0% | 3.8551% | 106 | 2.55x | 57.3% | 54.8% | ||
| Type of Mortgaged Properties - All Mortgage Loans(1)(4) | |||||||||||
| Weighted Averages | |||||||||||
| Property Type | Number of Mortgaged Properties | Aggregate
Cut-off Date Balance |
%
of Outstanding Initial Pool Balance |
Number
of NRA/Units/Rooms |
Cut-off
Date Balance per # of NRA/Units/Rooms |
Mortgage Rate | Stated Remaining Term (Mos.)(2) | Occupancy | U/W NCF DSCR | Cut-off Date LTV Ratio(3) | Maturity Date or ARD LTV Ratio(2)(3) |
| Office | 36 | $493,859,823 | 54.0% | 7,418,898 | $328 | 3.5415% | 101 | 90.5% | 3.04x | 54.6% | 54.1% |
| CBD | 10 | $271,903,400 | 29.7% | 4,740,912 | $307 | 3.6296% | 97 | 93.7% | 3.22x | 55.7% | 55.7% |
| Suburban | 18 | $111,819,086 | 12.2% | 1,840,969 | $192 | 3.7419% | 95 | 84.3% | 2.64x | 59.8% | 59.2% |
| CBD/Data Center | 1 | $85,000,000 | 9.3% | 661,553 | $588 | 2.7760% | 117 | 87.3% | 3.37x | 42.6% | 42.6% |
| Medical | 7 | $25,137,337 | 2.7% | 175,464 | $275 | 4.2858% | 116 | 95.1% | 1.83x | 60.0% | 53.6% |
| Retail | 36 | $198,100,063 | 21.7% | 1,131,715 | $954 | 4.1000% | 115 | 97.7% | 1.89x | 62.1% | 54.9% |
| Anchored | 5 | $112,145,189 | 12.3% | 731,065 | $187 | 4.1737% | 115 | 96.0% | 1.79x | 64.8% | 56.8% |
| Single Tenant | 27 | $49,205,552 | 5.4% | 342,309 | $279 | 4.1443% | 116 | 100.0% | 1.73x | 59.4% | 50.9% |
| Unanchored | 3 | $34,032,427 | 3.7% | 49,455 | $4,508 | 3.7064% | 117 | 99.5% | 2.53x | 56.5% | 54.5% |
| Shadow Anchored | 1 | $2,716,894 | 0.3% | 8,886 | $306 | 5.1840% | 119 | 100.0% | 1.38x | 65.8% | 54.5% |
| Multifamily | 6 | $82,970,000 | 9.1% | 1,075 | $153,384 | 4.3764% | 116 | 95.6% | 1.67x | 63.2% | 57.5% |
| Garden | 4 | $57,134,207 | 6.2% | 669 | $124,095 | 4.2809% | 119 | 94.5% | 1.80x | 59.3% | 55.0% |
| Mid Rise | 2 | $25,835,793 | 2.8% | 406 | $218,154 | 4.5876% | 110 | 98.1% | 1.38x | 72.0% | 63.2% |
| Industrial | 12 | $50,093,202 | 5.5% | 2,359,496 | $68 | 4.1466% | 119 | 100.0% | 1.88x | 54.6% | 53.6% |
| Manufacturing | 5 | $17,770,209 | 1.9% | 872,999 | $40 | 3.9932% | 119 | 100.0% | 1.84x | 52.9% | 51.2% |
| Flex | 1 | $10,500,000 | 1.1% | 56,761 | $185 | 4.8500% | 119 | 100.0% | 1.96x | 49.3% | 49.3% |
| Manufacturing/Warehouse | 2 | $9,552,920 | 1.0% | 960,590 | $10 | 3.9000% | 119 | 100.0% | 1.95x | 62.8% | 62.8% |
| Warehouse/Distribution | 3 | $8,020,073 | 0.9% | 432,678 | $20 | 3.9000% | 119 | 100.0% | 1.95x | 62.8% | 62.8% |
| Warehouse | 1 | $4,250,000 | 0.5% | 36,468 | $117 | 4.0700% | 119 | 100.0% | 1.57x | 40.5% | 36.8% |
| Other – Parking | 6 | $33,972,600 | 3.7% | 60,036 | $2,014 | 4.3191% | 99 | 100.0% (6) | 2.40x | 61.4% | 61.4% |
| Hospitality | 2 | $30,337,246 | 3.3% | 981 | $131,771 | 4.7752% | 78 | 45.8% | 2.87x | 46.3% | 42.7% |
| Full Service | 1 | $20,000,000 | 2.2% | 884 | $144,796 | 4.9950% | 57 | 36.8% | 3.14x | 41.8% | 41.8% |
| Select Service | 1 | $10,337,246 | 1.1% | 97 | $106,570 | 4.3500% | 119 | 63.2% | 2.34x | 55.0% | 44.3% |
| Mixed Use | 5 | $25,499,000 | 2.8% | 15,265 | $544,611 | 4.0442% | 94 | 95.1% | 1.98x | 64.6% | 64.6% |
| Multifamily/Retail | 4 | $22,787,500 | 2.5% | 15,233 | $599,332 | 4.0758% | 96 | 97.5% | 1.82x | 65.3% | 65.3% |
| Multifamily/Office/Retail | 1 | $2,711,500 | 0.3% | 32 | $84,734 | 3.7780% | 81 | 75.0% | 3.30x | 59.4% | 59.4% |
| Total/Weighted Average | 103 | $914,831,933 | 100.0% | 3.8551% | 106 | 91.9% (6) | 2.55x | 57.3% | 54.8% | ||
A-2-1
Annex A-2
| Mortgaged Properties by State and/or Location - All Mortgage Loans(1)(4) | ||||||||
| Weighted Averages | ||||||||
| State/Location | Number of Mortgaged Properties | Aggregate
Cut-off Date Balance |
%
of Outstanding Initial Pool Balance |
Mortgage Rate | Stated
Remaining Term (Mos.)(2) |
U/W NCF DSCR | Cut-off
Date LTV Ratio(3) |
Maturity
Date or ARD LTV Ratio(2)(3) |
| California | 8 | $286,150,645 | 31.3% | 3.7568% | 102 | 2.69x | 54.5% | 53.3% |
| Southern(5) | 7 | $262,718,202 | 28.7% | 3.7119% | 101 | 2.81 | 53.3% | 53.2% |
| Northern(5) | 1 | $23,432,443 | 2.6% | 4.2600% | 118 | 1.35 | 68.1% | 54.8% |
| New York | 11 | $165,595,000 | 18.1% | 3.3771% | 113 | 3.32x | 51.2% | 51.0% |
| New York City | 7 | $157,300,000 | 17.2% | 3.3416% | 113 | 3.39x | 51.0% | 51.0% |
| New York State | 4 | $8,295,000 | 0.9% | 4.0509% | 119 | 1.99x | 55.5% | 50.6% |
| Michigan | 16 | $126,212,745 | 13.8% | 3.8976% | 94 | 2.75x | 61.5% | 57.6% |
| Ohio | 5 | $46,131,387 | 5.0% | 4.6908% | 119 | 1.33x | 72.3% | 62.1% |
| Texas | 4 | $41,835,949 | 4.6% | 4.1161% | 119 | 2.12x | 48.6% | 48.4% |
| Washington | 1 | $34,500,000 | 3.8% | 4.0890% | 119 | 2.20x | 61.3% | 61.3% |
| Virginia | 14 | $32,922,263 | 3.6% | 4.0962% | 77 | 2.22x | 56.4% | 54.9% |
| Indiana | 8 | $31,160,759 | 3.4% | 4.6729% | 104 | 1.78x | 63.6% | 55.6% |
| Connecticut | 2 | $28,000,000 | 3.1% | 3.9700% | 119 | 2.10x | 64.4% | 64.4% |
| New Jersey | 2 | $26,417,000 | 2.9% | 3.0362% | 65 | 2.90x | 60.1% | 59.5% |
| Illinois | 3 | $21,708,538 | 2.4% | 4.2036% | 111 | 1.73x | 62.2% | 54.2% |
| Wisconsin | 3 | $13,032,246 | 1.4% | 4.2983% | 119 | 2.20x | 55.9% | 45.3% |
| Colorado | 1 | $8,970,000 | 1.0% | 4.3480% | 120 | 1.83x | 65.0% | 65.0% |
| Pennsylvania | 2 | $8,062,044 | 0.9% | 4.3596% | 119 | 1.91x | 59.9% | 59.9% |
| South Carolina | 2 | $7,625,000 | 0.8% | 4.1000% | 120 | 1.64x | 59.5% | 48.9% |
| West Virginia | 7 | $7,545,000 | 0.8% | 4.1000% | 120 | 1.64x | 59.5% | 48.9% |
| Minnesota | 1 | $5,132,299 | 0.6% | 3.9000% | 119 | 1.95x | 62.8% | 62.8% |
| Alabama | 5 | $4,645,000 | 0.5% | 4.1000% | 120 | 1.64x | 59.5% | 48.9% |
| Iowa | 1 | $4,420,621 | 0.5% | 3.9000% | 119 | 1.95x | 62.8% | 62.8% |
| Arizona | 1 | $3,886,861 | 0.4% | 3.9000% | 119 | 1.95x | 62.8% | 62.8% |
| Louisiana | 3 | $3,765,000 | 0.4% | 4.1000% | 120 | 1.64x | 59.5% | 48.9% |
| Arkansas | 1 | $2,983,577 | 0.3% | 3.9000% | 119 | 1.95x | 62.8% | 62.8% |
| Idaho | 1 | $2,965,000 | 0.3% | 4.1000% | 120 | 1.64x | 59.5% | 48.9% |
| Mississippi | 1 | $1,165,000 | 0.1% | 4.1000% | 120 | 1.64x | 59.5% | 48.9% |
| Total/Weighted Average | 103 | $914,831,933 | 100.0% | 3.8551% | 106 | 2.55x | 57.3% | 54.8% |
A-2-2
Annex A-2
| Range of LTV Ratios as of the Cut-off Date - All Mortgage Loans(1) | ||||||||||
| Weighted Averages | ||||||||||
| Range of LTV Ratios as of the Cut-off Date | Number
of Mortgage Loans |
Aggregate
Cut-off Date Balance |
%
of Outstanding Initial Pool Balance |
Mortgage Rate | Stated
Remaining Term (Mos.)(2) |
U/W NCF DSCR | Cut-off
Date LTV Ratio(3) |
Maturity
Date or ARD LTV Ratio(2)(3) | ||
| 30.0% | - | 39.9% | 1 | $5,343,202 | 0.6% | 4.2100% | 119 | 1.58x | 30.0% | 24.1% |
| 40.0% | - | 49.9% | 7 | $241,550,000 | 26.4% | 3.2538% | 112 | 3.49x | 43.1% | 43.0% |
| 50.0% | - | 59.9% | 9 | $206,107,246 | 22.5% | 3.8447% | 103 | 2.80x | 57.7% | 55.4% |
| 60.0% | - | 69.9% | 19 | $421,831,486 | 46.1% | 4.1092% | 101 | 2.02x | 63.9% | 60.9% |
| 70.0% | - | 73.8% | 1 | $40,000,000 | 4.4% | 4.8120% | 119 | 1.24x | 73.8% | 62.0% |
| Total/Weighted Average | 37 | $914,831,933 | 100.0% | 3.8551% | 106 | 2.55x | 57.3% | 54.8% | ||
| Range of LTV Ratios as of Maturity Dates - All Mortgage Loans(1) | ||||||||||
| Weighted Averages | ||||||||||
| Range of LTV Ratios as of the Maturity Date | Number
of Mortgage Loans |
Aggregate
Cut-off Date Balance |
%
of Outstanding Initial Pool Balance |
Mortgage Rate | Stated
Remaining Term (Mos.)(2) |
U/W NCF DSCR | Cut-off
Date LTV Ratio(3) |
Maturity
Date or ARD LTV Ratio(2)(3) | ||
| 24.1% | - | 39.9% | 2 | $9,593,202 | 1.0% | 4.1480% | 119 | 1.58x | 34.7% | 29.7% |
| 40.0% | - | 49.9% | 9 | $291,625,784 | 31.9% | 3.4115% | 114 | 3.20x | 46.1% | 44.1% |
| 50.0% | - | 59.9% | 14 | $273,100,947 | 29.9% | 4.0035% | 102 | 2.46x | 60.9% | 56.7% |
| 60.0% | - | 66.6% | 12 | $340,512,000 | 37.2% | 4.1077% | 101 | 2.09x | 64.5% | 63.1% |
| Total/Weighted Average | 37 | $914,831,933 | 100.0% | 3.8551% | 106 | 2.55x | 57.3% | 54.8% | ||
| Range of Debt Service Coverage Ratios as of the Cut-off Date - All Mortgage Loans(1) | ||||||||||
| Weighted Averages | ||||||||||
| Range of Debt Service Coverage Ratios | Number
of Mortgage Loans |
Aggregate
Cut-off Date Balance |
%
of Outstanding Initial Pool Balance |
Mortgage Rate | Stated
Remaining Term (Mos.)(2) |
U/W NCF DSCR | Cut-off
Date LTV Ratio(3) |
Maturity
Date or ARD LTV Ratio(2)(3) | ||
| 1.24x | - | 1.99x | 19 | $359,432,687 | 39.3% | 4.3710% | 115 | 1.63x | 63.6% | 57.8% |
| 2.00x | - | 2.49x | 8 | $136,857,246 | 15.0% | 4.0725% | 116 | 2.20x | 56.8% | 55.3% |
| 2.50x | - | 2.99x | 3 | $92,575,000 | 10.1% | 3.6143% | 75 | 2.88x | 60.6% | 60.6% |
| 3.00x | - | 3.49x | 5 | $225,667,000 | 24.7% | 3.4026% | 92 | 3.28x | 51.8% | 51.8% |
| 3.50x | - | 4.50x | 2 | $100,300,000 | 11.0% | 2.9498% | 117 | 4.36x | 44.5% | 44.5% |
| Total/Weighted Average | 37 | $914,831,933 | 100.0% | 3.8551% | 106 | 2.55x | 57.3% | 54.8% | ||
A-2-3
Annex A-2
| Range of Original Terms to Maturity or ARD in Months - All Mortgage Loans(1) | ||||||||||
| Weighted Averages | ||||||||||
| Range of Original Terms to Maturity | Number
of Mortgage Loans |
Aggregate
Cut-off Date Balance |
%
of Outstanding Initial Pool Balance |
Mortgage Rate | Stated
Remaining Term (Mos.)(2) |
U/W NCF DSCR | Cut-off
Date LTV Ratio(3) |
Maturity
Date or ARD LTV Ratio(2)(3) | ||
| 60 | - | 119 | 8 | $237,492,000 | 26.0% | 3.8580% | 69 | 2.89x | 60.5% | 59.9% |
| 120 | - | 120 | 29 | $677,339,933 | 74.0% | 3.8541% | 118 | 2.43x | 56.1% | 53.0% |
| Total/Weighted Average | 37 | $914,831,933 | 100.0% | 3.8551% | 106 | 2.55x | 57.3% | 54.8% | ||
| Range of Remaining Terms to Maturity or ARD in Months - All Mortgage Loans(1) | ||||||||||
| Weighted Averages | ||||||||||
| Range of Remaining Terms to Maturity | Number
of Mortgage Loans |
Aggregate
Cut-off Date Balance |
%
of Outstanding Initial Pool Balance |
Mortgage Rate | Stated
Remaining Term (Mos.)(2) |
U/W NCF DSCR | Cut-off
Date LTV Ratio(3) |
Maturity
Date or ARD LTV Ratio(2)(3) | ||
| 55 | - | 60 | 5 | $120,242,000 | 13.1% | 3.8529% | 57 | 2.86x | 59.8% | 59.4% |
| 61 | - | 120 | 32 | $794,589,933 | 86.9% | 3.8554% | 113 | 2.50x | 56.9% | 54.1% |
| Total/Weighted Average | 37 | $914,831,933 | 100.0% | 3.8551% | 106 | 2.55x | 57.3% | 54.8% | ||
| Range of U/W NOI Debt Yields as of the Cut-off Date - All Mortgage Loans(1) | ||||||||||
| Weighted Averages | ||||||||||
| Range of NOI Debt Yields as of the Cut-off Date | Number
of Mortgage Loans |
Aggregate
Cut-off Date Balance |
%
of Outstanding Initial Pool Balance |
Mortgage Rate | Stated
Remaining Term (Mos.)(2) |
U/W NCF DSCR | Cut-off
Date LTV Ratio(3) |
Maturity
Date or ARD LTV Ratio(2)(3) | ||
| 7.2% | - | 7.9% | 3 | $44,300,000 | 4.8% | 4.3670% | 103 | 1.63x | 65.0% | 65.0% |
| 8.0% | - | 8.9% | 6 | $197,902,443 | 21.6% | 4.3273% | 119 | 1.71x | 63.3% | 59.4% |
| 9.0% | - | 9.9% | 14 | $316,108,706 | 34.6% | 3.6609% | 113 | 2.42x | 55.3% | 52.1% |
| 10.0% | - | 10.9% | 2 | $14,508,538 | 1.6% | 4.2799% | 119 | 1.79x | 60.8% | 53.1% |
| 11.0% | - | 20.4% | 12 | $342,012,246 | 37.4% | 3.6770% | 90 | 3.30x | 54.4% | 53.3% |
| Total/Weighted Average | 37 | $914,831,933 | 100.0% | 3.8551% | 106 | 2.55x | 57.3% | 54.8% | ||
| Amortization Type - All Mortgage Loans(1) | ||||||||
| Weighted Averages | ||||||||
| Amortization Type | Number
of Mortgage Loans |
Aggregate
Cut-off Date Balance |
%
of Outstanding Initial Pool Balance |
Mortgage Rate | Stated
Remaining Term (Mos.)(2) |
U/W NCF DSCR | Cut-off
Date LTV Ratio(3) |
Maturity
Date or ARD LTV Ratio(2)(3) |
| Interest Only | 22 | $591,415,000 | 64.6% | 3.8552% | 103 | 2.77x | 56.6% | 56.6% |
| Interest Only, Amortizing Balloon | 7 | $125,450,000 | 13.7% | 4.4006% | 108 | 1.57x | 64.8% | 55.6% |
| Interest Only - ARD | 2 | $107,167,000 | 11.7% | 2.7888% | 104 | 3.33x | 47.0% | 47.0% |
| Amortizing Balloon | 6 | $90,799,933 | 9.9% | 4.3594% | 119 | 1.55x | 63.4% | 51.1% |
| Total/Weighted Average | 37 | $914,831,933 | 100.0% | 3.8551% | 106 | 2.55x | 57.3% | 54.8% |
A-2-4
| Footnotes | |
| (1) | The U/W NCF DSCR, Cut-off Date LTV Ratio, Maturity Date or ARD LTV Ratio, Underwritten NOI Debt Yield and Cut-off Date Balance per # of NRA/Units/Rooms calculations include any related pari passu companion loan(s) and exclude any related subordinate companion loan(s) and/or mezzanine loan(s). |
| (2) | With respect to the ARD Loans, the Original Term to Maturity or ARD, Remaining Term to Maturity or ARD, Maturity Date or ARD LTV Ratio and Stated Remaining Term (Mos.) are calculated through the related anticipated repayment date. |
| (3) | With respect to one mortgaged property (0.4%) (821 Route 97), the Cut-off Date LTV Ratio and Maturity Date or ARD LTV Ratio have been calculated using a value other than the “As Is” appraised value. For additional information please see the footnotes to Annex A-1 in the Preliminary Prospectus. |
| (4) | Reflects the allocated loan amount for properties securing multi-property Mortgage Loans. |
| (5) | Northern California properties have a zip code greater than 93600. Southern California properties have a zip code less than or equal to 93600. |
| (6) | Excludes occupancy for five properties in connection with Loan No. 3 as the collateral consists of parking garages with no attributable occupancy. |
A-2-5
(THIS PAGE INTENTIONALLY LEFT BLANK)
ANNEX A-3
DESCRIPTION OF TOP FIFTEEN MORTGAGE LOANS
AND ADDITIONAL MORTGAGE LOAN
INFORMATION
[THIS PAGE INTENTIONALLY LEFT BLANK]
601 Lexington Avenue New York, New York 10022 |
Collateral Asset Summary – Loan No. 1 601 Lexington Avenue |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 42.5% 4.50x 13.2% |
A-3-1
601 Lexington Avenue New York, New York 10022 |
Collateral Asset Summary – Loan No. 1 601 Lexington Avenue |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 42.5% 4.50x 13.2% |
A-3-2
601 Lexington Avenue New York, New York 10022 |
Collateral Asset Summary – Loan No. 1 601 Lexington Avenue |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 42.5% 4.50x 13.2% |
A-3-3
601 Lexington Avenue New York, New York 10022 |
Collateral Asset Summary – Loan No. 1 601 Lexington Avenue |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 42.5% 4.50x 13.2% |
| Mortgage Loan Information | |
| Loan Seller: | GACC, CREFI |
| Loan Purpose: | Refinance |
| Borrower Sponsor(1): | BP/CG Center MM LLC |
| Borrowers: | BP/CGCenter I LLC and BP/CGCenter II LLC |
| Original Balance(2): | $85,000,000 |
| Cut-off Date Balance(2): | $85,000,000 |
| % by Initial UPD: | 9.3% |
| Interest Rate: | 2.79196% |
| Payment Date: | 9th of each month |
| First Payment Date: | February 9, 2022 |
| Maturity Date: | January 9, 2032 |
| Amortization: | Interest Only |
| Additional Debt(2): | $638,300,000 Pari Passu Senior Notes; $276,700,000 Pari Passu Junior Notes |
| Call Protection(6): | L(27),D(86),O(7) |
| Lockbox / Cash Management: | Hard / Springing |
| Reserves(3) | |||
| Initial | Monthly | Cap | |
| Taxes: | $0 | Springing | NAP |
| Insurance: | $0 | Springing | NAP |
| Replacement/Capex: | $0 | Springing | $837,829 |
| TI/LC: | $0 | Springing | $10,053,948 |
| Other(4)(5): | $61,289,797 | $0 | NAP |
| Property Information | |
| Single Asset / Portfolio: | Single Asset |
| Property Type: | CBD Office |
| Collateral: | Fee / Leasehold |
| Location: | New York, NY |
| Year Built / Renovated: | 1977 / 2021 |
| Total Sq. Ft.: | 1,675,659 |
| Property Management: | Boston Properties Limited Partnership |
| Underwritten NOI: | $95,273,106 |
| Underwritten NCF: | $92,110,483 |
| Appraised Value: | $1,700,000,000 |
| Appraisal Date: | October 1, 2021 |
| Historical NOI | |
| Most Recent NOI: | $89,547,809 (T-12 September 30, 2021) |
| 2020 NOI: | $88,939,219 (December 31, 2020) |
| 2019 NOI: | $82,516,612 (December 31, 2019) |
| 2018 NOI: | $87,124,160 (December 31, 2018) |
| Historical Occupancy | |
| Most Recent Occupancy: | 96.3% (November 1, 2021) |
| 2020 Occupancy: | 97.6% (December 31, 2020) |
| 2019 Occupancy: | 100.0% (December 31, 2019) |
| 2018 Occupancy: | 99.3% (December 31, 2018) |
| Financial Information(2) | ||||||
| Tranche | Cut-off Date Balance | Balance per Sq. Ft. Cut-off / Balloon |
LTV Cut-off / Balloon |
U/W DSCR NOI / NCF |
U/W Debt Yield NOI / NCF |
U/W Debt Yield at Balloon NOI / NCF |
| Mortgage Loan | $85,000,000 | |||||
| Pari Passu Notes | 638,300,000 | |||||
| Total Senior Notes | $723,300,000 | $432 / $432 | 42.5% / 42.5% | 4.65x / 4.50x | 13.2% / 12.7% | 13.2% / 12.7% |
| B Note | 276,700,000 | |||||
| Whole Loan | $1,000,000,000 | $597 / $597 | 58.8% / 58.8% | 3.37x / 3.25x | 9.5% / 9.2% | 9.5% / 9.2% |
| (1) | There is no non-recourse carveout guarantor or separate environmental indemnitor. |
| (2) | The 601 Lexington Avenue Loan (as defined below) is part of a whole loan evidenced by 23 senior pari passu notes with an aggregate outstanding principal balance as of the Cut-off Date of $723,300,000 and four junior pari passu notes with an aggregate outstanding principal balance as of the Cut-off Date of $276,700,000. |
| (3) | See “Initial and Ongoing Reserves” herein. |
| (4) | BPLP (as defined below) provided a payment guaranty in lieu of depositing $52,315,328 at origination for approved leasing expenses outstanding at the time of origination of the 601 Lexington Avenue Whole Loan (as defined below). |
| (5) | BPLP provided a payment guaranty in lieu of depositing $8,974,469 at origination for the free rent and gap rent outstanding for six tenants at the time of origination of the 601 Lexington Avenue Whole Loan. |
| (6) | Defeasance of the 601 Lexington Avenue Whole Loan is permitted at any time after the earlier to occur of (a) the end of the two-year period commencing on the closing date of the securitization of the last promissory note representing a portion of the 601 Lexington Avenue Whole Loan to be securitized and (b) December 10, 2024. The assumed defeasance lockout period of 27 payments is based on the expected closing date of this transaction in April 2022. |
The Loan. The 601 Lexington Avenue mortgage loan (“601 Lexington Avenue Loan”) is part of a whole loan (the “601 Lexington Avenue Whole Loan”) with an aggregate outstanding principal balance as of the Cut-off Date of $1,000,000,000, which is secured by the borrowers’ fee interest in three condominium units and a leasehold interest in a portion of a fourth condominium unit relating to an office building located in New York, New York (the “601 Lexington Avenue Property”). The 601 Lexington Avenue Loan is evidenced by the non-controlling notes A-2-C2-1 and A-4-C2-1, with an aggregate outstanding principal balance as of the Cut-off Date of $85,000,000, representing approximately 9.3% of the Initial Pool Balance. The 601 Lexington Avenue Whole Loan is comprised of 23 senior pari passu notes with an aggregate outstanding principal balance as of the Cut-off Date of $723,300,000 (the “601 Lexington Avenue Senior Loan”) and four junior pari passu notes with an aggregate outstanding principal balance as of the Cut-off Date of $276,700,000 (the “601 Lexington Avenue Subordinate Companion Loan”) as detailed in the “Whole Loan Summary” table below. The 601 Lexington Avenue Whole Loan was co-originated on December 10, 2021, by Wells Fargo Bank, National Association (“WFB”), DBR Investments Co. Limited (“DBRI”), Morgan Stanley Bank, N.A. (“MSBNA”) and Citi Real Estate Funding Inc. (“CREFI”). GACC is contributing Note A-2-C2-1, with an outstanding principal balance of $43,479,070 as of the Cut-off Date and CREFI is contributing Note A-4-C2-1, with an outstanding principal balance of $41,520,930 as of the Cut-off Date.
A-3-4
601 Lexington Avenue New York, New York 10022 |
Collateral Asset Summary – Loan No. 1 601 Lexington Avenue |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 42.5% 4.50x 13.2% |
The table below summarizes the promissory notes that comprise the 601 Lexington Avenue Whole Loan. The relationship between the holders of the 601 Lexington Avenue Whole Loan will be governed by a co-lender agreement as described under “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced AB Whole Loans” in the Preliminary Prospectus.
| Whole Loan Summary | |||||
| Note | Original Balance | Cut-off Date Balance | Note Holder(1) | Controlling Piece | |
| A-1-S1, A-2-S1, A-3-S1, A-4-S1 | $150,000,000 | $150,000,000 | BXP 2021-601L | Yes | |
| A-1-C2, A-3-C2 | $110,000,000 | $110,000,000 | BANK 2022-BNK39 | No | |
| A-1-C1, A-1-C4 | $65,567,280 | $65,567,280 | WFB(1) | No | |
| A-1-C3, A-3-C3 | $110,000,000 | $110,000,000 | BANK 2022-BNK40 | No | |
| A-2-C3-1 | $40,000,000 | $40,000,000 | BMO 2022-C1 | No | |
| A-2-C2-2, A-4-C2-2 | $25,000,000 | $25,000,000 | Benchmark 2022-B32 | No | |
| A-4-C3, A-2-C1, A-2-C3-2, A-2-C4 | $80,000,000 | $80,000,000 | Benchmark 2022-B33 | No | |
| A-3-C1, A-3-C4 | $41,213,720 | $41,213,720 | MSC 2022-L8(2) | No | |
| A-4-C4, A-4-C1 | $16,519,000 | $16,519,000 | CREFI(1) | No | |
| A-2-C2-1, A-4-C2-1 | $85,000,000 | $85,000,000 | Benchmark 2022-B34(3) | No | |
| Total Senior Notes | $723,300,000 | $723,300,000 | |||
| B-1, B-2, B-3, B-4 | $276,700,000 | $276,700,000 | BXP 2021-601L | Yes | |
| Whole Loan | $1,000,000,000 | $1,000,000,000 | |||
| (1) | Notes held by lenders are expected to be contributed to one or more future securitization transactions or may otherwise be transferred at any time. |
| (2) | The MSC 2022-L8 securitization transaction is expected to close on April 7, 2022. |
| (3) | GACC is contributing Note A-2-C2-1, with an outstanding principal balance of $43,479,070 as of the Cut-off Date and CREFI is contributing A-4-C2-1, with an outstanding principal balance of $41,520,930 as of the Cut-off Date. |
The borrowers utilized the proceeds of the 601 Lexington Avenue Whole Loan to refinance a prior mortgage loan, pay origination costs and return equity to the borrower sponsor.
| Sources and Uses | ||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
| Senior Loan | $723,300,000 | 72.3% | Loan Payoff | $618,492,902 | 61.8% | |
| Subordinate Debt | 276,700,000 | 27.7 | Return of Equity | 368,350,972 | 36.8 | |
| Closing Costs | 13,156,127 | 1.3 | ||||
| Total Sources | $1,000,000,000 | 100.0% | Total Uses | $1,000,000,000 | 100.0% | |
The Borrowers and the Borrower Sponsor. The borrowers are BP/CGCenter I LLC and BP/CGCenter II LLC, each a Delaware limited liability company and single purpose entity with two independent directors. The borrower sponsor is BP/CG Center MM LLC, an indirectly owned subsidiary of Boston Properties Limited Partnership and of Norges Bank Investment Management (“Norges”). There is no separate environmental indemnitor or non-recourse carveout guarantor with respect to the 601 Lexington Avenue Whole Loan. Boston Properties Limited Partnership, a Delaware Limited partnership (“Boston Properties” or “BPLP”) has executed a guaranty of certain reserve funds in place of posting such reserves, as described under “Initial and Ongoing Reserves” below.
Boston Properties (NYSE: BXP) is the largest publicly traded developer, owner, and manager of Class A office properties in the United States, concentrated in five markets: Boston, Los Angeles, New York, San Francisco and Washington, DC. The company was founded in 1970 and became a public company in 1997. The company is a fully integrated real estate company, organized as a real estate investment trust (REIT), that develops, manages, operates, acquires and owns a diverse portfolio of primarily Class A office space. The company’s portfolio totals 52.5 million sq. ft. and 202 properties, including nine properties under construction or redevelopment. Boston Properties has held an ownership in interest in the 601 Lexington Avenue Property since 2001 and also controls property and leasing management. Norges manages the Norwegian Government Pension Fund Global, often referred to as the Norwegian oil fund. Norges manages assets worth more than 11,000 billion kroner, or about $1.3 trillion dollars. The fund is invested in international equity and fixed-income markets and in real estate.
The Property. The 601 Lexington Avenue Property is comprised of the borrowers’ fee and leasehold interests in certain condominium units within a 59-story, Class A, office tower located in Midtown Manhattan at East 53rd Street and Lexington Avenue. Situated on an approximately 1.6-acre site, the property consists of approximately 1.7 million sq. ft. of office and retail space, which includes a high-rise office tower as well as a six-story office and retail building totaling 227,276 sq. ft. situated at the base (the “Low Rise Building”). The building, with a 45° angled top and a stilt-style base, was designated as a landmark by the New York City Landmarks Preservation Commission in September 2016. As of November 1, 2021, the 601 Lexington Avenue Property was 96.3% leased. Investment grade tenants and tenants included in a legal industry magazine listing of the largest global 200 law firms by gross revenue represent 83.6% of the NRA and 85.7% of underwritten gross rent. Further, the top four tenants represent 71.6% of underwritten gross rent and have a weighted average remaining lease term of 14.8 years.
A-3-5
601 Lexington Avenue New York, New York 10022 |
Collateral Asset Summary – Loan No. 1 601 Lexington Avenue |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 42.5% 4.50x 13.2% |
Originally built in 1977, the 601 Lexington Avenue Property underwent renovations totaling approximately $283 million in 2021, which included repositioning the Low Rise Building as well as the redevelopment of the ground and lower level space into a food hall. Following the repositioning, the Low Rise Building includes 195,326 sq. ft. of office space, 31,950 sq. ft. of retail space, a public marketplace and a new dedicated street-level entrance and lobby for low-rise office floors. The food hall (known as The Hugh) contains a collection of 15 restaurants, bars and food retailers and is directly connected to a public plaza that provides access to the East 53rd Street subway stop. Additional amenities of the Low Rise Building include a succession of rooftop terraces on each floor as well as a fitness center. The Low Rise Building office space is fully leased to NYU, which utilizes the space to house NYU Langone Health. In addition, NYU is occupying a portion of the land owned by the adjoining St. Peter’s Church (see “—Ground Lease” section below).
COVID-19 Update. As of March 1, 2022, the 601 Lexington Avenue Whole Loan is not subject to any forbearance, modification or debt service relief request. The borrower sponsor reported that the only tenant with outstanding rent relief is Hillstone (7,800 sq. ft., 0.5% of NRA, 0.9% of underwritten gross rent), which received an abatement of 50% of six months’ rent (approximately $168,000 from September 1, 2020 to February 28, 2021), which it is expected to repay over the course of 2022 and 2023. The 601 Lexington Avenue Whole Loan was current as of the March 9, 2022 payment date.
Tenant Summary.
| Tenant Summary(1) | ||||||
Tenant |
Ratings (Moody’s/Fitch/S&P)(2) |
Net Rentable Area (Sq. Ft.) |
% of Net Rentable Area |
U/W Gross Rent per Sq. Ft.(3)(4) |
% of Total U/W Gross Rent(3)(4) |
Lease Expiration |
| Kirkland & Ellis(5) | NR/NR/NR | 616,139 | 36.8% | $99.37 | 39.4% | 2/28/2039(6) |
| Citibank(7)(8) | Aa3/A+/A+ | 216,256 | 12.9 | $88.00 | 12.3 | Various(9) |
| New York University(10) | Aa2/NR/AA- | 195,326 | 11.7 | $80.36 | 10.1 | 10/31/2049 |
| Freshfields Bruckhaus Deringer(11) | NR/NR/NR | 139,243 | 8.3 | $109.68 | 9.8 | 6/30/2026 |
| Citadel | Baa2/NR/BBB | 144,193 | 8.6 | $95.51 | 8.9 | 8/31/2022(12) |
| Blackstone | NR/A+/A+ | 89,967 | 5.4 | $89.68 | 5.2 | 12/31/2027 |
| BTG | NR/NR/NR | 31,401 | 1.9 | $151.19 | 3.1 | 3/31/2028 |
| Apax | NR/NR/NR | 31,401 | 1.9 | $130.35 | 2.6 | 7/31/2026 |
| OrbiMed | NR/NR/NR | 31,401 | 1.9 | $112.83 | 2.3 | 3/31/2033 |
| Siris Capital Group(13) | NR/NR/NR | 18,928 | 1.1 | $123.18 | 1.5 | 9/30/2030 |
| Largest Tenants | 1,514,255 | 90.4% | $97.59 | 95.2% | ||
| Other Tenants | 99,343 | 5.9 | $75.80 | 4.8 | ||
| Total/Wtd. Avg. Occupied | 1,613,598 | 96.3% | $96.25(14) | 100.0% | ||
| Vacant | 62,061 | 3.7% | ||||
| Total | 1,675,659 | 100.0% | ||||
| (1) | Based on the underwritten rent roll as of November 1, 2021. |
| (2) | In certain instances, ratings provided are those of the parent company of the entity shown, whether or not the parent company guarantees the lease. |
| (3) | % of Total U/W Gross Rent and U/W Gross Rent per Sq. Ft. are based on the underwritten gross rent based on the underwritten rent roll. |
| (4) | % of Total U/W Gross Rent and U/W Gross Rent per Sq. Ft. shown above include contractual rent steps through September 2022 totaling approximately $128,513 and CAM reimbursements totaling approximately $9,276,516. The lender’s underwriting gives separate credit for straight-line rent averaging for an investment grade tenant (New York University (“NYU”)) and tenants included in a legal industry magazine listing of the largest global 200 law firms by gross revenue Kirkland & Ellis (“K&E”) and Freshfields Bruckhaus Deringer (“Freshfields”)) through loan maturity. The total implied underwritten rental rate for K&E, NYU, and Freshfields, inclusive of the straight line credit, is approximately $108.46, $85.17 and $111.22 per sq. ft., respectively. See “Underwritten Net Cash Flow” below. |
| (5) | Includes 600 sq. ft. of storage space. |
| (6) | For floor 32 only, K&E has a June 30, 2027 termination option by March 31, 2026 upon the payment of unamortized leasing costs. Additionally, as of February 28, 2034, K&E can terminate either its highest or lowest odd-numbered floor (one floor only) other than the 51st floor. |
| (7) | Includes 6,333 sq. ft. of storage space. |
| (8) | Citibank is currently subleasing suites 1900 and 2100 totaling 59,978 sq. ft. (3.6% of NRA). The property was originally developed as Citicorp’s headquarters and the bank was previously an owner of the property. |
| (9) | Floors 18 and 20 (59,978 sq. ft.) expire in December 2022, floors 19 and 21 (59,978 sq. ft.) expire in August 2023, floor 23 (29,989 sq. ft.) expires in April 2027 and floors 24 and 25 (66,311 sq. ft.) expire in April 2032. Citibank is expected to vacate the space expiring in December 2022 and August 2023. |
| (10) | NYU is not yet in occupancy of its full space. NYU is expected to take occupancy of its full space by April or May 2022, and is currently paying rent. We cannot assure you that NYU will take occupancy as expected or at all. NYU’s lease is structured as a leasehold condominium for a period of approximately 30 years through October 2049. The leasehold condominium is structured as a standard lease and is operated as a leasehold condominium to allow the tenant to benefit from its tax exempt entity status. See “Condominium Regime” below. |
| (11) | Freshfields is currently subleasing suite 5510 totaling 15,932 sq. ft. (1.0% of NRA). As of the origination date, Freshfields was also publicly marketing the remainder of its leased space for sublet. |
| (12) | Citadel has provided notice it intends to vacate at its lease expiration in August 2022. |
| (13) | Siris Capital Group has the option to terminate all its space on September 30, 2027 with notice by September 30, 2026 (12 months) and the payment of unamortized leasing costs. |
| (14) | Total/Wtd. Avg. U/W Gross Rent per Sq. Ft. excludes vacant space. |
A-3-6
601 Lexington Avenue New York, New York 10022 |
Collateral Asset Summary – Loan No. 1 601 Lexington Avenue |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 42.5% 4.50x 13.2% |
| Lease Rollover Schedule(1)(2) | ||||||||
| Year | # of Leases Expiring |
Total Expiring Sq. Ft. |
% of Total Sq. Ft. Expiring |
Cumulative Sq. Ft. Expiring |
Cumulative % of Sq. Ft. Expiring |
Annual U/W Gross Rent per Sq. Ft.(3) |
% U/W Gross Rent Rolling(3) |
Cumulative % of U/W Gross Rent(3) |
| MTM | 0 | 0 | 0.0% | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
| 2022 | 10 | 204,171 | 12.2 | 204,171 | 12.2% | $93.23 | 12.3 | 12.3% |
| 2023 | 2 | 59,978 | 3.6 | 264,149 | 15.8% | $87.77 | 3.4 | 15.6% |
| 2024 | 1 | 5,724 | 0.3 | 269,873 | 16.1% | $115.00 | 0.4 | 16.1% |
| 2025 | 0 | 0 | 0.0 | 269,873 | 16.1% | $0.00 | 0.0 | 16.1% |
| 2026 | 7 | 170,645 | 10.2 | 440,518 | 26.3% | $113.48 | 12.5 | 28.5% |
| 2027 | 4 | 119,956 | 7.2 | 560,474 | 33.4% | $90.20 | 7.0 | 35.5% |
| 2028 | 1 | 31,401 | 1.9 | 591,875 | 35.3% | $151.19 | 3.1 | 38.6% |
| 2029 | 0 | 0 | 0.0 | 591,875 | 35.3% | $0.00 | 0.0 | 38.6% |
| 2030 | 4 | 18,928 | 1.1 | 610,803 | 36.5% | $123.18 | 1.5 | 40.1% |
| 2031 | 2 | 37,789 | 2.3 | 648,592 | 38.7% | $80.72 | 2.0 | 42.0% |
| 2032 & Thereafter | 41 | 965,006 | 57.6 | 1,613,598 | 96.3% | $93.30 | 58.0 | 100.0% |
| Vacant | 0 | 62,061 | 3.7 | 1,675,659 | 100.0% | NAP | NAP | NAP |
| Total / Wtd. Avg. | 72 | 1,675,659 | 100.0% | $96.25(4) | 100.0% | |||
| (1) | Based on the underwritten rent roll as of November 1, 2021. |
| (2) | Certain tenants may have lease termination options that are exercisable prior to the originally stated expiration date of the subject lease and that are not considered in the Lease Rollover Schedule. |
| (3) | The Annual U/W Gross Rent per Sq. Ft.,% U/W Gross Rent Rolling and Cumulative % of U/W Gross Rent are based on the underwritten gross rent based on the underwritten rent roll, which includes contractual rent steps through September 2022 totaling approximately $128,513 and CAM reimbursements totaling approximately $9,276,516. |
| (4) | Total / Wtd. Avg. Annual U/W Gross Rent per Sq. Ft. excludes vacant space. |
Environmental Matters. According to a Phase I environmental report dated November 12, 2021, there are no recognized environmental conditions or recommendations for further action at the 601 Lexington Avenue Property.
The Market. The 601 Lexington Avenue Property is located in Midtown Manhattan at East 53rd Street and Lexington Avenue in New York, New York. The 601 Lexington Avenue Property, which takes up the majority of a city block bounded clockwise from the west by Lexington Avenue and 54th Street, benefits from its proximity to Central Park, access to the luxury shopping corridor along Fifth and Madison Avenues, and available mass transit including the 4, 5, 6, E, M, N, R, and W subway lines. The property sits on top of a public plaza (directly connected to The Hugh food hall) that provides access to the East 53rd Street subway stop.
According to a third party market research report, the 601 Lexington Avenue Property is situated within the Plaza District Office submarket of the New York City Office Market. The Plaza District is not only the largest office submarket in New York City, with approximately 91 million sq. ft. of inventory, but in the United States as well. As of October 2021, the Plaza District submarket reported a 14.4% vacancy rate (and a 17.4% availability rate) and average asking rents of $86.73 per sq. ft., gross. The appraisal identified nine directly competitive buildings totaling approximately 10.5 million sq. ft. with a 7.0% vacancy rate and average asking rents of $102.14 per sq. ft. The appraisal concluded to market rents ranging from $80.00 to $115.00 per sq. ft., modified gross, for the various floors of office space at the 601 Lexington Avenue Property (see table below).
| Market Rent Summary(1) | |||||
| Office Floors 2-22 | Office Floors 23-31 | Office Floors 32-42 | Office Floors 43-54 | Office Floors 55-59 | |
| Market Rent (Per Sq. Ft.) | $80.00 | $85.00 | $95.00 | $105.00 | $115.00 |
| Lease Term (Years) | 10 | 10 | 10 | 15 | 15 |
| Lease Type (Reimbursements) | MG | MG | MG | MG | MG |
| Rent Increase Projection | $10.00 PSF in year 6 | $10.00 PSF in year 6 | $10.00 PSF in year 6 | $10.00 PSF in year 6 | $10.00 PSF in year 6 |
| (1) | Source: Appraisal. |
A-3-7
601 Lexington Avenue New York, New York 10022 |
Collateral Asset Summary – Loan No. 1 601 Lexington Avenue |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 42.5% 4.50x 13.2% |
The following table presents information relating to comparable office property sales for the 601 Lexington Avenue Property:
| Comparable Property Sale Summary(1) | ||||||
| Property Name/Location | Sale Date | Year Built/Renovated | Total NRA (Sq. Ft.) | Occupancy | Sale Price | Sale Price per Sq. Ft. |
601 Lexington Avenue New York, NY |
1977/2021 | 1,675,659(2) | 96.3%(2) | |||
Confidential Park Ave New York, NY |
Nov-2021 | 1994/2021 | 765,000 | 91% | $750,000,000 | $980.39 |
51 West 52nd Street New York, NY |
Nov-2021 | 1963/NAP | 872,593 | 100% | $960,000,000 | $1,100.17 |
1177 Avenue of the Americas New York, NY |
Nov-2021 | 1987/2013 | 1,024,733 | 81% | $858,500,000 | $837.78 |
550 Washington Street New York, NY |
Sep-2021 | 1934/2022 | 1,257,529 | 100% | $2,020,800,000 | $1,606.96 |
220 East 42nd Street New York, NY |
Jul-2021 | 1930/2015 | 1,224,755 | 93% | $790,100,000 | $645.11 |
One Park Avenue New York, NY |
Jul-2021 | 1926/2000 | 947,894 | 99% | $875,000,000 | $923.10 |
410 Tenth Avenue New York, NY |
Dec-2020 | 1927/2021 | 634,359 | 98% | $952,840,000 | $1,502.05 |
1633 Broadway New York, NY |
May-2020 | 1972/2013 | 2,561,512 | 98% | $2,400,000,000 | $936.95 |
| (1) | Source: Appraisal, unless otherwise indicated. |
| (2) | Based on the underwritten rent roll dated November 1, 2021. |
The following table presents information with respect to comparable office properties to the 601 Lexington Avenue Property:
| Comparable Office Supply Summary(1) | ||||||
| Property Name/Location | Total NRA (Sq. Ft.) | Year Built/Renovated | Stories | Sublease Sq. Ft. Available | % Occupied (Direct) | Average Asking Rent |
601 Lexington Avenue New York, NY |
1,675,659(2) | 1977/2021 | 59 | - | 96.3%(2) | $96.25(2)(3) |
599 Lexington Avenue(4) New York, NY |
1,058,805 | 1986/NAP | 50 | 0 | 100.0% | NAP |
600 Lexington Avenue New York, NY |
305,472 | 1983/NAP | 36 | 34,922 | 87.8% | $90.00 |
55 East 52nd Street New York, NY |
1,518,210 | 1981/NAP | 49 | 0 | 97.6% | $95.00 |
65 East 55th Street New York, NY |
619,631 | 1986/NAP | 38 | 23,708 | 92.9% | $155.00 |
237 Park Avenue New York, NY |
1,243,384 | 1915/NAP | 21 | 220,823 | 98.6% | $75.00 |
245 Park Avenue New York, NY |
1,787,000 | 1966/NAP | 45 | 93,108 | 89.5% | $110.00 |
875 Third Avenue New York, NY |
750,000 | 1982/NAP | 29 | 0 | 87.3% | $80.00 |
277 Park Avenue New York, NY |
1,850,000 | 1964/NAP | 51 | 23,163 | 83.2% | $110.00 |
280 Park Avenue New York NY |
1,320,211 | 1968/NAP | 43 | 27,407 | 100.0% | NAP |
| (1) | Source: Appraisal, unless otherwise indicated. |
| (2) | Information obtained from the underwritten rent roll dated as of November 1, 2021. |
| (3) | Represents annual underwritten gross rent per sq. ft. |
| (4) | 599 Lexington Avenue is owned by the borrower sponsor or its affiliate. |
A-3-8
601 Lexington Avenue New York, New York 10022 |
Collateral Asset Summary – Loan No. 1 601 Lexington Avenue |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 42.5% 4.50x 13.2% |
Cash Flow Analysis.
| Cash Flow Analysis(1) | ||||||
| 2018 | 2019 | 2020 | T-12 9/30/2021 | U/W | U/W Per Sq. Ft. | |
| Base Rent | $133,149,752 | $135,562,062 | $143,558,635 | $144,061,141 | $145,905,931 | $87.07 |
| Contractual Rent Steps(2) | 0 | 0 | 0 | 0 | 128,513 | 0.08 |
| Grossed Up Vacant Space | 0 | 0 | 0 | 0 | 5,489,750 | 3.28 |
| Gross Potential Rent | $133,149,752 | $135,562,062 | $143,558,635 | $144,061,141 | $151,524,194 | $90.43 |
| Total Recoveries | 13,799,300 | 10,210,032 | 9,414,939 | 9,538,732 | 10,422,946 | 6.22 |
| Less Vacancy & Credit Loss(3) | 0 | 0 | 0 | 0 | (10,444,971) | (6.23) |
| Net Rental Income | $146,949,052 | $145,772,094 | $152,973,574 | $153,599,873 | $151,502,169 | $90.41 |
| Rent Average Benefit(4) | 0 | 0 | 0 | 0 | 6,752,020 | 4.03 |
| Other Income | 1,616,466 | 1,730,575 | 2,517,181 | 1,475,308 | 1,452,145 | 0.87 |
| Effective Gross Income | $148,565,518 | $147,502,669 | $155,490,755 | $155,075,181 | $159,706,334 | $95.31 |
| Real Estate Taxes | 39,670,091 | 42,193,437 | 43,060,793 | 41,588,994 | 40,950,953 | 24.44 |
| Insurance | 569,495 | 612,718 | 732,213 | 892,330 | 1,375,389 | 0.82 |
| Management Fee | 3,006,130 | 3,265,479 | 3,235,326 | 3,218,199 | 1,000,000 | 0.60 |
| Other Operating Expenses | 18,195,642 | 18,914,423 | 19,523,204 | 19,827,849 | 21,106,886 | 12.60 |
| Total Expenses | $61,441,358 | $64,986,057 | $66,551,536 | $65,527,372 | $64,433,228 | $38.45 |
| Net Operating Income | $87,124,160 | $82,516,612 | $88,939,219 | $89,547,809 | $95,273,106 | $56.86 |
| Capital Expenditures | 0 | 0 | 0 | 0 | 418,915 | 0.25 |
| TI / LC | 0 | 0 | 0 | 0 | 2,743,708 | 1.64 |
| Net Cash Flow | $87,124,160 | $82,516,612 | $88,939,219 | $89,547,809 | $92,110,483 | $54.97 |
| (1) | Based on the underwritten rent roll dated as of November 1, 2021. |
| (2) | Represents contractual rent steps through September 2022. |
| (3) | The underwritten economic vacancy is 6.5%. The 601 Lexington Avenue Property was 96.3% leased as of November 1, 2021. |
| (4) | Represents straight-line rent averaging for an investment grade tenant (NYU) and tenants included in a legal industry magazine listing of the largest global 200 law firms by gross revenue (K&E and Freshfields). |
Property Management. The 601 Lexington Avenue Property is managed by Boston Properties Limited Partnership, a Delaware limited partnership and an affiliate of the borrowers.
Lockbox / Cash Management. The 601 Lexington Avenue Whole Loan documents require that the borrowers establish and maintain a lender-controlled lockbox account, which is already in-place, and direct all tenants to pay rent directly into such lockbox account. The 601 Lexington Avenue Whole Loan documents also require that all rents received by the borrowers be deposited into the lockbox account within five business days of receipt. Prior to the occurrence of a Cash Management Sweep Period (as defined below), all funds on deposit in the lockbox account will be disbursed to the borrowers’ operating account. During a Cash Management Sweep Period, all funds in the lockbox account are required to be swept each business day into the cash management account controlled by the lender and, on each payment date, all funds in the cash management account are required to be applied in accordance with the 601 Lexington Avenue Whole Loan documents to make required deposits (if any) into the real estate tax and insurance reserves, to pay debt service on the 601 Lexington Avenue Whole Loan, to make required deposits (if any) into the replacement and TI/LC reserves, and to pay operating expenses set forth in the annual budget (which is required to be approved by the lender during a Cash Management Sweep Period). During a Cash Management Sweep Period, any excess cash flow remaining after satisfaction of the foregoing items is required to be swept to an excess cash flow subaccount to be held by the lender as additional security for the 601 Lexington Avenue Whole Loan; provided, however, so long as no event of default exists under the 601 Lexington Avenue Whole Loan, if amounts on deposit in the TI/LC Reserve are not sufficient to pay approved leasing expenses, then upon request of the borrowers, funds in the excess cash flow subaccount are required to be disbursed for approved leasing expenses.
A “Cash Management Sweep Period” will commence upon the earlier of the following: (i) the occurrence and continuance of an event of default; or (ii) the net operating income debt service coverage ratio (“NOI DSCR”) for the 601 Lexington Avenue Whole Loan falling below 1.20x at the end of any calendar quarter, commencing with the calendar quarter ending on March 31, 2022.
A Cash Management Sweep Period will end upon the occurrence of the following: (A) with regard to clause (i) above, the cure of such event of default; or (B) with regard to clause (ii) above: (a) the NOI DSCR for the 601 Lexington Avenue Whole Loan being greater than or equal to 1.20x for one calendar quarter; or (b) the borrowers delivering to the lender as additional collateral and security for the payment of the 601 Lexington Avenue Whole Loan, (x) cash to be held as an additional reserve fund that, if applied as a prepayment of the outstanding principal balance of the 601 Lexington Avenue Whole Loan, would cause the NOI DSCR to be at least 1.20x (the “Cash Management Sweep Cure Amount”), (y) a letter of credit having an aggregate notional amount in the amount of the Cash Management Sweep Cure Amount, or (z) so long as BPLP’s senior unsecured credit rating satisfies the BPLP Guarantor Required Rating (as defined below), a guaranty by BPLP in the amount of the Cash Management Sweep Cure Amount.
A-3-9
601 Lexington Avenue New York, New York 10022 |
Collateral Asset Summary – Loan No. 1 601 Lexington Avenue |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 42.5% 4.50x 13.2% |
BPLP Guaranty. The borrowers have the right to deliver to the lender a guaranty (a “BPLP Guaranty”) from BPLP (in the context of the BPLP Guaranty, the “BPLP Guarantor”), in lieu of making the payments to any of the reserve accounts and in lieu of making any cash deposits as alteration security, net proceeds deficiency with respect to the restoration after a casualty or condemnation or Cash Sweep Management Sweep Cure Amount, so long as BPLP’s senior unsecured credit rating meets the BPLP Guarantor Required Rating. Additionally, the borrowers have the right to deliver to the lender a BPLP Guaranty in lieu of deposits previously made for any such purpose (whereupon, the amount so replaced would then be returned to the borrowers). The aggregate amount guaranteed under any such BPLP Guaranty (together with any cash delivered by the borrowers to the lender and/or any letter of credit delivered by the borrowers to the lender) related to any such purpose, must at all times be at least equal to the aggregate amount which the borrowers are required to have on deposit for such purpose. The aggregate amount guaranteed under any BPLP Guaranty (when aggregated with the full amount of any letter of credit and/or cash on deposit) will be reduced as the borrowers expend funds for the purposes which such funds would have otherwise been deposited in the applicable reserve account. The aggregate amount of any BPLP Guaranty (and the full amount of any letter of credit obtained by BPLP) may not at any time exceed 10.0% of the outstanding principal balance of the 601 Lexington Avenue Whole Loan, unless the borrowers deliver a new non-consolidation opinion which takes into account such BPLP guarantees and letters of credit.
In the event of any downgrade, withdrawal or qualification of the rating of the BPLP Guarantor by any rating agency such that the BPLP Guarantor no longer satisfies the BPLP Guarantor Required Rating, within 10 business days of such downgrade, withdrawal or qualification, the borrowers are required to either (i) deposit with the lender cash in the amount of the guaranteed obligations under each BPLP Guaranty then outstanding, and/or (ii) provide the lender with a letter of credit with a face amount equal to the guaranteed obligations under each BPLP Guaranty then outstanding.
Initial and Ongoing Reserves. At loan origination, the borrowers were not required to deposit $61,289,797 in upfront reserves but instead provided a payment guaranty in lieu, as described below.
Outstanding Tenant Specific TI/LC Reserve – BPLP provided a payment guaranty in lieu of depositing $52,315,328 at closing for approved leasing expenses outstanding at the time of origination of the 601 Lexington Avenue Whole Loan.
Free Rent Reserve – BPLP provided a payment guaranty in lieu of depositing $8,974,469 at closing for the free rent and gap rent outstanding for six tenants at the time of origination of the 601 Lexington Avenue Whole Loan.
Real Estate Taxes - Upon the occurrence and continuance of a Cash Management Sweep Period, the 601 Lexington Avenue Whole Loan documents require ongoing monthly real estate tax reserves in an amount equal to 1/12 of the real estate taxes that the lender reasonably estimates will be payable during the next 12 months. In lieu of making the monthly payments, the borrowers have the right to deliver to the lender a guaranty from BPLP (as described above under “BPLP Guaranty”) so long as BPLP’s senior unsecured credit rating is at least “BBB” by S&P and “Baa3” by Moody’s (the “BPLP Guarantor Required Rating”).
Insurance - Upon the occurrence and continuance of a Cash Management Sweep Period, the 601 Lexington Avenue Whole Loan documents require ongoing monthly insurance reserves in an amount equal to 1/12 of the insurance premiums that the lender estimates will be payable for the renewal of the coverage during the next 12 months; provided, however, notwithstanding any Cash Management Sweep Period, the reserve will not be required if the borrowers maintain a blanket insurance policy reasonably acceptable to the lender. In lieu of making the monthly payments, the borrowers have the right to deliver to the lender a guaranty from BPLP (as described above under “BPLP Guaranty”) so long as BPLP’s senior unsecured credit rating satisfies the BPLP Guarantor Required Rating.
Replacement Reserve – Upon the occurrence and continuance of a Cash Management Sweep Period, the 601 Lexington Avenue Whole Loan documents require ongoing monthly replacement reserves of approximately $34,910, subject to a cap of $837,829. In lieu of making the monthly payments, the borrowers have the right to deliver to the lender a guaranty from BPLP (as described above under “BPLP Guaranty”) so long as BPLP’s senior unsecured credit rating satisfies the BPLP Guarantor Required Rating.
TI/LC Reserve – Upon the occurrence and continuance of a Cash Management Sweep Period, the 601 Lexington Avenue Whole Loan documents require ongoing monthly TI/LC reserves of approximately $418,915, subject to a cap of $10,053,948. In lieu of making the monthly payments, the borrowers have the right to deliver to the lender a guaranty from BPLP (as described above under “BPLP Guaranty”) so long as BPLP’s senior unsecured credit rating satisfies the BPLP Guarantor Required Rating.
Current Mezzanine or Subordinate Indebtedness. The 601 Lexington Avenue Property also secures the 601 Lexington Avenue Subordinate Companion Loan, which has an aggregate Cut-off Date principal balance of $276,700,000. The 601 Lexington Avenue Subordinate Companion Loan accrues interest at the same rate as the 601 Lexington Avenue Mortgage Loan. The 601 Lexington Avenue Senior Loan is senior in right of payment to the 601 Lexington Avenue Subordinate Companion Loan. See “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced AB Whole Loans—The 601 Lexington Avenue Whole Loan” in the Preliminary Prospectus.
Future Mezzanine or Subordinate Indebtedness Permitted. None.
Partial Release. None.
A-3-10
601 Lexington Avenue New York, New York 10022 |
Collateral Asset Summary – Loan No. 1 601 Lexington Avenue |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 42.5% 4.50x 13.2% |
Ground Lease. The borrowers have an approximately 18,038 sq. ft. ground lease from the abutting St. Peter’s Lutheran Church of Manhattan (“St. Peter’s Church”), that is in turn sub-leased to NYU. The office space (floors 2-6) is 100% leased by NYU and is being used to house NYU Langone Health. NYU is occupying a portion of the Church Unit (as defined below) condominium unit owned by St. Peter’s Church. Such portion of the condominium unit is incorporated into the office building. The borrowers are required to pay ground rent ($49.96 per sq. ft. with annual escalations of 1.5%) to St. Peter’s Church. The borrowers are required to purchase the ground leased space in 2036 for a fixed price of approximately $23.3 million.
Condominium Regime. The 601 Lexington Avenue Property is comprised of (a) the borrowers’ fee simple interest in three condominium units within the four unit condominium known as the 601 Lexington Avenue Condominium (the “Condominium”) and (b) the borrowers’ leasehold interest in a portion of a fourth condominium unit, commonly known as the “Church Unit”, within the Condominium. The borrower-owned units include 94.4% of the common elements, which entitles the borrowers to 94 of the 100 votes in the condominium regime (together with the right to appoint six of seven board members). The loan documents provide that it is an event of default if, without the prior written consent of the lender, the borrowers vote for or otherwise consent to, any modification or amendment to any of the terms or provisions of the condominium documents in violation of the terms of the loan agreement. See “Description of the Mortgage Pool—Condominium and Other Shared Interests” in the Preliminary Prospectus.
A-3-11
624 South Grand Avenue Los Angeles, California 90017 |
Collateral Asset Summary – Loan No. 2 One Wilshire |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 42.6% 3.37x 9.6% |
A-3-12
624 South Grand Avenue Los Angeles, California 90017 |
Collateral Asset Summary – Loan No. 2 One Wilshire |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 42.6% 3.37x 9.6% |
A-3-13
624 South Grand Avenue Los Angeles, California 90017 |
Collateral Asset Summary – Loan No. 2 One Wilshire |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 42.6% 3.37x 9.6% |
| Mortgage Loan Information | |
| Loan Seller: | GSMC |
| Loan Purpose: | Refinance |
| Borrower Sponsor: | TechCore, LLC |
| Borrower: | GI TC One Wilshire, LLC |
| Original Balance: | $85,000,000 |
| Cut-off Date Balance(1): | $85,000,000 |
| % by Initial UPB: | 9.3% |
| Interest Rate(2): | 2.77600% |
| Payment Date: | 6th of each month |
| First Payment Date: | February 6, 2022 |
| Anticipated Repayment Date(2): | January 6, 2032 |
| Maturity Date(2): | January 6, 2035 |
| Amortization: | Interest Only - ARD |
| Additional Debt(1): | $304,250,000 Pari Passu Debt |
| Call Protection: | L(27),D(86),O(7) |
| Lockbox / Cash Management: | Hard / Springing |
| Reserves(3) | |||
| Initial | Monthly | Cap | |
| Taxes: | $0 | Springing | NAP |
| Insurance: | $0 | Springing | NAP |
| Replacement/Capex: | $0 | Springing | NAP |
| TI/LC: | $0 | Springing | NAP |
| Property Information | |
| Single Asset / Portfolio: | Single Asset |
| Property Type: | CBD / Data Center Office |
| Collateral: | Fee Simple |
| Location: | Los Angeles, CA |
| Year Built / Renovated: | 1967 / 1992 |
| Total Sq. Ft.: | 661,553 |
| Property Management: | GI Property Manager (CA) Inc. |
| Underwritten NOI: | $37,510,389 |
| Underwritten NCF: | $36,919,391 |
| Appraised Value: | $913,000,000 |
| Appraisal Date: | November 5, 2021 |
| Historical NOI | |
| Most Recent NOI: | $35,627,157 (T-12 September 30, 2021) |
| 2020 NOI: | $34,570,190 (December 31, 2020) |
| 2019 NOI: | $31,610,806 (December 31, 2019) |
| 2018 NOI: | $29,471,312 (December 31, 2018) |
| Historical Occupancy | |
| Most Recent Occupancy: | 87.3% (November 1, 2021) |
| 2020 Occupancy: | 89.4% (December 31, 2020) |
| 2019 Occupancy: | 90.3% (December 31, 2019) |
| 2018 Occupancy: | 86.6% (December 31, 2018) |
| Financial Information(2) | ||||||
| Tranche | Cut-off Date Balance | Balance per Sq. Ft. Cut-off / Balloon |
LTV Cut-off / Balloon |
U/W DSCR NOI / NCF |
U/W Debt Yield NOI / NCF |
U/W Debt Yield at Balloon NOI / NCF |
| Mortgage Loan | $85,000,000 | |||||
| Pari Passu Notes | 304,250,000 | |||||
| Whole Loan | $389,250,000 | $588 / $588 | 42.6% / 42.6% | 3.42x / 3.37x | 9.6% / 9.5% | 9.6% / 9.5% |
| (1) | The One Wilshire Loan (as defined below) is part of a whole loan evidenced by five pari passu notes with an aggregate outstanding principal balance as of the Cut-off Date of $389,250,000. |
| (2) | The One Wilshire Whole Loan (as defined below) is structured with an anticipated repayment date (“ARD”) of January 6, 2032 and a final maturity date of January 6, 2035. After the ARD, the interest rate will be revised to 3.0% over the greater of (x) 2.77600% and (y) the term SOFR rate in effect on the ARD, pursuant to the One Wilshire Whole Loan documents. The Financial Information presented in the tables above are calculated based on the ARD. |
| (3) | See “—Initial and Ongoing Reserves” below. |
| (4) | Calculated based on the aggregate outstanding principal balance of the One Wilshire Whole Loan (as defined below). See “—The Loan” below |
The Loan. The mortgage loan (the “One Wilshire Loan”) is part of a whole loan (the “One Wilshire Whole Loan”) evidenced by five pari passu notes with an aggregate outstanding principal balance as of the Cut-off Date of $389,250,000. The One Wilshire Whole Loan is secured by a first deed of trust encumbering the borrower’s fee interest in a 661,553 sq. ft. building comprised of data center and office space located in downtown Los Angeles, California (the “One Wilshire Property”). The One Wilshire Loan, which is evidenced by the non-controlling note A-3, has an outstanding principal balance as of the Cut-off Date of $85,000,000 and represents approximately 9.3% of the Initial Pool Balance.
The One Wilshire Whole Loan, which accrues interest at an initial rate of 2.77600% per annum (the “Initial Interest Rate”), was originated by Goldman Sachs Bank USA on December 22, 2021, had an aggregate original principal balance of $389,250,000 and has an aggregate outstanding principal balance as of the Cut-off Date of $389,250,000.
The One Wilshire Whole Loan has a 10-year interest-only term through the anticipated repayment date (“ARD”) of January 6, 2032 and a final maturity date of January 6, 2035. After the ARD, through and including January 6, 2035, the following structure will apply: the interest rate will increase (such new rate, the “Adjusted Interest Rate”) by 3.0% over the greater of (x) 2.77600%, and (y) the term SOFR rate in effect on the ARD; however, interest accrued at the excess of the Adjusted Interest Rate over the initial interest rate will be deferred as described below under “Lockbox / Cash Management.” For the period from the origination date through the ARD, the One Wilshire Whole Loan accrues interest at the Initial Interest Rate. Voluntary prepayment of the One Wilshire Whole Loan in whole (but not in part) is permitted on or after the open prepayment date occurring in July 2031 without payment of any prepayment premium. Defeasance of the One Wilshire Whole Loan in whole (but not in part) is permitted at any time after the earlier of (i) December 22, 2024 or (ii) the first due date following the second anniversary of the closing date of the securitization that includes that last note of the One Wilshire Whole Loan to be securitized.
A-3-14
624 South Grand Avenue Los Angeles, California 90017 |
Collateral Asset Summary – Loan No. 2 One Wilshire |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 42.6% 3.37x 9.6% |
The table below summarizes the promissory notes that comprise the One Wilshire Whole Loan. The relationship between the holders of the One Wilshire Whole Loan will be governed by a co-lender agreement as described under “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced Pari Passu Whole Loans” in the Preliminary Prospectus.
Whole Loan Summary | ||||
| Note | Original
Balance |
Cut-off Date Balance | Note Holder(s) | Controlling Piece |
| A-1 | $90,000,000 | $90,000,000 | Benchmark 2022-B32 | Yes |
| A-2 | 80,000,000 | 80,000,000 | Benchmark 2022-B33 | No |
| A-3 | 85,000,000 | 85,000,000 | Benchmark 2022-B34 | No |
| A-4 | 94,250,000 | 94,250,000 | GSBI(1) | No |
| A-5 | 40,000,000 | 40,000,000 | GSBI(1) | No |
| Whole Loan | $389,250,000 | $389,250,000 | ||
| (1) | Expected to be contributed to one or more future securitization trusts. |
The proceeds of the One Wilshire Whole Loan were primarily used to refinance the One Wilshire Property, pay origination costs, cover defeasance and return equity to the borrower sponsor.
| Sources and Uses | ||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
| Whole Loan | $389,250,000 | 100.0% | Return of Equity | $197,558,597 | 50.8% | |
| Loan Payoff | 190,909,806 | 49.0 | ||||
| Closing Costs | 781,598 | 0.2 | ||||
| Total Sources | $389,250,000 | 100.0% | Total Uses | $389,250,000 | 100.0% | |
The Borrower and the Borrower Sponsor. The borrower is GI TC One Wilshire, LLC, a Delaware limited liability company. The borrower is structured to be a single purpose bankruptcy-remote entity, having at least two independent directors in its organizational structure. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the One Wilshire Whole Loan. The non-recourse carve-out guarantor is TechCore, LLC (“TechCore”), a joint venture between GI Partners (“GI”) and the California Public Employees’ Retirement System (“CalPERS”). GI is the manager of TechCore and fund manager. CalPERS is the non-controlling member. TechCore is an investment vehicle that invests in technology-advantaged real estate in the United States, including data centers, internet gateways, and corporate campuses for technology tenants, and life science properties located in primary MSAs, leased to industry leading tenants.
The Property. The One Wilshire Property is a 30-story office building with a total rentable area of 661,553 sq. ft. (664,248 sq. ft. inclusive of the parking floors), located on an approximately 1.36-acre site at 624 South Grand Avenue in Los Angeles, California. The One Wilshire Property was originally constructed in 1967 and renovated in 1992. Additionally, there is also a 491 space five-level subterranean parking garage with 14 additional surface parking spaces. As of November 1, 2021, the One Wilshire Property was 87.3% leased to a variety of tenants, the largest being CoreSite.
Major Tenants. The largest tenant, CoreSite (176,685 sq. ft.; 26.7% of net rentable area; 40.5% of underwritten base rent) currently operates 24 data centers across eight markets in the United States. CoreSite provides hybrid IT solutions that empower enterprises, cloud, network, and IT service providers to monetize and future-proof their digital business. CoreSite has been at the One Wilshire Property since 2007 and currently leases 35 suites. CoreSite extended its lease in August 2017. CoreSite’s lease expires in July 2029 and features three, five-year extension options, each with 270-day notice periods. On December 28, 2021, it was announced that American Tower Corporation, a telecommunication infrastructure focused REIT, had finalized its acquisition of CoreSite. CoreSite is now a subsidiary of American Tower Corporation and no information has been provided that there will be any proposed changes to the legal entity operating at the One Wilshire Property and on the relevant leases. CoreSite subleases 10,848 sq. ft. expiring on July 31, 2029 ($105.88 per sq. ft.) from GI TC One Wilshire Services, a borrower sponsor affiliate, which brings its total footprint at the One Wilshire Property to 187,533 sq. ft. (28.3% of net rentable area).
The second largest tenant, Musick Peeler (106,475 sq. ft.; 16.1% of net rentable area; 8.4% of underwritten base rent) is a national law firm that offers representation in a wide variety of legal matters including appellate, banking and finance, corporate, business and technology, intellectual property, real estate, and trusts & estates and delivers legal services across the globe. Musick Peeler is a member of Ally Law, an alliance of international law firms. Musick Peeler has been at the One Wilshire Property since 1997 and expanded its space in 2004.
The third largest tenant, Verizon Global Networks (through its affiliated entities) (61,881 sq. ft.; 9.4% of net rentable sq. ft.; 13.4% of underwritten base rent) (“Verizon”) formed on June 30, 2000 and is one of the world’s leading providers of technology and communications services. Verizon is headquartered in New York City and in 2020 generated revenues of approximately $128.3 billion. Verizon offers voice, data and video services and solutions on its award-winning networks and platforms, delivering on customers’ demand for mobility, reliable network connectivity, security and control. Verizon has been at the One Wilshire Property since August 1982 and expanded its space in 1986, 1990, 1998, 2003, and 2012.
A-3-15
624 South Grand Avenue Los Angeles, California 90017 |
Collateral Asset Summary – Loan No. 2 One Wilshire |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 42.6% 3.37x 9.6% |
COVID-19 Update. As of March 11, 2022, the One Wilshire Property was open and operating. Rent collections for the One Wilshire Property were 100.0% and 99.3% for January 2022 and February 2022, respectively. There has been no rent relief requested but the following tenants did not pay base rent in January 2022 and February 2022 and are currently in bankruptcy (and excluded from the underwritten cash flows): (i) Starving Student Catering and (ii) Spectrum Link. As of March 11, 2022, no loan modification or forbearance requests have been made on the One Wilshire Whole Loan. The March debt service payment was made.
The following table presents certain information relating to the tenants at the One Wilshire Property:
| Tenant Summary(1) | ||||||
| Tenant | Credit Rating (Moody’s/Fitch/S&P) (2) |
Net Rentable Area (Sq. Ft.) | % of Net Rentable Area | U/W Base Rent Per Sq. Ft.(3) | % of Total U/W Base Rent(3) | Lease Expiration |
| CoreSite(4) | NR / NR / NR | 176,685 | 26.7% | $97.78 | 40.5% | 7/31/2029 |
| Musick Peeler | NR / NR / NR | 106,475 | 16.1 | $33.60 | 8.4 | 10/31/2023 |
| Verizon Global Networks(5) | NR / NR / NR | 61,881 | 9.4 | $92.57 | 13.4 | Various |
| CenturyLink Communications, LLC(6) | NR / NR / NR | 56,251 | 8.5 | $96.64 | 12.7 | Various |
| Crowell, Weedon | NR / NR / NR | 43,301 | 6.5 | $33.81 | 3.4 | 12/31/2024 |
| Zayo | NR / NR / NR | 32,017 | 4.8 | $55.85 | 4.2 | 10/31/2033 |
| Crown Castle(7) | NR / NR / NR | 26,361 | 4.0 | $59.45 | 3.7 | Various |
| China Telecom | NR / NR / NR | 11,066 | 1.7 | $58.97 | 1.5 | 9/30/2022 |
| GI TC One Wilshire Services (MMR Operated by CoreSite) | NR / NR / NR | 10,848 | 1.6 | $106.33 | 2.7 | 7/31/2031 |
| East-West Bank | NR / NR / NR | 7,507 | 1.1 | $67.32 | 1.2 | 10/17/2022 |
| Ten Largest Tenants | 532,392 | 80.5% | $73.53 | 91.7% | ||
| Remaining Occupied | 44,937 | 6.8 | $79.06 | 8.3 | ||
| Total Occupied | 577,329 | 87.3% | $73.96 | 100.0% | ||
| Vacant | 84,224 | 12.7 | ||||
| Total / Wtd. Avg. | 661,553 | 100.0% | ||||
| (1) | Based on the underwritten rent roll dated November 1, 2021. |
| (2) | In certain instances, ratings provided are those of the parent company of the entity shown, whether or not the parent company guarantees the lease. |
| (3) | U/W Base Rent Per Sq. Ft. and % of Total U/W Base Rent are inclusive of contractual rent steps underwritten through the termination option per the tenant’s lease. |
| (4) | CoreSite subleases 10,848 sq. ft. expiring on July 31, 2029 ($105.88 per sq. ft.) from GI TC One Wilshire Services, which brings its total footprint at the One Wilshire Property to 187,533 sq. ft. |
| (5) | Verizon Global Networks leases 24,283 sq. ft. expiring July 31, 2029, 18,835 sq. ft. expiring December 14, 2026, 7,905 sq. ft. expiring December 14, 2023, 4,698 sq. ft. expiring August 21, 2030, 3,907 sq. ft. expiring July 15, 2025, 2,253 sq. ft. expiring April 30, 2025 and antenna space expiring July 31, 2022. |
| (6) | CenturyLink Communications, LLC (through affiliated leases) leases 35,925 sq. ft. expiring December 31, 2025, 10,318 sq. ft. expiring April 30, 2023 and 10,008 sq. ft. expiring November 30, 2026. CenturyLink Communications, LLC has the one-time right to reduce its space at the One Wilshire Property by 7,445 sq. ft. on June 30, 2023 with nine months’ notice and payment of a reduction fee. |
| (7) | Crown Castle leases 14,199 sq. ft. expiring December 31, 2025 and 12,162 sq. ft. on a month to month basis. |
| Lease Rollover Schedule(1)(2)(3) | ||||||||
| Year | # of Leases Expiring |
Total Expiring Sq. Ft. |
% of Total Sq. Ft. Expiring |
Cumulative Sq. Ft. Expiring |
Cumulative % of Sq. Ft. Expiring |
Annual U/W Base Rent Per Sq. Ft. (4) |
% U/W Base Rent Rolling(4) | Cumulative % of U/W Base Rent(3) |
| MTM | 6 | 12,162 | 1.8% | 12,162 | 1.8% | $30.45 | 0.9% | 0.9% |
| 2022 | 10 | 21,101 | 3.2 | 33,263 | 5.0% | $66.05 | 3.3 | 4.1% |
| 2023 | 15 | 137,204 | 20.7 | 170,467 | 25.8% | $45.47 | 14.6 | 18.7% |
| 2024 | 8 | 46,163 | 7.0 | 216,630 | 32.7% | $35.65 | 3.9 | 22.6% |
| 2025 | 16 | 63,034 | 9.5 | 279,664 | 42.3% | $91.54 | 13.5 | 36.1% |
| 2026 | 8 | 38,052 | 5.8 | 317,716 | 48.0% | $91.68 | 8.2 | 44.3% |
| 2027 | 1 | 0 | 0.0 | 317,716 | 48.0% | $0.00 | 0.0 | 44.3% |
| 2028 | 0 | 0 | 0.0 | 317,716 | 48.0% | $0.00 | 0.0 | 44.3% |
| 2029 | 36 | 200,968 | 30.4 | 518,684 | 78.4% | $97.00 | 45.7 | 89.9% |
| 2030 | 4 | 15,780 | 2.4 | 534,464 | 80.8% | $86.11 | 3.2 | 93.1% |
| 2031 | 1 | 10,848 | 1.6 | 545,312 | 82.4% | $106.33 | 2.7 | 95.8% |
| 2032 | 0 | 0 | 0.0 | 545,312 | 82.4% | $0.00 | 0.0 | 95.8% |
| 2033 & Thereafter | 5 | 32,017 | 4.8 | 577,329 | 87.3% | $55.85 | 4.2 | 100.0% |
| Vacant | NAP | 84,224 | 12.7 | 661,553 | 100.0% | NAP | NAP | NAP |
| Total / Wtd. Avg. | 110 | 661,553 | 100.0% | $73.96 | 100.0% | |||
| (1) | Based on the underwritten rent roll dated November 1, 2021. |
| (2) | Lease Rollover Schedule is based on the lease expiration dates of all direct leases in place. |
| (3) | Certain tenants may have termination or contraction options (which may become exercisable prior to the originally stated expiration date of the tenant lease) that are not considered in the above Lease Rollover Schedule. |
| (4) | Annual U/W Base Rent Per Sq. Ft. and % U/W Base Rent Rolling are inclusive of contractual rent steps underwritten through the termination option per the tenant’s lease. |
Environmental Matters. According to a Phase I environmental report dated December 3, 2021, there are no recognized environmental conditions or recommendations for further action at the One Wilshire Property.
A-3-16
624 South Grand Avenue Los Angeles, California 90017 |
Collateral Asset Summary – Loan No. 2 One Wilshire |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 42.6% 3.37x 9.6% |
The Market. The One Wilshire Property is located in Los Angeles County in the Los Angeles-Long Beach-Anaheim metropolitan statistical area (“MSA”). Los Angeles County is the most populous county in the United States with a 2010 U.S. Census population of 9,818,605 and also has one of the largest economies in the world. Los Angeles is the sixth largest data center market in the United States by square footage. Los Angeles also benefits from a large number of technology, government, financial, and defense companies with large presences in the market.
The One Wilshire Property is within the financial district of Downtown Los Angeles central business district submarket. The downtown Los Angeles central business district submarket is home to a number of professional services companies including law firms, insurance companies and consulting firms. Notable companies with a presence in the area include Deloitte, Charles Schwab, Boston Consulting Group, Spotify and CBRE. The Downtown Los Angeles County office submarket reported a vacancy level of 21.3% and average office asking rent of $41.70 per square foot as of the third quarter of 2021. The Los Angeles County office market reported a vacancy level of 19.2% and average office rents of $43.85 per square foot as of the third quarter of 2021.
According to the appraisal, the 2020 population, population growth from 2010-2020 and average household income are presented in the chart below:
Los Angeles City |
Los Angeles County |
LA-Long Beach-Anaheim MSA | |
| Population | 3,967,152 | 10,173,432 | 13,403,861 |
| Population Growth | 4.60% | 3.61% | 4.48% |
| Average Household Income | $97,592 | $101,935 | $107,748 |
Cash Flow Analysis.
| Cash Flow Analysis | ||||||
| 2018 | 2019 | 2020 | T-12 9/30/2021 | U/W | U/W Per Sq. Ft. | |
| Base Rent(1) | $35,250,894 | $38,070,245 | $40,022,711 | $40,990,035 | $42,702,032 | $64.55 |
| Vacant Income | 0 | 0 | 0 | 0 | 7,120,420 | 10.76 |
| Gross Potential Rent | $35,250,894 | $38,070,245 | $40,022,711 | $40,990,035 | $49,822,452 | $75.31 |
| Total Reimbursements | 1,687,084 | 2,522,775 | 3,320,201 | 3,668,783 | 3,725,129 | 5.63 |
| Other Income(2) | 6,726,019 | 7,507,780 | 7,717,265 | 7,842,263 | 8,182,721 | 12.37 |
| Gross Potential Income | $43,663,997 | $48,100,800 | $51,060,178 | $52,501,081 | $61,730,302 | $93.31 |
| Less: Vacancy & Credit Loss | (92,515) | (968,281) | (195,262) | (336,103) | (7,120,420) | (10.76) |
| Effective Gross Income | $43,571,482 | $47,132,520 | $50,864,916 | $52,164,978 | $54,609,882 | $82.55 |
| Total Operating Expenses | 14,100,170 | 15,521,713 | 16,294,726 | 16,537,821 | 17,099,493 | 25.85 |
| Net Operating Income | $29,471,312 | $31,610,806 | $34,570,190 | $35,627,157 | $37,510,389 | $56.70 |
| TI/LC | 0 | 0 | 0 | 0 | 471,918 | 0.71 |
| Capital Expenditures | 0 | 0 | 0 | 0 | 119,080 | 0.18 |
| Net Cash Flow | $29,471,312 | $31,610,806 | $34,570,190 | $35,627,157 | $36,919,391 | $55.81 |
| (1) | Underwritten Base Rent is based on the underwritten rent roll dated November 1, 2021. |
| (2) | Other income includes Conduit, Generator, Condenser Water, Fluid Chiller, Junction Box, Roof & Antenna, Meet-Me-Room, Parking and Storage. |
Property Management. The One Wilshire Property is managed by GI Property Manager (CA) Inc., a Delaware corporation, an affiliate of the borrower sponsor.
Lockbox / Cash Management. The One Wilshire Whole Loan is structured with a hard lockbox and springing cash management. The borrower was required to direct each tenant to remit all rents directly to a lender-controlled lockbox account. In addition, the borrower is required to cause all cash revenues relating to the One Wilshire Property and all other money received by the borrower or the property manager with respect to the One Wilshire Property to be deposited into the lockbox account within two business days of receipt. On each business day during the continuance of a One Wilshire Cash Sweep Period under the One Wilshire Whole Loan, all amounts in the lockbox account are required to be remitted to the cash management account. To the extent no One Wilshire Cash Sweep Period is continuing, all funds in the lockbox account are required to be transferred to the borrower’s operating account.
Prior to the ARD, on each due date during the continuance of a One Wilshire Cash Sweep Period under the One Wilshire Whole Loan, all funds on deposit in the cash management account after the application of such funds in accordance with the One Wilshire Whole Loan documents are required to be held by the lender in the excess cash flow reserve as additional collateral for the One Wilshire Whole Loan and disbursed in accordance with the One Wilshire Whole Loan documents. If the One Wilshire Whole Loan is not paid by the ARD, from and after the ARD, the One Wilshire Whole Loan will accrue interest at the Adjusted Interest Rate; however, interest accrued at the excess of the Adjusted Interest Rate over the Initial Interest Rate will be deferred. After the ARD, all amounts on deposit in the cash management account after payment of debt service, required reserves and budgeted operating expenses will be required to be applied to the prepayment of the outstanding principal balance of the One Wilshire Whole Loan, until the outstanding principal balance has been reduced to zero, then to any excess interest until the excess interest has been reduced to zero and then to any other indebtedness due under the One Wilshire Whole Loan until the other indebtedness has been reduced to zero.
A-3-17
624 South Grand Avenue Los Angeles, California 90017 |
Collateral Asset Summary – Loan No. 2 One Wilshire |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 42.6% 3.37x 9.6% |
A “One Wilshire Cash Sweep Period” means a period (i) commencing upon any of (a) an event of default, (b) the debt yield falling below 7.0% as of the end of any fiscal quarter (each, a “Debt Yield Cash Sweep Trigger Event”), or (c) the ARD; and (ii) expiring upon (x) with regard to any One Wilshire Cash Sweep Period commenced in connection with clause (a) above, the cure or waiver (if applicable) of such event of default, (y) with regard to any One Wilshire Cash Sweep Period commenced in connection with clause (b) above, at such time as the debt yield has equaled or exceeded 7.0% for two consecutive fiscal quarters or, to the extent the borrower provides evidence that the sole reason a Debt Yield Cash Sweep Trigger Event occurs is a vacating data center underwriting adjustment or a vacating non-data center underwriting adjustment, each as more particularly described in the One Wilshire Whole Loan documents, the amount of funds deposited in the excess cash flow account as a result of the related Debt Yield Cash Sweep Trigger Event is equal to the applicable Excess Cash Flow Account Threshold Amount (as defined below) or (z) with regard to any One Wilshire Cash Sweep Period commenced in connection with clause (c) above, the payment in full of the outstanding One Wilshire Whole Loan. Notwithstanding the foregoing, a One Wilshire Cash Sweep Period will not be deemed to expire in the event that a One Wilshire Cash Sweep Period then exists for any other reason.
“Excess Cash Flow Account Threshold Amount” means, (i) in the case of a vacating data center underwriting adjustment, $15.00 times the rentable sq. ft. of the leased premises which is subject to a lease which caused the related vacating data center underwriting adjustment, and (ii) in the case of a vacating non-data center underwriting adjustment, $75.00 times the rentable sq. ft. of the leased premises which is subject to a lease which caused the related vacating non-data center underwriting adjustment.
Initial and Ongoing Reserves. On the origination date of the One Wilshire Whole Loan, the borrower was not required to deposit reserves.
On each due date, the borrower is required to fund the following reserves with respect to the One Wilshire Whole Loan: (i) a tax reserve in an amount equal to one-twelfth of the reasonably estimated annual real estate taxes unless the borrower timely pays such taxes, promptly provides to the lender evidence of such payment reasonably acceptable to the lender and there is no continuing material event of default for a period in excess of 30 or more consecutive days; (ii) an insurance reserve in an amount equal to one-twelfth of reasonably estimated insurance premiums unless the borrower maintains a blanket policy in accordance with the One Wilshire Whole Loan documents and the borrower provides proof of payment of the applicable insurance premiums; and (iii) during the continuance of a One Wilshire Cash Sweep Period, a capital expenditures reserve in an amount equal to approximately $9,923 in accordance with the One Wilshire Whole Loan documents. Amounts are disbursed from the capital expenditures reserve for capitalized expenditures (including expenditures for building improvements or major repairs, leasing commissions and tenant improvements) at the One Wilshire Property in accordance with the One Wilshire Whole Loan documents.
CoreSite Funds Reserve - Within 30 days after a binding decision is made in relation to the pending arbitration with tenant CoreSite regarding certain disputed prior CAM charges of approximately $1.8 million, the borrower is required to (a) provide the lender with written evidence of such decision and (b) to the extent the annual underwritable cash flow is less than the origination date net operating income (“NOI”) as of such date as a result of the decision from the related arbitration or any amendments to the leases entered with CoreSite as a consequence of the decision from the related arbitration, deposit with the lender into a CoreSite funds reserve an amount equivalent to the difference between the CoreSite underwritten annual expense reimbursements and the amount of any reduced annual expense reimbursements to be paid by CoreSite for the immediately subsequent 12 month period under the terms of its leases (the “Required Minimum Balance”). To the extent the amount of annual expense reimbursements to be paid by CoreSite are subject to adjustment under the terms of its leases, the borrower will deposit with the lender within 30 days of any adjustment any shortfall such that the balance maintained in the CoreSite funds reserve is always equal to Required Minimum Balance.
Operating Expense Funds Reserve - The borrower is required to deposit into an operating expense funds reserve during the continuance of a One Wilshire Cash Sweep Period, an amount equal to the aggregate amount of approved operating expenses and approved extraordinary expenses to be incurred by the borrower for the then current interest period in accordance with the One Wilshire Whole Loan documents. The lender is required to disburse the operating expense funds to the borrower to pay approved operating expenses and approved extraordinary expenses upon the borrower’s request (which such request must be accompanied by an officer’s certificate detailing the applicable expenses to which the requested disbursement relates and attesting that such expense will be paid with the requested disbursement).
Lease Sweep Reserve - The borrower is required to deposit into a lease sweep reserve during the continuance of a One Wilshire Cash Sweep Period, an amount equal to approximately $41,347 for leasing expenses in accordance with the One Wilshire Whole Loan documents. Amounts are disbursed from the lease sweep reserve for leasing space at the One Wilshire Property pursuant to leases entered into in accordance with the One Wilshire Whole Loan documents, including leasing commissions, concessions and improvements in accordance with the One Wilshire Whole Loan documents.
Excess Cash Flow Reserve - The borrower is required to deposit into an excess cash flow reserve during the continuance of a One Wilshire Cash Sweep Period, any excess cash flow in accordance with the One Wilshire Whole Loan documents. Amounts are disbursed from the excess cash flow reserve in accordance with the One Wilshire Whole Loan documents.
A-3-18
624 South Grand Avenue Los Angeles, California 90017 |
Collateral Asset Summary – Loan No. 2 One Wilshire |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 42.6% 3.37x 9.6% |
Current Mezzanine or Subordinate Indebtedness. None.
Future Mezzanine or Subordinate Indebtedness Permitted. None.
Partial Release. None.
A-3-19
Various Detroit, MI |
Collateral Asset Summary – Loan No. 3 Bedrock Portfolio |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 59.4% 3.30x 13.6% |
A-3-20
Various Detroit, MI |
Collateral Asset Summary – Loan No. 3 Bedrock Portfolio |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 59.4% 3.30x 13.6% |
A-3-21
Various Detroit, MI |
Collateral Asset Summary – Loan No. 3 Bedrock Portfolio |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 59.4% 3.30x 13.6% |
| Mortgage Loan Information | |
| Loan Seller: | JPMCB |
| Loan Purpose: | Refinance |
| Borrower Sponsor: | Bedrock Detroit |
| Borrowers(1): | Various |
| Original Balance(2): | $85,000,000 |
| Cut-off Date Balance(2): | $85,000,000 |
| % by Initial UPB: | 9.3% |
| Interest Rate: | 3.77800% |
| Payment Date: | 1st of each month |
| First Payment Date: | February 1, 2022 |
| Maturity Date: | January 1, 2029 |
| Amortization: | Interest Only |
| Additional Debt(2): | $345,000,000 Pari Passu Debt |
| Call Protection(3): | L(25),YM1(55),O(4) |
| Lockbox / Cash Management: | Springing (Residential); Hard (Commercial) / Springing |
| Reserves(4) | |||
| Initial | Monthly | Cap | |
| Taxes: | $1,696,002 | $424,000 | NAP |
| Insurance: | $0 | Springing | NAP |
| Replacement Reserves: | $62,336 | $62,336 | $1,469,568 |
| TI/LC: | $280,690 | $280,690 | $5,000,000 |
| Other(5): | $9,362,153 | $0 | NAP |
| Property Information | |
| Single Asset / Portfolio: | Portfolio of 14 properties |
| Property Type(6): | Various |
| Collateral(6)(7): | Fee / Leasehold |
| Location: | Detroit, MI |
| Year Built / Renovated(6): | Various / Various |
| Total Sq. Ft.: | 2,694,627 |
| Property Management: | Bedrock Management Services LLC |
| Underwritten NOI: | $58,423,999 |
| Underwritten NCF: | $54,409,505 |
| Appraised Value: | $724,300,000 |
| Appraisal Date: | Various |
| Historical NOI | |
| Most Recent NOI: | $55,595,704 (T-12 September 30, 2021) |
| 2020 NOI: | $54,095,059 (December 31, 2020) |
| 2019 NOI: | $47,208,742 (December 31, 2019) |
| 2018 NOI: | $42,141,735 (December 31, 2018) |
| Historical Occupancy(8) | |
| Most Recent Occupancy: | 88.7% (November 10, 2021) |
| 2020 Occupancy: | 92.4% (December 31, 2020) |
| 2019 Occupancy: | 88.9% (December 31, 2019) |
| 2018 Occupancy: | 85.0% (December 31, 2018) |
| Financial Information(2) | ||||||
| Tranche | Cut-off Date Balance | Balance per Sq. Ft. Cut-off / Balloon |
LTV Cut-off / Balloon |
U/W DSCR NOI / NCF |
U/W Debt Yield NOI / NCF |
U/W Debt Yield at Balloon NOI / NCF |
| Mortgage Loan | $85,000,000 | |||||
| Pari Passu Notes | 345,000,000 | |||||
| Whole Loan | $430,000,000 | $160 / $160 | 59.4% / 59.4% | 3.55x / 3.30x | 13.6% / 12.7% | 13.6% / 12.7% |
| (1) | The borrowers of the Bedrock Portfolio Whole Loan (as defined below) are Michigan Parking Co LLC, 419 Fort Street LLC, 1001 Brush Street LLC, 1001 Webward LLC, One Webward Avenue LLC, 719 Griswold Associates LLC, 660 Woodward Associates LLC, 1234 Library LLC, 600 Webward Avenue LLC, 611 Webward Avenue LLC, 1505 Webward LLC, 1520 Webward Avenue LLC, Corktown Lofts LLC and WWA Parking LLC. |
| (2) | The Bedrock Portfolio Loan (as defined below) is part of a whole loan evidenced by 11 pari passu notes with an aggregate outstanding principal balance of $430.0 million. The financial information in the chart above reflects the Cut-off Date Balance of the Bedrock Portfolio Whole Loan. |
| (3) | The prepayment lockout period will be 25 payments beginning with and including the first payment date of February 1, 2022. The Bedrock Portfolio Whole Loan may be prepaid in whole or in part at any time on or after March 1, 2024, subject to the payment of the applicable yield maintenance premium if such prepayment occurs prior to October 1, 2028. |
| (4) | See “Initial and Ongoing Reserves” herein. |
| (5) | The total amount of approximately $9,362,153 deposited at loan origination includes $8,392,690 for an upfront outstanding TI/LC reserve, $477,905 for an outstanding free rent reserve, $250,000 for an outstanding environmental reserve and $241,558 for a required repairs reserve. |
| (6) | The Bedrock Portfolio Whole Loan is secured by the fee simple or leasehold interests in seven office buildings, five parking garages and two mixed-use properties that were built between 1913 and 2013. Each Mortgaged Property within the portfolio was renovated between 2010 and 2019. See “Portfolio Summary” table herein. |
| (7) | The One Woodward Mortgaged Property is comprised in part of a ground leasehold interests under a pair of ground leases expiring in April 2040 or later. |
| (8) | Occupancy represents occupancy for office and retail space in the Bedrock Portfolio (as defined below). |
The Loan. The mortgage loan (the “Bedrock Portfolio Loan”) is part of a whole loan (the “Bedrock Portfolio Whole Loan”) comprised of eleven pari passu promissory notes with an aggregate outstanding principal balance as of the Cut-off Date of $430.0 million, secured by a first mortgage encumbering the borrowers’ fee simple or leasehold interests in a portfolio of office, mixed-use and parking garage properties totaling 2,694,627 sq. ft., located in the Detroit, Michigan central business district (the “Bedrock Portfolio” or the “Bedrock Portfolio Properties”). Notes A-1-2 and A-1-3-A, with an aggregate outstanding principal balance as of the Cut-off Date of $85.0 million, are being contributed to the Benchmark 2022-B34 trust. The remaining notes have been or are expected to be contributed to one or more future securitization trusts or may otherwise be transferred at any time. The Bedrock Portfolio Whole Loan was co-originated by JPMorgan Chase Bank, National Association (“JPMCB”) and Starwood Mortgage Capital LLC (“SMC”).
The Bedrock Portfolio Whole Loan has an initial term of 84 months and has a remaining term of 81 months as of the Cut-off Date. The Bedrock Portfolio Whole Loan requires interest-only payments during its entire term and accrues interest at a rate of 3.77800% per annum.
A-3-22
Various Detroit, MI |
Collateral Asset Summary – Loan No. 3 Bedrock Portfolio |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 59.4% 3.30x 13.6% |
The below table summarizes the promissory notes that comprise the Bedrock Portfolio Whole Loan. The relationship between the holders of the Bedrock Portfolio Whole Loan will be governed by a co-lender agreement as described under “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced Pari Passu Whole Loans” in the Preliminary Prospectus.
| Whole Loan Summary | |||||
| Note | Original Balance | Cut-off Date Balance | Note Holder | Controlling Piece | |
| A-1-1 | $125,000,000 | $125,000,000 | Benchmark 2022-B32 | Yes | |
| A-1-2 | $50,000,000 | $50,000,000 | Benchmark 2022-B34 | No | |
| A-1-3-A | $35,000,000 | $35,000,000 | Benchmark 2022-B34 | No | |
| A-1-3-B | $15,000,000 | $15,000,000 | JPMCB(1) | No | |
| A-1-4 | $50,000,000 | $50,000,000 | Benchmark 2022-B33 | No | |
| A-1-5 | $30,000,000 | $30,000,000 | Benchmark 2022-B33 | No | |
| A-1-6 | $39,000,000 | $39,000,000 | JPMCB(1) | No | |
| A-2-1 | $40,000,000 | $40,000,000 | BMO 2022-C1 | No | |
| A-2-2 | $26,000,000 | $26,000,000 | SMC(1) | No | |
| A-2-3 | $10,000,000 | $10,000,000 | SMC(1) | No | |
| A-2-4 | $10,000,000 | $10,000,000 | SMC(1) | No | |
| Whole Loan | $430,000,000 | $430,000,000 | |||
(1) The related notes are expected to be contributed to one or more future securitizations or otherwise transferred at any time.
The proceeds of the Bedrock Portfolio Whole Loan were used to pay off approximately $331.1 million of existing debt, return approximately $83.2 million of equity to the borrower sponsor, fund reserves and pay origination costs.
| Sources and Uses | ||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
| Whole Loan | $430,000,000 | 100.0% | Loan Payoff | $331,057,990 | 77.0% | |
| Return of Equity | 83,185,780 | 19.3 | ||||
| Upfront Reserves | 11,401,181 | 2.7 | ||||
| Closing Costs | 4,355,049 | 1.0 | ||||
| Total Sources | $430,000,000 | 100.0% | Total Uses | $430,000,000 | 100.0% | |
The Borrowers and the Borrower Sponsor. The borrower sponsor (the “Bedrock Portfolio Borrower Sponsor”) is Bedrock Detroit, which is owned and controlled by Dan Gilbert and affiliated entities, and the non-recourse carveout guarantor is Rock Baker LLC. Legal counsel to the borrowers delivered a non-consolidation opinion in connection with the origination of the Bedrock Portfolio Whole Loan. Founded in 2011, Bedrock Detroit is a full service commercial real estate firm based in downtown Detroit, specializing in the strategic development of urban cores. With a portfolio of more than 100 properties totaling over 18 million sq. ft., Bedrock Detroit is one of the largest real estate partners in downtown Detroit. Since its founding, Bedrock Detroit and its affiliates have invested and committed more than $5.6 billion to acquiring and developing more than 100 properties, including new construction of ground-up developments in downtown Detroit and Cleveland totaling more than 20 million sq. ft. Bedrock Detroit’s real estate personnel provide a full range of services with in-house teams for each area of expertise, including leasing, acquisition, finance, construction, architecture, historic rehabilitation and property management. Bedrock Detroit’s tenants include leading technology companies and startups, world renowned restaurants and national retailers, as well as Detroit locals. Bedrock Detroit also leases mixed-income residential properties to individuals, and acquires and renovates properties for new development. Bedrock Detroit and Dan Gilbert’s family of companies have been critical in the urban revival of Detroit and have demonstrated a strong commitment to the continued growth and stability of the market. The Bedrock Portfolio Borrower Sponsor acquired the Bedrock Portfolio for an aggregate purchase price of approximately $191.2 million and has since invested approximately $464.9 million across the Bedrock Portfolio, resulting in a total cost basis of approximately $656.1 million.
The Properties. The Bedrock Portfolio consists of seven office buildings with ground floor retail (2,529,041 sq. ft.; 80.7% of underwritten net cash flow), five parking garages (5,036 stalls; 16.1% of underwritten net cash flow) and two mixed-use multifamily buildings (53 units; 3.1% of underwritten net cash flow). The Bedrock Portfolio Properties are located in Downtown Detroit and are accessible via the I-75, I-94 and I-96 expressways in addition to other major roadways. The Bedrock Portfolio is a cross-collateralized portfolio encompassing several commercial and residential uses, in addition to a tenant mix representing a wide array of industries. The office assets included in the Bedrock Portfolio, include historic rehabilitations of landmark buildings, as well as ground-up construction. The Bedrock Portfolio represents a critical mass of central business district (“CBD”) Class A office inventory, comprising a substantial share of the overall submarket.
As of November 10, 2021, the Bedrock Portfolio office properties were 88.7% leased to a diverse array of institutional quality tenants, including several Bedrock Portfolio Borrower Sponsor-affiliated publicly traded entities. Dan Gilbert, the founder of the Bedrock Portfolio Borrower Sponsor, is affiliated and/or controls some of the tenants at the Bedrock Portfolio, including Quicken Loans, Amrock, Inc and Bedrock Management Services LLC, collectively accounting for approximately 58.0% of the underwritten base rent.
A-3-23
Various Detroit, MI |
Collateral Asset Summary – Loan No. 3 Bedrock Portfolio |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 59.4% 3.30x 13.6% |
Collectively, the five parking garages drive approximately 16.1% of underwritten net cash flow. The parking garage component features a combination of long-term parking leases (37.8% of total parking garage revenue), month-to-month leases (22.6% of total parking garage revenue), transient parking (9.4% of total parking garage revenue), as well as contractual parking leases associated with on-site parking at the office properties (30.2%). The parking garages in the Bedrock Portfolio benefit from high demand for parking in the Detroit CBD, with an average monthly utilization (occupancy) of 124.5% on leased and month-to-month parking spaces (not including transient parking) as of the third quarter of 2021. Utilization has averaged 122.8% since the first quarter of 2019. Due to the lack of publicly available transportation historically driven in part by resistance from the motor vehicle industry, Detroit has relied primarily on personal car transportation, which continues to benefit the garages in the Bedrock Portfolio.
| Portfolio Summary | |||||||||
| Property Name | Property Type / Subtype | Year Built / Renovated | Sq. Ft. / Stalls / Units | Allocated Whole Loan Cut-off Date Balance | % of Allocated Whole Loan Cut-off Date Balance | Appraised Value | % of Appraised Value | U/W NCF | % of U/W NCF |
| First National Building | Office / CBD | 1921 / 2010 | 800,119 / 427 / - | $99,140,800 | 23.1% | $162,000,000 | 22.4% | $14,276,324 | 26.2% |
| The Qube | Office / CBD | 1958 / 2011 | 522,702 / - / - | 63,038,000 | 14.7% | 103,000,000 | 14.2% | $8,693,152 | 16.0% |
| Chrysler House | Office / CBD | 1919 / 2013 | 343,488 / 924 / - | 49,278,000 | 11.5% | 83,000,000 | 11.5% | $6,142,746 | 11.3% |
| 1001 Woodward | Office / CBD | 1965 / 2013 | 319,039 / 731 / - | 48,959,800 | 11.4% | 80,000,000 | 11.0% | $6,887,443 | 12.7% |
| One Woodward | Office / CBD | 1962 / 2013 | 370,257 / 90 / - | 35,492,200 | 8.3% | 58,000,000 | 8.0% | $5,096,070 | 9.4% |
| The Z Garage | Other / Parking Garage | 2013 / 2015-2016 | 40,227 / 1,351 / - | 29,007,800 | 6.7% | 53,000,000 | 7.3% | $2,078,882 | 3.8% |
| Two Detroit Garage | Other / Parking Garage | 2002 / 2015-2016 | - / 1,106 / - | 21,955,800 | 5.1% | 37,000,000 | 5.1% | $2,928,886 | 5.4% |
| 1505 & 1515 Woodward | Office / CBD | 1925 / 2018 | 141,741 / - / - | 20,777,600 | 4.8% | 35,000,000 | 4.8% | $2,454,589 | 4.5% |
| 1001 Brush Street | Other / Parking Garage | 1993 / 2015-2016 | 38,519 / 1,309 / - | 17,535,400 | 4.1% | 32,000,000 | 4.4% | $1,683,875 | 3.1% |
| The Assembly | Mixed Use / Multifamily/Office/Retail | 1913 / 2019 | 81,147 / 50 / 32 | 13,717,000 | 3.2% | 23,100,000 | 3.2% | $1,334,926 | 2.5% |
| 419 Fort Street Garage | Other / Parking Garage | 2005 / 2015-2016 | - / 637 / - | 12,470,000 | 2.9% | 21,000,000 | 2.9% | $1,584,990 | 2.9% |
| Vinton | Mixed Use / Multifamily/Retail | 1917 / 2018 | 5,693 / - / 21 | 7,525,000 | 1.8% | 17,500,000 | 2.4% | $377,823 | 0.7% |
| 1401 First Street | Other / Parking Garage | 1976 / 2017 | - / 633 / - | 7,421,800 | 1.7% | 13,500,000 | 1.9% | $502,080 | 0.9% |
| Lane Bryant Building | Office / CBD | 1917 / 2018 | 31,695 / - / - | 3,680,800 | 0.9% | 6,200,000 | 0.9% | $367,719 | 0.7% |
| Total | 2,694,627 / 7,258 / 53 | $430,000,000 | 100.0% | $724,300,000 | 100.0% | $54,409,505 | 100.0% | ||
| Historical Parking Utilization(1) | |||||||||||||
| Parking Garages | Stalls | Q1 2019 | Q2 2019 | Q3 2019 | Q4 2019 | Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 | Q1 2021 | Q2 2021 | Q3 2021 | Average |
| 1001 Brush Street | 1,309 | 119.3% | 118.6% | 120.8% | 119.0% | 131.5% | 127.1% | 129.3% | 122.7% | 116.7% | 91.5% | 129.3% | 120.5% |
| 1401 First Street | 633 | 147.9% | 131.3% | 130.3% | 133.3% | 107.7% | 92.1% | 80.9% | 79.8% | 76.8% | 78.5% | 80.9% | 103.6% |
| 419 Fort Street Garage | 637 | 106.4% | 109.6% | 122.8% | 120.1% | 152.9% | 163.7% | 167.7% | 153.4% | 146.2% | 142.1% | 167.7% | 141.1% |
| The Z Garage | 1,351 | 119.3% | 119.0% | 120.0% | 117.6% | 125.7% | 119.0% | 112.2% | 107.8% | 101.1% | 115.2% | 112.2% | 115.4% |
| Two Detroit Garage | 1,106 | 119.0% | 119.9% | 120.8% | 120.2% | 122.9% | 127.3% | 134.2% | 146.8% | 162.6% | 177.3% | 134.2% | 135.0% |
| Total / Wtd. Avg. | 5,036 | 121.2% | 119.4% | 122.0% | 120.8% | 127.8% | 125.2% | 124.5% | 122.5% | 121.3% | 121.4% | 124.5% | 122.8% |
| (1) | Historical parking utilization above 100% is attributable to transient parking allowing for a single space to be occupied by multiple users in a given day. |
COVID-19 Update. As of March 1, 2022, the Bedrock Portfolio Properties are open and operating. No tenants are currently subject to rent abatements in connection with COVID-19 and all rent collections are current. As of March 1, 2022, the Bedrock Portfolio Whole Loan is not subject to any modification or forbearance requests. The first payment date for the Bedrock Portfolio Whole Loan was February 1, 2022.
A-3-24
Various Detroit, MI |
Collateral Asset Summary – Loan No. 3 Bedrock Portfolio |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 59.4% 3.30x 13.6% |
Tenant Summary.
| Tenant Summary(1) | |||||||
| Tenant | Tenant Type | Credit Rating (Moody’s/Fitch/S&P)(2) |
Net Rentable Area (Sq. Ft.) | % of Net Rentable Area | U/W Base Rent Per Sq. Ft. | % of Total U/W Base Rent | Lease Expiration |
| Quicken Loans Inc.(3) | Office | NR/NR/NR | 905,935 | 33.6% | $26.04 | 39.5% | Various |
| Amrock, Inc | Office | NR/NR/NR | 424,486 | 15.8 | $23.50 | 16.7 | 1/31/2032 |
| Honigman Miller Schwartz and Cohn LLP | Office | NR/NR/NR | 150,786 | 5.6 | $26.50 | 6.7 | 11/30/2025 |
| LinkedIn Corporation | Office | Aaa/AAA/AAA | 74,497 | 2.8 | $31.53 | 3.9 | 7/31/2026 |
| Coyote Logistics(4) | Office | A2/A-/NR | 58,192 | 2.2 | $29.25 | 2.9 | 10/31/2030 |
| Kitch Drutchas Wagner Valitutti & Sherbrook, P.C. | Office | NR/NR/NR | 56,265 | 2.1 | $27.17 | 2.6 | 5/31/2028 |
| Board of Trustees of Michigan State University | Office | NR/NR/NR | 46,598 | 1.7 | $28.84 | 2.3 | 9/30/2031 |
| Bedrock Management Services LLC | Office | NR/NR/NR | 39,087 | 1.5 | $26.81 | 1.8 | 1/31/2032 |
| JPMorgan Chase, National Association | Office | A2/A-/AA- | 32,126 | 1.2 | $29.13 | 1.6 | 5/31/2027 |
| Fifth Third Bank | Office | Baa1/BBB+/A- | 31,204 | 1.2 | $24.80 | 1.3 | 10/31/2025 |
| Ten Largest Tenants | 1,819,176 | 67.5% | $25.97 | 79.2% | |||
| Remaining Occupied Office Tenants | 461,647 | 17.1 | $22.47 | 17.4 | |||
| Remaining Occupied Retail Tenants | 110,225 | 4.1 | $18.48 | 3.4 | |||
| Total Occupied | 2,391,048 | 88.7% | $24.95 | 100.0% | |||
| Vacant | 303,579 | 11.3 | |||||
| Total / Wtd. Avg. | 2,694,627 | 100.0% | |||||
| (1) | Based on the underwritten rent roll dated November 10, 2021. |
| (2) | In certain instances, ratings provided are those of the parent company of the entity shown, whether or not the parent company guarantees the lease. |
| (3) | Quicken Loans Inc. has various Lease Expiration dates, including (i) 183,664 sq. ft. expiring in August 2023 for which it has two, five-year renewal options, (ii) 122,475 sq. ft. expiring in April 2024 for which it has two, three-year renewal options, (iii) 15,602 sq. ft. expiring in October 2025 for which it has no renewal options, (iv) 407,050 sq. ft. expiring in July 2028 for which it has two, five-year renewal options, (v) 21,124 sq. ft. expiring in January 2030 for which it has two, five-year renewal options and (vi) 156,020 sq. ft. expiring in March 2032 for which it has two, five-year renewal options. Quicken Loans Inc. has no remaining termination options. |
| (4) | Coyote Logistics has a one-time right to terminate its lease, effective as of August 31, 2025 with at least nine months’ prior written notice and the payment of a termination fee in an amount equal to the sum of (i) the then unamortized brokerage commissions, tenant improvement allowance, the abatement of base rental and attorneys’ fees incurred by landlord in negotiating the lease, amortized on a straight-line basis over the initial term of the lease with interest on the unamortized balance at a rate of 6% per annum, plus (ii) an amount equal to three full calendar months’ rent at the then existing rates. |
| Lease Rollover Schedule(1)(2) | ||||||||
| Year | # of Leases Expiring |
Total Expiring Sq. Ft. |
% of Total Sq. Ft. Expiring |
Cumulative Sq. Ft. Expiring |
Cumulative % of Sq. Ft. Expiring |
Annual U/W Base Rent Per Sq. Ft. |
% U/W Base Rent Rolling |
Cumulative % of U/W Base Rent |
| 2022 & MTM | 44 | 146,690 | 5.4% | 146,690 | 5.4% | $22.13 | 5.4% | 5.4% |
| 2023 | 16 | 304,272 | 11.3% | 450,962 | 16.7% | $23.83 | 12.2% | 17.6% |
| 2024 | 18 | 200,069 | 7.4% | 651,031 | 24.2% | $28.91 | 9.7% | 27.3% |
| 2025 | 15 | 258,173 | 9.6% | 909,204 | 33.7% | $25.90 | 11.2% | 38.5% |
| 2026 | 11 | 142,573 | 5.3% | 1,051,777 | 39.0% | $29.96 | 7.2% | 45.7% |
| 2027 | 7 | 76,383 | 2.8% | 1,128,160 | 41.9% | $19.55 | 2.5% | 48.2% |
| 2028 | 3 | 463,315 | 17.2% | 1,591,475 | 59.1% | $27.06 | 21.0% | 69.2% |
| 2029 | 1 | 3,536 | 0.1% | 1,595,011 | 59.2% | $27.50 | 0.2% | 69.3% |
| 2030 | 2 | 79,316 | 2.9% | 1,674,327 | 62.1% | $29.37 | 3.9% | 73.3% |
| 2031 | 1 | 46,598 | 1.7% | 1,720,925 | 63.9% | $28.84 | 2.3% | 75.5% |
| 2032 | 3 | 613,771 | 22.8 | 2,334,696 | 86.6% | $23.81 | 24.5% | 100.0% |
| 2033 & Thereafter(3) | 1 | 56,352 | 2.1 | 2,391,048 | 88.7% | $0.00 | 0.0% | 100.0% |
| Vacant | 0 | 303,579 | 11.3% | 2,694,627 | 100.0% | NAP | NAP | NAP |
| Total / Wtd. Avg. | 122 | 2,694,627 | 100.0% | $24.95 | 100.0% | |||
| (1) | Based on the underwritten rent roll dated November 10, 2021. |
| (2) | Certain tenants may have termination or contraction options (which may become exercisable prior to the originally stared expiration date of the tenant lease) that are not considered in the above Office and Retail Lease Rollover Schedule. |
| (3) | 2033 & Thereafter is inclusive of 56,352 sq. ft. attributable to the WeWork space at The 1001 Woodward property. In lieu of base rent, WeWork pays 50% of gross revenue, which is captured in the percentage rent line item of the lender’s U/W. |
Major Tenants.
Quicken Loans Inc. (“Quicken Loans”), (905,935 sq. ft.; 33.6% of NRA; 39.5% of U/W Base Rent) was founded in 1985 and markets conventional, government insured and sub-prime debt consolidation and home financing loans, secured primarily by first or second mortgages on one-to four-family, owner-occupied residences. Quicken Loans originates loans through 18 stores and branches, one call center and an Internet site. During the third quarter of 2021, Quicken Loans originated approximately $88 billion of mortgage loans and generated net income of approximately $1.4 billion. Quicken Loans rebranded in July 2021 and is now known as Rocket Mortgage. Quicken Loans leases space in five buildings with staggered lease expiration dates, including (i) 183,664 sq. ft. expiring in August 2023 for which it has two, five-year renewal options, (ii) 122,475 sq. ft. expiring in April 2024 for which it has two, three-year renewal options,
A-3-25
Various Detroit, MI |
Collateral Asset Summary – Loan No. 3 Bedrock Portfolio |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 59.4% 3.30x 13.6% |
renewal options, (iii) 15,602 sq. ft. expiring in October 2025 for which it has no renewal options, (iv) 407,050 sq. ft. expiring in July 2028 for which it has two, five-year renewal options, (v) 21,124 sq. ft. expiring in January 2030 for which it has two, five-year renewal options and (vi) 156,020 sq. ft. expiring in March 2032 for which it has two, five-year renewal options. Quicken Loans has no remaining termination options. Dan Gilbert, the founder of the Bedrock Portfolio Borrower Sponsor, has voting control in the parent company of Rocket Mortgage as a preferred shareholder.
Amrock, Inc (“Amrock”) (424,486 sq. ft.; 15.8% of NRA; 16.7% of U/W Base Rent) was founded in 1997 and provides title insurance, property valuations, and settlement services in the United States. Amrock offers residential solutions for a range of settlement services and products, including defined process work flows and data integrations; commercial title insurance coverages; valuation products and services through a network of residential real estate appraisers; title and settlement services in the state of Connecticut; escrow and closing services in the state of Washington; and ATLAS, a technology platform that supports title and settlement service platform, as well as allows a client to manage preferences, prioritize orders, and work flows. Amrock serves Fortune 100 companies and residential mortgage lenders, as well as residential lending institutions and smaller community-based lenders. Amrock has two, five-year renewal options and no termination options. Amrock is affiliated with Dan Gilbert and the Bedrock Portfolio Borrower Sponsor.
Quicken Loans and Amrock are subsidiaries of Rocket Companies, Inc. (NYSE:RKT), founded and controlled by Dan Gilbert, which announced its IPO in the summer of 2020. Rocket Companies, Inc. engages in the tech-driven real estate, mortgage, and eCommerce businesses in the United States and Canada. As of January 12, 2022, Rocket Companies, Inc. had a market cap of approximately $28.1 billion and approximately 24,000 employees.
Honigman Miller Schwartz and Cohn LLP (“Honigman”) (150,786 sq. ft.; 5.6% of NRA; 6.7% of U/W Base Rent) is a law firm founded in 1948 that employs over 325 attorneys and 350 staff and operates its local, national, and international practice from its Michigan offices located in Detroit, Bloomfield Hills, Lansing, Ann Arbor, Kalamazoo, and Grand Rapids; its Illinois office located in Chicago and its Washington, DC office. Honigman’s attorneys practice in more than 60 different areas of business law. Honigman has two, five-year renewal options and no termination options.
Environmental Matters. According to Phase I environmental reports dated between September 28, 2021 and October 4, 2021, there are no recognized environmental conditions with recommendations for further action at the Bedrock Portfolio Properties other than a recognized environmental condition with respect to the individual property located at 1700 West Fort Street, Detroit, Michigan, identified in the related Phase I environmental report (the “ESA”) as a potential vapor encroachment condition in association with such property’s mixed-use building for which the environmental consultant recommended a sub-slab investigation to determine the presence of a receptor into the mixed-use building. At loan origination, the related borrowers reserved $250,000 with the lender, representing the amount estimated by the ESA to complete the related mitigation work at such property. See “Description of the Mortgage Pool—Environmental Considerations” in the Preliminary Prospectus.
The Market. The Bedrock Portfolio is located in downtown Detroit, Michigan, which, according to the appraisal, remains the economic and entertainment focal point of southeast Michigan and serves as a major international crossing with Canada. The Bedrock Portfolio benefits from Detroit’s hub layout that results in many roadways leading from the central business district into the surrounding communities. Detroit is serviced by the Detroit-Metropolitan Wayne County Airport situated approximately 15 miles southwest in the City of Romulus. This international airport serves as the mid-western hub of operation for Delta Airlines, as well as servicing other commercial airlines. Passenger rail service to other cities is provided by Amtrak with the central station located in the New Center area immediately north of the central business district.
According to the appraisal, the primary demand generator in Downtown Detroit has been the growing employment base. A number of large employers have anchored the central business district including Quicken Loans, TitleSource, Blue Cross/Blue Shield, MSX International, Rossetti and Campbell Ewald. Downtown Detroit offers a number of entertainment districts, including Foxtown, three casinos, and the sports venues (Ford Field, home to the NFL’s Detroit Lions; Comerica Park, home to MLB’s Detroit Tigers; and Little Caesars Arena, home to the NBA’s Detroit Pistons and the NHL’s Detroit Red Wings). There are a growing number of restaurants and bars throughout the Downtown area.
According to the appraisal, there have been several recent developments in Downtown Detroit that are expected to have a positive long-term impact on the Downtown market, including Ford’s acquisition of Michigan Central Station in Corktown. Ford is in the process of developing a multi-billion dollar investment in autonomous-vehicle development in Corktown. Additionally, TCF Bank, formerly Chemical Bank, is constructing a new 20-story building downtown that is projected to add an additional 500 workers.
The appraiser identified four comparable office leases with rents ranging from $24.50 to $29.75 per sq. ft. Based on the identified lease comparables, the appraiser concluded market rents ranging between $26.50 and $29.50 per sq. ft. for the seven office properties in the Bedrock Portfolio, generally in-line with underwritten base rents across the office component of the Bedrock Portfolio.
A-3-26
Various Detroit, MI |
Collateral Asset Summary – Loan No. 3 Bedrock Portfolio |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 59.4% 3.30x 13.6% |
| Office Lease Comparables(1)(2) | ||||||||
| Property | Address | Year Built | Building Size (Sq. Ft.) | Tenant Name | Size (Sq. Ft.) | Lease Start Date | Lease Term | Rent Per Sq. Ft. |
| Bedrock Portfolio Office Tenants | Various | 2,694,627 | $25.26 | |||||
| One Detroit Center | 500 Woodward Ave. | 1992 | 979,477 | DT Midstream | 22,727 | Nov-21 | 126 | $29.75 |
| Renaissance Center | 400 E. Jefferson Ave. | 1980 | 7,123,170 | Consulate of Italy | 4,133 | Mar-21 | 110 | $26.00 |
| Fisher Building | 3011 W. Grand Blvd. | 1928 | 634,819 | Strategic Staffing | 57,000 | Jan-21 | 120 | $24.50 |
| Hemmeter Building | 230 E. Grand River Ave. | 1913 | 56,203 | UHY | 7,156 | Sep-20 | 60 | $25.00 |
| Total / Wtd. Avg. | 1945 | 2,198,417 | 22,754 | Mar-21 | 116 | $25.92 | ||
| (1) | Source: Appraisal. |
| (2) | Bedrock Portfolio Office Tenants Rent per Sq. Ft. is based on the underwritten rent roll dated as of November 10, 2021. |
Cash Flow Analysis.
| Cash Flow Analysis(1) | ||||||
| 2018 | 2019 | 2020 | T-12 9/30/2021 | U/W(1) | U/W
Per Sq. Ft. | |
| Rents In Place(2) | $49,546,085 | $52,751,303 | $57,994,616 | $60,138,958 | $59,656,311 | $22.14 |
| Vacant Income | 0 | 0 | 0 | 0 | 7,501,625 | 2.78 |
| Gross Potential Rent | $49,546,085 | $52,751,303 | $57,994,616 | $60,138,958 | $67,157,936 | $24.92 |
| Total Reimbursements | 8,517,719 | 9,107,253 | 8,931,194 | 7,857,374 | 12,024,156 | 4.46 |
| Percentage Rent | 2,421,923 | 2,615,463 | 1,377,500 | 1,277,610 | 2,991,501 | 1.11 |
| Other Rental Storage(3) | 1,978,084 | 2,343,354 | 2,799,699 | 2,808,240 | 2,544,077 | 0.94 |
| Gross Potential Income | $62,463,811 | $66,817,372 | $71,103,009 | $72,082,182 | $84,717,669 | $31.44 |
| Vacancy/Credit Loss | (1,100,662) | (1,099,639) | (1,694,177) | (2,030,041) | (10,418,183) | (3.87) |
| Concessions | (89,423) | (49,389) | (45,615) | (44,800) | 0 | 0.00 |
| Parking (Contractual) | 19,565,127 | 20,062,906 | 20,373,075 | 20,247,590 | 19,321,511 | 7.17 |
| Parking (Transient) | 4,382,014 | 5,250,614 | 1,860,131 | 2,231,702 | 2,004,714 | 0.74 |
| Other Income | 1,423,306 | 2,619,763 | 1,723,795 | 1,925,200 | 1,934,739 | 0.72 |
| Effective Gross Income | $86,644,173 | $93,601,628 | $93,320,219 | $94,411,832 | $97,560,449 | $36.21 |
| Total Expenses | 44,502,438 | 46,392,886 | 39,225,160 | 38,816,129 | 39,136,450 | 14.52 |
| Net Operating Income | $42,141,735 | $47,208,742 | $54,095,059 | $55,595,704 | $58,423,999 | $21.68 |
| TI/LC | 0 | 0 | 0 | 0 | 3,353,632 | 1.24 |
| Capital Expenditures | 0 | 0 | 0 | 0 | 660,862 | 0.25 |
| Net Cash Flow | $42,141,735 | $47,208,742 | $54,095,059 | $55,595,704 | $54,409,505 | $20.19 |
| (1) | Based on the underwritten rent roll dated November 10, 2021. |
| (2) | Underwritten Rents in Place is inclusive of (i) contractual rent steps though December 2022 totaling approximately $1,154,143 and (ii) straight-line average rent over the lease term for investment grade rated tenants totaling $147,485. |
| (3) | Other Rental Storage includes grossed up multifamily income and other storage income. |
Property Management. The Bedrock Portfolio is currently managed by Bedrock Management Services LLC, an affiliate of the borrower.
Lockbox / Cash Management. The Bedrock Portfolio Whole Loan is structured with an in-place hard lockbox for commercial units, the office and retail properties, a springing lockbox for residential units, the multifamily properties and various parking properties, and springing cash management. At loan origination, the borrowers were required to direct each tenant at a property subject to a hard lockbox to remit all rents directly to the applicable lockbox account. In addition, the borrowers are required to cause all cash revenues and all other money received by the borrowers or the property manager with respect to the properties subject to a hard lockbox to be deposited into the applicable lockbox account within one business day of receipt. On each business day on which no Cash Sweep Event (as defined below) is continuing, all amounts in the lockbox account are required to be remitted to a borrower-controlled operating account. Upon the occurrence of a Cash Sweep Event, (i) the borrowers are required to establish lockbox accounts for all properties, and (ii) the borrowers are required to establish a cash management account. On each business day during the continuance of a Cash Sweep Event, all amounts in each lockbox account are required to be remitted to the cash management account. On each due date during the continuance of a Cash Sweep Event, all funds on deposit in the cash management account after payment of debt service on the Bedrock Portfolio Whole Loan, required reserves and budgeted operating expenses are required to be deposited into an excess cash flow reserve account as additional collateral for the Bedrock Portfolio Whole Loan.
A “Cash Sweep Event” means (a) an event of default, (b) the bankruptcy or insolvency of the any of the borrowers or the property manager, or (c) if the debt service coverage ratio based on a trailing three-month period for the Bedrock Portfolio Whole Loan falls below 2.50x.
A-3-27
Various Detroit, MI |
Collateral Asset Summary – Loan No. 3 Bedrock Portfolio |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 59.4% 3.30x 13.6% |
A Cash Sweep Event may be cured upon the occurrence of the following: (i) with respect to clause (a) above, the acceptance by the lender of a cure of such event of default in accordance with the Bedrock Portfolio Whole Loan documents, (ii) with respect to clause (b) above solely with respect to the borrowers, if the bankruptcy action is an involuntary petition against such individual borrower and no individual borrower has colluded with, or otherwise assisted, such person, and has not solicited creditors for any involuntary petition against such individual borrower from any person and the bankruptcy action is dismissed within 90 days from the filing of such bankruptcy action, (iii) with respect to clause (b) above solely with respect to the property manager, if the applicable individual borrower replaces such property manager with a “Qualified Manager” (as fully described in the Bedrock Portfolio Whole Loan documents) under a replacement management agreement acceptable to the lender in accordance with the Bedrock Portfolio Whole Loan documents, or (iv) with respect to clause (c) above, if the debt service coverage ratio based on the trailing three-month period immediately preceding the date of such determination for two consecutive quarters is not less than 2.50x; provided, however, (A) no event of default has occurred and is continuing under the Bedrock Portfolio Whole Loan documents, (B) the borrowers have paid all of the lender’s reasonable expenses incurred in connection with such Cash Sweep Event Cure including reasonable attorney’s fees and expenses, and (C) in no event may the borrowers cure a Cash Sweep Event caused by a bankruptcy action caused by any of the borrowers filing a voluntary petition or arising from a person filing an involuntary petition against any of the borrowers and any such borrower has colluded with or otherwise assisted such person with the involuntary petition against the applicable borrower.
Initial and Ongoing Reserves. At loan origination, the borrowers deposited (i) $8,392,690 into an outstanding TI/LC reserve, (ii) approximately $1,696,002 into a real estate tax reserve, (iii) $477,905 into an outstanding free rent reserve, (iv) $280,690 into a TI/LC reserve, (v) $250,000 into an outstanding environmental reserve with respect to the 1700 West Fort Street individual property, (vi) $241,558 into a required repairs reserve and (vii) $62,336 into a replacement reserve.
Real Estate Taxes and Insurance Reserves. On each monthly due date, the borrowers are required to deposit an amount equal to 1/12th of the estimated annual real estate taxes into the tax reserve account, which is estimated to be $424,000 and 1/12th of estimated insurance premiums, unless the borrower maintains a blanket policy in accordance with the Bedrock Portfolio Whole Loan documents.
Replacement Reserve. On each monthly due date, the borrowers are required to deposit $62,336 into a replacement reserve, subject to a cap of $1,469,568.
TI/LC Reserve. On each monthly due date, the borrowers are required to deposit $280,690, subject to a cap of $5,000,000.
Current Mezzanine or Subordinate Indebtedness. None.
Future Mezzanine or Subordinate Indebtedness Permitted. None.
Partial Release. The Bedrock Portfolio Whole Loan documents permit the release of an individual property (each, an “Individual Property”) from the lien of the mortgage, provided no event of default has occurred and is continuing and upon satisfaction of certain conditions set forth in the Bedrock Portfolio Whole Loan documents, including, without limitation, the following: (a) the amount of the outstanding principal balance of the Bedrock Portfolio Whole Loan to be prepaid must equal or exceed 115% of the allocated loan amount for such applicable Individual Property, (b) the resulting debt service coverage ratio for the remaining Bedrock Portfolio Properties is equal to or greater than 3.10x, (c) unless the Individual Property to be released is subject to a non-monetary event of default that relates solely to such Individual Property and borrower has demonstrated in good faith that it has pursued a cure of the event of default, the Individual Property to be released is conveyed in an arm’s length transfer to a person other than the applicable individual borrower or any of its affiliates, and (d) upon release of the Individual Property, the customary REMIC rules are satisfied.
Ground Lease. Portions of the individual property identified as One Woodward (the “One Woodward Property”) consist of leasehold interests. A portion of the One Woodward Property consisting of the southwest portion of the building and patio (“Parcel B”) is ground leased by the related borrower, as the ground lessee, under a ground lease with Lawrence Edwin Burch Living Trust and related individuals who collectively comprise the ground lessor. The related borrower assumed the Parcel B ground lease in 2012, which expires in April 2040 with five, 25-year remaining extension options. The current rent is approximately $43,775 annually. The ground lessee’s interest in the Parcel B ground lease is freely assignable to the leasehold mortgagee without the consent of the ground lessor and, in the event that it is so assigned, is further assignable by the leasehold mortgagee without the need to obtain the consent of the ground lessor. A portion of the One Woodward Property consisting of the sidewalk area around the building, including the ramp to the underground parking (“Parcel C”), is ground leased by the related borrower, as the ground lessee, under a ground lease with the City of Detroit. The Parcel C ground lease is intended to stay in effect for so long as the office building or any replacement thereof remains on the premises immediately adjacent to the leased premises. The borrowers represented in the Bedrock Portfolio Whole Loan documents that no rent is due in connection with the Parcel C ground lease. The Parcel C ground lease does not prohibit an assignment of the ground lessee’s interest in the Parcel C ground lease to the leasehold mortgagee. See “Description of the Mortgage Pool-–Mortgage Pool Characteristics-–Fee & Leasehold Estates; Ground Leases” in the Preliminary Prospectus for additional information.
A-3-28
Various Detroit, MI |
Collateral Asset Summary – Loan No. 3 Bedrock Portfolio |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$85,000,000 59.4% 3.30x 13.6% |
Master Leases. Three individual properties, identified as The Qube, Chrysler House, and 1001 Woodward, are subject to a master leases that were originally entered into for the purpose of securing historic tax credit investors. None of the historic tax credit investors remain in the ownership of the master tenants, which are now wholly owned indirectly by Detroit Real Estate Holdings Company I LLC, which directly owns each of the borrowers. Each master tenant is required to comply with single purpose entity covenants in the Bedrock Portfolio Whole Loan documents, including having independent directors. Each master tenant granted the lender a mortgage and an assignment of leases and rents on its individual property.
A-3-29
7007
Romaine Street and 1009-1023 North Los Angeles, CA 90038 |
Collateral Asset Summary – Loan No. 4 Romaine & Orange Square |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$68,000,000 62.4% 1.78x 8.1% |
A-3-30
7007
Romaine Street and 1009-1023 North Los Angeles, CA 90038 |
Collateral Asset Summary – Loan No. 4 Romaine & Orange Square |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$68,000,000 62.4% 1.78x 8.1% |
A-3-31
7007
Romaine Street and 1009-1023 North Los Angeles, CA 90038 |
Collateral Asset Summary – Loan No. 4 Romaine & Orange Square |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$68,000,000 62.4% 1.78x 8.1% |
| Mortgage Loan Information | |
| Loan Seller: | GACC |
| Loan Purpose: | Refinance |
| Borrower Sponsors: | Richard Scott Ressler, Avraham Shemesh and Shaul Kuba |
| Borrower: | 7007 Romaine-Orange Square (LA), LLC |
| Original Balance: | $68,000,000 |
| Cut-off Date Balance: | $68,000,000 |
| % by Initial UPD: | 7.4% |
| Interest Rate: | 4.44000% |
| Payment Date: | 6th of each month |
| First Payment Date: | May 6, 2022 |
| Maturity Date: | April 6, 2032 |
| Amortization: | Interest Only |
| Additional Debt: | Future Mezzanine Permitted |
| Call Protection: | L(24),D(89),O(7) |
| Lockbox / Cash Management: | Hard / Springing |
| Reserves(1) | |||
| Initial | Monthly | Cap | |
| Taxes: | $99,759 | $33,253 | NAP |
| Insurance: | $0 | Springing | NAP |
| Replacement: | $0 | $1,734 | NAP |
| TI/LC: | $0 | $5,100 | $275,425 |
| Other(2) | $325,050 | $0 | NAP |
| Property Information | |
| Single Asset / Portfolio: | Single Asset |
| Property Type: | CBD Office |
| Collateral: | Fee Simple |
| Location: | Los Angeles, CA |
| Year Built / Renovated: | 1928, 2018 / NAP |
| Total Sq. Ft.: | 122,411 |
| Property Management: | CIM Management, Inc. |
| Underwritten NOI(3): | $5,526,168 |
| Underwritten NCF: | $5,444,153 |
| Appraised Value: | $109,000,000 |
| Appraisal Date: | January 11, 2022 |
| Historical NOI | |
| Most Recent NOI(3): | $4,664,614 (T-12 September 30, 2021) |
| 2020 NOI: | $2,975,928 (December 31, 2020) |
| 2019 NOI: | $1,921,169 (December 31, 2019) |
| 2018 NOI(4): | NAV |
| Historical Occupancy | |
| Most Recent Occupancy: | 100.0% (March 10, 2022) |
| 2020 Occupancy: | 96.2% (December 31, 2020) |
| 2019 Occupancy: | 96.8% (December 31, 2019) |
| 2018 Occupancy(4): | NAV |
| Financial Information | ||||||
| Tranche | Cut-off Date Balance | Balance per Sq. Ft. Cut-off / Balloon |
LTV Cut-off / Balloon |
U/W DSCR NOI / NCF |
U/W Debt Yield NOI / NCF |
U/W Debt Yield at Balloon NOI / NCF |
| Mortgage Loan | $68,000,000 | $556 / $556 | 62.4% / 62.4% | 1.81x / 1.78x | 8.1% / 8.0% | 8.1% / 8.0% |
| (1) | See “Initial and Ongoing Reserves” herein. |
| (2) | Other Reserve includes approximately $290,050 for free rent reserve and $35,000 for unfunded obligations reserve. |
| (3) | See “Cash Flow Analysis” regarding the increase from Most Recent NOI to Underwritten NOI. |
| (4) | 2018 NOI and 2018 Occupancy are not available because the Romaine building was redeveloped by the borrower sponsor in 2018 with Kaiser’s (as defined below) lease commencing in September 2018. |
The Loan. The mortgage loan (the “Romaine & Orange Square Loan”) has an original principal balance and outstanding principal balance as of the Cut-off Date of $68,000,000 and is secured by the borrower’s fee simple interest in two adjacent office buildings located in Los Angeles, California (the “Romaine & Orange Square Property”).
The Romaine & Orange Square Loan has an initial term of 120 months and has a remaining term of 120 months as of the Cut-off Date. The Romaine & Orange Square Loan requires interest-only payments during its entire term and accrues interest at the rate of 4.44000% per annum. The proceeds of the Romaine & Orange Square Loan were used to refinance existing debt, fund upfront reserves, pay origination costs and return equity to the borrower sponsor.
| Sources and Uses | ||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
| Mortgage Loan | $68,000,000 | 100.0% | Loan Payoff | $56,147,345 | 82.6% | |
| Return of Equity | 10,779,117 | 15.9 | ||||
| Closing Costs | 648,730 | 1.0 | ||||
| Upfront Reserves | 424,808 | 0.6 | ||||
| Total Sources | $68,000,000 | 100.0% | Total Uses | $68,000,000 | 100.0% | |
The Borrower and the Borrower Sponsors. The borrower is 7007 Romaine-Orange Square (LA), LLC, a Delaware limited liability company and special purpose entity with one independent director. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the Romaine & Orange Square Loan.
The borrower sponsors are Richard Scott Ressler, Avraham Shemesh and Shaul Kuba and the non-recourse carve-out guarantor is SKR Holdings, LLC. SKR Holdings, LLC is an entity controlled by Shaul Kuba, Richard Scott Ressler and Avraham Shemesh, the three co-founders of CIM Group (“CIM”). Founded in 1994, CIM is a community-focused real estate and infrastructure owner, operator, lender and developer. As of September 30, 2021, CIM had approximately $29.7 billion of assets owned and operated and over 975 employees across ten corporate office locations.
A-3-32
7007
Romaine Street and 1009-1023 North Los Angeles, CA 90038 |
Collateral Asset Summary – Loan No. 4 Romaine & Orange Square |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$68,000,000 62.4% 1.78x 8.1% |
The Property. The Romaine & Orange Square Property consists of two adjacent office buildings totaling 122,411 sq. ft. in Hollywood’s Media/Creative District. The Romaine building is a six-story Class A office building totaling 91,286 sq. ft. that was built by the borrower sponsor in 2018. The Romaine building was originally conceived as a creative office building with balconies, outdoor decks and floor-to-ceiling windows, however, the primary tenant, Kaiser Foundation Health Plan, Inc. (“Kaiser”), subsequently converted its space into a medical office. The Orange Square building is a Class B office building totaling 31,125 sq. ft. that was built in 1928 and over the years has been fully converted to creative office and media/post-production space that features loft designs with skylights, high ceilings revealing exposed beams and exposed brick walls. The Romaine building contains one floor of subterranean parking as well as parking on the second floor, third floor and a portion of the fourth floor, while the Orange Square building contains a surface parking lot. The Romaine & Orange Square Property is walking distance to numerous production companies, restaurants and the West Hollywood Gateway Center. The Romaine & Orange Square Property sits within a five-minute walk (0.5 miles) to the famous Sunset Las Palmas (13 studio sound stages). The borrower sponsor owns various buildings near the Romaine & Orange Square Property, along this Sycamore block, which has seen a rejuvenation with various creative/media offices and restaurants.
As of March 10, 2022, the Romaine & Orange Square Property was 100% leased to seven tenants. The largest tenant is Kaiser. (S&P/Fitch: AA-/AA-; 71,775 sq. ft.; 78.6% of the Romaine building NRA; 58.6% of total NRA). Kaiser leases suite 100 in addition to the top three floors (4-6), which are utilized as medical office where Kaiser operates its facilities, and the ground level is leased to a café and Common Grounds, a shared workspace user. The four suites in the Orange Square building all benefit from private suite entrances from the parking area which is a desirable characteristic for tenants. The Orange Square building is leased to four creative media/post-production tenants with the largest being MTI Film (14,095 sq. ft.; 45.3% of the Orange Square building NRA; 11.5% of total NRA), which has been in occupancy at the Orange Square building for over 10 years. The Orange Square building has a historical occupancy of approximately 94% over the last 10 years and an approximately 91% occupancy over the last 20 years.
Major Tenant.
Kaiser (S&P/Fitch: AA-/AA-, 71,775 sq. ft., 78.6% of the Romaine building NRA, 58.6% of total NRA) is one of the nation’s leading health care providers and not-for-profit health plans. Founded in 1945, the parent company, Kaiser Permanente, serves approximately 12.5 million members across eight states and the District of Columbia. Headquartered in Oakland, California, Kaiser Permanente employs over 210,000 employees and operates 39 hospitals and 730 medical offices. Kaiser Permanente is composed of three subsidiaries, including Kaiser Foundation Hospitals, Kaiser Foundation Health Plan, Inc., and the Permanente Medical Groups. As an entity of Kaiser Permanente, Kaiser Foundation Health Plan, Inc. (S&P: AA-) acts as a nonprofit public-benefit corporation that helps to arrange comprehensive medical and hospital services for individuals and groups. In 2020, Kaiser Permanente reported total operating revenues of approximately $88.7 billion. In the third quarter of 2021, Kaiser Permanente reported total operating revenues of $23.2 billion, up 5.48% year-over-year.
Kaiser has invested $14 million (approximately $195 per sq. ft.) in its space. Kaiser’s services at the Romaine building include: internal medicine, pediatrics, obstetrics/gynecology, LGBTQ care, laboratory, radiology, and nurse clinics. The facility features technologically advanced examination rooms. Kaiser also has an in-house pharmacy to provide members prescriptions. Kaiser has a right of first refusal to purchase the Romaine & Orange Square Property, which it has agreed will not be exercisable in connection with a foreclosure or deed-in-lieu of foreclosure of the Romaine & Orange Square Loan.
The Romaine & Orange Square Property requires additional offsite parking in order to satisfy the parking requirements of the current leases, predominantly in connection with the Kaiser lease. There is a parking license in place between the borrower and a CIM affiliate to use up to 109 offsite spaces located in a nearby parking structure (owned by CIM) to satisfy the parking requirements under the leases. The parking license is coterminous with the Kaiser lease.
COVID-19 Update. As of March 14, 2022, the Romaine & Orange Square Property is fully open and operational and the Romaine & Orange Square Loan is not subject to any modification or forbearance request. Four tenants, Common Grounds, MTI Film, Funny or Die/Posterized and Stella Adler Studio of Acting received lease modifications related to the COVID-19 pandemic. Common Grounds, a shared workspace provider, received rent deferrals totaling $329,237 from May through October 2021, which it agreed to repay in equal monthly installments from January 1, 2023 through June 30, 2026. MTI Film received rent deferrals of 50% of base rent on two separate suites for six months each during 2020 and 2021, and has agreed to repay the deferred rent in equal installments from June 2021 through June 2026. Funny or Die/Posterized received a two month rent abatement in return for a two month extension of its lease. Stella Adler Studio of Acting was allowed to move a 50% rent abatement under its lease that originally applied to a future period to the period from September 2020 through January 2021. The first payment date for the Romaine & Orange Square Loan is May 6, 2022. Rent collections have been 100% for the prior two months. See “Risk Factors—Special Risks—Coronavirus Pandemic Has Adversely Affected the Global Economy and Will Likely Adversely Affect the Performance of the Mortgage Loans” in the Preliminary Prospectus.
A-3-33
7007
Romaine Street and 1009-1023 North Los Angeles, CA 90038 |
Collateral Asset Summary – Loan No. 4 Romaine & Orange Square |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$68,000,000 62.4% 1.78x 8.1% |
Tenant Summary.
| Tenant Summary(1) | ||||||
Tenant |
Ratings (Moody’s/Fitch/S&P)(2) |
Net Rentable Area (Sq. Ft.) |
% of Net Rentable Area |
U/W Base Rent per Sq. Ft. |
% of Total U/W Base Rent |
Lease Expiration |
| Kaiser | NR / AA- / AA- | 71,775 | 58.6% | $45.24 | 59.9% | 9/30/2028 |
| Common Grounds | NR / NR / NR | 17,241 | 14.1 | $38.19 | 12.2 | 6/30/2026 |
| MTI Film(3) | NR / NR / NR | 14,095 | 11.5 | $47.39 | 12.3 | 1/31/2030 |
| Funny or Die / Posterized | NR / NR / NR | 6,553 | 5.4 | $47.40 | 5.7 | 12/31/2023 |
| Stella Adler Studio of Acting | NR / NR / NR | 6,370 | 5.2 | $36.48 | 4.3 | 7/31/2030 |
| RQ Media Group(4) | NR / NR / NR | 4,107 | 3.4 | $46.80 | 3.5 | 2/28/2029 |
| Mizlala(5) | NR / NR / NR | 2,270 | 1.9 | $48.00 | 2.0 | 4/30/2031 |
| Total/Wtd. Avg. Occupied | 122,411 | 100.0% | $44.26 | 100.0% | ||
| Vacant | 0 | 0.0% | ||||
| Total | 122,411 | 100.0% | ||||
| (1) | Based on the underwritten rent roll dated as of March 10, 2022. |
| (2) | Certain ratings are those of the parent entity whether or not the parent entity guarantees the lease. |
| (3) | MTI Film has partial free rent for Suites 1009 and 1012-1016 (11,935 sq. ft.) each June from 2022 through June 2026 and for Suite 1011 (2,160 sq. ft.) each June from 2022 through June 2027 except June 2023. |
| (4) | RQ Media Group has free rent for the months of April and May 2022, February, March and October 2023, and October 2024. |
| (5) | Mizlala is an affiliate of the borrower. |
| Lease Rollover Schedule(1)(2) | ||||||||
| Year | # of Leases Expiring |
Total Expiring Sq. Ft. |
% of Total Sq. Ft. Expiring |
Cumulative Sq. Ft. Expiring |
Cumulative % of Sq. Ft. Expiring |
Annual U/W Base Rent per Sq. Ft. |
% U/W Base Rent Rolling |
Cumulative % of U/W Base Rent |
| MTM & 2022 | 0 | 0 | 0.0% | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
| 2023 | 1 | 6,553 | 5.4 | 6,553 | 5.4% | $47.40 | 5.7 | 5.7% |
| 2024 | 0 | 0 | 0.0 | 6,553 | 5.4% | $0.00 | 0.0 | 5.7% |
| 2025 | 0 | 0 | 0.0 | 6,553 | 5.4% | $0.00 | 0.0 | 5.7% |
| 2026 | 1 | 17,241 | 14.1 | 23,794 | 19.4% | $38.19 | 12.2 | 17.9% |
| 2027 | 0 | 0 | 0.0 | 23,794 | 19.4% | $0.00 | 0.0 | 17.9% |
| 2028 | 1 | 71,775 | 58.6 | 95,569 | 78.1% | $45.24 | 59.9 | 77.8% |
| 2029 | 1 | 4,107 | 3.4 | 99,676 | 81.4% | $46.80 | 3.5 | 81.4% |
| 2030 | 2 | 20,465 | 16.7 | 120,141 | 98.1% | $44.00 | 16.6 | 98.0% |
| 2031 | 1 | 2,270 | 1.9 | 122,411 | 100.0% | $48.00 | 2.0 | 100.0% |
| 2032 | 0 | 0 | 0.0 | 122,411 | 100.0% | $0.00 | 0.0 | 100.0% |
| 2033 & Thereafter | 0 | 0 | 0.0 | 122,411 | 100.0% | $0.00 | 0.0 | 100.0% |
| Vacant | NAP | 0 | 0.0 | 122,411 | 100.0% | NAP | NAP | NAP |
| Total / Wtd. Avg. | 7 | 122,411 | 100.0% | $44.26 | 100.0% | |||
| (1) | Based on the underwritten rent roll dated as of March 10, 2022. |
| (2) | Certain tenants may have termination or contraction options (which may become exercisable prior to the originally stated expiration date of the tenant lease) that are not considered in the above Lease Rollover Schedule. |
Environmental Matters. According to a Phase I environmental report dated January 7, 2022, there was no evidence of any recognized environmental conditions at the Romaine & Orange Square Property.
The Market. The Romaine & Orange Square Property is located in Los Angeles, California within the Mid-Wilshire Market and the Hollywood submarket. The Mid-Wilshire submarket contains approximately 47,516,000 sq. ft. of office space with roughly 10,889,000 sq. ft. in the Hollywood submarket. According to the appraisal, there is roughly 79,500 sq. ft. of office developments under construction and approximately 3.5 million sq. ft. proposed within the Mid-Wilshire Market. The submarket vacancy in Hollywood finished 2021 at 17.9% with an average monthly asking rent of $4.57 per sq. ft. at the end of 2021. According to the appraisal, the 2021 estimated population within a one-, three- and five-mile radius of the Romaine & Orange Square Property is 52,624, 409,074, and 963,605, respectively. According to the appraisal, the 2021 estimated average household income within a one-, three- and five-mile radius of the Romaine & Orange Square Property is $98,123, $105,022, and $100,476, respectively.
A-3-34
7007
Romaine Street and 1009-1023 North Los Angeles, CA 90038 |
Collateral Asset Summary – Loan No. 4 Romaine & Orange Square |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$68,000,000 62.4% 1.78x 8.1% |
| Comparable Office Lease Summary(1) | ||||||
| Property Name/Location | Tenant | Year Built | Total NRA (Sq. Ft.) | Start Date | Rent Per Sq.Ft. /Year | Free Rent (mos) |
729-733 Seward Street Los Angeles, CA |
Netflix | 1925 | 21,294 | Jun-19 | $53.40 | 3.0 |
6040 Sunset Boulevard Los Angeles, CA |
Technicolor | 2009 | 15,000 | Mar-19 | $55.80 | 10.0 |
1608 N Cahuenga Boulevard Los Angeles, CA |
Geenee | 1925 | 39,955 | Mar-19 | $51.00 | 0.0 |
Academy on Vine Los Angeles, CA |
Netflix | 2019 | 350,000 | Mar-19 | $53.40 | 12.0 |
8888 Washington Boulevard Los Angeles, CA |
Scopley | 2021 | 60,516 | Mar-19 | $61.20 | 8.0 |
5735 Melrose Avenue Los Angeles, CA |
88Rising | N/A | 8,596 | Sep-20 | $58.80 | 0.0 |
8830 National Boulevard Culver City, CA |
HBO | 2021 | 240,000 | Mar-19 | $59.40 | 11.0 |
10800 Pico Boulevard Los Angeles, CA |
2022 | 584,000 | Apr-22 | $63.00 | 14.0 | |
(1) Source: Appraisal.
Cash Flow Analysis.
| Cash Flow Analysis(1)(2) | ||||||||||
| 2019 | 2020 | T-12 9/30/2021 | U/W | U/W Per Sq. Ft. | ||||||
| Base Rent | $4,039,832 | $4,949,595 | $5,023,591 | $5,417,745 | $44.26 | |||||
| Credit Rent Steps(3) | 0 | 0 | 0 | 310,068 | 2.53 | |||||
| Rent Step(4) | 0 | 0 | 0 | 45,255 | 0.37 | |||||
| Gross Potential Rent | $4,039,832 | $4,949,595 | $5,023,591 | $5,773,068 | $47.16 | |||||
| CAM | 668,442 | 1,200,351 | 1,047,317 | 1,374,465 | 11.23 | |||||
| Vacancy | 0 | 0 | 0 | (389,046) | (3.18) | |||||
| Parking | 470,224 | 621,800 | 596,371 | 633,390 | 5.17 | |||||
| Abatements | (1,985,714) | (1,068,877) | (180,953) | 0 | 0.00 | |||||
| Effective Gross Income | $3,192,784 | $5,702,869 | $6,486,326 | $7,391,876 | $60.39 | |||||
| Total Operating Expenses | 1,271,615 | 2,726,942 | 1,821,713 | 1,865,708 | 15.24 | |||||
| Net Operating Income | $1,921,169 | $2,975,928 | $4,664,614 | $5,526,168 | $45.14 | |||||
| TI/LC | 0 | 0 | 0 | 61,206 | 0.50 | |||||
| Replacement Reserves | 0 | 0 | 0 | 20,810 | 0.17 | |||||
| Net Cash Flow | $1,921,169 | $2,975,928 | $4,664,614 | $5,444,153 | $44.47 | |||||
| (1) | The main causes of the growth in base rent and Net Operating Income from T-12 9/30/2021 to U/W are rent steps, a new RQ Media Lease and a MTI expansion in August 2020 and in April 2021 and expiration of COVID-19 related rent deferrals or abatements. |
| (2) | Based on the underwritten rent roll dated as of March 10, 2022. |
| (3) | Straight line rent credit for investment grade tenants. |
| (4) | Rent Steps are underwritten through December 1, 2022. |
Property Management. The Romaine & Orange Square Property is managed by CIM Management, Inc., a California corporation, and an affiliate of the borrower.
Lockbox / Cash Management. The Romaine & Orange Square Loan is structured with a hard lockbox and springing cash management. All funds in the lockbox accounts will be swept to an account designated by the borrower, unless a Trigger Period (as defined below) is continuing, in which case such funds are required to be swept on a daily basis into a cash management account controlled by the lender within 3 business days, at which point, following taxes and insurance reserve deposits, debt service, operating expenses, other required reserves deposits, approved leasing expenses reimbursements, and mezzanine debt service (if applicable), all funds are required to be deposited (i) if a Lease Sweep Period (as defined below) is continuing into a lease sweep reserve, (ii) if no Lease Sweep Period is continuing, and provided that a Trigger Period is not ongoing solely due to a mezzanine loan being outstanding, into a cash collateral account to be held as additional collateral for the Romaine & Orange Square Loan, (iii) if the only Trigger Period is a mezzanine loan being outstanding, to an account for the benefit of the mezzanine lender, and (iv) otherwise, to the borrower.
A “Trigger Period” means the occurrence of (a) an event of default under the Romaine & Orange Square Loan documents, (b) the bankruptcy or insolvency of the affiliated property manager, (c) if the debt yield for the Romaine & Orange Square Loan falls below 6.25% at the end of any calendar quarter, (d) a Lease Sweep Period (as defined below) or (e) any time a mezzanine loan is outstanding.
A-3-35
7007
Romaine Street and 1009-1023 North Los Angeles, CA 90038 |
Collateral Asset Summary – Loan No. 4 Romaine & Orange Square |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$68,000,000 62.4% 1.78x 8.1% |
A Trigger Period may be cured, (i) in the case of clause (a) above, if a cure of the event of default has been accepted by the lender, (ii) in the case of clause (b) above, if the property manager is replaced with an unaffiliated qualified property manager approved by the lender, (iii) in the case of clause (c) above, if the debt yield (calculated based on the outstanding principal balance of the Romaine & Orange Square Loan minus the amount of funds deposited in the cash collateral account) exceeds 6.50% at the end of any calendar quarter, (iv) in the case of clause (d) above, such Lease Sweep Period has ended, and (v) in the case of clause (e) above, a mezzanine loan is no longer outstanding.
A “Lease Sweep Period” will commence (a) upon the earlier of (i) the date that is 12 months prior to the expiration of a Lease Sweep Lease (as defined below), (ii) upon the date required under the Lease Sweep Lease by which the tenant is required to give notice of its exercise of a renewal option thereunder (and such renewal has not been so exercised) (June 30, 2027 in connection to the Kaiser lease), or (iii) 12 months prior to loan maturity (if a Lease Sweep Lease expires less than 12 months beyond loan maturity); (b) upon the early termination, early cancellation or early surrender of a Lease Sweep Lease or upon the borrower’s receipt of notice by a tenant of its intent to effect an early termination, early cancellation or early surrender of its Lease Sweep Lease; (c) if a tenant has ceased operating its business at the Romaine & Orange Square Property (i.e., “goes dark”) in a majority of its space at the Romaine & Orange Square Property; (d) upon a default under a Lease Sweep Lease by a tenant beyond any applicable notice and cure period, and (e) upon a bankruptcy or insolvency proceeding of a tenant under a Lease Sweep Lease or its guarantor.
A Lease Sweep Period may be cured, (i) in the case of clause (a), (b) or (c) above, upon the date when the entirety of the Lease Sweep Lease space (or applicable portion) is leased under qualified lease(s) meeting the requirements of the loan documents and in the judgment of the lender sufficient funds have been accumulated in the lease sweep reserve to cover all anticipated leasing expenses, free rent periods and required loan payment and operating expense shortfalls that may occur as a result of down time prior to the commencement of payment(s) under such qualified lease(s); (ii) in the case of clause (a) above, the date on which the tenant under the Lease Sweep Lease exercises its renewal or extension option and in the judgment of the lender sufficient funds have been accumulated in the lease sweep reserve to cover all anticipated leasing expenses and free rent periods; (iii) in the case of clause (d) above, the date on which the related default has been cured, and no other such default occurs for a period of three consecutive months following such cure; (iv) in the case of clause (e) above, the related bankruptcy or insolvency has terminated and the Lease Sweep Lease has been affirmed by the tenant and each guarantor (if any) and the tenant is in occupancy and paying full, unabated rent; and (v) in the case of clauses (a) through (e) above, the date on which the funds in the related lease sweep reserve are equal to (or the borrower has provided cash or a letter of credit in) an amount equal to the total rentable sq. ft. of the applicable Lease Sweep Lease multiplied by $55.00.
A “Lease Sweep Lease” means the Kaiser lease, and any replacement lease covering a majority of the space currently demised under such lease.
Initial and Ongoing Reserves. At origination, the borrower deposited approximately $290,050 into a free rent reserve, $99,759 into a Tax Reserve and $35,000 into an unfunded obligations reserve for wall and window work identified by Kaiser. The borrower has agreed that if either (i) a third party vendor that has been retained by the borrower and Kaiser determines the borrower is responsible to perform certain elevator and parking garage repairs identified by Kaiser or (ii) Kaiser claims the borrower is responsible to perform such repairs after the vendor’s determination, notwithstanding such determination, the borrower will promptly perform such repairs, and, if an event of default occurs, the borrower is required to deposit the estimated cost of performing such repairs into the unfunded obligations reserve, unless previously performed in a manner satisfactory to Kaiser.
Tax Reserve – On each monthly payment date, the borrower is required to deposit into a real estate tax reserve, 1/12 of the estimated annual real estate taxes. Initially, this is approximately $33,253. This is waived as long as no Trigger Period is continuing.
Insurance Reserve – On each monthly payment date, the borrower is required to deposit into an insurance reserve, 1/12 of estimated insurance premiums. This is waived as long as an acceptable blanket policy is in place.
Replacement Reserve – On each monthly payment date, the borrower is required to deposit into a replacement reserve approximately $1,734.
TI/LC Reserve – On each monthly payment date, the borrower is required to deposit into a TI/LC reserve in the amount of approximately $5,100 capped at approximately $275,425.
Current Mezzanine or Subordinate Indebtedness. None.
Future Mezzanine or Subordinate Indebtedness Permitted. A mezzanine loan secured by equity in the borrower is permitted to be incurred once during the term of the Romaine & Orange Square Loan with a term co-terminous with the Romaine & Orange Square Loan, as long as the combined loan-to-value ratio is no higher than 62.4%, the combined debt service coverage ratio is no lower than 1.78x and an intercreditor agreement reasonably acceptable to the lender and acceptable to the rating agencies rating the certificates is in place.
Partial Release. None.
A-3-36
301 East Ocean Boulevard Long Beach, CA 90802 |
Collateral Asset Summary – Loan No. 5 Shoreline Square |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$55,575,000 63.5% 2.93x 11.9% |
A-3-37
301 East Ocean Boulevard Long Beach, CA 90802 |
Collateral Asset Summary – Loan No. 5 Shoreline Square |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$55,575,000 63.5% 2.93x 11.9% |
A-3-38
301 East Ocean Boulevard Long Beach, CA 90802 |
Collateral Asset Summary – Loan No. 5 Shoreline Square |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$55,575,000 63.5% 2.93x 11.9% |
A-3-39
301 East Ocean Boulevard Long Beach, CA 90802 |
Collateral Asset Summary – Loan No. 5 Shoreline Square |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$55,575,000 63.5% 2.93x 11.9% |
| Mortgage Loan Information | |
| Loan Seller: | CREFI |
| Loan Purpose: | Acquisition |
| Borrower Sponsors: | Jack Sitt and Ezak Assa |
| Borrower: | Shoreline Square Holdings LLC |
| Original Balance: | $55,575,000 |
| Cut-off Date Balance: | $55,575,000 |
| % by Initial UPB: | 6.1% |
| Interest Rate: | 3.75000% |
| Payment Date: | 6th of each month |
| First Payment Date: | March 6, 2022 |
| Maturity Date: | February 6, 2027 |
| Amortization: | Interest Only |
| Additional Debt: | None |
| Call Protection: | L(26),D(30),O(4) |
| Lockbox / Cash Management: | Hard / Springing |
| Reserves(1) | |||
| Initial | Monthly | Cap | |
| Taxes: | $253,034 | $126,517 | NAP |
| Insurance: | $50,600 | $25,300 | NAP |
| Replacement: | $3,000,000 | $6,897 | NAP |
| TI/LC: | $3,500,000 | Springing | $3,500,000 |
| Other(2): | $9,174,047 | $0 | NAP |
| Property Information | ||
| Single Asset / Portfolio: | Single Asset | |
| Property Type: | CBD Office | |
| Collateral: | Leasehold | |
| Location: | Long Beach, CA | |
| Year Built / Renovated: | 1988 / 2008 | |
| Total Sq. Ft.: | 413,801 | |
| Property Management: | G&E Real Estate Management Services, Inc. d/b/a Newmark Knight Frank | |
| Underwritten NOI: | $6,591,759 | |
| Underwritten NCF: | $6,196,084 | |
| Appraised Value: | $87,500,000 | |
| Appraisal Date: | December 23, 2021 | |
| Historical NOI | ||
| Most Recent NOI: | $6,812,393 (December 31, 2021) | |
| 2020 NOI: | $6,226,478 (December 31, 2020) | |
| 2019 NOI: | $6,211,938 (December 31, 2019) | |
| 2018 NOI: | $4,835,050 (December 31, 2018) | |
| Historical Occupancy | ||
| Most Recent Occupancy: | 85.0% (January 24, 2022) | |
| 2020 Occupancy: | 89.8% (December 31, 2020) | |
| 2019 Occupancy: | 90.2% (December 31, 2019) | |
| 2018 Occupancy: | 88.6% (December 31, 2018) | |
| Financial Information | ||||||
| Tranche | Cut-off Date Balance | Balance per Sq. Ft. Cut-off / Balloon |
LTV Cut-off / Balloon |
U/W DSCR NOI / NCF |
U/W Debt Yield NOI / NCF |
U/W Debt Yield at Balloon NOI / NCF |
| Mortgage Loan | $55,575,000 | $134 / $134 | 63.5% / 63.5% | 3.12x / 2.93x | 11.9% / 11.1% | 11.9% / 11.1% |
| (1) | See “Initial and Ongoing Reserves” herein. |
| (2) | Other upfront reserves consist of a U.S. customs lease work reserve of $7,144,299, unfunded obligations reserve of $1,787,748 and a ground lease reserve of $242,000. |
The Loan. The Shoreline Square mortgage loan (the “Shoreline Square Loan”) is evidenced by a promissory note with an original principal balance and outstanding principal balance as of the Cut-off Date of $55,575,000. The Shoreline Square Loan is secured by a first mortgage encumbering the borrower’s leasehold interest in a 413,801 sq. ft. CBD office building located in Long Beach, California (the “Shoreline Square Property”).
The Shoreline Square Loan has a 60-month term, with 58 months remaining as of the Cut-off Date. The Shoreline Square Loan is interest-only for its entire term and accrues interest at the rate of 3.75000% per annum.
The borrower’s leasehold interest in the Shoreline Square Property is governed by a ground lease (the “Ground Lease”) between Terra Funding – Shoreline Square, LP, a Delaware limited partnership, as the lessor, and the borrower, as the lessee, with an original term of 99 years expiring March 31, 2113. The current annual base ground rent as of the Cut-off Date is $2,985,131 and will increase annually by (i) 3.0% through March 31, 2044 and (ii) 1.5% from April 1, 2044 to March 31, 2113.
The Shoreline Square Loan proceeds along with borrower sponsor equity and other sources described below were used to acquire the Shoreline Square Property, fund upfront reserves and pay closing costs.
| Sources and Uses | |||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | ||
| Mortgage Loan | $55,575,000 | 53.5% | Purchase Price | $85,500,000 | 82.2% | ||
| Borrower Sponsor Equity | 35,958,174 | 34.6 | Upfront Reserves | 15,977,682 | 15.4 | ||
| Other Sources(1) | 12,432,048 | 12.0 | Closing Costs | 2,487,540 | 2.4 | ||
| Total Sources | $103,965,221 | 100.0% | Total Uses | $103,965,221 | 100.0% | ||
| (1) | Other sources consist of sellers outstanding tenant improvements and leasing commissions of $7,569,771.57, adjustments per the purchase and sale agreement of $3,500,000 and future rent abatements of $1,362,276.02. |
The Borrower and the Borrower Sponsors. The borrower is Shoreline Square Holdings LLC, a Delaware limited liability company. The borrower is structured to be a single purpose bankruptcy-remote entity with one independent director in its organizational structure. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the Shoreline Square Loan.
A-3-40
301 East Ocean Boulevard Long Beach, CA 90802 |
Collateral Asset Summary – Loan No. 5 Shoreline Square |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$55,575,000 63.5% 2.93x 11.9% |
The borrower sponsors and non-recourse carveout guarantors are Jack Sitt and Ezak Assa. Jack Sitt is the founder and chief executive officer of Jack Sitt Real Estate LLC. Prior to founding Jack Sitt Real Estate LLC, Jack was an executive at Sitt Asset Management. Since 2007, Jack Sitt has contributed to the acquisition and management of a $2 billion dollar portfolio comprising two million sq. ft. of office, retail and residential properties. Jack Sitt is also the non-recourse carveout guarantor of the Glen Forest Office Portfolio Whole Loan.
The Property. The Shoreline Square Property is a Class A, 20-story, 413,801 sq. ft., office building located in the CBD of Long Beach, California. The Shoreline Square Property was built in 1988, renovated in 2008 and is situated on an approximately 1.12-acre site at the northeast corner of Long Beach Boulevard and East Ocean Boulevard. Pursuant to a reciprocal easement agreement, parking at the Shoreline Square Property is provided by a seven-level, 1,346 stall, parking garage comprised of four above and three below grade levels. The Shoreline Square Property has exclusive use of 988 parking spaces in the parking garage and shares 358 parking spaces with the neighboring Westin Hotel. The parking structure’s 1,346 spaces equate to approximately 3.25 spaces per 1,000 sq. ft. Amenities at the Shoreline Square Property include a fitness center, onsite café, and concierge services.
As of January 24, 2022, the Shoreline Square Property was 85.0% occupied by 31 tenants. The Shoreline Square Property has an average occupancy of 89.6% since 2018 and approximately 51.1% of current tenants’ net rentable area has been occupied since 2011. The largest tenant at the Shoreline Square Property is GSA US Customs which accounts for 29.8% of net rentable area and 32.2% of underwritten base rent. Outside of GSA US Customs, no tenant accounts for higher than 7.1% of net rentable area and 7.1% of underwritten base rent. The Shoreline Square Property features multiple state and government agencies which account for approximately 48.1% of net rentable area and 53.8% of underwritten rent.
Major Tenants.
GSA US Customs (123,386 sq. ft.; 29.8% of NRA; 32.2% of U/W Base Rent). GSA US Customs is a department of the United States federal government with over 60,000 employees that is charged with keeping terrorists and their weapons out of the United States while facilitating lawful international travel and trade. GSA US Customs is responsible for guarding nearly 7,000 miles of land bordering the United States and neighboring Canada and Mexico. The agency also partners with the United States Coast Guard to protect an additional 95,000 miles of tidal shoreline. GSA US Customs has been at the Shoreline Square Property since October 10, 2001. The premises demised to GSA US Customs are subject to two leases. The lease currently in effect (the “Current US Customs Lease”) expires on August 9, 2022 and demises approximately 143,732 sq. ft. The second lease was entered into for the purpose of renewing a majority of the space leased to GSA US Customs, approximately 123,386 sq. ft., and requires that certain tenant improvements be completed (the “Renewal US Customs Lease”). The Renewal US Customs Lease will become effective upon the completion of certain tenant improvement work which, as of the closing of the Shoreline Square Loan, is expected to be completed by September 2022. In connection with the closing of the Shoreline Square Loan, the borrower provided evidence that prior to the August 9, 2022 expiration of the Current US Customs Lease, GSA US Customs expects to amend the Renewal US Customs Lease such that the commencement date of said lease is August 10, 2022, notwithstanding that the tenant improvement work may not be completed at such time. Upon such amendment being executed, the Renewal US Customs Lease would expire on August 9, 2037. There can be no assurance that such amendment will be executed, in which case the Renewal US Customs Lease will commence upon acceptance of the demised premises by GSA US Customs. Similarly, there can be no assurance whether or when GSA US Customs will accept the demised premises.
State of CA State Lands Commission (29,492 sq. ft.; 7.1% of NRA; 7.1% of U/W Base Rent). The State of CA State Lands Commission was established in 1938 and manages four million acres of tide and submerged lands at the beds of natural navigable rivers, streams, lakes, bays, estuaries, inlets and straits. The State of CA State Lands Commission is led by the Lieutenant Governor of California and is responsible for issuing leases for use or development, providing public access, and resolving boundaries between public and private lands. The State of CA State Lands Commission has been at the Shoreline Square Property since February 26, 2019 and is leased through February 28, 2027, and has an ongoing termination option effective on or after February 28, 2023, with 30 days’ notice.
Dassault Systemes Americas Corp. (20,501 sq. ft.; 5.0% of NRA; 5.9% of U/W Base Rent). Dassault Systemes Americas Corp. (“Dassault”) is a French software company founded in 1981 that focuses on 3D product design and simulation related to markets including life science and healthcare, infrastructure and cities, and manufacturing. Dassault has over 290,000 customers and 25 million users across 11 industries worldwide. Dassault’s customer base includes corporate accounts, startups, governments, and individual users. Dassault has been at the Shoreline Square Property since November 21, 2008 and is leased through December 31, 2022 with one five-year renewal option.
COVID-19 Update. As of March 6, 2022, the Shoreline Square Property is open and operating. November and December 2022 rent collections at the Shoreline Square Property totaled 100.0% for each month. As of March 6, 2022, the Shoreline Square Loan is not subject to any modification or forbearance request and no tenants have requested lease modifications. The March 2022 debt service payment was made.
A-3-41
301 East Ocean Boulevard Long Beach, CA 90802 |
Collateral Asset Summary – Loan No. 5 Shoreline Square |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$55,575,000 63.5% 2.93x 11.9% |
| Tenant Summary(1) | |||||||
| Tenant | Ratings (Moody’s/Fitch/S&P)(2) |
Net Rentable Area (Sq. Ft.) |
% of Net Rentable Area |
U/W Base Rent
Per |
% of Total U/W Base Rent |
Lease Expiration | |
| GSA US Customs(3) | Aaa/AAA/AA+ | 123,386 | 29.8% | $33.71 | 32.2% | 8/9/2037 | |
| State of CA State Lands Commission(4) | Aa2/AA/AA- | 29,492 | 7.1 | $31.12 | 7.1 | 2/28/2027 | |
| Dassault Systemes Americas Corp. | NR/NR/A- | 20,501 | 5.0 | $37.15 | 5.9 | 12/31/2022 | |
| Department of Defense | Aaa/AAA/AA+ | 20,250 | 4.9 | $45.65 | 7.2 | 9/5/2024 | |
| Tesoro Refining & Marketing Company LLC | Baa2/BBB/BBB | 17,883 | 4.3 | $37.93 | 5.3 | 10/31/2025 | |
| Comerica Bank | A3/A-/BBB+ | 16,920 | 4.1 | $46.38 | 6.1 | 12/31/2022 | |
| State of CA Coastal Commission(5) | Aa2/AA/AA- | 15,024 | 3.6 | $31.90 | 3.7 | 2/28/2027 | |
| Mieco Inc. | Baa2/NR/BBB | 11,914 | 2.9 | $37.65 | 3.5 | 8/31/2023 | |
| Zwift, Inc. | NR/NR/NR | 10,330 | 2.5 | $41.18 | 3.3 | 10/31/2025 | |
| Long Beach Area Convention & Visitors Bureau | NR/NR/NR | 9,637 | 2.3 | $45.60 | 3.4 | 12/31/2025 | |
| Total / Wtd. Avg. Major Tenants | 275,337 | 66.5% | $36.39 | 77.6% | |||
| Remaining Tenants | 76,529 | 18.5 | $37.72 | 22.4 | |||
| Total / Wtd. Avg. Occupied | 351,866 | 85.0% | $36.68 | 100.0% | |||
| Vacant Space | 61,935 | 15.0 | |||||
| Total | 413,801 | 100.0% | |||||
| (1) | Based on the underwritten rent roll dated as of January 24, 2022 with rent steps through December 1, 2022. |
| (2) | Certain credit ratings are those of the parent company or government whether or not the parent or government guarantees the lease. |
| (3) | The GSA US Customs Lease Expiration assumes the Renewal US Customs Lease becomes effective in August 2022, as described above under “Major Tenants” herein. There can be no assurance as to whether or when the Renewal US Customs Lease will become effective. The lease currently in place expires in August 2022. |
| (4) | State of CA State Lands Commission has the right to terminate its lease at any time effective on or after February 28, 2023 with 30 days’ notice. |
| (5) | State of CA Coastal Commission has the right to terminate its lease at any time effective on or after February 28, 2023 with 30 days’ notice. |
| Lease Rollover Schedule(1)(2) | ||||||||
| Year | # of Leases Expiring |
Total Expiring Sq. Ft. |
% of Total Sq. Ft. Expiring |
Cumulative Expiring |
Cumulative
% Sq. Ft. Expiring |
Annual U/W Base Rent Per Sq. Ft. |
% U/W Base Rent Rolling |
Cumulative % of U/W Base Rent |
| MTM and Storage(3) | 8 | 2,766 | 0.7% | 2,766 | 0.7% | $7.21 | 0.2% | 0.2% |
| 2022 | 4 | 45,814 | 11.1 | 48,580 | 11.7% | $40.87 | 14.5 | 14.7% |
| 2023 | 5 | 28,016 | 6.8 | 76,596 | 18.5% | $37.84 | 8.2 | 22.9% |
| 2024 | 5 | 28,695 | 6.9 | 105,291 | 25.4% | $45.96 | 10.2 | 33.1% |
| 2025 | 7 | 57,025 | 13.8 | 162,316 | 39.2% | $39.86 | 17.6 | 50.7% |
| 2026 | 3 | 10,302 | 2.5 | 172,618 | 41.7% | $35.00 | 2.8 | 53.5% |
| 2027 | 3 | 47,718 | 11.5 | 220,336 | 53.2% | $31.84 | 11.8 | 65.3% |
| 2028 | 0 | 0 | 0.0 | 220,336 | 53.2% | $0.00 | 0.0 | 65.3% |
| 2029 | 1 | 2,496 | 0.6 | 222,832 | 53.9% | $27.77 | 0.5 | 65.8% |
| 2030 | 0 | 0 | 0.0 | 222,832 | 53.9% | $0.00 | 0.0 | 65.8% |
| 2031 | 0 | 0 | 0.0 | 222,832 | 53.9% | $0.00 | 0.0 | 65.8% |
| 2032 | 0 | 0 | 0.0 | 222,832 | 53.9% | $0.00 | 0.0 | 65.8% |
| 2033 & Thereafter | 2 | 129,034 | 31.2 | 351,866 | 85.0% | $34.18 | 34.2 | 100.0% |
| Vacant | NAP | 61,935 | 15.0 | 413,801 | 100.0% | NAP | NAP | NAP |
| Total / Wtd. Avg. | 38 | 413,801 | 100.0% | $36.68 | 100.0% | |||
| (1) | Based on the underwritten rent roll dated as of January 24, 2022 and inclusive of rent steps of $327,680 underwritten for various tenants through December 1, 2022. |
| (2) | Certain tenants may have termination or contraction options (which may become exercisable prior to the originally stated expiration date of the tenant lease) that are not considered in the above Lease Rollover Schedule. |
| (3) | Includes seven storage units totaling 1,350 sq. ft. that do not have underwritten rent attributable. |
Environmental Matters. According to the Phase I environmental report dated as of January 19, 2022, there are no recognized environmental conditions or recommendations for further action at the Shoreline Square Property.
The Market. The Shoreline Square Property is located in the city of Long Beach, Los Angeles County, California. The city of Long Beach is located approximately 25 miles south of the Los Angeles CBD and is one of the largest cities within Los Angeles County. The top employment sectors in Long Beach are Trade, Transportation & Utilities, Education & Health Services, Professional & Business Services, Government and Leisure & Hospitality. Major employers in the city of Long Beach include Los Angeles County, Los Angeles Unified School District, UCLA, Kaiser Permanente, and Target Corporation.
A-3-42
301 East Ocean Boulevard Long Beach, CA 90802 |
Collateral Asset Summary – Loan No. 5 Shoreline Square |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$55,575,000 63.5% 2.93x 11.9% |
The Shoreline Square Property is situated within the Downtown Long Beach Office submarket. As of the second quarter of 2021 the submarket had inventory of 4,110,262 sq. ft. and had a vacancy rate of 23.8%. Average asking rents within the submarket were $30.46 per sq. ft. with Class A office properties average asking rents at $36.05 per sq. ft. According to the appraisal, the 2020 population within a one-, three- and five-mile radius of the Shoreline Square Property is 29,235, 210,185, and 393,752, respectively.
| Comparable Office Buildings(1) | ||||
| Property Name | City / State | NRA | Year Built | Occupancy |
| Shoreline Square | Long Beach, CA | 413,801(2) | 1988 | 85.0%(2) |
| City Tower | Orange, CA | 431,007 | 1988 | 90.0% |
| Cerritos Towne Center | Cerritos, CA | 165,678 | 2002 | 97.0% |
| Airport Plaza | Long Beach, CA | 126,219 | 1983 | 98.3% |
| Airport Center Building III | Los Angeles, CA | 306,243 | 1968 | 92.6% |
| Cerritos Corporate Center | Cerritos, CA | 103,718 | 2001 | 100.0% |
| Cerritos Towne Center | Cerritos, CA | 142,198 | 1988 | 88.2% |
| Cerritos Town Center | Cerritos, CA | 104,898 | 2009 | 92.6% |
| Atria West Building | Los Angeles, CA | 178,902 | 1992 | 96.6% |
| (1) | Source: Appraisal. |
| (2) | Based on the underwritten rent roll dated as of January 24, 2022. |
Cash Flow Analysis.
| Cash Flow Analysis(1) | ||||||
| 2018 | 2019 | 2020 | TTM July 2021 | U/W | U/W PSF | |
| Base Rent | $11,041,247 | $12,502,969 | $12,991,151 | $13,246,432 | $12,577,119 | $30.39 |
| Contractual Rent Steps(2) | 0 | 0 | 0 | 0 | 327,680 | 0.79 |
| Vacancy Gross Up | 0 | 0 | 0 | 0 | 2,140,336 | 5.17 |
| Reimbursements | 538,942 | 592,699 | 670,740 | 759,635 | 1,300,154 | 3.14 |
| Other Income | 1,228,113 | 1,215,430 | 1,216,618 | 1,243,931 | 1,044,772 | 2.52 |
| Gross Potential Rent | $12,808,302 | $14,311,097 | $14,878,510 | $15,249,998 | $17,390,061 | $42.03 |
| Vacancy & Credit Loss | 579,764 | 396,069 | 713,320 | 205,523 | 2,140,336 | 5.17 |
| Effective Gross Income | $12,228,539 | $13,915,028 | $14,165,190 | $15,044,475 | $15,249,726 | $36.85 |
| Real Estate Taxes | 1,399,214 | 1,422,522 | 1,467,527 | 1,478,736 | 1,690,941 | 4.09 |
| Insurance | 176,982 | 217,862 | 261,840 | 280,866 | 289,143 | 0.70 |
| Management Fee | 369,522 | 417,451 | 424,963 | 452,380 | 457,492 | 1.11 |
| Other Operating Expenses | 5,447,771 | 5,645,255 | 5,784,380 | 6,020,101 | 6,220,391 | 15.03 |
| Total Operating Expenses | $7,393,489 | $7,703,090 | $7,938,711 | $8,232,082 | $8,657,966 | $20.92 |
| Net Operating Income | $4,835,050 | $6,211,938 | $6,226,478 | $6,812,393 | $6,591,759 | $15.93 |
| Replacement Reserves | 0 | 0 | 0 | 0 | 82,760 | 0.20 |
| TI/LC | 0 | 0 | 0 | 0 | 312,915 | 0.76 |
| Net Cash Flow | $4,835,050 | $6,211,938 | $6,226,478 | $6,812,393 | $6,196,084 | $14.97 |
| (1) | Based on the underwritten rent roll dated as of January 24, 2022. |
| (2) | Represents rent steps occurring through December 1, 2022. |
Property Management. The Shoreline Square Property is managed by G&E Real Estate Management Services, Inc. d/b/a Newmark Knight Frank, a third-party property management company.
Lockbox / Cash Management. The Shoreline Square Loan is structured with a hard lockbox and springing cash management. The borrower is required to, and is required to cause manager to, deposit all rents directly into a lender approved lockbox account. The borrower is required to deliver a tenant direction letter to the existing tenants at the Shoreline Square Property directing them to remit their rent checks directly to the lender-controlled lockbox. All funds deposited into the lockbox are required to be transferred on each business day to or at the direction of the borrower unless a Trigger Period (as defined below) exists. Upon the occurrence and during the continuance of a Trigger Period, all funds in the lockbox account are required to be swept on each business day to a cash management account under the control of the lender to be applied and disbursed in accordance with the Shoreline Square Loan documents, and all excess cash flow funds remaining in the cash management account after the application of such funds in accordance with the Shoreline Square Loan documents are required to be held by the lender in an excess cash flow reserve account as additional collateral for the Shoreline Square Loan; provided, however, so long as no event of default has occurred, during the continuance of a Trigger Period, the borrower may request that funds in the excess cash flow reserve account be disbursed to borrower for tenant improvements and leasing commissions and the cost of capital improvements, in each case as approved by the lender and in each case only if funds on deposit in the TI/LC Reserve and the Replacement Reserve, as applicable, are insufficient to pay the costs thereof. Upon the cure of the applicable Trigger Period, so long as no other Trigger Period exists, the lender is required to return any amounts remaining on deposit in the excess cash flow reserve account to the borrower. Upon an event of default under the Shoreline Square Loan documents, the lender may apply funds to the debt in such priority as it may determine.
A-3-43
301 East Ocean Boulevard Long Beach, CA 90802 |
Collateral Asset Summary – Loan No. 5 Shoreline Square |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$55,575,000 63.5% 2.93x 11.9% |
A “Trigger Period” means a period (A) commencing upon the earliest of (i) the occurrence and continuance of an event of default, (ii) the debt yield falling below 7.0%, or (iii) the occurrence of a Specified Tenant Trigger Period (as defined below), and (B) expiring upon (x) with regard to any Trigger Period commenced in connection with clause (i) above, the cure (if applicable) of such event of default, (y) with regard to any Trigger Period commenced in connection with clause (ii) above, the date that the debt yield is equal to or greater than 7.0% for two consecutive calendar quarters and (z) with regard to any Trigger Period commenced in connection with clause (iii) above, a Specified Tenant Trigger Period ceasing to exist.
A “Specified Tenant” means, as applicable, (i) U.S. Customs, (ii) any tenant whose lease at the Shoreline Square Property, individually or when aggregated with all other leases at the Shoreline Square Property with the same tenant or its affiliate, either (A) accounts for 15% or more of the total rental income for the Shoreline Square Property, or (B) demises 15% or more of the Shoreline Square Property’s total gross leasable area and (iii) any other replacement lessee(s) of the Specified Tenant space and any guarantor(s) of the applicable related Specified Tenant lease.
A “Specified Tenant Trigger Period” means a period (A) commencing upon the first to occur of (i) Specified Tenant being in default under the applicable Specified Tenant lease (beyond applicable notice and cure periods that are expressly set forth in such Specified Tenant lease at the time such default occurs), (ii) Specified Tenant failing to be in actual, physical possession of the Specified Tenant space (or applicable portion thereof) (unless (1) such failure is effectuated in order to comply with governmental restrictions and the applicable tenant resumes operations in its space within 90 days after such restrictions are lifted, or (2) the Specified Tenant space is operational (i.e., with staff coming in as necessary to perform necessary business functions), is available to employees for use on as needed and/or voluntary basis and such limited operations are consistent with customary market standards for companies similar to the applicable tenant (each a “Permitted Dark Exception”)), failing to be open for business during customary hours and/or “going dark” in the Specified Tenant space (or applicable portion thereof) (unless a Permitted Dark Exception is ongoing with respect to the applicable Specified Tenant) (provided, however, for so long as the applicable Specified Tenant (x) satisfies the Credit Rating Condition (as defined below) and (y) continues to pay full, unabated rent (i.e., without offset in connection with any of the foregoing matters), the foregoing matters described in this clause (ii) will only give rise to a Specified Tenant Trigger Period to the extent that the same are required by the applicable Specified Tenant lease), (iii) Specified Tenant giving notice that it is terminating its lease for all or 10% or more of the Specified Tenant space (or applicable portion thereof), (iv) any termination or cancellation of any Specified Tenant lease (including, without limitation, rejection in any bankruptcy or similar insolvency proceeding) and/or any Specified Tenant lease failing to otherwise be in full force and effect, (v) any bankruptcy or similar insolvency of Specified Tenant and (vi) U.S. Customs ceasing to satisfy the Credit Rating Condition (any such occurrence, a “Credit Rating Trigger”); and (B) expiring upon the first to occur of the lender’s receipt of evidence reasonably acceptable to the lender (which such evidence will include, without limitation, a duly executed estoppel certificate from the applicable Specified Tenant in form and substance acceptable to lender) of (1) the satisfaction of the Specified Tenant Cure Conditions (as defined below) or (2) the borrower leasing the entire Specified Tenant space (or applicable portion thereof) in accordance with the applicable terms and conditions of the loan documents, the applicable tenant under such lease being in actual, physical occupancy of, and open for business in, the space demised under its lease and paying the full amount of the rent due under its lease.
The “Specified Tenant Cure Conditions” means each of the following, as applicable (i) the applicable Specified Tenant has cured all defaults under the applicable Specified Tenant lease, (ii) the applicable Specified Tenant is in actual, physical possession of the Specified Tenant space (or applicable portion thereof), open for business during customary hours and not “dark” in the Specified Tenant space (or applicable portion thereof), (iii) the applicable Specified Tenant has revoked or rescinded all termination or cancellation notices with respect to the applicable Specified Tenant lease and has re-affirmed the applicable Specified Tenant lease as being in full force and effect, (iv) with respect to any applicable bankruptcy or insolvency proceedings involving the applicable Specified Tenant and/or the applicable Specified Tenant lease, the applicable Specified Tenant is no longer insolvent or subject to any bankruptcy or insolvency proceedings and has affirmed the applicable Specified Tenant lease pursuant to final, non-appealable order of a court of competent jurisdiction, (v) the applicable Specified Tenant is paying full, unabated rent under the applicable Specified Tenant lease and (vi) in the event the Specified Tenant Trigger Period is due to a Credit Rating Trigger, the applicable Specified Tenant with respect to which such Credit Rating Trigger occurred satisfies the Credit Rating Cure Condition (as defined below).
“Credit Rating Condition” means, as to any entity, a condition which will be satisfied to the extent that, as of the applicable date of determination, such entity then maintains a long-term unsecured debt rating of at least BBB- from S&P and an equivalent rating from each of Moody’s and Fitch, to the extent the foregoing rate such entity.
“Credit Rating Cure Condition” means, as to any entity, a condition which will be satisfied to the extent that, as of the applicable date of determination, such entity then maintains (and has maintained for at least two (2) consecutive calendar quarters) a long-term unsecured debt rating of at least BBB- from S&P and, if applicable, an equivalent rating from Moody’s and Fitch.
Initial and Ongoing Reserves. At origination of the Shoreline Square Loan, the borrower funded reserves of (i) approximately $253,034 into a real estate tax reserve account, (ii) approximately $50,600 into an insurance premium reserve account, (iii) $3,000,000 into a replacement reserve account, (iv) $3,500,000 into a tenant improvements and leasing commissions reserve account, (iv) $7,144,299 into a U.S. Customs lease work reserve account, (v) $1,787,748 into a reserve account for certain unfunded obligations, and (vi) $242,000 into a ground lease reserve account.
A-3-44
301 East Ocean Boulevard Long Beach, CA 90802 |
Collateral Asset Summary – Loan No. 5 Shoreline Square |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$55,575,000 63.5% 2.93x 11.9% |
Real Estate Tax Reserve. The borrower is required to deposit into a real estate tax reserve, on a monthly basis, 1/12 of the real estate taxes that lender estimates will be payable during the next 12 months (initially estimated to be approximately $126,517).
Insurance Reserve. The borrower is required to deposit into an insurance reserve, on a monthly basis, 1/12 of the insurance premiums that lender estimates will be payable for the renewal of coverage, unless an acceptable blanket insurance policy is in place (initially estimated to be approximately $25,300).
Replacement Reserve. On a monthly basis, the borrower is required to deposit into a replacement reserve account approximately $6,897.
TI/LC Reserve. On each monthly payment date where the sum on deposit in the tenant improvements and leasing commissions reserve account is less than $3,000,000, the borrower is required to deposit approximately $34,483 into a tenant improvements and leasing commissions reserve account. Notwithstanding the preceding sentence, the amount of sums on deposit in the tenant improvements and leasing commissions reserve account at any given time will not exceed $3,500,000.
Ground Lease Rent Reserve. In the event that amounts on deposit in the ground lease reserve account are less than one (1) month of rent and any and all other charges which may be due by borrower under the Ground Lease (the “Minimum Ground Lease Reserve Balance Amount”), then borrower is required to deposit into the ground lease reserve account a sufficient amount such that the amount on deposit in the ground lease reserve is at least equal to the Minimum Ground Lease Reserve Balance Amount.
U.S. Customs Lease Work Reserve Account. In the event that the lender reasonably determines that sums on deposit in the U.S. Customs lease work reserve account are less than the sum, reasonably estimated by lender, which is required to complete and pay for the U.S. Customs lease work in accordance with the U.S. Customs lease, the borrower is required, within five (5) business days after being notified by lender that there is or will such a deficiency, to deposit into the U.S. Customs lease work reserve account an amount sufficient to eliminate such deficiency.
Current Mezzanine or Subordinate Indebtedness. None.
Future Mezzanine or Subordinate Indebtedness Permitted. None.
Partial Release. None.
A-3-45
Various Various, OH |
Collateral Asset Summary – Loan No. 6 Millennia Portfolio |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$40,000,000 73.8% 1.24x 8.5% |
A-3-46
Various Various, OH |
Collateral Asset Summary – Loan No. 6 Millennia Portfolio |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$40,000,000 73.8% 1.24x 8.5% |
A-3-47
Various Various, OH |
Collateral Asset Summary – Loan No. 6 Millennia Portfolio |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$40,000,000 73.8% 1.24x 8.5% |
| Mortgage Loan Information | |
| Loan Seller: | GACC |
| Loan Purpose: | Refinance |
| Borrower Sponsor: | Frank T. Sinito |
| Borrowers: | Kettering OH-DE, LLC, Chapel Hill Towers OH-DE, LLC and Lexington Village OH-DE, LLC |
| Original Balance: | $40,000,000 |
| Cut-off Date Balance: | $40,000,000 |
| % by Initial UPB: | 4.4% |
| Interest Rate: | 4.81200% |
| Payment Date: | 6th of each month |
| First Payment Date: | April 6, 2022 |
| Maturity Date: | March 6, 2032 |
| Amortization: | Interest Only, Amortizing Balloon |
| Additional Debt: | None |
| Call Protection: | L(25),D(91),O(4) |
| Lockbox / Cash Management: | Soft / Springing |
| Reserves(1) | |||
| Initial | Monthly | Cap | |
| Taxes: | $102,174 | $34,058 | NAP |
| Insurance: | $350,988 | $38,999 | NAP |
| Replacement(4): | $0 | $21,403 | NAP |
| Immediate Repairs: | $531,675 | $0 | NAP |
| Environmental: | $4,400 | $0 | NAP |
| Property Information | |
| Single Asset / Portfolio: | Portfolio of 3 properties |
| Property Type: | Garden/Mid-Rise Multifamily |
| Collateral: | Fee Simple |
| Location(2): | Various, OH |
| Year Built / Renovated(2): | Various / Various |
| Total Units: | 777 |
| Property Management: | Millennia Housing Management, Ltd. |
| Underwritten NOI(3): | $3,387,724 |
| Underwritten NCF: | $3,131,152 |
| Appraised Value: | $54,200,000 |
| Appraisal Date: | Various |
| Historical NOI | |
| Most Recent NOI(3): | $1,997,491 (December 31, 2021) |
| 2020 NOI: | $1,821,784 (December 31, 2020) |
| 2019 NOI: | $1,338,620 (December 31, 2019) |
| 2018 NOI: | $808,669 (December 31, 2018) |
| Historical Occupancy | |
| Most Recent Occupancy: | 93.3% (February 9, 2022) |
| 2020 Occupancy: | 73.3% (December 31, 2020) |
| 2019 Occupancy: | 73.1% (December 31, 2019) |
| 2018 Occupancy: | 73.5% (December 31, 2018) |
| Financial Information | ||||||
| Tranche | Cut-off Date Balance | Balance per Unit Cut-off / Balloon |
LTV Cut-off / Balloon |
U/W DSCR NOI / NCF |
U/W Debt Yield NOI / NCF |
U/W Debt Yield at Balloon NOI / NCF |
| Mortgage Loan | $40,000,000 | $51,480 / $43,235 | 73.8% / 62.0% | 1.34x / 1.24x | 8.5% / 7.8% | 10.1% / 9.3% |
| (1) | See “Initial and Ongoing Reserves” herein. |
| (2) | See “The Property—Millennia Portfolio Summary” herein. |
| (3) | See “Cash Flow Analysis” for an explanation of the increase from Most Recent NOI to Underwritten NOI. |
| (4) | The borrowers are required to deposit $21,403 into a replacement reserve through February 2028 and $32,417 from and after March 2028. |
The Loan. The mortgage loan (the “Millennia Portfolio Loan”) has an original principal balance and outstanding principal balance as of the Cut-off Date of $40,000,000, secured by the borrowers’ fee simple interests in three multifamily properties totaling 777 units located in Ohio (the “Millennia Portfolio” or “Millennia Portfolio Properties”).
The Millennia Portfolio Loan has an original term of 120 months and, following a one-year interest only period, will amortize on a 30-year schedule. The Millennia Portfolio Loan accrues interest at a rate of 4.81200% per annum. The proceeds of the Millennia Portfolio Loan were used to pay off approximately $26.2 million of existing debt, return equity to the borrower sponsor, buy out certain equity partners, pay closing costs and fund upfront reserves.
| Sources and Uses | ||||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |||
| Mortgage Loan | $40,000,000 | 100.0% | Loan Payoff | $26,174,432 | 65.4% | |||
| Return of Equity | 9,268,127 | 23.2 | ||||||
| Partnership Buyout | 1,859,150 | 4.6 | ||||||
| Closing Costs | 1,709,054 | 4.3 | ||||||
| Upfront Reserves | 989,237 | 2.5 | ||||||
| Total Sources | $40,000,000 | 100.0% | Total Uses | $40,000,000 | 100.0% | |||
The Borrowers and the Borrower Sponsor. The borrowers are Chapel Hill Towers OH-DE, LLC, Lexington Village OH-DE, LLC and Kettering OH-DE, LLC, each a Delaware limited liability company and special purpose entity with two independent directors. Legal counsel to the borrowers delivered a non-consolidation opinion in connection with the origination of the Millennia Portfolio Loan.
The borrower sponsor and the nonrecourse carve-out guarantor is Frank T. Sinito, who is the CEO and founder of The Millennia Companies, which merged with Jacobs Real Estate Services LLC to form Millennia Commercial Group, Ltd. Millennia Companies was founded in 1995 and is a fully integrated real estate company based in Cleveland, Ohio, which encompasses over 5 million sq. ft. of office space, nearly 30,000 residential units in 26 states and a hospitality group, including the Cleveland Downtown Marriott.
A-3-48
Various Various, OH |
Collateral Asset Summary – Loan No. 6 Millennia Portfolio |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$40,000,000 73.8% 1.24x 8.5% |
The Property. The Millennia Portfolio consists of three multifamily properties totaling 777 units in Akron, Cleveland and Kettering, Ohio and known as Summit Ridge (the “Summit Ridge Property”), Lexington Village (the “Lexington Village Property”) and Gateway at the Greene (the “Gateway at the Greene Property”). The Millennia Portfolio Properties were built between 1965 and 1990 and underwent renovations from 2018 through 2021. As of February 9, 2022, the Millennia Portfolio was 93.3% occupied.
| Millennia Portfolio Summary | ||||||||
| Property Name | Address | City, State | Year
Built / Renovated |
Total Units | Occupancy | Allocated Loan Amount | Appraised Value | % of U/W CF |
| Summit Ridge | 1111 Independence Avenue | Akron, OH | 1969 / 2020-2021 | 397 | 97.5% | $19,335,793 | $26,200,000 | 46.5% |
| Lexington Village | 7820 Lexington Avenue | Cleveland, OH | 1986, 1990 / 2020-2021 | 277 | 86.3% | $12,324,723 | $16,700,000 | 30.9% |
| Gateway at the Greene | 3325 East Stroop Road | Kettering, OH | 1965 / 2018-2020 | 103 | 96.1% | $8,339,484 | $11,300,000 | 22.6% |
| Total / Wtd Avg. | 777 | 93.3% | $40,000,000 | $54,200,000 | 100.0% | |||
The Summit Ridge Property is a 397-unit complex with two, six-story buildings located in Akron, Ohio. The Summit Ridge Property was built in 1969, acquired by the borrower sponsor in 2013, and between 2020 and 2021 was converted from an elderly care housing community to traditional market-rate apartments. The renovation included approximately $488,000 in site work, approximately $352,000 in building exterior enhancements and approximately $1.3 million in common area upgrades, totaling approximately $2.5 million. The Summit Ridge Property includes 159 one-bedroom units (560 to 600 sq. ft.), 218 two-bedroom units (700 to 840 sq. ft.) and 20 three-bedroom units (980 sq. ft.). The Summit Ridge Property operates as a market rate, non-age restricted property. Approximately 69 tenants at the Summit Ridge Property receive section 8 vouchers/assistance. As of February 9, 2022, the Summit Ridge Property was 97.5% occupied.
The Lexington Village Property is a 277-unit complex with 72, two-story buildings and a clubhouse located in Cleveland, Ohio. The Lexington Village Property was built in 1986 and 1990, and acquired by the borrower sponsor in October 2017. At the time of acquisition, the Lexington Village Property had a first mortgage of approximately $5,000,000 and subordinate debt of approximately $11,196,756 from municipal, foundation and non-profit entities. The borrower sponsor agreed to assume all loans, negotiated forgiveness of all but $840,000 of the subordinate debt (which has since been repaid) and paid approximately $270,000 for land, resulting in an effective purchase price of approximately $6.1 million. The Lexington Village Property most recently underwent a renovation between 2020 and 2021. The capital improvements included approximately $448,000 in site work, approximately $683,000 in unit interior upgrades, approximately $433,000 in building exterior enhancements and approximately $100,000 in common area upgrades, totaling approximately $2.3 million in capital improvements. The Lexington Village Property includes 38 one-bedroom units (630 sq. ft.), 217 two-bedroom units (828 to 1,026 sq. ft.) and 22 three-bedroom units (1,196 to 1,248 sq. ft.). The Lexington Village Property operates as a market rate, non-age restricted property. Approximately 39 tenants at the Lexington Village Property receive section 8 vouchers/assistance. As of February 9, 2022, the Lexington Village Property was 86.3% occupied, however 14 units were offline due to ongoing renovations.
The Gateway at the Greene Property is a 103-unit apartment complex with four, three-story buildings and a clubhouse located in Kettering, Ohio. The Gateway at the Greene Property was built in 1965 and was acquired by the borrower sponsor in September 2017 for a price equal to the then-existing debt on the Gateway at the Greene Property, which was used to repay such debt. The Gateway at the Greene Property most recently underwent a renovation between 2018 and 2020. The capital improvements included approximately $1.8 million in unit interior renovations ($17,054 per unit), approximately $391,000 in site work, approximately $263,000 in building exterior enhancements and approximately $329,000 in common area upgrades, for a total of approximately $4.5 million. The Gateway at the Greene Property includes 39 one-bedroom units (560 sq. ft.) and 64 two-bedroom units (760 sq. ft.). The Gateway at the Greene Property operates as a mixed conventional market rate and affordable (lower income housing tax credit (LIHTC) restricted), non-age restricted property. 30% of the 103 units are on a “floating” (or unassigned) basis restricted to households with incomes of 80% of area median household income and with rents restricted in accordance with federal regulations. The initial compliance period commenced in 2003 and lasted for 15 years (2018). The extended use period lasts 20 years beyond the initial compliance period (2038). As of February 9, 2022, the Gateway at the Greene Property was 96.1% occupied.
A-3-49
Various Various, OH |
Collateral Asset Summary – Loan No. 6 Millennia Portfolio |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$40,000,000 73.8% 1.24x 8.5% |
| Summit Ridge - Unit Mix(1) | ||||||
| Unit Type | # of Units | % of Total Units | Occupancy | Average Unit Size (Sq. Ft.) | Average Monthly Rent Per Unit | Annual Rent Per Sq. Ft. |
| 1 BR | 159 | 40.1% | 98.1% | 563 | $746 | $15.91 |
| 2 BR | 218 | 54.9% | 96.8% | 777 | $848 | $13.10 |
| 3 BR | 20 | 5.0% | 100.0% | 980 | $1,022 | $12.52 |
| Total / Wtd Avg. | 397 | 100.0% | 97.5% | 701 | $816 | $14.21 |
| (1) | Based on the underwritten rent roll dated February 9, 2022. |
| Lexington Village - Unit Mix(1) | ||||||
| Unit Type | # of Units | % of Total Units | Occupancy | Average Unit Size (Sq. Ft.) | Average Monthly Rent Per Unit | Annual Rent Per Sq. Ft. |
| 1 BR | 38 | 13.7% | 92.1% | 630 | $755 | $14.38 |
| 2 BR | 217 | 78.3% | 84.8% | 968 | $895 | $11.10 |
| 3 BR | 22 | 7.9% | 90.9% | 1,215 | $1,003 | $9.91 |
| Total / Wtd Avg. | 277 | 100.0% | 86.3% | 941 | $883 | $11.48 |
| (1) | Based on the underwritten rent roll dated February 9, 2022. |
| Gateway at the Greene - Unit Mix(1) | ||||||
| Unit Type | # of Units | % of Total Units | Occupancy | Average Unit Size (Sq. Ft.) | Average Monthly Rent Per Unit | Annual Rent Per Sq. Ft. |
| 1 BR | 39 | 37.9% | 94.9% | 560 | $1,000 | $21.42 |
| 2 BR | 64 | 62.1% | 96.9% | 760 | $1,055 | $16.66 |
| Total / Wtd Avg. | 103 | 100.0% | 96.1 % | 684 | $1,035 | $18.44 |
| (1) | Based on the underwritten rent roll dated February 9, 2022. |
COVID-19 Update. As of March 1, 2022, the Millennia Portfolio Loan is not subject to any modification or forbearance request. Rent collections for February 2022 were 100%. No tenants received rent deferrals or lease modifications. The first payment date of the Millennia Portfolio Loan is April 6, 2022. See “Risk Factors—Special Risks—Coronavirus Pandemic Has Adversely Affected the Global Economy and Will Likely Adversely Affect the Performance of the Mortgage Loans” in the Preliminary Prospectus.
Environmental Matters. According to Phase I environmental reports dated December 17, 2021, there are no recognized environmental conditions at any of the Millennia Portfolio Properties. With respect to the Summit Ridge Property, the environmental report recommended additional radon investigation. See “Description of the Mortgage Pool—Environmental Considerations” in the Preliminary Prospectus.
The Market. The Summit Ridge Property is located in the Akron submarket in Akron, Ohio. In the Akron market, approximately 23% of the inventory was constructed prior to 1970, and in the submarket approximately 27% of the inventory was also built during this period. Average rent in the submarket is $994 with an overall vacancy of 3.8%. The Summit Ridge Property is located in a major retail corridor with national retailers including Target, Giant Eagle, Sam’s Club, Best Buy, Home Depot and Dick’s Sporting Goods. According to the appraisal, the 2020 population within a one-, three- and five-mile radius of the Summit Ridge Property is 7,379, 90,380, and 223,462, respectively. According to the appraisal, the median household income within a one-, three- and five-mile radius of the Summit Ridge Property is $38,897, $50,533, and $49,815, respectively.
The Lexington Village Property is located in the Midtown submarket in Cleveland, Ohio, approximately three miles east of the Cleveland central business district (“CBD”) with convenient access to public transportation. The submarket vacancy is 7.2% with an average rent of $1,353 per unit. According to the appraisal, the 2020 population within a one-, three- and five-mile radius of the Lexington Village Property is 16,120, 110,725, and 254,066 respectively. According to the appraisal, the median household income within a one-, three- and five-mile radius of the Summit Ridge Property is $21,130, $27,043, and $34,080, respectively.
The Gateway at the Greene Property is located in the South Central Dayton submarket in Kettering, Ohio. The submarket vacancy is 3.1% with an average rent of $877. Since 2016, there have been 84 units added to the inventory of the submarket and 3,088 units
added to the inventory of the market. As of January 6, 2022 there are three properties under construction in the submarket and one property which is proposed. Gateway at the Greene is located adjacent to a large demand driver, a densely developed open-air retail center. According to the appraisal, the 2020 population within a one-, three- and five-mile radius of the Gateway at the Greene Property is 10,012, 67,420, and 188,254, respectively. According to the appraisal, the median household income within a one-, three- and five-mile radius of the Gateway at the Greene Property is $68,010, $67,630, and $68,515, respectively.
A-3-50
Various Various, OH |
Collateral Asset Summary – Loan No. 6 Millennia Portfolio |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$40,000,000 73.8% 1.24x 8.5% |
The following table presents certain information relating to the appraisals’ market rent conclusion for the Millennia Portfolio Properties:
| Average Market Rent and Vacancy(1) | ||||
| Property Name | Property Rent(2) |
Average Market Rent | Property Vacancy(2) |
Submarket Vacancy Rate |
| Summit Ridge | $816 | $994 | 2.5% | 3.8% |
| Lexington Village | $883 | $1,353 | 13.7% | 7.2% |
| Gateway at The Greene | $1,035 | $877 | 3.9% | 3.1% |
| (1) | Source: Appraisals. |
| (2) | Based on the underwritten rent roll dated February 9, 2022. |
| Concluded Market Rent(1) | |||
| Property Name | 1 BR | 2 BR | 3 BR |
| Summit Ridge | $741 | $842 | $1,020 |
| Lexington Village | $765 | $891 | $995 |
| Gateway at The Greene | $950 | $1,025 | NAV |
| (1) | Source: Appraisals. |
Cash Flow Analysis.
| Cash Flow Analysis(1) | |||||
| 2019 | 2020 | T-12 12/31/2021 | U/W | U/W Per Unit | |
| Gross Potential Rent | $7,532,143 | $7,849,125 | $7,910,389 | $8,160,540 | $10,502.63 |
| Vacancy | 2,029,497 | 2,094,825 | 1,128,954 | 613,781 | 789.94 |
| Bad Debt/Collection Loss | 94,604 | 129,037 | 217,665 | 81,605 | 105.03 |
| Concessions | 80,361 | 83,686 | 210,283 | 81,605 | 105.03 |
| Laundry / Vending | 25,044 | 25,223 | 24,391 | 24,391 | 31.39 |
| Other Income | 75,890 | 117,134 | 223,844 | 223,844 | 288.09 |
| Utility Reimbursement | 154,703 | 149,273 | 168,593 | 168,593 | 216.98 |
| Effective Gross Income | $5,583,318 | $5,833,207 | $6,770,316 | $7,800,376 | $10,039.09 |
| Total Operating Expenses | 4,244,698 | 4,011,423 | 4,772,824 | 4,412,652 | 5,679.09 |
| Net Operating Income(2) | $1,338,620 | $1,821,784 | $1,997,491 | $3,387,724 | $4,360.01 |
| Replacement Reserves | 0 | 0 | 0 | 256,572 | 330.21 |
| Net Cash Flow | $1,338,620 | $1,821,784 | $1,997,491 | $3,131,152 | $4,029.80 |
| (1) | Based on the underwritten rent roll dated February 9, 2022 |
| (2) | The increase from T-12 12/31/2021 Net Operating Income to U/W Net Operating Income is mainly driven by lease-up post renovation at all three properties, primarily the conversion from senior living to traditional multifamily at the Summit Ridge Property in addition to concession burn off during lease up and burnoff of COVID-19 related bad debt/collection loss. |
Property Management. The Millennia Portfolio Properties are currently managed by Millennia Housing Management, Ltd. which is a borrower sponsor affiliate.
Lockbox / Cash Management. The Millennia Portfolio Loan documents require a soft lockbox and springing cash management. All rents, revenues and receipts from residential tenants received by the borrower or property manager are required to be deposited into lender-controlled lockbox accounts within two business days of receipt. If no Trigger Period (as defined below) exists, all funds in the lockbox accounts will be transferred to the borrower’s operating account. During the continuance of a Trigger Period, all funds on deposit in the lockbox accounts are required to be transferred to a lender controlled cash management account on a daily basis, at which point, following deposits to tax and insurance reserves, payments of debt service, deposits to the replacement reserve, and payments of budgeted operating expenses and lender-approved extraordinary expenses, all funds are required to be deposited into an excess cash flow reserve, to be held as additional collateral during the continuance of such Trigger Period.
A “Trigger Period” will commence upon the occurrence of (i) an event of default under the Millennia Portfolio Loan documents (ii) a bankruptcy action of an affiliated property manager or (iii) the debt service coverage ratio falls below 1.20x.
A Trigger Period may be cured, (i) in the case of clause (i) above, if a cure of the event of default has been accepted by the lender, (ii) in the case of clause (ii) above, if the property manager is replaced with an unaffiliated property manager approved by the lender, and (iii) in the case of clause (iii) above, if the debt service coverage ratio exceeds 1.20x for two consecutive calendar quarters.
Initial and Ongoing Reserves. At loan origination, the borrowers deposited approximately (i) $102,174 into a tax reserve, (ii) $350,988 into an insurance reserve, (iii) $531,675 into an immediate repairs reserve (including roof replacement at the Summit Ridge Property and renovation of 14 down units at the Lexington Village Property, as well as sidewalk, flooring and seal coat repairs, installation of smoke
A-3-51
Various Various, OH |
Collateral Asset Summary – Loan No. 6 Millennia Portfolio |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$40,000,000 73.8% 1.24x 8.5% |
detectors at the Lexington Village Property and addition or reconfiguration of ADA accessible parking spaces) and (iv) $4,400 into a radon mitigation reserve.
Tax Reserve – On each monthly payment date, the borrowers are required to deposit into a real estate tax reserve, 1/12 of the estimated annual real estate taxes (initially approximately $34,058).
Insurance Reserve – On each monthly payment date, the borrowers are required to deposit into an insurance reserve, 1/12 of estimated annual insurance premiums (initially approximately $38,999).
Replacement Reserve – On each monthly payment date, the borrowers are required to deposit into a replacement reserve in (i) through February 2028, $21,403 and (ii) from and after March 2028, $32,417.
Current Mezzanine or Subordinate Indebtedness. None.
Future Mezzanine or Subordinate Indebtedness Permitted. None.
Partial Release. In connection with an arm’s length sale to an unrelated third party, the borrowers have the right to obtain the release of any individual Millennia Portfolio Property, after the expiration of the defeasance lockout period, by defeasing an amount equal to 120% of the allocated loan amount of such Millennia Portfolio Property, subject to the following conditions among others: (i) the debt service coverage ratio after giving effect to such release is at least the greater of (x) 1.25x and (y) the debt service coverage ratio immediately prior to such release, (ii) the loan-to-value ratio after giving effect to such release is no more than the lesser of (x) 73.8% and (y) the loan-to-value ratio immediately prior to such release and (iii) satisfaction of REMIC related conditions.
A-3-52
| Various | Collateral Asset Summary – Loan No. 7 InCommercial Net Lease Portfolio #5 |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$35,000,000 59.5% 1.64x 9.7% |
A-3-53
| Various | Collateral Asset Summary – Loan No. 7 InCommercial Net Lease Portfolio #5 |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$35,000,000 59.5% 1.64x 9.7% |
A-3-54
| Various | Collateral Asset Summary – Loan No. 7 InCommercial Net Lease Portfolio #5 |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$35,000,000 59.5% 1.64x 9.7% |
| Mortgage Loan Information | |
| Loan Seller: | CREFI |
| Loan Purpose: | Recapitalization |
| Borrower Sponsor: | Erik Conrad |
| Borrower: | InCommercial Net Lease DST 5 |
| Original Balance: | $35,000,000 |
| Cut-off Date Balance: | $35,000,000 |
| % by Initial UPB: | 3.8% |
| Interest Rate: | 4.10000% |
| Payment Date: | 6th of each month |
| First Payment Date: | May 6, 2022 |
| Maturity Date: | April 6, 2032 |
| Amortization: | Interest Only, Amortizing Balloon |
| Additional Debt: | None |
| Call Protection: | L(24),YM1(92),O(4) |
| Lockbox / Cash Management: | Hard / Springing |
| Reserves | |||
| Initial | Monthly | Cap | |
| Taxes: | $49,723 | $16,574 | NAP |
| Insurance: | $28,293 | $2,176 | NAP |
| Replacement: | $308,654 | Springing | NAP |
| TI/LC: | $0 | Springing | NAP |
| Immediate Repairs: | $14,955 | $0 | NAP |
| Property Information | |
| Single Asset / Portfolio: | Portfolio of 25 properties |
| Property Type(1): | Various |
| Collateral: | Fee Simple |
| Location(4): | Various |
| Year Built / Renovated(5): | Various |
| Total Sq. Ft.: | 307,520 |
| Property Management: | InCommercial, Inc. |
| Underwritten NOI: | $3,378,793 |
| Underwritten NCF: | $3,332,665 |
| Appraised Value: | $58,855,000 |
| Appraisal Date(3): | Various |
| Historical NOI(2) | |
| Most Recent NOI: | NAV |
| 2021 NOI: | NAV |
| 2020 NOI: | NAV |
| 2019 NOI: | NAV |
| Historical Occupancy(2) | |
| Most Recent Occupancy: | 100.0% (April 6, 2022) |
| 2021 Occupancy: | NAV |
| 2020 Occupancy: | NAV |
| 2019 Occupancy: | NAV |
| Financial Information | ||||||
| Tranche | Cut-off Date Balance | Balance per Sq. Ft. Cut-off / Balloon |
LTV Cut-off / Balloon |
U/W DSCR NOI / NCF |
U/W Debt Yield NOI / NCF |
U/W Debt Yield at Balloon NOI / NCF |
| Mortgage Loan | $35,000,000 | $114 / $94 | 59.5% / 48.9% | 1.66x / 1.64x | 9.7% / 9.5% | 11.7% / 11.6% |
| (1) | The InCommercial Net Lease Portfolio #5 Properties (as defined below) consist of 22 single tenant retail properties and three medical office properties. |
| (2) | Historical NOI and Historical Occupancy for the InCommercial Net Lease Portfolio #5 Properties are not available as they were recently acquired. |
| (3) | The InCommercial Net Lease Portfolio #5 Properties have multiple appraisal dates ranging from January 27, 2022 through February 10, 2022. |
| (4) | The InCommercial Net Lease Portfolio #5 Properties consist of 25 properties that are geographically dispersed and located in nine different states in the Mideast/Southeastern regions. |
| (5) | See “Portfolio Summary” below for further discussion of the InCommercial Net Lease Loan #5 Properties. |
| Sources and Uses | ||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
| Loan Amount | $35,000,000 | 58.3% | Purchase Price(1) | $58,401,676 | 97.2% | |
| Borrower Cash Contribution | 25,064,960 | 41.7 | Closing Costs | 1,261,659 | 2.1 | |
| Upfront Reserves | 401,625 | 0.7 | ||||
| Total Sources | $60,064,960 | 100.0% | Total Uses | $60,064,960 | 100.0% | |
| (1) | Eleven of the InCommercial Net Lease Portfolio #5 Properties were acquired between August 2021 and January 2022 and the remaining 14 InCommercial Net Lease Portfolio #5 Properties were acquired in conjunction with the InCommercial Net Lease Portfolio #5 Loan (as defined below). $14,352,432.38 of the Purchase Price amount is a payoff to Southern Bank for the short term debt that was used to acquire such 14 InCommercial Net Lease Portfolio #5 Properties. |
The Loan. The InCommercial Net Lease Portfolio #5 mortgage loan (the “InCommercial Net Lease Portfolio #5 Loan”) is secured by the borrower’s fee interest in a 307,520 sq. ft. retail and office portfolio comprised of 25 properties located across nine states (collectively, the “InCommercial Net Lease Portfolio #5 Properties”). The InCommercial Net Lease Portfolio #5 Loan has an original principal balance and an outstanding principal balance as of the Cut-off Date of $35,000,000 and represents approximately 3.8% of the Initial Pool Balance. The InCommercial Net Lease Portfolio #5 Loan accrues interest at a fixed rate of 4.10000% per annum. The proceeds of the InCommercial Net Lease Portfolio #5 Loan were primarily used to acquire fourteen of the twenty-five InCommercial Net Lease Portfolio #5 Properties, pay closing costs and fund upfront reserves. The InCommercial Net Lease Portfolio #5 Loan was originated on March 9, 2022 by Citi Real Estate Funding Inc. (“CREFI”).
The InCommercial Net Lease Portfolio #5 Loan has an initial term of 120 months and has a remaining term of 120 months as of the Cut-off Date. The InCommercial Net Lease Portfolio #5 Loan requires interest-only payments during the first year of its term, followed by payments of principal and interest sufficient to amortize the InCommercial Net Lease Portfolio #5 Loan over a 30-year amortization period. The scheduled maturity date of the InCommercial Net Lease Portfolio #5 Loan is the due date in April 2032. Provided that no event of default has occurred and is continuing under the InCommercial Net Lease Portfolio #5 Loan documents, voluntary prepayment of the InCommercial Net Lease Portfolio #5 Loan is permitted without prepayment premium or penalty on or after the monthly payment due date occurring in January 2032.
The Borrower and the Borrower Sponsor. The borrower is InCommercial Net Lease DST 5, a Delaware statutory trust and single purpose entity with one independent director. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the InCommercial Net Lease Portfolio #5 Loan.
A-3-55
| Various | Collateral Asset Summary – Loan No. 7 InCommercial Net Lease Portfolio #5 |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$35,000,000 59.5% 1.64x 9.7% |
The non-recourse carveout guarantor is Erik Conrad. Erik Conrad is the President of InCommercial Property Group, a core real estate investment firm focusing on freestanding real estate properties leased to NNN tenants that typically carry an investment grade rating. Mr. Conrad has been involved in over 2,000 net-leased real estate transactions.
The Properties. The InCommercial Net Lease Portfolio #5 Properties are comprised of 22 single tenant retail properties and three medical office properties leased on a long-term basis to investment grade tenants. The borrower master leases the InCommercial Net Lease Portfolio #5 Properties to an affiliate, InCommercial Net Lease MT 5, LLC, a Delaware limited liability company and single purpose entity, pursuant to a master lease expiring March 9, 2032. The lender may terminate such master lease upon a foreclosure of the related mortgage. For so long as the master lease is in effect, the borrower is entitled to receive only rents from the master lease, and not the underlying rents and other receipts from the InCommercial Net Lease Portfolio #5 Properties. The U/W NOI Debt Yield and U/W NCF DSCR of the InCommercial Net Lease Portfolio #5 Loan, based only on the master lease rent, is 7.7% and 1.33x, respectively. The U/W NOI Debt Yield and U/W NCF DSCR of the InCommercial Net Lease Portfolio #5 Loan, based on the rents from the underlying tenants (and not the master lease rent), is 9.7% and 1.64x, respectively.
The InCommercial Net Lease Portfolio #5 Properties are geographically diverse spanning across nine different states in the Midwest/Southeastern regions. Fourteen properties are occupied by Dollar General, two properties are occupied by Family Dollar, four properties are occupied by Tractor Supply Company, two properties are occupied by Fresenius Kidney Care, one property is occupied by Renal Care Options, LLC (“Renal Care”), and two properties are occupied by Walgreen Co. The portfolio possesses a weighted average lease term of approximately 10.8 years remaining. In addition to the long term, investment grade nature of 100% of the tenants in occupancy, the portfolio also benefits from its geographic diversification. Dollar General represents the largest tenant concentration, accounting for approximately 39.2% of the portfolio’s underwritten base rent. The Dollar General exposure is spread out across 14 different locations encompassing four states. Fresenius Kidney Care is spread across two different locations, Louisiana and Mississippi, and accounts for approximately 6.6% of the portfolio’s underwritten base rent. Tractor Supply Company occupies four locations and accounts for approximately 17.5% of the portfolio’s underwritten base rent. Renal Care is located in South Carolina, and accounts for approximately 7.1% of the portfolio’s underwritten base rent. Walgreen Co. occupies two locations and accounts for approximately 22.8% of the portfolio’s underwritten base rent. Family Dollar occupies two locations and accounts for approximately 6.8% of the portfolio’s underwritten base rent.
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| Various | Collateral Asset Summary – Loan No. 7 InCommercial Net Lease Portfolio #5 |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$35,000,000 59.5% 1.64x 9.7% |
The following table presents detailed information with respect to each of the InCommercial Net Lease Portfolio #5 Properties.
| Portfolio Summary | |||||||||||
| Property Name | Property Subtype | Year Built / Renovated(1) | Total Sq.Ft.(2) |
Occ. (%)(2) | Allocated Mortgage Loan Amount | % Allocated Mortgage Loan Amount | As-Is Appraised Value(1) | % As-Is Appraised Value | U/W NCF(2) | % U/W NCF(2) | Lease Expiration |
| Fresenius, Belzoni, MS | Medical | 2018/NAP | 5,112 | 100.0% | $1,165,000 | 3.3% | $1,950,000 | 3.3% | $113,103 | 3.4% | 7/31/2033 |
| Tractor Supply Co, Kewaunee, WI | Single Tenant | 2002/2021 | 35,330 | 100.0% | $1,335,000 | 3.8% | $2,290,000 | 3.9% | $119,579 | 3.6% | 11/30/2032 |
| Tractor Supply Co, Oconto, WI | Single Tenant | 2000/2021 | 34,877 | 100.0% | $1,360,000 | 3.9% | $2,330,000 | 4.0% | $122,019 | 3.7% | 9/30/2032 |
| Fresenius, Rayville, LA | Medical | 2017/NAP | 5,588 | 100.0% | $1,070,000 | 3.1% | $1,800,000 | 3.1% | $109,344 | 3.3% | 5/31/2032 |
| Family Dollar, Linden, AL | Single Tenant | 2021/NAP | 10,500 | 100.0% | $1,120,000 | 3.2% | $1,800,000 | 3.1% | $117,624 | 3.5% | 8/31/2031 |
| Family Dollar, Franklinton, LA | Single Tenant | 2021/NAP | 10,500 | 100.0% | $1,070,000 | 3.1% | $1,750,000 | 3.0% | $108,252 | 3.2% | 12/31/2031 |
| Renal Care, Moncks Corner, SC | Medical | 2020/NAP | 7,490 | 100.0% | $2,525,000 | 7.2% | $4,100,000 | 7.0% | $240,047 | 7.2% | 1/31/2036 |
| Tractor Supply Co, Lake Ch, LA | Single Tenant | 1995/2007 | 21,974 | 100.0% | $1,625,000 | 4.6% | $2,750,000 | 4.7% | $155,131 | 4.7% | 12/31/2033 |
| Walgreens, Meridian, ID | Single Tenant | 2000/NAP | 15,120 | 100.0% | $2,965,000 | 8.5% | $5,100,000 | 8.7% | $276,291 | 8.3% | 12/31/2030 |
| Tractor Supply Co, Ogdensbg, NY | Single Tenant | 2011/NAP | 19,097 | 100.0% | $1,945,000 | 5.6% | $3,300,000 | 5.6% | $173,194 | 5.2% | 1/31/2036 |
| Walgreens, Mount Pleasant, SC | Single Tenant | 2011/NAP | 13,386 | 100.0% | $5,100,000 | 14.6% | $8,600,000 | 14.6% | $489,686 | 14.7% | 10/31/2036 |
| Dollar General, Billingsley, AL | Single Tenant | 2017/NAP | 9,100 | 100.0% | $850,000 | 2.4% | $1,450,000 | 2.5% | $80,825 | 2.4% | 12/31/2032 |
| Dollar General, Rushford, NY | Single Tenant | 2017/NAP | 9,002 | 100.0% | $1,000,000 | 2.9% | $1,700,000 | 2.9% | $94,897 | 2.8% | 11/30/2032 |
| Dollar General, South Dayton, NY | Single Tenant | 2017/NAP | 9,100 | 100.0% | $825,000 | 2.4% | $1,400,000 | 2.4% | $76,992 | 2.3% | 11/30/2032 |
| Dollar General, Bay Minette, AL | Single Tenant | 2017/NAP | 9,100 | 100.0% | $925,000 | 2.6% | $1,600,000 | 2.7% | $88,736 | 2.7% | 7/31/2032 |
| Dollar General, Fruithurst, AL | Single Tenant | 2017/NAP | 9,026 | 100.0% | $925,000 | 2.6% | $1,525,000 | 2.6% | $87,943 | 2.6% | 10/31/2032 |
| Dollar General, Gaylesville, AL | Single Tenant | 2018/NAP | 9,026 | 100.0% | $825,000 | 2.4% | $1,400,000 | 2.4% | $80,401 | 2.4% | 11/30/2032 |
| Dollar General, Burlington, WV | Single Tenant | 2016/NAP | 9,026 | 100.0% | $1,070,000 | 3.1% | $1,800,000 | 3.1% | $103,395 | 3.1% | 9/30/2031 |
| Dollar General, Dixie, WV | Single Tenant | 2017/NAP | 9,100 | 100.0% | $975,000 | 2.8% | $1,600,000 | 2.7% | $91,680 | 2.8% | 5/31/2032 |
| Dollar General, Ghent, WV | Single Tenant | 2017/NAP | 10,640 | 100.0% | $1,360,000 | 3.9% | $2,300,000 | 3.9% | $129,507 | 3.9% | 4/30/2032 |
| Dollar General, Hinton, WV | Single Tenant | 2016/NAP | 9,026 | 100.0% | $1,025,000 | 2.9% | $1,730,000 | 2.9% | $100,321 | 3.0% | 10/31/2031 |
| Dollar General, Lerona, WV | Single Tenant | 2017/NAP | 9,100 | 100.0% | $1,020,000 | 2.9% | $1,660,000 | 2.8% | $95,917 | 2.9% | 2/29/2032 |
| Dollar General, Lenore, WV | Single Tenant | 2016/NAP | 9,100 | 100.0% | $1,120,000 | 3.2% | $1,830,000 | 3.1% | $106,332 | 3.2% | 9/30/2031 |
| Dollar General, Walker, WV | Single Tenant | 2017/NAP | 9,100 | 100.0% | $975,000 | 2.8% | $1,640,000 | 2.8% | $94,726 | 2.8% | 2/29/2032 |
| Dollar General, Knox City, TX | Single Tenant | 2017/NAP | 9,100 | 100.0% | $825,000 | 2.4% | $1,450,000 | 2.5% | $76,724 | 2.3% | 4/30/2032 |
| Total / Wtd. Avg. | 307,520 | 100.0% | $35,000,000 | 100.0% | $58,855,000 | 100.0% | $3,332,665 | 100.0% | |||
| (1) | Source: Appraisal. |
| (2) | Based on the underwritten rent roll as of April 6, 2022. |
COVID-19 Update. As of February 21, 2022, the tenants at the InCommercial Net Lease Portfolio #5 Properties are current on rent and have not missed any payments throughout the COVID-19 pandemic. The InCommercial Net Lease Portfolio #5 Loan is not subject to any modification or forbearance requests. The first payment date of the InCommercial Net Lease Portfolio #5 Loan is May 6, 2022. See “Risk Factors—Special Risks—Coronavirus Pandemic Has Adversely Affected the Global Economy and Will Likely Adversely Affect the Performance of the Mortgage Loans” in the Preliminary Prospectus.
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| Various | Collateral Asset Summary – Loan No. 7 InCommercial Net Lease Portfolio #5 |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$35,000,000 59.5% 1.64x 9.7% |
| Tenant Summary(1) | |||||||
| Tenant | Ratings | Net Rentable | % of Net | U/W Base | U/W Base | % of Total | Lease |
| (Moody’s/Fitch/S&P)(2) | Area (Sq. Ft.) | Rentable Area | Rent | Rent PSF | U/W Base Rent | Expiration | |
| Dollar General(3) | Baa2/NR/BBB | 128,546 | 41.8% | $1,357,311 | $10.56 | 39.2% | Various |
| Tractor Supply Company(4) | Baa1/NR/BBB | 111,278 | 36.2 | 604,302 | $5.43 | 17.5 | Various |
| Walgreen Co.(7) | Baa2/NR/BBB | 28,506 | 9.3 | 789,000 | $27.68 | 22.8 | Various |
| Family Dollar(6) | Baa2/NR/NR | 21,000 | 6.8 | 234,255 | $11.16 | 6.8 | Various |
| Fresenius Kidney Care(5) | Baa3/BBB-/BBB | 10,700 | 3.5 | 229,496 | $21.45 | 6.6 | Various |
| Renal Care | B3/NR/B- | 7,490 | 2.4 | 247,524 | $33.05 | 7.1 | 1/31/2036 |
| Total / Wtd. Avg. Major Tenants | 307,520 | 100.0% | $3,461,887 | $11.26 | 100.0% | ||
| Remaining Tenants | 0 | 0.0 | $0.00 | 0.0 | |||
Total / Wtd. Avg. Occupied Collateral |
307,520 | 100.00% | 100.0% | ||||
| Vacant | 0 | 0.0 | |||||
| Total | 307,520 | 100.00% | |||||
| (1) | Based on the underwritten rent roll as of April 6, 2022, inclusive of the average contractual rent steps of $39,858 for Fresenius Kidney Care and three Tractor Supply Company properties. |
| (2) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
| (3) | Dollar General has multiple lease expirations ranging from September 30, 2031 through December 31, 2032. |
| (4) | Tractor Supply Company has multiple lease expirations ranging from September 30, 2032 through January 31, 2036. |
| (5) | Fresenius Kidney Care has two lease expirations on May 31, 2032 and July 31, 2033. |
| (6) | Family Dollar has two lease expirations on August 31, 2031 and December 31, 2031. |
| (7) | Walgreen Co. has the right to terminate its lease as of October 31, 2036 or as of the last day of any month thereafter, with 12 months’ prior notice for the Walgreens – Mount Pleasant property. Walgreen Co. has two lease expirations on December 31, 2030 and October 31, 2036. |
| Lease Rollover Schedule(1)(2) | ||||||||
| Year | # of Leases Expiring |
Total Expiring Sq. Ft. |
% of Total Sq. Ft. Expiring |
Cumulative Sq. Ft. Expiring |
Cumulative % of Sq. Ft. Expiring |
Annual U/W Base Rent PSF |
% U/W Base Rent Rolling |
Cumulative % of U/W Base Rent |
| MTM | 0 | 0 | 0.0% | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
| 2022 | 0 | 0 | 0.0 | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
| 2023 | 0 | 0 | 0.0 | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
| 2024 | 0 | 0 | 0.0 | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
| 2025 | 0 | 0 | 0.0 | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
| 2026 | 0 | 0 | 0.0 | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
| 2027 | 0 | 0 | 0.0 | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
| 2028 | 0 | 0 | 0.0 | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
| 2029 | 0 | 0 | 0.0 | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
| 2030 | 1 | 15,120 | 4.9 | 15,120 | 4.9% | $18.85 | 8.2% | 8.2% |
| 2031 | 5 | 48,152 | 15.7 | 63,272 | 20.6% | $11.53 | 16.0% | 24.3% |
| 2032 | 14 | 177,189 | 57.6 | 240,461 | 78.2% | $7.95 | 40.7% | 65.0% |
| 2033 & Thereafter | 5 | 67,059 | 21.8 | 307,520 | 100.0% | $18.09 | 35.0% | 100.0% |
| Vacant | NAP | 0 | 0.0 | 307,520 | 100.0% | NAP | NAP | NAP |
| Total / Wtd. Avg. | 25 | 307,520 | 100.0% | $11.26 | 100.0% | |||
| (1) | Based on the underwritten rent roll as of April 6, 2022, inclusive of the average contractual rent steps of $39,858 for Fresenius Kidney Care and three Tractor Supply Company properties. |
| (2) | Certain tenants may have termination or contraction options (which may become exercisable prior to the originally stated expiration date of the tenant lease) that are not considered in the above Lease Rollover Schedule. |
Environmental Matters. According to the Phase I environmental reports dated between September 20, 2021 and February 22, 2022, there are no recognized environmental conditions or recommendations for further action at any of the InCommercial Net Lease Portfolio #5 Properties.
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| Various | Collateral Asset Summary – Loan No. 7 InCommercial Net Lease Portfolio #5 |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$35,000,000 59.5% 1.64x 9.7% |
The Market.
Market Analysis(1) | |||||
| Property Name | Market | Submarket | Submarket Inventory (SF) | Submarket Vacancy | Submarket NNN Rent PSF |
| Fresenius, Belzoni, MS | 50-Mile Radius | NAP | 8,574,989 | 2.40% | $9.46 |
| Tractor Supply Co, Kewaunee, WI | Green Bay | Kewaunee County | 769,205 | 2.00% | $10.65 |
| Tractor Supply Co, Oconto, WI | Green Bay | Oconto County | 1,167,129 | 5.00% | $9.97 |
| Fresenius, Rayville, LA | Monroe | NAP | 3,664,423 | 4.80% | $17.08 |
| Family Dollar, Linden, AL | Marengo County | 15-Mile Radius | 997,247 | 0.30% | $23.00 |
| Family Dollar, Franklinton, LA | New Orleans | NAP | 85,331,725 | 3.30% | $17.51 |
| Renal Care, Moncks Corner, SC | Charleston / N Charleston | Outlying Berkeley County | 717,462 | 6.20% | $23.08 |
| Tractor Supply Co, Lake Ch, LA | Lake Charles | 2-Mile Radius | 542,211 | 0.90% | $9.75 |
| Walgreens, Meridian, ID | Boise | Meridian | 6,109,756 | 5.20% | $19.74 |
| Tractor Supply Co, Ogdensbg, NY | St. Lawrence County | Ogdensburg | 902,939 | 5.70% | $12.00 |
| Walgreens, Mount Pleasant, SC | Charleston / N Charleston | East Islands / Mt Pleasant | 7,034,536 | 4.00% | $27.26 |
| Dollar General, Billingsley, AL | Montgomery | Outlying Autauga County | 210,114 | 2.40% | NAP |
| Dollar General, Rushford, NY | 25-Mile Radius | 15-Mile Radius | 1,081,202 | 2.20% | $10.00 |
| Dollar General, South Dayton, NY | 25-Mile Radius | 15-Mile Radius | 2,193,247 | 3.70% | $4.00 |
| Dollar General, Bay Minette, AL | Mobile | Baldwin County | 17,385,240 | 2.50% | $13.57 |
| Dollar General, Fruithurst, AL | Cleburne-25 miles | 20-Mile Radius | 2,958,471 | 2.50% | $13.59 |
| Dollar General, Gaylesville, AL | Cherokee County | 15-Mile Radius | 2,332,623 | 3.00% | $7.66 |
| Dollar General, Burlington, WV | West Virginia | Mineral County | 814,091 | 0.30% | $7.25 |
| Dollar General, Dixie, WV | Beckley | Fayette County | 3,496,905 | 0.90% | $9.18 |
| Dollar General, Ghent, WV | Beckley | Raleigh County | 7,882,733 | 3.00% | $5.88 |
| Dollar General, Hinton, WV | West Virginia | Beckley | 11,379,196 | 2.60% | $6.80 |
| Dollar General, Lerona, WV | West Virginia | Mercer County | 6,128,442 | 1.20% | $6.76 |
| Dollar General, Lenore, WV | West Virginia | Charleston | 20,309,910 | 1.70% | $16.06 |
| Dollar General, Walker, WV | West Virginia | Wood County | 9,323,765 | 2.80% | $12.50 |
| Dollar General, Knox City, TX | Abilene | Taylor County | 9,241,802 | 3.10% | $11.99 |
| (1) | Source: Appraisal. |
Cash Flow Analysis.
| Cash Flow Analysis(1)(2) | ||
| U/W | U/W PSF | |
| Base Rent | $3,422,030 | $11.13 |
| Total Reimbursement Revenue | 692,855 | $2.25 |
| Contractual Rent Steps | 39,858 | $0.13 |
| Gross Revenue | $4,154,742 | $13.51 |
| Less: Vacancy | (83,095) | (0.27) |
| Effective Gross Income | $4,071,648 | $13.24 |
| Total Operating Expenses | 692,855 | 2.25 |
| Net Operating Income | $3,378,793 | $10.99 |
| TI/LC | 0 | 0.00 |
| Replacement Reserves | 46,128 | 0.15 |
| Net Cash Flow | $3,332,665 | $10.84 |
| (1) | Based on the underwritten rent roll as of April 6, 2022, inclusive of the average contractual rent steps of $39,858 for Fresenius Kidney Care and three Tractor Supply Company properties. |
| (2) | Historical cash flows for the InCommercial Net Lease Portfolio #5 Properties are not available as they were recently acquired. |
Property Management. The InCommercial Net Lease Portfolio #5 Properties are managed by InCommercial, Inc., an affiliate of the borrower.
Lockbox / Cash Management. The InCommercial Net Lease Portfolio #5 Loan is structured with a hard lockbox and springing cash management. The borrower, manager, or master lessee is required to cause all rents due under the master lease, or if the master lease has been terminated, all revenue generated by the InCommercial Net Lease Portfolio #5 Properties, to be deposited directly into a lender approved lockbox account. All funds received by the borrower, manager, or master lessee are required to be deposited in a lockbox account within two business days following receipt (or, to the extent no Trigger Period (as defined below) exists, within five days of
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| Various | Collateral Asset Summary – Loan No. 7 InCommercial Net Lease Portfolio #5 |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$35,000,000 59.5% 1.64x 9.7% |
receipt). During the continuance of a Trigger Period, all funds on deposit in the lockbox account are required to be swept each business day into a lender-controlled cash management account and applied on each payment date and disbursed in accordance with the InCommercial Net Lease Portfolio #5 Loan documents. Provided no Trigger Period is continuing, funds on deposit in the lockbox accounts will be disbursed each business day to or at the direction of the borrower.
A “Trigger Period” means a period (A) commencing upon the earliest of (i) the occurrence and continuance of an event of default (beyond any applicable, notice and cure periods), (ii) the debt service coverage ratio being less than 1.30x (iii) the occurrence of a Specified Tenant Trigger Period (as defined below) and (iv) the date that is eighteen months prior to the maturity date; and (B) expiring upon (w) with regard to any Trigger Period commenced in connection with clause (i) above, the cure (if applicable) of such event of default, (x) with regard to any Trigger Period commenced in connection with clause (ii) above, the date that the debt service coverage ratio is equal to or greater than 1.30x for two consecutive calendar quarters, (y) with regard to any Trigger Period commenced in connection with clause (iii) above, a Specified Tenant Trigger Period ceasing to exist in accordance with the terms of the InCommercial Net Lease Portfolio #5 Loan documents, and (z) with regard to any Trigger Period commenced in connection with clause (iv) above, the occurrence of either (A) a qualified transfer in accordance with the terms of the InCommercial Net Lease Portfolio #5 Loan documents (which provides the borrower the right to transfer the entire ownership interests in borrower, without lender’s consent, to an approved transferee provided certain conditions are satisfied, including, among other things, the delivery of a REMIC opinion, a new non-consolidation opinion, a replacement guaranty and an environmental indemnity, and a rating agency confirmation, and that the borrower converts to a limited liability company), or (B) the weighted average number of years remaining on the term of each lease at the InCommercial Net Lease Portfolio #5 Properties as of the date set forth in such clause (iv) is at least six years, as determined by lender in its reasonable discretion.
A “Specified Tenant” means, as applicable, (i) Walgreens, (ii) Dollar General, and/or (iii) any other lessee of the Specified Tenant space, together with any parent company of any such Specified Tenant, and any affiliate providing credit support for, or guarantor of, the Specified Tenant lease.
A “Specified Tenant Trigger Period” means a period (A) commencing upon the first to occur of (i) Specified Tenant being in monetary default or material nonmonetary default under the applicable Specified Tenant lease beyond all applicable notice and cure periods (provided, however, that the foregoing will not be deemed to include delayed reimbursements for any unforeseen immaterial landlord work items which are being disputed in accordance with the terms of the applicable Specified Tenant lease), (ii) Specified Tenant(s) failing to be in actual, physical possession of, or failing to be open to the public for business during customary hours in, at least 75% of the aggregate Specified Tenant space(s), and/or “going dark” in 25% or more of the aggregate Specified Tenant space(s), other than Permitted Temporary Closures (as defined below), (iii) Specified Tenant giving written notice that it is terminating two or more of its leases at the InCommercial Net Lease Portfolio #5 Properties, for all or any substantial portion of the applicable Specified Tenant space, (iv) any termination or cancellation of any Specified Tenant lease (including, without limitation, rejection in any bankruptcy or similar insolvency proceeding) and/or any Specified Tenant lease failing to otherwise be in full force and effect, (v) any bankruptcy or similar insolvency of a Specified Tenant or Specified Tenant parent and (vi) the occurrence of a Credit Rating Trigger (as defined below); and (B) expiring upon the first to occur of (1) the satisfaction of the Specified Tenant Cure Conditions (as defined below) or (2) the borrower leasing the entire Specified Tenant space (or applicable portion thereof) in accordance with the applicable terms and conditions of the InCommercial Net Lease Portfolio #5 Loan documents (pursuant to a replacement lease or otherwise), the applicable tenant under such lease being in actual, physical occupancy of, and open to the public for business in (subject to temporary closures due to (a) applicable legal requirements (including, without limitation, governmental mandates), (b) force majeure, (c) restoration following casualty or condemnation or (d) restocking, repairs, maintenance or other like activities undertaken by the applicable Specified Tenant in the ordinary course of its business and in accordance with the terms of the applicable lease, in each case solely to the extent that any such temporary closure does not exceed 90 days), the space demised under its lease and paying the full amount of the rent due under its lease.
The “Specified Tenant Cure Conditions” means each of the following, as applicable (i) the applicable Specified Tenant has cured all defaults under the applicable Specified Tenant lease, (ii) the applicable Specified Tenant is in actual, physical possession of the Specified Tenant space (or applicable portion thereof), open to the public for business during customary hours and not “dark” in the Specified Tenant space (or applicable portion thereof), other than Permitted Temporary Closures, (iii) the applicable Specified Tenant has revoked or rescinded all termination or cancellation notices with respect to its Specified Tenant lease, and has re-affirmed the applicable Specified Tenant lease as being in full force and effect, (iv) with respect to any applicable bankruptcy or insolvency proceedings involving the applicable Specified Tenant, Specified Tenant parent and/or the applicable Specified Tenant lease, the applicable Specified Tenant and/or Specified Tenant parent is no longer insolvent or subject to any bankruptcy or insolvency proceedings and has affirmed the applicable Specified Tenant lease pursuant to final, non-appealable order of a court of competent jurisdiction, (v) the applicable Specified Tenant is paying full, unabated rent under the applicable Specified Tenant lease and (vi) in the event the Specified Tenant Trigger Period is due to a Credit Rating Trigger, the Credit Rating Condition (as defined below) is again satisfied with respect to each Specified Tenant or Specified Tenant parent, as applicable.
A “Permitted Temporary Closure” means temporary closures due to (i) applicable legal requirements (including, without limitation, governmental mandates), (ii) force majeure, (iii) restoration following casualty or condemnation or (iv) restocking, repairs, maintenance or other like activities undertaken by the applicable Specified Tenant in the ordinary course of its business and in accordance with the terms of the applicable lease, in each case solely to the extent that any such temporary closure does not exceed 90 days.
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| Various | Collateral Asset Summary – Loan No. 7 InCommercial Net Lease Portfolio #5 |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$35,000,000 59.5% 1.64x 9.7% |
A “Credit Rating Condition” means a condition that will be satisfied to the extent that, as of the applicable date of determination, the senior unsecured credit rating of each Specified Tenant (or Specified Tenant parent, as applicable) being at least “BB”, “Ba2” or “BB” as rated by S&P, Moody’s or Fitch (or the equivalent thereof by any other rating agency which rates such entity), respectively.
A “Credit Rating Trigger” means the occurrence of the senior unsecured credit rating of any Specified Tenant (or Specified Tenant parent, as applicable) falling below the rating set forth in the Credit Rating Condition.
Initial and Ongoing Reserves. At origination of the InCommercial Net Lease Portfolio #5 Loan, the borrower deposited approximately (i) $49,723 into a real estate tax reserve account, (ii) $28,293 into an insurance reserve account, (iii) $308,654 into a replacement reserve account, and (iv) $14,955 into an immediate repairs reserve account.
Tax Reserve. The borrower will have no obligation to make monthly deposits into the tax reserve to the extent that the Reserve Waiver Conditions (as defined below) with respect to the tax reserve are satisfied, and to the extent not satisfied, the borrower is required to deposit into a real estate tax reserve, on a monthly basis, 1/12 of the real estate taxes that lender estimates will be payable for the applicable InCommercial Net Lease Portfolio #5 Properties for which the Reserve Waiver Conditions have not been satisfied. At the time of origination of the InCommercial Net Lease Portfolio #5 Loan, the Reserve Waiver Conditions for deposits to the tax reserve were not satisfied with respect to certain of the individual properties, and monthly tax reserve deposits were required with respect thereto (initially estimated to be approximately $16,574).
Insurance Reserve. The borrower will have no obligation to make monthly deposits into the insurance reserve to the extent that the Reserve Waiver Conditions with respect to the insurance reserve are satisfied, and to the extent not satisfied, the borrower is required to deposit into an insurance reserve, on a monthly basis, 1/12 of the insurance premiums that lender estimates will be payable during the next 12 months for the applicable InCommercial Net Lease Portfolio #5 Properties and related insurance coverages for which the Reserve Waiver Conditions have not been satisfied. At the time of origination of the InCommercial Net Lease Portfolio #5 Loan, the reserve waiver conditions for deposits to the insurance reserve were not satisfied with respect to certain of the InCommercial Net Lease Portfolio #5 Properties, and monthly insurance reserve deposits were required with respect thereto (initially estimated to be approximately $2,176).
The “Reserve Waiver Conditions” means, with respect to the tax reserve and/or the insurance reserve (as applicable), lender’s determination in its reasonable discretion that each of the following have been satisfied: (i) no Trigger Period (as defined above) has occurred and is continuing, (ii) the leases with the tenants are in full force and effect, (iii) the tenants are each required, pursuant to the terms of their tenant leases, to timely pay and perform, at their sole cost and expense, the obligations and liabilities for which the applicable tax reserve and/or insurance reserve, was established, and (iv) the tenants are in fact timely paying and performing such obligations and liabilities in accordance with the terms of their applicable leases, and upon request, lender receives evidence of such payment and performance as and when same is due.
Replacement Reserve. The borrower deposited $308,654 into a replacement reserve at closing. To the extent that no Trigger Period exists, no monthly reserve deposits are required. During the continuance of a Trigger Period, the borrower is required to deposit an amount equal to 1/12 of the product of (i) $0.15 multiplied by (ii) the aggregate square footage of all space with respect to which a Trigger Period exists.
TI/LC Reserve – On each monthly payment date for which the applicable Specified Tenant or its parent company at any individual InCommercial Net Lease Portfolio #5 Property does not maintain an investment grade long-term unsecured debt rating from each of the rating agencies which rate such entity (the “Leasing Reserve Waiver Condition”), the borrower is required to deposit into a TI/LC reserve an amount equal to one-twelfth of the product of (i) $1.50 multiplied by (ii) the aggregate square footage of all space with respect to which the Leasing Reserve Waiver Condition is not satisfied. At origination of the InCommercial Net Lease Portfolio #5 Loan the Leasing Reserve Waiver Condition was satisfied with respect to the tenants at each of the individual InCommercial Net Lease Portfolio #5 Properties.
Current Mezzanine or Subordinate Indebtedness. None.
Future Mezzanine or Subordinate Indebtedness Permitted. None.
Partial Release. Provided that no event of default is continuing under the related InCommercial Net Lease Portfolio #5 Loan documents, at any time on or after two years from the securitization date, the borrower may partially prepay the InCommercial Net Lease Portfolio #5 Loan and obtain the release of one or more individual InCommercial Net Lease Portfolio #5 Properties, in each case, provided that, among other conditions: (i) the borrower partially prepays the InCommercial Net Lease Portfolio #5 Loan in an amount equal to the (a) with respect to an InCommercial Net Lease Portfolio #5 Property for which the applicable specified tenant is “dark” and/or not open to the public for business during customary hours, an amount equal to 110% of the allocated loan amount for the InCommercial Net Lease Portfolio #5 Property, and (b) with respect to any other InCommercial Net Lease Portfolio #5 Property, an amount equal to 120% of the
A-3-61
| Various | Collateral Asset Summary – Loan No. 7 InCommercial Net Lease Portfolio #5 |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$35,000,000 59.5% 1.64x 9.7% |
allocated loan amount for the individual InCommercial Net Lease Portfolio #5 Property, and pays the applicable yield maintenance premium with respect to such prepayment; (ii) as of the date of notice of the partial release and the consummation of the partial release, after giving effect to the release, (a) the debt service coverage ratio with respect to the remaining InCommercial Net Lease Portfolio #5 Properties is greater than the greater of (1) 1.60x, and (2) the debt service coverage ratio for all of the InCommercial Net Lease Portfolio #5 Properties immediately prior to the date of notice of the partial release or the consummation of the partial release, (b) the debt yield with respect to the remaining InCommercial Net Lease Portfolio #5 Properties is greater than the greater of (1) 9.50%, and (2) the debt yield for all of the InCommercial Net Lease Portfolio #5 Properties immediately prior to the date of notice of the partial release or the consummation of the partial release, and (c) the loan-to-value ratio with respect to the remaining InCommercial Net Lease Portfolio #5 Properties is no greater than the lesser of (a) 60.0% and (b) the loan-to-value ratio for all of the InCommercial Net Lease Portfolio #5 Properties immediately prior to the date of notice of the partial release or the consummation of the partial release; (iii) the borrower delivers (if required by the lender) a rating agency confirmation; and (iv) the borrower delivers a REMIC opinion.
A-3-62
7215-7597 170th Avenue Northeast and 17181-17209 Redmond Way Redmond, WA 98052 |
Collateral Asset Summary – Loan No. 8 Redmond Community Center |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$34,500,000 61.3% 2.20x 9.4% |
A-3-63
7215-7597 170th Avenue Northeast and 17181-17209 Redmond Way Redmond, WA 98052 |
Collateral Asset Summary – Loan No. 8 Redmond Community Center |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$34,500,000 61.3% 2.20x 9.4% |
A-3-64
7215-7597 170th Avenue Northeast and 17181-17209 Redmond Way Redmond, WA 98052 |
Collateral Asset Summary – Loan No. 8 Redmond Community Center |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$34,500,000 61.3% 2.20x 9.4% |
| Mortgage Loan Information | |
| Loan Seller: | GACC |
| Loan Purpose: | Acquisition |
| Borrower Sponsor: | Collin P. Madden |
| Borrower: | WBMT Buildings LLC |
| Original Balance: | $34,500,000 |
| Cut-off Date Balance: | $34,500,000 |
| % by Initial UPD: | 3.8% |
| Interest Rate: | 4.08900% |
| Payment Date: | 6th of each month |
| First Payment Date: | April 6, 2022 |
| Maturity Date: | March 6, 2032 |
| Amortization: | Interest Only |
| Additional Debt: | NAP |
| Call Protection: | L(25),D(90),O(5) |
| Lockbox / Cash Management: | Springing / Springing |
| Reserves(1) | |||
| Initial | Monthly | Cap | |
| Taxes: | $0 | $38,829 | NAP |
| Insurance: | $0 | Springing | NAP |
| Replacement: | $374,315 | $1,712 | $41,098 |
| TI/LC: | $611,698 | $13,746 | $329,895 |
| Other(2): | $3,551,271 | $0 | NAP |
| Property Information | |
| Single Asset / Portfolio: | Single Asset |
| Property Type: | Anchored Retail |
| Collateral: | Fee Simple |
| Location: | Redmond, WA |
| Year Built / Renovated: | 1996, 1998, 1999 / NAP |
| Total Sq. Ft.: | 109,965 |
| Property Management: | JSH Properties, Inc. |
| Underwritten NOI: | $3,259,749 |
| Underwritten NCF: | $3,151,316 |
| Appraised Value: | $56,300,000 |
| Appraisal Date: | January 3, 2022 |
| Historical NOI(3) | |
| Most Recent NOI: | NAV |
| 2021 NOI: | NAV |
| 2020 NOI: | NAV |
| 2019 NOI: | NAV |
| Historical Occupancy(3) | |
| Most Recent Occupancy: | 97.3% (February 15, 2022) |
| 2021 Occupancy: | NAV |
| 2020 Occupancy: | NAV |
| 2019 Occupancy: | NAV |
| Financial Information | ||||||
| Tranche | Cut-off Date Balance | Balance per Sq. Ft. Cut-off / Balloon |
LTV Cut-off / Balloon |
U/W DSCR NOI / NCF |
U/W Debt Yield NOI / NCF |
U/W Debt Yield at Balloon NOI / NCF |
| Mortgage Loan | $34,500,000 | $314 / $314 | 61.3% / 61.3% | 2.28x / 2.20x | 9.4% / 9.1% | 9.4% / 9.1% |
| (1) | See “Initial and Ongoing Reserves” herein. |
| (2) | Other Reserves includes (i) H-Mart TI Allowance Reserve ($2,877,691), Free Rent Reserve ($634,763) and PetCo Reserve ($38,817). |
| (3) | Historical NOI and Historical Occupancy are not available due to the acquisition of the Redmond Community Center being part of a larger acquisition and separate financial information not having been provided for the collateral. |
The Loan. The mortgage loan (the “Redmond Community Center Loan”) has an original principal balance and an outstanding principal balance as of the Cut-off Date of $34,500,000, and is secured by a first mortgage encumbering the borrower’s fee simple interest in a community anchored retail center located in Redmond, Washington (the “Redmond Community Center Property”).
The Redmond Community Center Loan has a 120-month interest only term and accrues interest at a rate of 4.08900% per annum.
The proceeds of the Redmond Community Center Loan, together with borrower sponsor equity, were used to acquire the Redmond Community Center Property, fund upfront reserves and pay loan origination costs.
| Sources and Uses | ||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
| Mortgage Loan | $34,500,000 | 80.8% | Purchase Price | $37,200,000(1) | 87.1% | |
| Borrower Sponsor Equity | 8,193,329 | 19.2 | Upfront Reserves | 4,537,284 | 10.6 | |
| Closing Costs | 956,045 | 2.2 | ||||
| Total Sources | $42,693,329 | 100.0% | Total Uses | $42,693,329 | 100.0% | |
| (1) | The borrower sponsor and non-recourse carveout guarantors or their families previously owned the fee interest in the two parcels comprising the Redmond Community Center Property and ground leased such parcels to a third party. The Purchase Price represents the purchase price of the ground leasehold interest. In addition to such purchase, the land parcels, which have a land value of approximately $20.9 million based on the appraisal, were contributed to the borrower. |
The Borrower and the Borrower Sponsor. The borrower is WBMT Buildings LLC, a Delaware single purpose limited liability company and special purpose entity with one independent director. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the Redmond Community Center Loan.
The borrower sponsor is Collin P. Madden and the non-recourse carve-out guarantors are Collin P. Madden, Lynda Rae Collins, Robert D. Butler, and Daryl Vander Pol. Collin P. Madden is a partner of GEM Real Estate Partners which is a vertically integrated real estate platform focused on development, investment and management of real estate properties. GEM real estate owns eight properties in the greater Seattle area including office, retail and hospitality. The Madden family has owned and managed the Redmond Community Center since Collin P. Madden’s grandfather purchased the Redmond Community Center land parcels in 1975.
A-3-65
7215-7597 170th Avenue Northeast and 17181-17209 Redmond Way Redmond, WA 98052 |
Collateral Asset Summary – Loan No. 8 Redmond Community Center |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$34,500,000 61.3% 2.20x 9.4% |
The Property. The Redmond Community Center Property consists of a portion or all of two non-contiguous retail centers totaling 109,965 sq. ft. located in Redmond, Washington. The Redmond Community Center is part of a mixed-use development project (Redmond Town Center) that includes more than 110 shops, restaurants, lodging, entertainment venues, as well as office space occupied by Microsoft, Amazon WebServices, and AT&T. The first retail center included in the Redmond Community Center, known as “Creekside Crossing”, all of which is included in the collateral, is a strip retail building consisting of 33,850 sq. ft. located on the south side of Redmond Way and east of 170th Avenue NE and was built in 1996. The collateral portion of the second retail center included in the Redmond Town Center, known as the “Community Center”, is a 76,115 sq. ft. retail center located across the street from the Creekside Crossing at the southwest corner of 170th Avenue Northeast and Northeast 76th Street and was built in phases between 1998 and 1999. The Community Center also includes a 24-Hour Fitness building and a two-tenant building hosting Big 5 Sporting Goods and Cost Plus World Market, which are not part of the collateral, but were separately acquired by the borrower sponsor. An entity owned by the non-recourse carveout guarantors and/or their families previously owned the fee interest in the two centers and ground leased such land to the property seller; at origination the ground leasehold interest was acquired, the ground lease was terminated and the fee interest was transferred to the borrower.
As of February 15, 2022, the Redmond Community Center Property was 97.3% leased to 13 tenants, but is currently 51.3% occupied, as the new tenants H-Mart, Overlake Medical Clinics (as to an expansion suite) and Happy Lemon are not yet in occupancy. There can be no assurance that such tenants will take occupancy as expected, or at all. The Community Center is expected to be anchored by the grocery tenant H-Mart (37,954 sq. ft., 34.5% of total NRA) with remaining tenants including PetCo, WA Department of License, Mayuri Grocer and a Red Robin ground lease pad. In May 2021, Bed Bath & Beyond vacated the big box space at the Community Center, which was quickly leased to H-Mart in August 2021. H-Mart is currently building out its space and is expected to open in July 2022. The Creekside Crossing is leased to eight tenants including a 6,304 sq. ft. pad leased to Overlake Medical Clinics, with the remaining tenants primarily consisting of service-oriented and food and beverage tenants.
Major Tenants.
H-Mart (37,954 sq. ft., 34.5% of total NRA; 27.2% of U/W base rent) is a Korean grocery store chain that operates 97 stores in the United States, of which eight stores are located in the state of Washington. H-Mart is currently building out their space and not yet in occupancy. H-Mart is expected to invest approximately $1.0 million ($26 PSF) into its space in addition to tenant improvements provided by the borrower sponsor. H-Mart signed a 15-year lease term with three, five year renewal options and is anticipated to open in July 2022 with an additional five months of free rent. H-Mart is permitted to extend its required opening date up to an additional 120 days if the tenant is not permitted to open in any capacity due to regulations affecting its premises related to the COVID-19 pandemic or similar event. The H-Mart lease is personally guaranteed by its principal owner.
Overlake Medical Clinics (17,373 sq. ft.; 15.8% of total NRA; 20.7% of U/W base rent) is a 349-bed, nonprofit regional medical center offering a full range of advanced medical services to the Puget Sound region. Overlake Medical Clinics has been a tenant at the Redmond Community Center Property since 2012 and is expanding into a second suite that will continue to support their urgent care function. Overlake Medical Clinics is not yet in occupancy of the 11,069 sq. ft. expansion suite, which is expected to open in April 2022, as to which the tenant has a 2-month free rent period. The Overlake Medical Clinics’ lease expires in 2032 with two five-year renewal options remaining.
WA Department of License (11,267 sq. ft.; 10.2% of NRA; 14.6% of U/W base rent) issues driver’s licenses and identification cards for people residing in Washington State. The WA Department of License has many locations all over the state where residents can visit to take care of all of their driver license and identification card needs. The WA Department of License lease expires in 2029 with one, five-year renewal option remaining.
COVID-19 Update. As of March 1, 2022, the Redmond Community Center Loan is not subject to any modification or forbearance request. The Redmond Community Center Property has two tenants, C2 Educational Systems and Great Clips, that received COVID-related rent deferrals that they are in the process of paying back. Both tenants are currently paying full rent in addition to their COVID rent deferrals through the end of the year. The first payment date of the Redmond Community Center Loan is April 6, 2022. All other tenants are at 100% collection the last month. See “Risk Factors—Special Risks—Coronavirus Pandemic Has Adversely Affected the Global Economy and Will Likely Adversely Affect the Performance of the Mortgage Loans” in the Preliminary Prospectus.
A-3-66
7215-7597 170th Avenue Northeast and 17181-17209 Redmond Way Redmond, WA 98052 |
Collateral Asset Summary – Loan No. 8 Redmond Community Center |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$34,500,000 61.3% 2.20x 9.4% |
Tenant Summary.
| Tenant Summary(1) | ||||||||||
Tenant |
Ratings (Moody’s/Fitch/S&P)(2) |
Net Rentable Area (Sq. Ft.) |
% of Net Rentable Area |
U/W Base Rent per Sq. Ft. |
% of Total U/W Base Rent |
Lease Expiration |
Sales
per Sq. Ft. |
Occupancy Cost | ||
| H-Mart(3) | NR / NR / NR | 37,954 | 34.5% | $24.00 | 27.2% | 8/1/2037 | NAV | NAV | ||
| Overlake Medical Clinics(4) | NR / NR / NR | 17,373 | 15.8 | $40.00 | 20.7 | 4/30/2032 | NAV | NAV | ||
| WA Department of License | NR / NR / NR | 11,267 | 10.2 | $43.46 | 14.6 | 11/30/2029 | NAV | NAV | ||
| PetCo(5) | NR / NR / NR | 10,479 | 9.5 | $22.96 | 7.2 | 1/31/2024 | $271 | 13.1% | ||
| Mayuri Grocer | NR / NR / NR | 9,195 | 8.4 | $38.02 | 10.4 | 7/31/2031 | NAV | NAV | ||
| Red Robin | NR / NR / NR | 7,220 | 6.6 | $22.16 | 4.8 | 1/31/2024 | $385 | 9.6% | ||
| Mattress Firm | NR / NR / NR | 4,226 | 3.8 | $38.00 | 4.8 | 12/31/2031 | NAV | NAV | ||
| C2 Educational Systems | NR / NR / NR | 2,174 | 2.0 | $37.96 | 2.5 | 12/31/2027 | $436 | 10.6% | ||
| Fatburger | NR / NR / NR | 1,880 | 1.7 | $37.10 | 2.1 | 3/31/2026 | $496 | 10.8% | ||
| Happy Lemon(6) | NR / NR / NR | 1,521 | 1.4 | $40.00 | 1.8 | 7/31/2032 | NAV | NAV | ||
| Largest Tenants | 103,289 | 93.9% | $31.17 | 96.0% | ||||||
| Other Tenants | 3,656 | 3.3 | $36.55 | 4.0 | ||||||
| Total/Wtd. Avg. Occupied | 106,945 | 97.3% | $31.35 | 100.0% | ||||||
| Vacant | 3,020 | 2.7 | ||||||||
| Total | 109,965 | 100.0% | ||||||||
| (1) | Based on the underwritten rent roll dated as of February 15, 2022. |
| (2) | Certain ratings are those of the parent entity whether or not the parent entity guarantees the lease. |
| (3) | H-Mart is not yet in occupancy, and has a 5-month free rent period. H-Mart is permitted to extend its required opening date up to an additional 120 days if the tenant is not permitted to open in any capacity due to regulations affecting its premises related to the COVID-19 pandemic or similar event. |
| (4) | Overlake Medical Clinics is not yet in occupancy of an 11,069 sq. ft. expansion suite, which is expected to open in April 2022, as to which the tenant has a 2-month free rent period. |
| (5) | PetCo is paying reduced rent (equal to the lesser of 3% of the tenant’s gross sales and 50% of fixed rent, plus in either case all other charges) due to a co-tenancy triggered by the departure of Bed, Bath & Beyond in May 2021. PetCo agreed in a lease amendment to resume paying rent on May 16, 2022, in exchange for a $1.00 per sq. ft. discount on rent per year through the expiration of PetCo’s current lease term. |
| (6) | Happy Lemon is not yet in occupancy, is expected to open in September 2022, and has free rent through February 2023. |
| Lease Rollover Schedule(1)(2) | ||||||||
| Year | # of Leases Expiring |
Total Expiring Sq. Ft. |
% of Total Sq. Ft. Expiring |
Cumulative Sq. Ft. Expiring |
Cumulative % of Sq. Ft. Expiring |
Annual U/W
Base per Sq. Ft. |
% U/W Base Rent Rolling |
Cumulative % of U/W Base Rent |
| MTM & 2022 | 0 | 0 | 0.0% | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
| 2023 | 2 | 2,583 | 2.3 | 2,583 | 2.3% | $38.46 | 3.0% | 3.0% |
| 2024 | 2 | 17,699 | 16.1 | 20,282 | 18.4% | $22.63 | 11.9% | 14.9% |
| 2025 | 1 | 1,073 | 1.0 | 21,355 | 19.4% | $31.93 | 1.0% | 15.9% |
| 2026 | 1 | 1,880 | 1.7 | 23,235 | 21.1% | $37.10 | 2.1% | 18.0% |
| 2027 | 1 | 2,174 | 2.0 | 25,409 | 23.1% | $37.96 | 2.5% | 20.5% |
| 2028 | 0 | 0 | 0.0 | 25,409 | 23.1% | $0.00 | 0.0% | 20.5% |
| 2029 | 1 | 11,267 | 10.2 | 36,676 | 33.4% | $43.46 | 14.6% | 35.1% |
| 2030 | 0 | 0 | 0.0 | 36,676 | 33.4% | $0.00 | 0.0% | 35.1% |
| 2031 | 2 | 13,421 | 12.2 | 50,097 | 45.6% | $38.02 | 15.2% | 50.3% |
| 2032 | 3 | 18,894 | 17.2 | 68,991 | 62.7% | $40.00 | 22.5% | 72.8% |
| 2033 & Beyond | 1 | 37,954 | 34.5 | 106,945 | 97.3% | $24.00 | 27.2% | 100.0% |
| Vacant | NAP | 3,020 | 2.7 | 109,965 | 100.0% | NAP | NAP | NAP |
| Total / Wtd. Avg. | 14 | 109,965 | 100.0% | $31.35 | 100.0% | |||
| (1) | Based on the underwritten rent roll dated as of February 15, 2022. |
| (2) | Certain tenants may have termination or contraction options (which may become exercisable prior to the originally stated expiration date of the tenant lease) that are not considered in the above Lease Rollover Schedule. |
Environmental Matters. According to the Phase I environmental reports dated January 7, 2022 and November 30, 2021, there was no evidence of any recognized environmental conditions at the Redmond Community Center Property.
The Market. The Redmond Community Center Property is located in Redmond, King County, Washington. The Seattle market contained nearly 182.1 million sq. ft. of retail space as of the fourth quarter of 2021. Meanwhile, the Redmond Community Center Property’s Eastside Seattle submarket contained over 31.6 million sq. ft. of retail space over the same period, accounting for 17.38% of total market inventory. According to a third party report, there is nearly 1.4 million sq. ft. of retail space under construction within the Seattle market and roughly 1.7 million sq. ft. proposed.
Vacancy rates in the Eastside submarket have historically trended below those of the broader market, and have generally compressed over each subsequent year over the past decade. Like the broader market, the submarket was affected by the COVID-19 pandemic, and in 2020 witnessed net returns of approximately 96,000 sq. ft. of retail space on a net basis. However, the economy has shown signs of recovery and in year-end 2021, the submarket witnessed the absorption of 294,000 sq. ft. of retail space on a net basis, coinciding with
A-3-67
7215-7597 170th Avenue Northeast and 17181-17209 Redmond Way Redmond, WA 98052 |
Collateral Asset Summary – Loan No. 8 Redmond Community Center |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$34,500,000 61.3% 2.20x 9.4% |
a vacancy rate of 1.77%, down 40 basis points from the previous year. According to the appraisal, the estimated 2021 population within a one-, three- and five-mile radius are 14,493, 98,461 and 235,734 respectively. According to the appraisal, the estimated 2021 average household income within a one-, three- and five-mile radius are $152,126, $175,967 and $180,827, respectively.
| Comparable Leases(1) | ||||||
| Location | Tenant Name | Square Feet | Lease Start Date | Term | Annual Rent PSF | Scheduled Increases |
| Redmond Community Center(2) | Mayuri Grocer | 9,195 | 2021 | 10 Years | $38.02 | 3% Annual |
| Confidential Community Center | Cigarland | 1,078 | 2021 | 7 Years | $34.62 | 3% Annual |
| Confidential Community Center | Chipotle | 2,168 | 2021 | 5 Years | $47.30 | Flat |
| Confidential Neighborhood Center | Wingstop | 1,247 | 2021 | 10 Years | $38.00 | 3% Annual |
| Confidential Community Center | Dough Zone | 2,086 | 2021 | 10 Years | $40.00 | 5% Midterm |
| Confidential Community Center | Wells Fargo Bank | 2,357 | 2020 | 5 Years | $52.00 | Flat |
| Bear Creek Village | N/A | 2,494 | Listing | N/A | $45.00 | N/A |
| (1) | Source: Appraisal. |
| (2) | Based on the underwritten rent roll dated as of February 15, 2022 |
Comparable Sales(1) | |||||
| Location | Sale Date | Square Feet | Sale Price | Price/Acre | Price/SF |
| Redmond Community Center | Dec-21(2) | 109,965 | $37,200,000(2) | $3,492,958 | $338.29 |
| 207 8th Avenue West | May-21 | 16,998 | $3,900,000 | $10,000,000 | $229.57 |
| 10113 Northeast 12th Street | Jul-21 | 40,946 | $18,150,000 | $19,308,511 | $443.26 |
| 7707 Southeast Street | Jan-21 | 22,651 | $4,200,000 | $8,076,923 | $185.42 |
| 12669 Northeast 85th Street | Dec-21 | 149,049 | $20,515,800 | $5,995,802 | $137.64 |
| 16759-17181 Redmond Way | Dec-20 | 131,551 | $26,400,000 | $8,741,722 | $200.68 |
| 15260 Northeast Bel Red Road | Apr-20 | 41,818 | $6,850,000 | $7,135,417 | $163.81 |
| (1) | Source: Appraisal. |
| (2) | Source is the purchase agreement for the property. Purchase was of the ground leasehold interest in the property only. In addition to such purchase, the land parcels, which have a land value of approximately $20.9 million based on the appraisal, were contributed to the borrower |
Cash Flow Analysis.
| Cash Flow Analysis(1)(2) | ||
| U/W | U/W PSF | |
| Base Rent | $3,353,018 | $30.49 |
| Contractual Rent Steps(3) | 12,347 | 0.11 |
| Value of Vacant Space | 120,800 | 1.10 |
| Gross Potential Rent | $3,486,165 | $31.70 |
| CAM | 1,042,169 | 9.48 |
| Vacancy & Credit Loss | (226,417) | (2.06) |
| Effective Gross Income | $4,301,918 | $39.12 |
| Total Operating Expenses | 1,042,169 | 9.48 |
| Net Operating Income | $3,259,749 | $29.64 |
| TI/LC | 87,883 | 0.80 |
| Replacement Reserves | 20,549 | 0.19 |
| Net Cash Flow | $3,151,316 | $28.66 |
| (1) | Based on the underwritten rent roll dated as February 15, 2022. |
| (2) | Historical financial information is not available due to the acquisition of the Redmond Community Center being part of a larger acquisition and separate financial information not having been provided for the collateral. |
| (3) | Contractual Rent Steps are underwritten through July 11, 2022. |
Property Management. The Redmond Community Center Property is managed by JSH Properties, Inc., a Delaware corporation. This is a third party property manager.
Lockbox / Cash Management. The Redmond Community Center Loan is structured with a springing lockbox and springing cash management. Upon the first occurrence of a Lockbox Trigger Event (as defined below), the borrower will be required to establish a lender controlled lockbox account, and cause all revenues relating to the Redmond Community Center Property to be deposited into a such lockbox account within one business day of receipt. On each business day during the continuance of a Trigger Period (as defined below), all amounts in the lockbox account are required to be remitted to a lender-controlled cash management account, at which point, following payment to tax and insurance reserves, debt service, other required reserves, and operating expenses, all remaining funds are required to be deposited (i) if a Lease Sweep Period (as defined below) is continuing, into a lease sweep reserve, and (ii) if no Lease Sweep Period is continuing, into a cash collateral account to be held as additional collateral for the Redmond Community Center Loan. On each business day that no Trigger Period is continuing, all funds in the lockbox account are required to be swept into a borrower-controlled operating account.
A-3-68
7215-7597 170th Avenue Northeast and 17181-17209 Redmond Way Redmond, WA 98052 |
Collateral Asset Summary – Loan No. 8 Redmond Community Center |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$34,500,000 61.3% 2.20x 9.4% |
A “Lockbox Trigger Event” means (a) the occurrence of an event of default under the Redmond Community Center Loan documents, (b) an affiliated property manager becomes insolvent or a debtor in any bankruptcy or insolvency proceeding, (c) if the debt service coverage ratio falls below 1.30x as of any calendar quarter, or (d) a Lease Sweep Period commences.
A “Trigger Period” means a period that commences upon (a) the occurrence of an event of default under the Redmond Community Center Loan documents, (b) if the debt service coverage ratio falls below 1.20x as of the end of any calendar quarter, (c) if an affiliated property manager becomes insolvent or a debtor in any bankruptcy or insolvency proceeding, (d) the commencement of a Lease Sweep Period and ends upon (i) with respect to clause (a) above, a cure of the event of default has been accepted by the lender, (ii) with respect to clause (b) above, the debt service coverage ratio is at least 1.25x as of the end of two consecutive calendar quarters, (iii) with respect to clause (c) above, the property manager has been replaced by an unaffiliated qualified manager approved by the lender, and (iv) with respect to clause (d) above, the Lease Sweep Period has ended.
A “Lease Sweep Period” will commence (a) with respect to the Overlake Medical Leases (as defined below), upon the earlier of (i) the date that is nine months prior to the earliest expiration of such Sweep Lease (as defined below) or (ii) upon the date required under such Sweep Lease by which the Sweep Tenant (as defined below) is required to give notice of its exercise of a renewal option thereunder (and such renewal has not been so exercised); (b) upon the early termination, early cancellation or early surrender of a Sweep Lease (or a material portion thereof) or upon the borrower’s receipt of notice by a Sweep Tenant of its intent to effect an early termination, early cancellation or early surrender of its Sweep Lease (or a material portion thereof); (c) if a Sweep Tenant has ceased operating its business at the Redmond Community Center Property (i.e., “goes dark”) in its space at the Redmond Community Center Property (or a material portion thereof); (d) upon a default under a Sweep Lease by a Sweep Tenant beyond any applicable notice and cure period, or (e) upon a bankruptcy or insolvency proceeding of a Sweep Tenant or its parent or guarantor.
A Lease Sweep Period may be cured, (i) in the case of clause (a), (b) or (c) above, (x) upon the date when the entirety of the Sweep Lease space (or applicable portion) is leased under qualified lease(s) meeting the requirements of the loan documents and in the judgment of the lender sufficient funds have been accumulated in the lease sweep reserve to cover all anticipated leasing expenses, free rent periods, required loan payments and operating expense shortfalls that may occur as a result of down time prior to the commencement of payment(s) under such qualified lease(s) (collectively, “Qualified Lease Expenses”) or (y) with respect to the space leased to H-Mart, not less than 65% of such space is leased pursuant to one or more qualified leases and in the lender’s reasonable judgment, sufficient funds have been accumulated in the lease sweep reserve to cover (A) all Qualified Lease Expenses and (B) an amount equal to the remaining unleased sq. ft. of the H-Mart space multiplied by $15.00; (ii) in the case of clause (a) above, the date on which the applicable Sweep Tenant exercises its renewal or extension option and in the judgment of the lender sufficient funds have been accumulated in the lease sweep reserve to cover all anticipated leasing expenses and free rent periods; (iii) in the case of clause (d) above, the date on which the related default has been cured, and no other such default occurs for a period of three consecutive months following such cure; (iv) in the case of clause (e) above, the related bankruptcy or insolvency has terminated and the Sweep Lease has been affirmed by the tenant and each guarantor (if any) and the tenant is in occupancy and paying full, unabated rent; and (v) in the case of clauses (a) through (e) above, the date on which the funds in the related lease sweep reserve are equal to an amount equal to the total rentable sq. ft. of the applicable Sweep Lease multiplied by $15.00. The borrower may prevent the commencement of a Lease Sweep Period if, prior to the commencement thereof, the borrower has provided cash or a letter of credit in an amount equal to the total rentable sq. ft. of the applicable Sweep Lease multiplied by $15.00.
A “Sweep Lease” means (a) the lease with H-Mart, as tenant (the “H-Mart Lease”), (b) the lease with Overlake Hospital Medical Center and Overlake Medical Clinics, as tenant, and the lease with Overlake Urgent Care, as tenant (collectively, the “Overlake Medical Leases”) and any replacement lease covering a majority of the space currently demised under any such lease.
A “Sweep Tenant” means any tenant under a Sweep Lease.
Initial and Ongoing Reserves. At origination, the borrower deposited into a reserve for outstanding tenant improvements and leasing commissions (i) approximately $2,877,691 for a tenant improvements allowance related to the H-Mart lease and (ii) $611,698 for tenant improvements and/or leasing commissions related to the H-Mart, Mattress Firm, Overlake Medical Clinics and Happy Lemon leases. In addition, the borrower deposited approximately $634,763 into a free rent reserve for the H-Mart, Overlake Medical Clinics and Happy Lemon leases, $374,315 into a replacement reserve (for roof replacement) and $38,817 into a reserve related to PetCo’s reduced rental payments due to its co-tenancy.
Tax Reserve – On each monthly payment date, the borrower is required to deposit into a real estate tax reserve, 1/12 of the estimated annual real estate taxes (initially, approximately $38,829). Such deposits are suspended if no Trigger Period is in effect and the borrower is satisfying its obligation to provide evidence of payment of taxes.
Insurance Reserve – On each monthly payment date, the borrower is required to deposit into an insurance reserve 1/12 of estimated annual insurance premiums; provided, that such deposits are suspended if acceptable blanket insurance policies are in effect (which was the case at origination).
Replacement Reserve – On each monthly payment date, the borrower is required to deposit into a replacement reserve the amount of $1,712, capped at $41,098 (excluding the amount deposited at origination).
A-3-69
7215-7597 170th Avenue Northeast and 17181-17209 Redmond Way Redmond, WA 98052 |
Collateral Asset Summary – Loan No. 8 Redmond Community Center |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$34,500,000 61.3% 2.20x 9.4% |
TI/LC Reserve – On each monthly payment date, the borrowers are required to deposit into a TI/LC reserve the amount of $13,746, capped at $329,895.
Current Mezzanine or Subordinate Indebtedness. None.
Future Mezzanine or Subordinate Indebtedness Permitted. None.
Partial Release. In connection with an arm’s length sale to an unrelated third party, the borrower has the right to obtain the release of the parcel ground leased to Red Robin (the “Release Parcel”) after the expiration of the defeasance lockout period, by defeasing the greater of (x) 125% of the allocated loan amount of the Release Parcel (which allocated loan amount is $2,592,096), or (y) 100% of the net sales proceeds of the Release Parcel (which in no event shall be less than 94% of the gross sales proceeds of the Release Parcel), and subject to the following conditions, among others: (i) the debt service coverage ratio after giving effect to such release is at least the greater of (x) 1.54x and (y) the debt service coverage ratio immediately prior to such release; (ii) the loan-to-value ratio after giving effect to such release is no more than the lesser of (x) 61.28% and (y) the aggregate loan-to-value ratio immediately prior to such release; (iii) the Release Parcel is a legally subdivided parcel on a separate tax lot; (iv) the conveyance of the Release Parcel does not (1) adversely affect the use or operation of, or access to or from, the remaining Redmond Community Center Property (the “Remaining Property”), (2) cause any portion of the Remaining Property to be in violation of any legal requirements, (3) create any liens on the Remaining Property (except for utility, access, parking and other easements necessary for infrastructure that benefit or are necessary for the Release Parcel) or (4) violate the terms of any document or instrument relating to the Redmond Community Center Property, including any lease or any permitted encumbrance and (v) satisfaction of REMIC related conditions.
A-3-70
Various
|
Collateral Asset Summary – Loan No. 9 Shearer’s Industrial Portfolio |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$30,000,000 62.8% 1.95x 8.3% |
A-3-71
Various
|
Collateral Asset Summary – Loan No. 9 Shearer’s Industrial Portfolio |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$30,000,000 62.8% 1.95x 8.3% |
A-3-72
Various
|
Collateral Asset Summary – Loan No. 9 Shearer’s Industrial Portfolio |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$30,000,000 62.8% 1.95x 8.3% |
| Mortgage Loan Information | |
| Loan Seller: | GSMC |
| Loan Purpose: | Acquisition |
| Borrower Sponsor: | USRA Institutional Net Lease Fund IV, LLC |
| Borrower: | Snackhouse Portfolio Property LLC |
| Original Balance(1): | $30,000,000 |
| Cut-off Date Balance(1): | $30,000,000 |
| % by Initial UPB: | 3.3% |
| Interest Rate: | 3.90000% |
| Payment Date: | 6th of each month |
| First Payment Date: | April 6, 2022 |
| Maturity Date: | March 6, 2032 |
| Amortization: | Interest Only |
| Additional Debt(1): | $107,598,000 Pari Passu debt |
| Call Protection: | L(11),YM1(105),O(4) |
| Lockbox / Cash Management: | Hard / In Place |
| Reserves(2) | |||
| Initial | Monthly | Cap | |
| Taxes: | $0 | Springing | NAP |
| Insurance: | $0 | Springing | NAP |
| Replacement: | $0 | Springing | NAP |
| TI/LC: | $0 | Springing | NAP |
| Other(3): | $12,243,079 | Springing | NAP |
| Property Information | |
| Single Asset / Portfolio: | Portfolio of nine properties |
| Property Type: | Industrial |
| Collateral: | Fee Simple |
| Location: | Various |
| Year Built / Renovated: | Various / Various |
| Total Sq. Ft.(3): | 2,206,965 |
| Property Management: | Self-Managed |
| Underwritten NOI: | $11,385,868 |
| Underwritten NCF: | $10,595,698 |
| Appraised Value(4)(5): | $219,100,000 |
| Appraisal Date: | Various |
| Historical NOI(6) | |
| Most Recent NOI: | NAV |
| 2021 NOI: | NAV |
| 2020 NOI: | NAV |
| 2019 NOI: | NAV |
| Historical Occupancy(6) | |
| Most Recent Occupancy: | 100.0% (March 1, 2022) |
| 2021 Occupancy: | NAV |
| 2020 Occupancy: | NAV |
| 2019 Occupancy: | NAV |
| Financial Information(1) | ||||||
| Tranche | Cut-off Date Balance | Balance per Sq. Ft. Cut-off / Balloon(1) |
LTV Cut-off / Balloon(4)(5) |
U/W DSCR NOI / NCF |
U/W Debt Yield NOI / NCF |
U/W Debt Yield at Balloon NOI / NCF |
| Mortgage Loan | $30,000,000 | |||||
| Pari Passu Notes | 107,598,000 | |||||
| Whole Loan | $137,598,000 | $62 / $62 | 62.8% / 62.8% | 2.09x / 1.95x | 8.3% / 7.7% | 8.3% / 7.7% |
| (1) | The Shearer’s Industrial Portfolio Whole Loan is part of a whole loan evidenced by four pari passu notes with an aggregate original principal balance and outstanding principal balance as of the Cut-off Date of $137,598,000. The Shearer’s Industrial Portfolio Whole Loan (defined below) was co-originated by Goldman Sachs Bank USA and Wells Fargo Bank, National Association. |
| (2) | See “Initial and Ongoing Reserves” herein. |
| (3) | Total sq. ft. includes the fully expanded 821 Route 97 property, which is currently expected to undergo an expansion increasing the sq. ft. of the related improvements from 145,485 sq. ft. to 221,876 sq. ft. The construction of the expansion is Shearer’s (as defined below) responsibility and the expansion is expected to be completed by August 2022. At origination, the borrower funded a Shearer’s expansion allowance reserve in an amount equal to $12,243,079 in connection with the anticipated expansion. We cannot assure you that the expansion at the 821 Route 97 property will be completed as expected or at all. |
| (4) | The aggregate appraised value of $219,100,000 includes a hypothetical market value “as if complete” for the 821 Route 97 property, which is currently expected to undergo an expansion increasing the sq. ft. of the 821 Route 97 property from 145,485 sq. ft. to 221,876 sq. ft. The expansion is expected to be completed by August 2022. The hypothetical market value “as if complete” for the 821 Route 97 property assumes the expansion is completed as planned. |
| (5) | According to the appraisals, the Shearer’s Industrial Portfolio Properties had an aggregate “as-is” appraised value of $206,300,000 as of various dates between January 6, 2022 and January 26, 2022. The Cut-off Date LTV Ratio and the Maturity Date LTV ratio based on the “as-is” value is 66.7% The appraiser also concluded an aggregate “go dark” value of $157,300,000 as of various dates between January 6, 2022 and January 26, 2022. The Cut-off Date LTV Ratio and the Maturity Date LTV Ratio based on the “go dark” value is 87.5%. |
| (6) | Historical financial information and occupancy is not available due to the nature of the sale-leaseback transaction and at loan origination a unitary master lease over the Portfolio (as defined below) was executed with a 20-year initial term and an absolute triple-net (“NNN”) structure. |
The Loan. The Shearer’s Industrial Portfolio mortgage loan (the “Shearer’s Industrial Portfolio Loan”) is part of a whole loan (the “Shearer’s Industrial Portfolio Whole Loan”) consisting of four pari passu promissory notes with an aggregate original principal balance and outstanding principal balance as of the Cut-off Date of $137,598,000 and is secured by first deeds of trust and mortgages encumbering the borrower’s fee simple interest in a portfolio of nine single-tenant industrial properties located across Arizona, Arkansas, Iowa, Minnesota, Ohio, Pennsylvania, Texas, and Virginia (the “Shearer Industrial Portfolio Properties” or “Portfolio”). The Shearer’s Industrial Portfolio Loan is evidenced by the non-controlling note A-1-2 with an original and outstanding principal balance as of the Cut-off Date of $30,000,000 and represents approximately 3.3% of the Initial Pool Balance.
The Shearer’s Industrial Portfolio Whole Loan was co-originated by Goldman Sachs Bank USA and Wells Fargo Bank, National Association on February 16, 2022. The Shearer’s Industrial Portfolio Whole Loan has an interest rate of 3.90000% per annum. The Shearer’s Industrial Portfolio Whole Loan had an initial term of 120 months and has a remaining term of 119 months as of the Cut-off Date. The Shearer’s Industrial Portfolio Whole Loan requires interest-only payments during the full term. The scheduled maturity date of the Shearer’s Industrial Portfolio Whole Loan is the due date in March, 2032. Voluntary prepayment of the Shearer’s Industrial Portfolio Whole Loan in whole (but not in part) is permitted on or after the due date occurring in December 2031 without the payment of any prepayment premium. In addition, the Shearer’s Industrial Portfolio Whole Loan may be voluntary prepaid in whole (but not in part) at any time beginning on the first due date following February 16, 2023 with the payment of a yield maintenance premium. The table below summarizes the promissory notes that comprise the Shearer’s Industrial Portfolio Whole Loan. The relationship between the holders of the Shearer’s Industrial Portfolio Whole Loan is governed by a co-lender agreement as described under “Description of the
A-3-73
Various
|
Collateral Asset Summary – Loan No. 9 Shearer’s Industrial Portfolio |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$30,000,000 62.8% 1.95x 8.3% |
Mortgage Pool—The Whole Loans —The Serviced Pari Passu Whole Loans and The Non-Serviced Pari Passu Whole Loans” in the Preliminary Prospectus.
Whole Loan Summary | ||||
| Note | Original Balance | Cut-off Date Balance | Note Holder(s) | Controlling Piece |
| A-1-1 | $36,318,600 | $36,318,600 | GSBI(1) | Yes |
| A-1-2 | 30,000,000 | 30,000,000 | Benchmark 2022-B34 | No |
| A-1-3 | 30,000,000 | 30,000,000 | GSBI(1) | No |
| A-2 | 41,279,400 | 41,279,400 | WFB(1) | No |
| Whole Loan | $137,598,000 | $137,598,000 | ||
| (1) | Expected to be contributed to one or more future securitization trusts. |
The borrower utilized the proceeds of the Shearer’s Industrial Portfolio Whole Loan, together with borrower sponsor equity and seller credit, to acquire the Portfolio, fund upfront reserves and pay closing costs.
Sources and Uses | |||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | ||
| Loan Amount | $137,598,000 | 62.4% | Purchase Price | $199,447,281 | 90.5% | ||
| Sponsor Equity | 78,997,416 | 35.8 | Reserves | 12,243,079 | 5.6 | ||
| Seller Credit | 3,898,500 | 1.8 | Closing Costs | 8,803,556 | 4.0 | ||
| Total Sources | $220,493,916 | 100.0% | Total Uses | $220,493,916 | 100.0% | ||
The Borrower and the Borrower Sponsor. The borrower is Snackhouse Portfolio Property LLC, a Delaware limited liability company. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the Shearer’s Industrial Portfolio Whole Loan. The non-recourse carveout guarantor of the Shearer’s Industrial Portfolio Whole Loan is USRA Net Lease IV Capital Corp., which is a subsidiary of USRA Institutional Net Lease Fund IV Capital Corp. The borrower sponsor is USRA Institutional Net Lease Fund IV, LLC, a real estate investment fund sponsored by U.S. Realty Advisors (“USRA”). USRA was founded in 1989 as a single-tenant real estate investment and asset management firm. The borrower sponsor completed over $5 billion in transactions over the past 30 years with a focus on acquisition and ownership of single-tenant, net leased properties above $10 million nationwide. Currently, USRA has over $2.7 billion of assets under management.
The
Property. The Portfolio is comprised of nine manufacturing and/or warehouse/distribution facilities encompassing 2,206,965
sq. ft. and is located across eight states including Arizona, Arkansas, Iowa, Minnesota, Ohio, Pennsylvania, Texas, and Virginia.
The Portfolio is occupied by a single tenant, Shearer’s Foods LLC (“Shearer’s”), which is a subsidiary
of Chip Holdings, LLC (“Chip”) and a contract manufacturer and private label supplier of snack products including
salty snacks, cookies, and crackers, headquartered in Massillon, Ohio at 100 Lincoln Way East. The Portfolio was constructed between
1946 and 2009, has average clear heights of approximately 25 feet, and has benefitted from $469 million of total capital expenditures
and equipment investment by Shearer’s over time. The Portfolio generated nearly $1.05 billion in net sales in the 2021 fiscal
year and nearly 86% of Chip’s total production footprint of 12 facilities (11 in the United States, 1 in Canada). Two United
States facilities were excluded from the transaction as Shearer’s is exploring strategic options as they seek to build up
their West Coast presence, and the Canada asset is excluded from the Portfolio to maintain a fully United States / US Dollar portfolio.
A-3-74
Various
|
Collateral Asset Summary – Loan No. 9 Shearer’s Industrial Portfolio |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$30,000,000 62.8% 1.95x 8.3% |
At loan origination, all nine facilities comprising the Portfolio commenced an absolute NNN unitary master lease with Shearer’s (the “Shearer’s Lease”), under which Shearer’s obligations are guaranteed by Chip. The lease has an initial term of 20 years and five, five-year renewal options, for a fully extended term of 45 years, and contains no termination options (outside of casualty and condemnation). For the first 10 years the rent will escalate by 2.0% annually, followed by 1.5% annual escalations for the next 10 years.
Officially founded in 1974, Shearer’s traces its roots back to the early 1900’s when William Shearer opened a family grocery store in Canton, Ohio called Shearer’s Market. Since its inception, Shearer’s has expanded through a series of acquisitions and expansions. Shearer’s is headquartered in Massillon, Ohio and is a contract manufacturer and private label supplier to the snack industry in North America. Shearer’s is known for producing salty snacks, cookies, and crackers and has expanded in recent years with revenues of $1.2 billion and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $202 million in 2021.
COVID-19 Update. As of March 10, 2022, the Shearer Industrial Portfolio Properties are open and operating. As of March 10, 2022, no loan modification or forbearance requests have been made on the Shearer Industrial Portfolio Whole Loan. The sole tenant has not received any rent deferrals or lease modifications. The first payment date of the Shearer Industrial Portfolio Whole Loan is April 6, 2022.
| Portfolio Summary | |||||||
| Property Name | City, State | Allocated Cut-off Balance | Lease End(1) | Total Sq. Ft. (1) |
Lease Type(1) | U/W Total Rent(1) | U/W Total Rent PSF(1) |
| 800 Northwest 4th Street | Perham, MN | $5,132,299 | 2/28/2042 | 515,972 | NNN | $2,598,970 | $5.04 |
| 4100 Millennium Boulevard Southeast | Massillon, OH | $4,899,635 | 2/28/2042 | 171,390 | NNN | $2,481,981 | 14.48 |
| 3000 East Mount Pleasant Street | Burlington, IA | $4,420,621 | 2/28/2042 | 444,618 | NNN | $2,239,557 | 5.04 |
| 7330 West Sherman Street | Phoenix, AZ | $3,886,861 | 2/28/2042 | 207,222 | NNN | $1,696,150 | 8.19 |
| 821 Route 97(2) | Waterford, PA | $3,312,044 | 2/28/2042 | 221,876 | NNN | $1,676,396 | 7.56 |
| 3200 Northern Cross Boulevard | Fort Worth, TX | $3,010,949 | 2/28/2042 | 121,253 | NNN | $1,526,890 | 12.59 |
| 3636 Medallion Avenue | Newport, AR | $2,983,577 | 2/28/2042 | 278,553 | NNN | $1,578,467 | 5.67 |
| 692 Wabash Avenue North | Brewster, OH | $1,231,752 | 2/28/2042 | 141,878 | NNN | $625,314 | 4.41 |
| 225 Commonwealth Avenue Extension | Bristol, VA | $1,122,263 | 2/28/2042 | 104,203 | NNN | $557,679 | 5.35 |
| Total / Wtd. Avg. | $30,000,000 | 2,206,965 | $14,981,405 | $6.79 | |||
| (1) | Based on the underwritten rent roll dated February 16, 2022, with rent steps through March 1, 2023. |
| (2) | The 821 Route 97 property is currently expected to undergo an expansion increasing the sq. ft. of the related improvements from 145,485 sq. ft. to 221,876 sq. ft. The expansion is expected to be completed by August 2022. At origination, the borrower funded a Shearer’s expansion allowance reserve in an amount equal to $12,243,079 in connection with the anticipated expansion. We cannot assure you that the expansion at the 821 Route 97 property will be completed as expected or at all. |
| Lease Rollover Schedule(1) | ||||||||
| Year | # of Leases Expiring |
Total Expiring Sq. Ft.(2) |
% of Total Sq. Ft. Expiring(2) |
Cumulative Sq. Ft. Expiring(2) |
Cumulative % of Sq. Ft. Expiring(2) |
U/W Total Rent per Sq. Ft. |
% U/W Total Rent Rolling |
Cumulative % of U/W Total Rent |
| MTM & 2022 | 0 | 0 | 0.0% | 0 | 0.0% | $0.00 | 0.0% | 0% |
| 2023 | 0 | 0 | 0.0 | 0 | 0.0 | $0.00 | 0.0 | 0% |
| 2024 | 0 | 0 | 0.0 | 0 | 0.0 | $0.00 | 0.0 | 0% |
| 2025 | 0 | 0 | 0.0 | 0 | 0.0 | $0.00 | 0.0 | 0% |
| 2026 | 0 | 0 | 0.0 | 0 | 0.0 | $0.00 | 0.0 | 0% |
| 2027 | 0 | 0 | 0.0 | 0 | 0.0 | $0.00 | 0.0 | 0% |
| 2028 | 0 | 0 | 0.0 | 0 | 0.0 | $0.00 | 0.0 | 0% |
| 2029 | 0 | 0 | 0.0 | 0 | 0.0 | $0.00 | 0.0 | 0% |
| 2030 | 0 | 0 | 0.0 | 0 | 0.0 | $0.00 | 0.0 | 0% |
| 2031 | 0 | 0 | 0.0 | 0 | 0.0 | $0.00 | 0.0 | 0% |
| 2032 | 0 | 0 | 0.0 | 0 | 0.0 | $0.00 | 0.0 | 0% |
| 2033 & Thereafter | 1 | 2,206,965 | 100.0 | 2,206,965 | 100.0 | $6.79 | 100.0 | 100.0% |
| Vacant | NAP | 0 | 0.0 | 2,206,965 | 100.0 | NAP | NAP | NAP |
| Total / Wtd. Avg. | 1 | 2,206,965 | 100.0% | $6.79 | 100.0% | |||
| (1) | Based on the underwritten rent roll dated February 16, 2022, with rent steps through March 1, 2023. |
| (2) | Total sq. ft., % of Total sq. ft. Expiring and Cumulative sq. ft. Expiring include the fully expanded 821 Route 97 property, which is currently expected to undergo an expansion increasing the sq. ft. of the related improvements from 145,485 sq. ft. to 221,876 sq. ft. The expansion is expected to be completed by August 2022. At origination, the borrower funded a Shearer’s expansion allowance reserve in an amount equal to $12,243,079 in connection with the anticipated expansion. We cannot assure you that the expansion at the 821 Route 97 property will be completed as expected or at all. |
Environmental Matters. According to Phase I environmental reports, dated between October 21, 2021 and November 11, 2021, there are certain recognized environmental conditions (“RECs”) at the Shearer’s Industrial Portfolio Properties including (i) a REC at the 3636 Medallion Avenue property in connection with soil and groundwater impacts including, among other things, polynuclear aromatic hydrocarbons (PAHs) and metals, from prior manufacturing operations at such property, (ii) four RECs at the 3000 East Mount Pleasant Street property in connection with (a) potential releases from a former bulk oil underground storage tank associated with a gas station previously located at such property, (b) soil and groundwater impacts including, among other things, arsenic, from a septic system associated with a radiator repair shop previously located at such property, (c) potential soil and ground water impacts from certain former
A-3-75
Various
|
Collateral Asset Summary – Loan No. 9 Shearer’s Industrial Portfolio |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$30,000,000 62.8% 1.95x 8.3% |
underground storage tanks associated with prior manufacturing operations at such property, and (d) potential soil and groundwater impacts from prior operations at adjacent properties including, among other things, a foundry and an auto repair shop and gas station, and (iii) a REC at the 3200 Northern Cross Boulevard property in connection with potential soil and groundwater impacts from potential oil releases in the vicinity of transformers located at such property. In addition, the related Phase I ESAs identified certain controlled recognized environmental conditions at certain of the Shearer’s Industrial Portfolio Properties for which regulatory closure has been granted subject to compliance with certain use restrictions or engineering controls. At origination, the borrower obtained an environmental insurance policy issued by the Great American E & S Insurance Company that names the lender as an additional insured and has a policy limit of $5,000,000 per incident and $10,000,000 in the aggregate, a deductible of $100,000 and a term expiring on February 16, 2032 with respect to the borrower and February 16, 2035 with respect to the lender. See “Description of the Mortgage Pool—Environmental Considerations” in the Preliminary Prospectus.
The Market. The Shearer’s Industrial Portfolio consists of nine properties in eight states. The following highlights the five largest markets by allocated loan amount:
Cleveland, OH (20.4% of Cut-off Date Allocated Loan Amount): The Cleveland industrial market has approximately 541.4 million sq. ft. of industrial space and an average rent of $4.33 per sq. ft./year with vacancy of 4.4%, as of fourth quarter of 2021.
Fargo-Valley City, ND-MN (17.1% of Cut-off Date Allocated Loan Amount): The Fargo industrial market has approximately 13.6 million sq. ft. of industrial space and an average rent of $7.47 per sq. ft./year with vacancy of 3.9%, as of fourth quarter of 2021.
Davenport, IA (14.7% of Cut-off Date Allocated Loan Amount): The Davenport industrial market has approximately 43.5 million sq. ft. of industrial space and an average rent of $4.04 per sq. ft./year with vacancy of 2.2%, as of fourth quarter of 2021.
Phoenix, AZ (13.0% of Cut-off Date Allocated Loan Amount): The Phoenix industrial market has approximately 354.1 million sq. ft. of industrial space and an average rent of $7.69 per sq. ft./year with vacancy of 4.6% as of fourth quarter of 2021.
Erie, PA (11.0% of Cut-off Date Allocated Loan Amount): The Erie industrial market currently has approximately 26.2 million sq. ft. of industrial space and an average rent of $4.00 per sq. ft./year with vacancy of 2.4% as of fourth quarter of 2021.
Cash Flow Analysis.
| Cash Flow Analysis(1)(2) | ||
| U/W | U/W PSF | |
| Base Rent | $11,896,998 | $5.39 |
| Total Reimbursement Revenue | 2,846,467 | 1.29 |
| Contractual Rent Steps | 237,940 | 0.11 |
| Vacancy Loss | (749,070) | (0.34) |
| Effective Gross Revenue | $14,232,335 | $6.45 |
| Management Fee | 142,323 | 0.06 |
| Other Expenses(3) | 2,704,144 | 1.23 |
| Total Operating Expenses | $2,846,467 | $1.29 |
| Net Operating Income | $11,385,868 | $5.16 |
| TI/LC | 441,202 | 0.20 |
| Capital Expenditures | 348,967 | 0.16 |
| Net Cash Flow | $10,595,698 | $4.80 |
| (1) | Based on the underwritten rent roll dated February 16, 2022, with rent steps through March 1, 2023. |
| (2) | Historical financial information and occupancy is not available due to the nature of the sale-leaseback transaction and at loan origination a unitary master lease over the Portfolio was executed with a 20-year initial term and an absolute NNN structure. |
| (3) | Other Expenses assumes approximately 19% of Effective Gross Revenue. |
Property Management. The Shearer’s Industrial Portfolio Properties are managed by Shearer’s, the sole tenant at the Shearer’s Industrial Portfolio Properties.
Lockbox / Cash Management. The Shearer’s Industrial Portfolio Whole Loan is structured with a hard lockbox and in place cash management. The borrower was required to deliver a tenant direction letter instructing Shearer’s to deposit rents into a lender-controlled lockbox account. In addition, the borrower is required to cause all cash revenues relating to the Shearer’s Industrial Portfolio Properties and all other money received by the borrower or borrower’s property manager (if any) with respect to the Shearer’s Industrial Portfolio Properties (other than tenant security deposits) to be deposited into such lockbox account or a lender-controlled cash management account within one business day following receipt. On each business day, all funds in the lockbox account (other than a minimum required balance of $5,000) are required to be swept into the cash management account.
A-3-76
Various
|
Collateral Asset Summary – Loan No. 9 Shearer’s Industrial Portfolio |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$30,000,000 62.8% 1.95x 8.3% |
For so long as no Shearer’s Industrial Portfolio Trigger Period or event of default under the Shearer’s Industrial Portfolio Whole Loan documents is continuing, all amounts in the cash management account in excess of the aggregate amount required to be paid to or reserved with the lender on the next monthly due date are required to be swept into a borrower-controlled operating account on each business day. During the continuance of a Shearer’s Industrial Portfolio Trigger Period or, at the lender’s discretion, during an event of default under the Shearer’s Industrial Portfolio Whole Loan documents, all amounts on deposit in the cash management account after payment of debt service, required reserves and budgeted operating expenses are required to (i) be remitted into the borrower-controlled operating account (and the borrower will be entitled to distribute the same to its equityholders) if (a) no event of default under the Shearer’s Industrial Portfolio Whole Loan documents is continuing and (b) the Shearer’s Industrial Portfolio Trigger Period is continuing solely as a result of a Shearer’s Industrial Portfolio Tenant Semi-Vacancy Period (as defined below), or (ii) otherwise, be deposited in the excess cash flow reserve as additional collateral for the Shearer’s Industrial Portfolio Whole Loan. Additionally, during the continuance of an event of default under the Shearer’s Industrial Portfolio Whole Loan documents, the lender may apply funds on deposit in the cash management account in such order of priority as it may determine.
A “Shearer’s Industrial Portfolio Trigger Period” means (a) any period during the continuance of (i) an event of default by the borrower under the Shearer’s Lease beyond any applicable grace or cure period, which (in the lender’s reasonable opinion) is reasonably expected to lead to the termination of the Shearer’s Lease in its entirety, (ii) a bankruptcy or similar insolvency proceeding of Shearer’s, unless the Shearer’s Lease has been affirmed in such proceeding, (iii) termination, cancellation or surrender of the Shearer’s Lease prior to its scheduled expiration date (other than on account of condemnation), (iv) a Shearer’s Industrial Portfolio Tenant Semi-Vacancy Period, (v) a Shearer’s Industrial Portfolio Full-Vacancy Period or (b) each period commencing when the debt yield (as calculated under the Shearer’s Industrial Portfolio Whole Loan documents), determined as of the first day of any fiscal quarter, is less than 7.3%, and ending when the debt yield (as calculated under the loan documents), determined as of the first day of each of two consecutive fiscal quarters, is at least 7.3%, or (c) each period commencing upon the borrower’s failure to deliver required annual, quarterly or monthly financial reports and ending when such reports are delivered and indicate that no other Shearer’s Industrial Portfolio Trigger Period is ongoing.
A “Shearer’s Industrial Portfolio Tenant Full-Vacancy Period” means any period during the continuance of which more than 50% of the gross leasable square footage of the improvements at all of the Shearer’s Industrial Portfolio Properties, collectively, are not occupied by Shearer’s or a subtenant for the ordinary conduct of business for longer than (x) 90 consecutive days or (y) 150 days in any 12-month period (other than any portion of any improvements while such portion is un-tenantable because of the performance of any alterations or equipment installment or accession or retooling or restoration permitted under the Shearer’s Industrial Portfolio Whole Loan documents (including the anticipated expansion of the improvements of the 821 Route 97 property), fire or other casualty or occupancy is prohibited by legal requirements or not possible due to force majeure).
A “Shearer’s Industrial Portfolio Tenant Semi-Vacancy Period” means any period during the continuance of which at least 35%, but not more than 50%, of the gross leasable square footage of the improvements at all of the Shearer Industrial Portfolio Properties, collectively, are not occupied by Shearer’s or a subtenant for the ordinary conduct of business for more than (x) 90 consecutive days or (y) 150 days in any 12-month period (other than any portion of any improvements while such portion is un-tenantable because of the performance of any alterations or equipment installation or accession or retooling or restoration permitted under the Shearer’s Industrial Portfolio Whole Loan documents (including the anticipated expansion of the improvements of the 821 Route 97 property), fire or other casualty or occupancy is prohibited by legal requirements or not possible due to force majeure).
Initial and Ongoing Reserves. At origination, the borrower funded a Shearer’s expansion allowance reserve in an amount equal to $12,243,079 in connection with an anticipated expansion of the improvements at the 821 Route 97 property.
Tax Reserve – On each due date, the borrower is required to fund a tax reserve in an amount equal to 1/12 of the real property taxes that the lender reasonably estimates will be payable during the next ensuing 12 months, unless Shearer’s is paying or contesting the taxes.
Insurance Reserve – On each due date, the borrower is required to fund an insurance reserve in an amount equal to 1/12 of the insurance premiums that the lender reasonably estimates will be payable during the next ensuing 12 months, unless Shearer’s, the borrower or the guarantor is paying the insurance premiums.
TI/LC Reserve – On each due date during a Shearer’s Industrial Portfolio Trigger Period that is not caused solely as a result of a Shearer’s Industrial Portfolio Tenant Semi-Vacancy Period, the borrower is required to fund a tenant improvement and leasing commission reserve in an amount equal to $183,913.75.
Capital Expenditure Reserve – On each due date during a Shearer’s Industrial Portfolio Trigger Period that is not caused solely as a result of a Shearer’s Industrial Portfolio Tenant Semi-Vacancy Period, the borrower is required to fund a capital expenditure reserve in an amount equal to $27,587.06.
A-3-77
Various
|
Collateral Asset Summary – Loan No. 9 Shearer’s Industrial Portfolio |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$30,000,000 62.8% 1.95x 8.3% |
Excess Cash Flow Reserve – On each due date during a Shearer’s Industrial Portfolio Trigger Period that is continuing solely as a result of a Shearer’s Industrial Portfolio Tenant Semi-Vacancy Period, the borrower is required to fund an excess cash flow reserve, as additional collateral for the Shearer’s Industrial Portfolio Whole Loan, monthly in an amount equal to 1/12 of the product of (x) $0.50 multiplied by (y) the number of leasable sq. ft. of the improvements demised under the Shearer’s Lease that is no longer in regular use, has been vacated or for which Shearer’s ceases to occupy. In addition, on each due date during a Shearer’s Industrial Portfolio Trigger Period (other than a Shearer’s Industrial Portfolio Trigger Period that is continuing solely as a result of a Shearer’s Industrial Portfolio Tenant Semi-Vacancy Period), the borrower is required to fund an excess cash flow reserve, as additional collateral for the Shearer’s Industrial Portfolio Whole Loan, monthly, with all excess cash flow (after payment of debt service, other required reserves and budgeted operating expenses).
Current Mezzanine or Subordinate Indebtedness. None.
Future Mezzanine or Subordinate Indebtedness Permitted. None.
Partial Release. None.
A-3-78
13821-13995 Hall Road Shelby Township, MI 48315 |
Collateral Asset Summary – Loan No. 10 Hall Road Crossing |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$28,712,745 68.2% 1.50x 9.3% |
A-3-79
13821-13995 Hall Road Shelby Township, MI 48315 |
Collateral Asset Summary – Loan No. 10 Hall Road Crossing |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$28,712,745 68.2% 1.50x 9.3% |
A-3-80
13821-13995 Hall Road Shelby Township, MI 48315 |
Collateral Asset Summary – Loan No. 10 Hall Road Crossing |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$28,712,745 68.2% 1.50x 9.3% |
A-3-81
13821-13995 Hall Road Shelby Township, MI 48315 |
Collateral Asset Summary – Loan No. 10 Hall Road Crossing |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$28,712,745 68.2% 1.50x 9.3% |
| Mortgage Loan Information | |
| Loan Seller: | CREFI |
| Loan Purpose: | Refinance |
| Borrower Sponsors: | Daniel Kukes, Nikolaos Moschouris, Daniel Kukes Living Trust and Nikolaos A. Moschouris Trust Under Agreement Dated July 13, 2009 |
| Borrower: | Hall Road Crossing Owner, LLC |
| Original Balance: | $28,750,000 |
| Cut-off Date Balance: | $28,712,745 |
| % by Initial UPB: | 3.1% |
| Interest Rate: | 4.12000% |
| Payment Date: | 6th of each month |
| First Payment Date: | April 6, 2022 |
| Maturity Date: | March 6, 2032 |
| Amortization: | Amortizing Balloon |
| Additional Debt: | None |
| Call Protection: | L(25), D(91), O(4) |
| Lockbox / Cash Management: | Springing / Springing |
| Reserves(1) | |||
| Initial | Monthly | Cap | |
| Taxes: | $90,580 | $22,645 | NAP |
| Insurance: | $0 | Springing | NAP |
| Replacement: | $0 | $2,264 | $135,847 |
| TI/LC: | $0 | $9,045 | $550,000 |
| Other(2): | $1,872,253 | $0 | NAP |
| Property Information | |
| Single Asset / Portfolio: | Single Asset |
| Property Type: | Anchored Retail |
| Collateral: | Fee Simple |
| Location: | Shelby Township, MI |
| Year Built / Renovated: | 1986 / 2022 |
| Total Sq. Ft.: | 181,129 |
| Property Management: | Streamline Commercial Real Estate Solutions, LLC |
| Underwritten NOI: | $2,673,254 |
| Underwritten NCF: | $2,511,060 |
| Appraised Value: | $42,125,000 |
| Appraisal Date: | February 1, 2022 |
| Historical NOI | |
| Most Recent NOI: | $2,165,442 (T-12 October 31, 2021) |
| 2020 NOI: | $2,070,595 (December 31, 2020) |
| 2019 NOI: | $1,965,586 (December 31, 2019) |
| 2018 NOI: | $1,768,422 (December 31, 2018) |
| Historical Occupancy | |
| Most Recent Occupancy: | 97.9% (January 11, 2022) |
| 2020 Occupancy: | 93.1% (December 31, 2020) |
| 2019 Occupancy: | 88.1% (December 31, 2019) |
| 2018 Occupancy: | 80.3% (December 31, 2018) |
| Financial Information | ||||||
| Tranche | Cut-off Date Balance | Balance per Sq. Ft. Cut-off / Balloon |
LTV Cut-off / Balloon |
U/W DSCR NOI / NCF |
U/W Debt Yield NOI / NCF |
U/W Debt Yield at Balloon NOI / NCF |
| Mortgage Loan | $28,712,745 | $159 / $127 | 68.2% / 54.5% | 1.60x / 1.50x | 9.3% / 8.7% | 11.7% / 10.9% |
| (1) | See “Initial and Ongoing Reserves” herein. |
| (2) | Initial Other reserve consists of (i) $849,909 for a free rent reserve, (ii) $817,656 for an unfunded obligations reserve and (iii) $204,688 for an immediate repairs reserve. |
The Loan. The Hall Road Crossing mortgage loan (the “Hall Road Crossing Loan”) had an original principal balance of $28,750,000 and has an outstanding principal balance as of the Cut-off Date of approximately $28,712,745 and is secured by a first priority mortgage encumbering the borrower’s fee simple interest in an anchored retail property located in Shelby Township, Michigan (the “Hall Road Crossing Property”).
The Hall Road Crossing Loan had an initial term of 120 months and has a remaining term of 119 months as of the Cut-off Date. The Hall Road Crossing Loan will amortize on a 30-year schedule and accrues interest at the rate of 4.12000% per annum.
The borrower sponsor utilized the proceeds of the Hall Road Crossing Loan to refinance existing debt, fund upfront reserves and pay origination costs.
| Sources and Uses | ||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
| Loan Amount | $28,750,000 | 93.6% | Loan Payoff | $27,334,337 | 89.0% | |
| Borrower Sponsor Equity | 1,978,980 | 6.4 | Upfront Reserves | 1,962,833 | 6.4 | |
| Closing Costs | 1,431,810 | 4.7 | ||||
| Total Sources | $30,728,980 | 100.0% | Total Uses | $30,728,980 | 100.0% | |
The Borrower and the Borrower Sponsors. The borrower is Hall Road Crossing Owner, LLC, a Delaware limited liability company. The borrower sponsors and nonrecourse carve-out guarantors are Daniel Kukes, Nikolaos Moschouris, Daniel Kukes Living Trust and Nikolaos A. Moschouris Trust Under Agreement Dated July 13, 2009. Nikolaos Moschouris and Daniel Kukes are the co-managers of Hall Road Crossing Partners LLC which is the sole member of the borrower. Nikolaos Moschouris is a principal at Moschouris Management Company, LLC, a real estate management company and Daniel Kukes is a partner at Landmark Commercial Real Estate Services, LLC and a co-founder and partner of the Landmark Investment Sales Team. Daniel Kukes works on the sale of retail shopping centers and single tenant net lease investment properties of all property types across the country. He currently represents institutional funds, private equity funds, and high net worth investors in listing investment properties nationwide.
A-3-82
13821-13995 Hall Road Shelby Township, MI 48315 |
Collateral Asset Summary – Loan No. 10 Hall Road Crossing |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$28,712,745 68.2% 1.50x 9.3% |
The Property. The Hall Road Crossing Property is a 181,129 sq. ft. anchored retail center located in Shelby Township, Michigan. The Hall Road Crossing Property was built in 1986 and is 97.9% leased to 16 tenants as of January 11, 2022. The Hall Road Crossing Property contains 900 parking spaces for a ratio of 4.97 per 1,000 sq. ft. The largest tenant by sq. ft. Amazon Fresh occupies 36,415 sq. ft. (20.1% of the net rentable area, 21.1% of the U/W Base Rent) and has signed a new 13-year lease with no termination options. The Hall Road Crossing Property will be the first Amazon Fresh location opened in the state of Michigan. The second largest tenant by sq. ft., Bob’s Discount Furniture, occupies 33,000 sq. ft. (18.2% of the net rentable area, 14.7% of the U/W Base Rent) on a lease expiring in May 2031. The third largest tenant by sq. ft., Michaels, occupies 20,325 sq. ft. (11.2% of the net rentable area, 8.0% of the U/W Base Rent) on a lease expiring in February 2024.
Major Tenants.
Amazon Fresh (36,415 sq. ft.; 20.1% of NRA; 21.1% of U/W base rent) is a grocery store designed to offer a seamless shopping experience, whether customers are shopping in-store or online. Amazon Fresh offers free same-day delivery and pick-up for Prime members. The first Amazon Fresh store opened to the public in September 2020 and as of January 12, 2022 there are a total of 23 Amazon Fresh stores across the United States. Amazon Fresh is not yet open and the borrower reserved $639,448 for gap rent relating to the Amazon Fresh lease at closing.
Bob’s Discount Furniture (33,000 sq. ft.; 18.2% of NRA; 14.7% of U/W base rent) is a furniture and bedding retailer that was founded in 1991. The company offers couches, sofas, tables, dining room sets, mattresses, home accents, entertainment centers, desks, filing cabinets, book cases and stools. As of January 24, 2022, Bob’s Discount Furniture had 150 stores across 23 states and is the 10th-largest furniture chain in the United States.
Michaels (20,325 sq. ft.; 11.2% of NRA; 8.0% of U/W base rent) is the largest specialty retailer in North America providing an assortment of curated arts and crafts componentry. Michaels operates 1,275 stores in 49 states and Canada and online at Michaels.com and Michaels.ca. In addition, The Michaels Companies owns Artistree, a manufacturer of custom and specialty framing merchandise. Michaels was founded in 1973 and is headquartered in Irving, Texas.
COVID-19 Update. As of February 10, 2022, the Hall Road Crossing Property is open and operating. Tenants are current on rent and no tenants are requesting deferred rent or lease modifications. As of February 10, 2022, the Hall Road Crossing Loan is not subject to any modifications or forbearance requests. The first payment date of the Hall Road Crossing Loan is due on April 6, 2022.
| Tenant Summary(1) | |||||||
| Tenant | Rating (Fitch/Moody’s/S&P)(2) | Net Rentable Area (Sq. Ft.) | % of Net Rentable Area | U/W Base Rent Per Sq. Ft.(3) | % of Total U/W Base Rent(3) | Lease Expiration | |
| Amazon Fresh(4) | AA-/A1/AA | 36,415 | 20.1% | $15.83 | 21.1% | 1/31/2035 | |
| Bob’s Discount Furniture(5) | NR/B3/B | 33,000 | 18.2 | $12.17 | 14.7 | 5/31/2031 | |
| Michaels(6) | NR/NR/NR | 20,325 | 11.2 | $10.75 | 8.0 | 2/29/2024 | |
| Old Navy(7) | NR/Ba2/BB | 17,330 | 9.6 | $13.00 | 8.2 | 1/31/2023 | |
| Foot Locker(8) | NR/Ba2/BB+ | 12,047 | 6.7 | $19.00 | 8.4 | 11/30/2031 | |
| Rally House(9) | NR/NR/NR | 9,446 | 5.2 | $12.00 | 4.1 | 1/31/2025 | |
| ULTA(10) | NR/NR/NR | 9,405 | 5.2 | $19.25 | 6.6 | 2/28/2027 | |
| Skechers(11) | NR/NR/NR | 8,800 | 4.9 | $20.00 | 6.4 | 1/31/2030 | |
| Famous Footwear | NR/NR/NR | 8,250 | 4.6 | $12.12 | 3.7 | 9/30/2022 | |
| Kirkland’s(12) | NR/NR/NR | 7,080 | 3.9 | $24.20 | 6.3 | 1/31/2026 | |
| Total / Wtd. Avg. Major Tenants | 162,098 | 89.5% | $14.76 | 87.5% | |||
| Remaining Tenants | 15,181 | 8.4 | $22.49 | 12.5 | |||
| Total / Wtd. Avg. Occupied Collateral | 177,279 | 97.9% | $15.42 | 100.0% | |||
| Vacant | 3,850 | 2.1 | |||||
| Total | 181,129 | 100.0% | |||||
| (1) | Based on the underwritten rent roll dated as of January 11, 2022. |
| (2) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
| (3) | U/W Base Rent Per Sq. Ft. and % of Total U/W Base Rent are inclusive of contractual rent steps of $1,614 occurring through February 1, 2023, and $30,436 attributable to straight line rent credit for Amazon Fresh. |
| (4) | Amazon Fresh has six, five-year renewal options. Amazon Fresh is not yet open and the borrower reserved $639,448 for gap rent relating to the Amazon Fresh lease at closing. |
| (5) | Bob’s Discount Furniture has three, five-year renewal options. |
| (6) | Michaels has one, five-year renewal option. |
| (7) | There is currently a failure of the co-tenancy requirements under the Old Navy lease for which Old Navy has a rent credit in the amount of approximately $198,026 covering the period from November 30, 2019 through November 30, 2020, which amount will be offset against rent until recovered. |
| (8) | Foot Locker has two, five-year renewal options. |
| (9) | Rally House has two, five-year renewal options. |
| (10) | ULTA has two, five-year renewal options. |
| (11) | Sketchers has two, five-year renewal options. |
| (12) | Kirkland’s has two five-year renewal options |
A-3-83
13821-13995 Hall Road Shelby Township, MI 48315 |
Collateral Asset Summary – Loan No. 10 Hall Road Crossing |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$28,712,745 68.2% 1.50x 9.3% |
| Lease Rollover Schedule(1)(2) | ||||||||
| Year | # of Leases Expiring |
Total Expiring Sq. Ft. |
% of Total Sq. Ft. Expiring |
Cumulative Sq. Ft. Expiring |
Cumulative % of Sq. Ft. Expiring |
Annual U/W Base Rent Per Sq. Ft.(3) |
% U/W Base Rent Rolling(3) |
Cumulative % of U/W Base Rent(3) |
| MTM | 1 | 2,200 | 1.2% | 2,200 | 1.2% | $23.00 | 1.9% | 1.9% |
| 2022 | 1 | 8,250 | 4.6 | 10,450 | 5.8% | $12.12 | 3.7% | 5.5% |
| 2023 | 3 | 20,616 | 11.4 | 31,066 | 17.2% | $15.51 | 11.7% | 17.2% |
| 2024 | 2 | 24,770 | 13.7 | 55,836 | 30.8% | $12.05 | 10.9% | 28.1% |
| 2025 | 1 | 9,446 | 5.2 | 65,282 | 36.0% | $12.00 | 4.1% | 32.3% |
| 2026 | 1 | 7,080 | 3.9 | 72,362 | 40.0% | $24.20 | 6.3% | 38.5% |
| 2027 | 2 | 11,655 | 6.4 | 84,017 | 46.4% | $19.84 | 8.5% | 47.0% |
| 2028 | 1 | 3,000 | 1.7 | 87,017 | 48.0% | $22.00 | 2.4% | 49.4% |
| 2029 | 0 | 0 | 0.0 | 87,017 | 48.0% | $0.00 | 0.0% | 49.4% |
| 2030 | 1 | 8,800 | 4.9 | 95,817 | 52.9% | $20.00 | 6.4% | 55.8% |
| 2031 | 2 | 45,047 | 24.9 | 140,864 | 77.8% | $14.00 | 23.1% | 78.9% |
| 2032 | 0 | 0 | 0.0 | 140,864 | 77.8% | $0.00 | 0.0% | 78.9% |
| 2033 & Thereafter | 1 | 36,415 | 20.1 | 177,279 | 97.9% | $15.83 | 21.1% | 100.0% |
| Vacant | 0 | 3,850 | 2.1 | 181,129 | 100.0% | NAP | NAP | NAP |
| Total / Wtd. Avg. | 16 | 181,129 | 100.0% | $15.42 | 100.0% | |||
| (1) | Based on the underwritten rent roll dated as of January 11, 2022. |
| (2) | Certain tenants may have termination or contraction options (which may become exercisable prior to the originally stated expiration date of the tenant lease) that are not considered in the above Lease Rollover Schedule. |
| (3) | Annual U/W Base Rent Per Sq. Ft.,% U/W Base Rent Rolling and Cumulative % of U/W Base Rent are inclusive of contractual rent steps of $1,614 occurring through February 1, 2023, and $30,436 attributable to straight line rent credit for Amazon Fresh. |
Environmental Matters. According to the Phase I environmental report dated as of December 20, 2022, there are no recognized environmental conditions or recommendations for further action at the Hall Road Crossing Property.
The Market. The Hall Road Crossing Property is located in Shelby Township, a northern suburb of Detroit, Michigan that is located approximately 15 miles north of the city. The Hall Road Crossing Property neighborhood is located within an area known as the “Golden Corridor” which is known for its high concentration of national retailers and is anchored by Lakeside Mall, a 1.55 million sq. ft. super-regional mall. Primary Access to the Hall Road Crossing Property is provided by Hall Road and Schoenherr Road with nearby highway access provided by Interstate 94 to the east.
The Hall Road Crossing Property is located within the Macomb West retail submarket. According to a third-party market research report, the Macomb West retail submarket had a total inventory of 26,272,485 sq. ft. As of the third quarter of 2021, the Macomb West retail submarket had a 6.1% vacancy rate with average asking rents of $13.43 per sq. ft. According to the appraisal, the 2021 population within a one-, three- and five-mile radius of the Hall Road Crossing Property was 9,199, 100,972, and 249,033, respectively. The 2021 average household income within a one-, three- and five-mile radius of the Hall Road Crossing Property was $82,025, $82,835, and $92,248, respectively.
The following table presents certain information relating to the appraisal’s market rent conclusion for the Hall Road Crossing Property:
| Summary of Appraisal’s Concluded Retail Market Rent | |
| Market Rent PSF | |
| Grocery Space | $15.00 |
| Jr. Anchors (20,000+ Sq. Ft.) | $12.50 |
| 15,000-20,000 Sq. Ft. | $13.50 |
| Outlot Space | $19.00 |
| 5,000-15,000 Sq. Ft. | $20.00 |
| Inline (<5,000 Sq. Ft.) | $27.50 |
| Restaurant | $25.00 |
A-3-84
13821-13995 Hall Road Shelby Township, MI 48315 |
Collateral Asset Summary – Loan No. 10 Hall Road Crossing |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$28,712,745 68.2% 1.50x 9.3% |
The following table presents certain information relating to comparable properties to the Hall Road Crossing Property:
| Competitive/Comparable Properties(1) | |||||
| Property Name | City, State | Distance to Subject | Size (SF) | Year Built | Occupancy |
| Hall Road Crossing | Shelby Township, Michigan | — | 181,129 | 1986 | 97.9% |
| Troy Sports Shopping Center | Troy, Michigan | 10.3 miles | 248,244 | 1996 | 97.0% |
| Oakland Square | Troy, Michigan | 11.9 miles | 220,226 | 1986 | 100.0% |
| Shelby Corners Shopping Center | Utica, Michigan | 0.5 miles | 134,266 | 1987 | 91.0% |
| Shelby Town Center III | Shelby Township, Michigan | 0.5 miles | 159,856 | 2000 | 92.0% |
| Midtown Square | Troy, Michigan | 15.6 miles | 539,977 | 2000 | 100.0% |
| Troy Commons | Troy, Michigan | 11.3 miles | 129,461 | 1972 | 91.0% |
| Waterside Marketplace | New Baltimore, Michigan | 10.3 miles | 395,641 | 2007 | 100.0% |
| (1) | Source: Appraisal. |
Cash Flow Analysis.
| Cash Flow Analysis(1) | ||||||
| 2018 | 2019 | 2020 | T-12 10/31/2021 | U/W(2) | U/W Per Sq. Ft. | |
| Base Rent | $1,885,619 | $2,101,003 | $2,168,364 | $2,251,624 | $2,701,981 | $14.92 |
| Contractual Rent Steps(3) | 0 | 0 | 0 | 0 | 31,960 | 0.18 |
| Vacant Income | 0 | 0 | 0 | 0 | 118,398 | 0.65 |
| Reimbursements | 410,771 | 491,651 | 473,016 | 462,623 | 559,913 | 3.09 |
| Vacancy & Credit Loss | 0 | 0 | 0 | 0 | (149,836) | (0.83) |
| Effective Gross Income | $2,296,390 | $2,592,655 | $2,641,380 | $2,714,247 | $3,262,416 | $18.01 |
| Total Operating Expenses | $527,968 | $627,069 | $570,785 | $548,805 | $589,162 | $3.25 |
| Net Operating Income | $1,768,422 | $1,965,586 | $2,070,595 | $2,165,442 | $2,673,254 | $14.76 |
| TI/LC | 0 | 0 | 0 | 0 | 135,025 | 0.75 |
| Capital Expenditures | 0 | 0 | 0 | 0 | 27,169 | 0.15 |
| Net Cash Flow | $1,768,422 | $1,965,586 | $2,070,595 | $2,165,442 | $2,511,060 | $13.86 |
| (1) | Based on the underwritten rent roll dated as of January 11, 2022. |
| (2) | The increase from T-12 10/31/2021 to Underwritten Net Operating Income is primarily attributed to the recent Amazon Fresh lease and rent steps. |
| (3) | Contractual Rent Steps represent contractual Rent Steps of $1,614 occurring through February 1, 2023, and $30,436 attributable to straight line rent credit for Amazon Fresh. |
Property Management. The Hall Road Crossing Property is managed by Streamline Commercial Real Estate Solutions, LLC, an affiliate of the borrower sponsor.
Lockbox / Cash Management. The Hall Road Crossing Loan is structured with a springing lockbox and springing cash management. The borrower is required, from and after the first occurrence of a Restricted Account Trigger Event (as defined below) to cause all revenue derived from the Hall Road Crossing Property to be deposited directly into a lender approved lockbox account. All funds deposited into the lockbox are required to be transferred on each business day to or at the direction of the borrower unless a Trigger Period (as defined below) exists. Upon the occurrence and during the continuance of a Trigger Period, all funds in the lockbox account are required to be swept on each business day to a cash management account under the control of the lender to be applied and disbursed in accordance with the Hall Road Crossing Loan documents, and all excess cash flow funds remaining in the cash management account after the application of such funds in accordance with the Hall Road Crossing Loan documents are required to be held by the lender in an excess cash flow reserve account as additional collateral for the Hall Road Crossing Loan. Upon the cure of the applicable Trigger Period, so long as no other Trigger Period exists, the lender is required to return any amounts remaining on deposit in the excess cash flow reserve account to the borrower. Upon an event of default under the Hall Road Crossing Loan documents, the lender may apply funds to the debt in such priority as it may determine.
A “Restricted Account Trigger Event” means an event occurring on the first to occur of (i) a Trigger Period, and (ii) the debt service coverage ratio being less than 1.25x.
A “Trigger Period” means a period (A) commencing upon the earliest of (i) the occurrence and continuance of an event of default, (ii) the occurrence of a DSCR Trigger Period (as defined below), and (iii) the occurrence of a Specified Tenant Trigger Period (as defined below); and (B) expiring upon (x) with regard to any Trigger Period commenced in connection with clause (i) above, the cure (if applicable) of such event of default, (y) with regard to any Trigger Period commenced in connection with clause (ii) above, either (a) the date that the debt service coverage ratio is equal to or greater than 1.20x for two consecutive calendar quarters or (b) the satisfaction of the DSCR Trigger Period Avoidance Conditions (as defined below), and (z) with regard to any Trigger Period commenced in connection with clause (iii) above, a Specified Tenant Trigger Period ceasing to exist in accordance with the terms hereof. Notwithstanding the foregoing, a Trigger Period will not be deemed to expire in the event that a Trigger Period then exists for any other reason.
A-3-85
13821-13995 Hall Road Shelby Township, MI 48315 |
Collateral Asset Summary – Loan No. 10 Hall Road Crossing |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$28,712,745 68.2% 1.50x 9.3% |
A “DSCR Trigger Period” means a period commencing upon the debt service coverage ratio being less than 1.15x; provided, however, that no DSCR Trigger Period will be deemed to exist if the DSCR Trigger Period Avoidance Conditions are satisfied within five (5) business days of receipt of notice that the Debt Service Coverage Ratio is less than 1.15x.
“DSCR Trigger Period Avoidance Conditions” means that (i) the borrower deposits into an eligible account established with lender or servicer an amount that if applied to the outstanding principal balance of the Hall Road Crossing Loan would cause the debt service coverage ratio to be equal to or greater than 1.20x (the “DSCR Trigger Period Avoidance Deposit Amount”) and (ii) thereafter, on or prior to each anniversary of the date such deposit was made, borrower deposits into the same eligible account an amount of funds (in the form of cash or a letter of credit) equal to the DSCR Trigger Period Avoidance Deposit Amount. Upon the expiration of all Trigger Periods then in existence, other than due to satisfaction of the DSCR Trigger Period Avoidance Conditions, all such funds will be disbursed to borrower.
A “Specified Tenant Trigger Period” means a period (A) commencing upon the first to occur of (i) Specified Tenant (as defined below) being in monetary or material non-monetary default under the applicable Specified Tenant lease (beyond applicable notice and cure periods that are expressly set forth in such Specified Tenant lease at the time such default occurs), (ii) Specified Tenant failing to be in actual, physical possession of the Specified Tenant space (or applicable portion thereof), failing to be open for business during customary hours and/or “going dark” in the Specified Tenant space (or applicable portion thereof) (any such occurrence, a “Go Dark Trigger”) (provided, however, that notwithstanding the foregoing, no Go Dark Trigger will be deemed to exist so long as the Specified Tenant satisfies (and continues to satisfy) the Credit Rating Condition (as defined below)), (iii) Specified Tenant giving notice that it is terminating its lease for all or any portion of the Specified Tenant space (or applicable portion thereof), (iv) any termination or cancellation of any Specified Tenant lease (including, without limitation, rejection in any bankruptcy or similar insolvency proceeding) and/or any Specified Tenant lease failing to otherwise be in full force and effect, (v) any bankruptcy or similar insolvency of Specified Tenant, and (vi) Specified Tenant ceasing to satisfy the Credit Rating Condition (any such occurrence, a “Credit Rating Trigger”); and (B) expiring upon the first to occur of lender’s receipt of evidence reasonably acceptable to lender (which such evidence will include, without limitation, a duly executed estoppel certificate from the applicable Specified Tenant in form and substance acceptable to lender) of (1) the satisfaction of the Specified Tenant Cure Conditions (as defined below) or (2) borrower leasing the entire Specified Tenant space (or applicable portion thereof) in accordance with the applicable terms and conditions of the Hall Road Crossing Loan documents, the applicable tenant under such lease being in actual, physical occupancy of, and open to the public for business in, the space demised under its lease and paying the full amount of the rent due under its lease.
A “Specified Tenant” means, as applicable, (i) Amazon Fresh and (ii) any other lessee(s) of the Specified Tenant space (or any portion thereof) and (iii) any parent company of any such Specified Tenant, and any affiliate providing credit support for, or guarantor of, any such Specified Tenant lease(s).
“Specified Tenant Cure Conditions” mean each of the following, as applicable (i) the applicable Specified Tenant has cured all monetary and material non-monetary defaults under the applicable Specified Tenant lease, (ii) the applicable Specified Tenant is in actual, physical possession of at least seventy percent of the Specified Tenant space (or applicable portion thereof), open to the public for business during customary hours and not “dark” in at least seventy percent of the Specified Tenant space (or applicable portion thereof), (iii) the applicable Specified Tenant has revoked or rescinded all termination or cancellation notices with respect to the applicable Specified Tenant lease and has re-affirmed the applicable Specified Tenant lease as being in full force and effect, (iv) with respect to any applicable bankruptcy or insolvency proceedings involving the applicable Specified Tenant and/or the applicable Specified Tenant lease, the applicable Specified Tenant is no longer insolvent or subject to any bankruptcy or insolvency proceedings and has affirmed the applicable Specified Tenant lease pursuant to final, non-appealable order of a court of competent jurisdiction, (v) the applicable Specified Tenant is paying full, unabated rent under the applicable Specified Tenant lease, and (vi) in the event the Specified Tenant Trigger Period is due to a Credit Rating Condition, the applicable Specified Tenant with respect to which such Credit Rating Trigger occurred satisfies the Credit Rating Cure Condition (as defined below).
“Credit Rating Condition” means, as to any Specified Tenant, a condition which will be satisfied to the extent that, as of the applicable date of determination, such Specified Tenant then maintains a long-term unsecured debt rating of at least “BBB-” from S&P and an equivalent rating from each of the other rating agencies which rate such entity.
“Credit Rating Cure Condition” means, as to any Specified Tenant, a condition which will be satisfied to the extent that, as of the applicable date of determination, such Specified Tenant then maintains (and has maintained for at least two (2) consecutive calendar quarters) a long-term unsecured debt rating of at least “BBB+” from S&P and an equivalent rating from each of the other rating agencies which rate such entity.
Initial and Ongoing Reserves. At origination of the Hall Road Crossing Loan, the borrower deposited (i) approximately $90,580 into a real estate tax reserve account, (ii) $204,688 into a deferred maintenance account, (iii) $849,909 into a reserve account for free rent, and (iv) $817,656 into a reserve account for certain unfunded obligations.
Real Estate Tax Reserve. The borrower is required to deposit into a real estate tax reserve, on a monthly basis, 1/12 of the real estate taxes that lender estimates will be payable during the next 12 months (but excluding such Taxes due for any tax parcel with respect to which the Reserve Waiver Conditions are then satisfied with respect to the payment of taxes) (initially estimated to be approximately $22,645). “Reserve Waiver Conditions” means each of the following: (i) no event of default has occurred and is continuing, (ii) the
A-3-86
13821-13995 Hall Road Shelby Township, MI 48315 |
Collateral Asset Summary – Loan No. 10 Hall Road Crossing |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$28,712,745 68.2% 1.50x 9.3% |
applicable lease is in full force and effect with no monetary defaults or material non-monetary defaults thereunder, (iii) the applicable tenant makes the payments and perform the obligations required under such tenant’s lease (in the case of taxes, directly to the applicable governmental authority) and delivers evidence of the same by no later than the dates required under the Hall Road Crossing Loan documents, (iv) the applicable tenant is not bankrupt or insolvent, and (v) the applicable tenant has not expressed its intention in writing to terminate, or cancel or default under such tenant’s lease.
Insurance Reserve. The borrower is required to deposit, into an insurance reserve, on a monthly basis, 1/12 of an amount which would be sufficient to pay the insurance premiums due for the renewal of the coverage afforded by such policies (but excluding insurance premiums for such policies as may be maintained by one or more tenants, so long as the Reserve Waiver Conditions are satisfied); provided, however, such insurance reserve has been conditionally waived so long as the borrower maintains a blanket policy meeting the requirements of the Hall Road Crossing Loan documents. An acceptable blanket policy was in place at origination of the Hall Road Crossing Loan, and therefore no monthly insurance reserve deposits are currently required.
Replacement Reserve. On a monthly basis, the borrower is required to deposit into a replacement reserve account approximately $2,264. Notwithstanding the preceding sentence, to the extent that no Trigger Period then exists, the amount of sums on deposit in the replacement reserve account at any given time will not exceed $135,846.60.
TI/LC Reserve. On each monthly payment date, the borrower is required to deposit approximately $9,045 into a tenant improvements and leasing commissions reserve account. Notwithstanding the preceding sentence, to the extent that no Trigger Period then exists, the amount of sums on deposit in the tenant improvements and leasing commissions reserve account at any given time will not exceed $550,000.
Current Mezzanine or Subordinate Indebtedness. None.
Future Mezzanine or Subordinate Indebtedness Permitted. None.
Partial Release. None.
A-3-87
44 West 47th Street New York, NY 10036 |
Collateral Asset Summary – Loan No. 11 Gem Tower |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$28,000,000 54.5% 2.78x 9.6% |
| Mortgage Loan Information | |
| Loan Seller: | GSMC |
| Loan Purpose: | Refinance |
| Borrower Sponsor: | Prime Real Estate Holding Corp. |
| Borrowers: | Manhattan Property Development Corp. and IGT-City’s Property Development LLC |
| Original Balance(1): | $28,000,000 |
| Cut-off Date Balance(1): | $28,000,000 |
| % by Initial UPB: | 3.1% |
| Interest Rate: | 3.38800% |
| Payment Date: | 1st of each month |
| First Payment Date: | January 1, 2022 |
| Maturity Date: | December 6, 2031 |
| Amortization: | Interest Only |
| Additional Debt(1)(2): | $12,000,000 Pari Passu Debt / Future Mezzanine Loan Permitted |
| Call Protection(3): | L(28),YM(87),O(5) |
| Lockbox / Cash Management(4): | Soft / Springing |
| Reserves | |||
| Initial | Monthly | Cap | |
| Taxes: | $0 | Springing | NAP |
| Insurance: | $0 | Springing | NAP |
| Replacement: | $0 | Springing | NAP |
| TI/LC: | $0 | Springing | $73,460 |
| Other(5): | $1,551,668 | $0 | NAP |
| Property Information | |
| Single Asset / Portfolio: | Single Asset |
| Property Type: | Unanchored Retail |
| Collateral(6): | Fee Simple |
| Location: | New York, NY |
| Year Built / Renovated: | 2009 / NAP |
| Total Sq. Ft.: | 7,346 |
| Property Management: | IGT Shopping Mall Manager LLC |
| Underwritten NOI(7): | $3,831,944 |
| Underwritten NCF: | $3,824,965 |
| Appraised Value: | $73,400,000 |
| Appraisal Date: | October 14, 2021 |
| Historical NOI | |
| Most Recent NOI(7): | $2,315,701 (T-12 September 30, 2021) |
| 2020 NOI: | $1,821,960 (December 31, 2020) |
| 2019 NOI: | $3,820,927 (December 31, 2019) |
| 2018 NOI: | NAV |
| Historical Occupancy | |
| Most Recent Occupancy: | 100.0% (November 1, 2021) |
| 2020 Occupancy: | 97.5% (December 31, 2020) |
| 2019 Occupancy: | 100.0% (December 31, 2019) |
| 2018 Occupancy: | 100.0% (December 31, 2018) |
| Financial Information(1) | ||||||
| Tranche | Cut-off
Date Balance |
Balance per Sq. Ft. Cut-off / Balloon |
LTV Cut-off / Balloon |
U/W DSCR NOI / NCF |
U/W Debt Yield NOI / NCF |
U/W Debt Yield at Balloon NOI / NCF |
| Mortgage Loan | $28,000,000 | |||||
| Pari Passu Note | 12,000,000 | |||||
| Whole Loan | $40,000,000 | $5,445 / $5,445 | 54.5% / 54.5% | 2.79x / 2.78x | 9.6% / 9.6% | 9.6% / 9.6% |
| (1) | The Gem Tower Loan (the “Gem Tower Loan”) is part of the whole loan (the “Gem Tower Whole Loan”) evidenced by two pari passu notes, with an aggregate outstanding principal balance as of the Cut-off Date of $40.0 million. For additional information, see the “Whole Loan Summary” chart herein. |
| (2) | An indirect owner of the borrowers is permitted to obtain mezzanine financing secured by a pledge of the direct or indirect equity interests in the borrowers subject to certain conditions, including, without limitation: (i) a combined maximum loan to value ratio of 55.0%, inclusive of the additional mezzanine debt, (ii) a debt service coverage ratio at the closing of the mezzanine loan at least equal to 2.97x, inclusive of the additional mezzanine debt, (iii) a debt yield at the closing of the mezzanine loan at least equal to 10.15%, inclusive of the additional mezzanine debt and (iv) a subordination and intercreditor agreement reasonably satisfactory to the lender. |
| (3) | The lockout period will be at least 28 payment dates beginning with and including the first payment date in January 2022. Prepayment of the Gem Tower Whole Loan in full is permitted at any time on or after the sixth day of the month that first occurs after the earlier to occur of (i) December 2, 2024 or (ii) the date that is two years from the closing date of the securitization that includes the last pari passu note to be securitized. The assumed lockout period of 28 payments is based on the expected Benchmark 2022-B34 securitization closing date in April 2022. The actual lockout period may be longer. |
| (4) | During the continuance of a cash management period, the Gem Tower Whole Loan documents permit the lender to deliver notices to each tenant instructing them to directly deposit all rents into the lender-controlled lockbox account. |
| (5) | Other initial reserves consist of a rent stabilization reserve ($1,000,000) and a rent deferral reserve (approximately $551,668). |
| (6) | The Gem Tower Whole Loan is secured by both the fee interest owned by Manhattan Property Development Corp. and the leasehold interest owned by IGT-City’s Property Development LLC pursuant to an operating lease in a retail condominium unit. The Gem Tower Property (as defined below) is leased in its entirety from the fee owner, Manhattan Property Development Corp., to IGT-City’s Property Development LLC. These two entities are the co-borrowers for the Gem Tower Whole Loan. |
| (7) | The increase from the Most Recent NOI to Underwritten NOI is primarily attributable to the expiration of rent discounts and arrears related to the COVID-19 pandemic. We cannot assure you that the Gem Tower Property will stabilize as expected or at all. |
A-3-88
44 West 47th Street New York, NY 10036 |
Collateral Asset Summary – Loan No. 11 Gem Tower |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$28,000,000 54.5% 2.78x 9.6% |
| Whole Loan Summary | ||||
| Note | Original Balance | Cut-off Date Balance | Note Holder | Controlling Piece |
| A-1 | $28,000,000 | $28,000,000 | Benchmark 2022-B34 | Yes |
| A-2 | 12,000,000 | 12,000,000 | GSBI(1) | No |
| Whole Loan | $40,000,000 | $40,000,000 | ||
| (1) | Expected to be contributed to one or more future securitization transactions or may otherwise be transferred at any time. |
| Sources and Uses | ||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
| Whole Loan | $40,000,000 | 95.9% | Loan Payoff | $40,000,341 | 95.9% | |
| Borrower Sponsor Equity | 1,712,393 | 4.1 | Rent Stabilization Reserve | 1,000,000 | 2.4 | |
| Rent Deferral Reserve | 551,668 | 1.3 | ||||
| Closing Costs | 160,385 | 0.4 | ||||
| Total Sources | $41,712,393 | 100.0% | Total Uses | $41,712,393 | 100.0% | |
The Borrowers and the Borrower Sponsor. The borrowers, Manhattan Property Development Corp. and IGT-City’s Property Development LLC, each are single-purpose entities with one independent director. Legal counsel to the borrowers delivered a non-consolidation opinion in connection with the origination of the Gem Tower Whole Loan. The borrowers are both wholly owned by the borrower sponsor, Prime Real Estate Holding Corp. Manhattan Property Development Corp. is the fee interest owner of the Gem Tower Property and IGT-City’s Property Development LLC is the operating lessee of the Gem Tower Property. The borrower sponsor, Prime Real Estate Holding Corp., is a privately owned entity which is wholly owned by Mehmet Gulay and controlled by Ihsan Gulay, businessmen who are Turkish nationals. Ihsan Gulay is the owner of The Gulaylar Group, a privately held, Turkish conglomerate which owns and manages offices, malls and resorts and is involved in all aspects of the jewelry industry including the exportation of gems, gold and silver to over 55 countries. The Gulaylar Group was founded in 1926 and expanded in the 1950s under the second-generation control of Mehmet Gulay. The conglomerate currently consists of 36 separate corporations. The non-recourse carveout guarantor is Ihsan Gulay.
The Property. The Gem Tower Property is a 3-story, diamond exchange retail condominium located in Manhattan’s diamond district on 47th Street between 5th and 6th Avenue with approximately 15,955 sq. ft. of gross area and 7,346 sq. ft. of net rentable area (the “Gem Tower Property”). The borrower sponsor purchased the Gem Tower Property for approximately $31.9 million in September 2013. The borrower sponsor spent approximately $6.9 million developing the Gem Tower Property into a shopping mall-style diamond exchange.
The Gem Tower Property is located at the base of the 36-story International Gem Tower. International Gem Tower was developed by Extell Development Company in 2012 and is the only commercial condominium development in New York designed specifically for the global diamond, gem and jewelry industry. The Gemological Institute of America, an independent nonprofit that protects the gem and jewelry buying public through research, education and laboratory services, is headquartered at International Gem Tower.
The Gem Tower Property contains 7,346 sq. ft. of net rentable area spread across three floors, a ground floor, mezzanine floor and basement level. The ground floor includes six street front jewelry kiosks, each which features street front display cases and additional access points, 19 interior jewelry kiosks, a café and an ATM. The mezzanine floor features seven offices, including a management office. Lastly, the basement level features a mix of eight retail offices.
COVID-19 Update. As of March 11, 2022, the Gem Tower Property was open and operating. As of March 9, 2022, no loan modification or forbearance requests have been made on the Gem Tower Whole Loan. The March debt service payment was made. In connection with the COVID-19 pandemic, the borrower has granted rent deferrals in the amount of approximately $3,266,000 in the aggregate to the tenants at the Gem Tower Property, of which approximately (i) $2,673,000 has been forgiven and (ii) $593,000 remains unpaid. In addition, the Gem Tower Whole Loan documents permit the borrower to grant to any tenant on an ongoing basis, without the lender’s prior consent, deferral of up to four months’ of rent in the aggregate, provided that such deferred rent is required to be repaid prior to the expiration of the term of the related lease and the borrower delivers notice to the lender of any such deferral. At origination, the borrower deposited with the lender (i) approximately $551,668 in a rent deferral reserve in connection with any deferred rent as of the origination date and (ii) $1,000,000 in a rent stabilization reserve, to be held as additional collateral until the debt yield at the Gem Tower Property is no less than 9.6% for four consecutive fiscal quarters.
A-3-89
44 West 47th Street New York, NY 10036 |
Collateral Asset Summary – Loan No. 11 Gem Tower |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$28,000,000 54.5% 2.78x 9.6% |
The following table presents certain information relating to the tenants at the Gem Tower Property:
| Tenant Summary(1) | |||||
| Tenant | Credit Rating (Fitch/Moody’s/S&P) | Net Rentable Area (Sq. Ft.) | % of Net Rentable Area | U/W Base Rent Per Sq. Ft.(2) | % of Total U/W Base Rent(2) |
| City’s Property Development Corp.(3) | NR / NR / NR | 530 | 7.2% | $356.60 | 3.9% |
| E&S Creation LLC | NR / NR / NR | 530 | 7.2 | $223.01 | 2.4 |
| The Laser Booth Corp. | NR / NR / NR | 485 | 6.6 | $238.73 | 2.4 |
| Diamond Scene of New York Corp.(4) | NR / NR / NR | 445 | 6.1 | $1,068.31 | 9.7 |
| Pristine Jewelers NY Inc. | NR / NR / NR | 415 | 5.6 | $1,007.60 | 8.6 |
| Jangmi Jewelers Corp. | NR / NR / NR | 403 | 5.5 | $486.36 | 4.0 |
| World Star Trading Corp. | NR / NR / NR | 388 | 5.3 | $601.49 | 4.8 |
| Kent Jewelry, Inc. | NR / NR / NR | 336 | 4.6 | $1,633.24 | 11.3 |
| Zen Diamond | NR / NR / NR | 311 | 4.2 | $655.95 | 4.2 |
| New York Gold and Silver Refiners Inc. | NR / NR / NR | 274 | 3.7 | $598.57 | 3.4 |
| Ten Largest Tenants | 4,117 | 56.0% | $646.76 | 54.6% | |
| Remaining Occupied | 3,229 | 44.0 | $686.00 | 45.4 | |
| Total / Wtd. Avg. Occupied Collateral | 7,346 | 100.0% | $664.00 | 100.0% | |
| Vacant | 0 | 0.0 | |||
| Total | 7,346 | 100.0% | |||
| (1) | Based on the underwritten rent roll dated November 1, 2021. |
| (2) | U/W Base Rent Per Sq. Ft. and % of Total U/W Base Rent are inclusive of contractual rent steps through March 31, 2023. |
| (3) | City’s Property Development Corp. is an affiliate of the borrower sponsor. |
| (4) | Diamond Scene of New York Corp., leases 315 sq. ft. expiring September 22, 2024 and 130 sq. ft. expiring January 20, 2025. |
| Lease Rollover Schedule(1) | ||||||||
| Year | # of Leases Expiring |
Total Expiring Sq. Ft. |
% of Total Sq. Ft. Expiring |
Cumulative Sq. Ft. Expiring |
Cumulative % of Sq. Ft. Expiring |
Annual U/W Base Rent Per Sq. Ft.(2) |
% U/W Base Rent Rolling(2) |
Cumulative % of U/W Base Rent(2) |
| MTM | 0 | 0 | 0.0% | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
| 2022 | 2 | 388 | 5.3 | 388 | 5.3% | $601.49 | 4.8 | 4.8% |
| 2023 | 0 | 0 | 0.0 | 388 | 5.3% | $0.00 | 0.0 | 4.8% |
| 2024 | 31 | 5588 | 76.1 | 5,976 | 81.4% | $694.46 | 79.6 | 84.3% |
| 2025 | 5 | 631 | 8.6 | 6,607 | 89.9% | $718.65 | 9.3 | 93.6% |
| 2026 | 1 | 104 | 1.4 | 6,711 | 91.4% | $889.08 | 1.9 | 95.5% |
| 2027 | 0 | 0 | 0.0 | 6,711 | 91.4% | $0.00 | 0.0 | 95.5% |
| 2028 | 1 | 105 | 1.4 | 6,816 | 92.8% | $274.63 | 0.6 | 96.1% |
| 2029 | 0 | 0 | 0.0 | 6,816 | 92.8% | $0.00 | 0.0 | 96.1% |
| 2030 | 0 | 0 | 0.0 | 6,816 | 92.8% | $0.00 | 0.0 | 96.1% |
| 2031 | 1 | 530 | 7.2 | 7,346 | 100.0% | $356.60 | 3.9 | 100.0% |
| 2032 | 0 | 0 | 0.0 | 7,346 | 100.0% | $0.00 | 0.0 | 100.0% |
| 2033 & Beyond | 0 | 0 | 0.0 | 7,346 | 100.0% | $0.00 | 0.0 | 100.0% |
| Vacant | 0 | 0 | 0.0 | 7,346 | 100.0% | NAP | NAP | NAP |
| Total / Wtd. Avg. | 41 | 7,346 | 100.0% | $664.00 | 100.0% | |||
| (1) | Based on the underwritten rent roll dated November 1, 2021. |
| (2) | Annual U/W Base Rent Per Sq. Ft., % U/W Base Rent Rolling and Cumulative % of U/W Base Rent are inclusive of contractual rent steps through March 31, 2023. |
A-3-90
44 West 47th Street New York, NY 10036 |
Collateral Asset Summary – Loan No. 11 Gem Tower |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$28,000,000 54.5% 2.78x 9.6% |
| Competitive Properties(1) | ||||
| Property Name & Address | Year Built / Renovated | Total NRA | Occupancy | Rent/Sq. Ft. |
Gem Tower 44 West 47th Street, New York NY |
2009 / NAP | 7,346(2) | 100.0%(2) | $664(2) |
| 1166
Avenue of the Americas New York, NY |
NAP / NAP | 7,432 | NAP | $393 |
| 15
West 47th Street New York, NY |
NAP / NAP | 1,112 | NAP | $846 |
| 29-31
West 47th Street New York, NY |
NAP / NAP | 760 | NAP | $890 |
| 71
West 47th Street New York, NY |
NAP / NAP | 348 | NAP | $589 |
| 16-20
West 47th Street New York, NY |
NAP / NAP | 8,198 | NAP | $493 |
| (1) | Source: Appraisal. |
| (2) | Based on the underwritten rent roll dated November 1, 2021. |
Cash Flow Analysis.
| Cash Flow Analysis(1) | |||||
| 2019 | 2020 | T-12 9/30/2021(2) | U/W(2) | U/W PSF | |
| Base Rent(3) | $4,413,914 | $4,477,038 | $4,498,667 | $4,877,776 | $664.00 |
| Total Commercial Reimbursement Revenue | 345,064 | 329,512 | 353,492 | 357,946 | 48.73 |
| Other Income | 92,493 | 102,854 | 88,284 | 96,000 | 13.07 |
| Gross Potential Rent | $4,851,471 | $4,909,404 | $4,940,442 | $5,331,722 | $725.80 |
| Vacancy Loss | 0 | (345,790) | (405,381) | (266,586) | (36.29) |
| Rent Discounts | (36,557) | (1,785,332) | (1,167,339) | 0 | 0.00 |
| Effective Gross Income | $4,814,914 | $2,778,282 | $3,367,722 | $5,065,136 | $689.51 |
| Total Operating Expenses | $993,987 | $956,322 | $1,052,021 | $1,233,191 | $167.87 |
| Net Operating Income | $3,820,927 | $1,821,960 | $2,315,701 | $3,831,944 | $521.64 |
| Replacement Reserves | 0 | 0 | 0 | 6,979 | 0.95 |
| Net Cash Flow | $3,820,927 | $1,821,960 | $2,315,701 | $3,824,965 | $520.69 |
| (1) | Based on the underwritten rent roll dated November 1, 2021. |
| (2) | The increase from the T-12 9/30/2021 to U/W is primarily attributable to the expiration of rent discounts and arrears related to the COVID-19 pandemic. We cannot assure you that the Gem Tower Property will stabilize as expected or at all. |
| (3) | U/W Base Rent is inclusive of contractual rent steps through March 31, 2023. |
A-3-91
Various Westport, Connecticut 06880 |
Collateral Asset Summary – Loan No. 12 285 & 355 Riverside Ave |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$28,000,000 64.4% 2.10x 9.0% |
| Mortgage Loan Information | |
| Loan Seller: | CREFI |
| Loan Purpose: | Acquisition |
| Borrower Sponsor: | Jeffrey J. Feil |
| Borrower: | Westport Riverside Associates LLC |
| Original Balance: | $28,000,000 |
| Cut-off Date Balance: | $28,000,000 |
| % by Initial UPB: | 3.1% |
| Interest Rate: | 3.97000% |
| Payment Date: | 6th of each month |
| First Payment Date: | April 6, 2022 |
| Maturity Date: | March 6, 2032 |
| Amortization: | Interest Only |
| Additional Debt: | None |
| Call Protection: | L(25),D(89),O(6) |
| Lockbox / Cash Management: | Hard / Springing |
| Reserves | |||
| Initial | Monthly | Cap | |
| Taxes: | $30,785 | $30,785 | NAP |
| Insurance: | $0 | Springing | NAP |
| Replacement: | $0 | $1,577 | NAP |
| TI/LC: | $0 | $11,831 | NAP |
| Other(2): | $54,036 | $0 | NAP |
| Property Information | |
| Single Asset / Portfolio: | Portfolio of 2 properties |
| Property Type: | Suburban Office |
| Collateral: | Fee Simple |
| Location: | Westport, CT |
| Year Built / Renovated(1): | Various / Various |
| Total Sq. Ft.: | 94,647 |
| Property Management: | Jeffrey Management Corp. |
| Underwritten NOI: | $2,531,663 |
| Underwritten NCF: | $2,370,763 |
| Appraised Value: | $43,500,000 |
| Appraisal Date: | December 7, 2021 |
| Historical NOI | |
| Most Recent NOI: | $2,469,124 (T-12 October 31, 2021) |
| 2020 NOI: | $2,006,776 (December 31, 2020) |
| 2019 NOI: | $1,643,681 (December 31, 2019) |
| 2018 NOI: | NAV |
| Historical Occupancy | |
| Most Recent Occupancy: | 88.0% (November 1, 2021) |
| 2020 Occupancy: | 90.8% (December 31, 2020) |
| 2019 Occupancy: | 90.8% (December 31, 2019) |
| 2018 Occupancy: | NAV |
| Financial Information | ||||||
| Tranche | Cut-off Date Balance | Balance per Sq. Ft. Cut-off / Maturity |
LTV Cut-off / Maturity |
U/W DSCR NOI / NCF |
U/W Debt Yield NOI / NCF |
U/W Debt Yield at Maturity NOI / NCF |
| Mortgage Loan | $28,000,000 | $296 / $296 | 64.4% / 64.4% | 2.25x / 2.10x | 9.0% / 8.5% | 9.0% / 8.5% |
| Sources and Use | ||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
| Mortgage Loan | $28,000,000 | 64.2% | Purchase Price | $43,057,500 | 98.7% | |
| Principal’s New Cash Contribution | 15,102,959 | 34.6 | Closing Costs | 497,304 | 1.1 | |
| Other Sources | 536,665 | 1.2 | Upfront Reserves | 84,821 | 0.2 | |
| Total Sources | $43,639,625 | 100.0% | Total Uses | $43,639,625 | 100.0% | |
| (1) | The 285 Riverside Ave Property (as defined below) was built in 1923 and 1981 and subsequently renovated in 2017. The 355 Riverside Ave Property (as defined below) was built in 1970 and renovated in 2019. |
| (2) | Other reserve consists of a $54,036 free rent reserve. |
The Borrower and the Borrower Sponsor. The borrower is Westport Riverside Associates LLC, a Delaware limited liability company.
The borrower sponsor and non-recourse carveout guarantor is Jeffrey J. Feil of the Feil Organization. The Feil Organization is an established family-owned investment, development and management firm based in New York City. The firm was founded by Louis Feil in the 1950s and manages 24 million sq. ft. of retail, commercial, and industrial property, 5,000 residential rental units, and thousands of acres of undeveloped land across the United States.
The Properties. The 285 & 355 Riverside Ave properties (the “285 & 355 Riverside Ave Properties”) consist of two Class A office buildings located at 285 Riverside Avenue (the “285 Riverside Ave Property”) and 355 Riverside Avenue (the “355 Riverside Ave Property”) in Westport, Connecticut. The 285 Riverside Ave Property is a 55,278 sq. ft., three and four-story office building situated on an approximately 1.76-acre site that was built in two phases, 1923 and 1981, and renovated in 2017. The 285 Riverside Ave Property possesses 149 surface and covered parking spaces, with a parking ratio of approximately 2.7 spaces per 1,000 sq. ft. The 285 Riverside Ave Property is currently 85.6% occupied by six office tenants as of November 1, 2021. The largest tenant at the 285 Riverside Ave Property, Sterling Investment Partners, occupies 9,939 sq. ft. (10.5% of the net rentable area, 12.3% of the U/W Base Rent). Sterling Investment Partners was founded in 1991 and is a middle market private equity firm with a long history of building companies across its targeted industry sector.
The 355 Riverside Ave Property is a 39,369 sq. ft., three-story office building situated on an approximately 2.39-acre site that was built in 1970 and renovated in 2019. The 355 Riverside Ave Property possesses 118 surface and covered parking spaces, with a parking ratio of 3.0 spaces per 1,000 sq. ft. The 355 Riverside Property is currently 91.3% occupied by five tenants as of November 1, 2021, with vacant spaces comprised of a 1,325 sq. ft. suite on the first floor and a third-floor suite totaling 2,116 sq. ft. The largest tenant at the 355
A-3-92
Various Westport, Connecticut 06880 |
Collateral Asset Summary – Loan No. 12 285 & 355 Riverside Ave |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$28,000,000 64.4% 2.10x 9.0% |
Riverside Ave Property, Verrill Dana LLP, occupies 14,895 sq. ft. (15.7% of the net rentable area, 17.0% of the U/W Base Rent). Verrill Dana LLP is a leading New England regional law firm founded in 1862.
COVID-19 Update. The 285 & 355 Riverside Ave Properties are open and operational. As of March 4, 2021, all tenants are current on rent and no tenants are requesting deferred rent or lease modifications. No rent deferrals or lease modifications were requested by the tenants at the 285 & 355 Riverside Ave Properties at any time during the COVID-19 pandemic. As of March 4, 2021, the 285 & 355 Riverside Ave loan is not subject to any modifications or forbearance requests. The first payment date of the 285 & 355 Riverside Ave loan is April 6, 2022.
| Tenant Summary(1) | |||||||
| Tenant | Credit Rating (Moody’s/Fitch/S&P)(2) | Net Rentable Area (Sq. Ft.) | % of Net Rentable Area | U/W Base Rent Per Sq. Ft.(3) | % of Total U/W Base Rent(3) | Lease Expiration | |
| Verrill Dana LLP(4) | NR/NR/NR | 14,895 | 15.7% | $42.00 | 17.0% | 11/30/2030 | |
| Sterling Investment Partners(5) | NR/NR/NR | 9,939 | 10.5 | $45.62 | 12.3 | 5/31/2025 | |
| Raymond James & Associates | A3/A-/BBB+ | 9,141 | 9.7 | $46.15 | 11.5 | 5/31/2025 | |
| Great Rock Capital Partners | NR/NR/NR | 8,737 | 9.2 | $33.29 | 7.9 | 3/31/2027 | |
| Balance Point Capital Advisors(6) | NR/NR/NR | 8,324 | 8.8 | $50.75 | 11.5 | 2/28/2023 | |
| Coldwell Banker(7) | NR/NR/NR | 7,817 | 8.3 | $43.71 | 9.3 | 6/30/2029 | |
| RBC Capital Markets, LLC(8) | NR/NR/AA- | 7,205 | 7.6 | $47.31 | 9.3 | 5/31/2032 | |
| Bluff Point Associates(9) | NR/NR/NR | 5,384 | 5.7 | $49.50 | 7.2 | 9/30/2027 | |
| IXM Trading, LLC(10) | NR/NR/NR | 5,082 | 5.4 | $44.00 | 6.1 | 3/31/2026 | |
| Parrino & Shattuck, P.C.(11) | NR/NR/NR | 3,990 | 4.2 | $45.02 | 4.9 | 3/31/2023 | |
| Largest Tenant | 80,514 | 85.1% | $44.30 | 96.8% | |||
| Remaining Occupied | 2,750 | 2.9 | $42.45 | 3.2 | |||
| Total / Wtd. Avg. Occupied Collateral | 83,264 | 88.0% | $44.23 | 100.0% | |||
| Vacant | 11,383 | 12.0 | |||||
| Total | 94,647 | 100.0% | |||||
| (1) | Based on the underwritten rent roll dated November 1, 2021. |
| (2) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
| (3) | U/W Base Rent Per Sq. Ft. and % of Total U/W Base Rent are inclusive of contractual straight-line rent steps. |
| (4) | Verrill Dana LLP has four, five-year renewal options. |
| (5) | Sterling Investment Partners has one, five-year renewal option. |
| (6) | Balance Point Capital Advisors has one, five-year renewal option. |
| (7) | Coldwell Banker has a three, three-year renewal options. |
| (8) | RBC Capital Markets, LLC, has two, five-year renewal options and a termination option effective May 12, 2029, upon 365 days’ notice and payment of unamortized cost of landlord’s work, leasing commissions, free rent, and legal fees. |
| (9) | Bluff Point Associates has one, five-year renewal option and a termination option effective October 1, 2024, not earlier than 270 days but no later than 180 days prior to cancellation notice and payment of unamortized cost of landlord’s work, leasing commissions, free rent, and legal fees. |
| (10) | IXM Trading, LLC has one, five-year renewal option and a termination option effective May 31, 2024, upon 365 days’ notice and payment of unamortized cost of landlord’s work, leasing commissions, free rent and legal fees. |
| (11) | Parrino & Shattuck, P.C. has a two, five-year renewal options. |
| Lease Rollover Schedule(1)(2) | ||||||||
| Year | # of Leases Expiring |
Total Expiring Sq. Ft. |
% of Total Sq. Ft. Expiring |
Cumulative Sq. Ft. Expiring |
Cumulative % of Sq. Ft. Expiring |
Annual U/W Base Rent Per Sq. Ft.(3) |
% U/W Base Rent Rolling(3) |
Cumulative % of U/W Base Rent(3) |
| MTM & 2022 | 0 | 0 | 0.0% | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
| 2023 | 2 | 12,314 | 13.0 | 12,314 | 13.0% | $48.89 | 16.3 | 16.3% |
| 2024 | 0 | 0 | 0.0 | 12,314 | 13.0% | $0.00 | 0.0 | 16.3% |
| 2025 | 2 | 19,080 | 20.2 | 31,394 | 33.2% | $45.87 | 23.8 | 40.1% |
| 2026 | 2 | 7,832 | 8.3 | 39,226 | 41.4% | $43.46 | 9.2 | 49.4% |
| 2027 | 2 | 14,121 | 14.9 | 53,347 | 56.4% | $39.47 | 15.1 | 64.5% |
| 2028 | 0 | 0 | 0.0 | 53,347 | 56.4% | $0.00 | 0.0 | 64.5% |
| 2029 | 1 | 7,817 | 8.3 | 61,164 | 64.6% | $43.71 | 9.3 | 73.8% |
| 2030 | 1 | 14,895 | 15.7 | 76,059 | 80.4% | $42.00 | 17.0 | 90.7% |
| 2031 | 0 | 0 | 0.0 | 76,059 | 80.4% | $0.00 | 0.0 | 90.7% |
| 2032 & Thereafter | 1 | 7,205 | 7.6 | 83,264 | 88.0% | $47.31 | 9.3 | 100.0% |
| Vacant | NAP | 11,383 | 12.0 | 94,647 | 100.0% | NAP | NAP | NAP |
| Total / Wtd. Avg. | 11 | 94,647 | 100.0% | $44.23 | 100.0% | |||
| (1) | Based on the underwritten rent roll dated November 1, 2021. |
| (2) | Certain tenants may have termination or contraction options (which may become exercisable prior to the originally stated expiration date of the tenant lease) that are not considered in the above Lease Rollover Schedule. |
| (3) | Annual U/W Base Rent Per Sq. Ft., % U/W Base Rent Rolling and Cumulative % of U/W Base Rent are inclusive of contractual straight-line rent steps. |
A-3-93
Various Westport, Connecticut 06880 |
Collateral Asset Summary – Loan No. 12 285 & 355 Riverside Ave |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$28,000,000 64.4% 2.10x 9.0% |
Cash Flow Analysis.
| Cash Flow Analysis(1) | ||||||
| 2019 | 2020 | T-12 10/31/2021 | U/W | U/W PSF | ||
| Base Rent | $2,876,272 | $3,692,572 | $3,770,364 | $3,585,207 | $37.88 | |
| Contractual Rent Steps | 0 | 0 | 0 | 97,961 | 1.04 | |
| Vacant Income | 0 | 0 | 0 | 523,618 | 5.53 | |
| Reimbursements | 34,650 | 37,658 | 33,707 | 10,478 | 0.11 | |
| Vacancy & Credit Loss | (196,916) | (639,121) | (229,033) | (523,618) | (5.53) | |
| Other Income | 192,366 | 215,802 | 203,371 | 226,254 | 2.39 | |
| Effective Gross Income | $2,906,372 | $3,306,910 | $3,778,409 | $3,919,900 | $41.42 | |
| Total Operating Expenses | $1,262,692 | $1,300,134 | $1,309,285 | $1,388,238 | $14.67 | |
| Net Operating Income | $1,643,681 | $2,006,776 | $2,469,124 | $2,531,663 | $26.75 | |
| Replacement Reserves | 0 | 0 | 0 | 18,929 | 0.20 | |
| TI/LC | 0 | 0 | 0 | 141,971 | 1.50 | |
| Net Cash Flow | $1,643,681 | $2,006,776 | $2,469,124 | $2,370,763 | $25.05 | |
| (1) | Based on the underwritten rent roll dated November 1, 2021. |
A-3-94
23200 Forest North Drive Kingwood, Texas 77339 |
Collateral Asset Summary – Loan No. 13 Bala Woods |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$27,500,000 46.5% 2.21x 8.9% |
| Mortgage Loan Information | |
| Loan Seller: | CREFI |
| Loan Purpose: | Acquisition |
| Borrower Sponsor: | CF Real Estate Holdings, LLC |
| Borrower: | CF Bala Woods Multifamily DST |
| Original Balance: | $27,500,000 |
| Cut-off Date Balance: | $27,500,000 |
| % by Initial UPB: | 3.0% |
| Interest Rate: | 3.86000% |
| Payment Date: | 6th of each month |
| First Payment Date: | April 6, 2022 |
| Maturity Date: | March 6, 2032 |
| Amortization: | Interest Only |
| Additional Debt: | None |
| Call Protection: | L(25),D(90),O(5) |
| Lockbox / Cash Management: | Springing / Springing |
| Reserves | |||
| Initial | Monthly | Cap | |
| Taxes: | $159,396 | $53,132 | NAP |
| Insurance: | $73,391 | $18,348 | NAP |
Replacement: Debt Service Reserve: |
$0 $88,458 |
$5,699 $0 |
NAP NAP |
| Property Information | |
| Single Asset / Portfolio: | Single Asset |
| Property Type: | Multifamily - Garden |
| Collateral: | Fee Simple |
| Location: | Kingwood, TX |
| Year Built / Renovated: | 2000 / 2014 |
| Total Units: | 262 |
| Property Management: | CAF Management, LLC |
| Underwritten NOI: | $2,442,670 |
| Underwritten NCF: | $2,374,288 |
| Appraised Value: | $59,200,000 |
| Appraisal Date: | January 26, 2022 |
| Historical NOI | |
| Most Recent NOI: | $2,594,376 (December 31, 2021) |
| 2020 NOI: | $2,495,166 (December 31, 2020) |
| 2019 NOI: | $2,464,992 (December 31, 2019) |
| 2018 NOI: | NAV |
| Historical Occupancy | |
| Most Recent Occupancy: | 95.8% (February 5, 2022) |
| 2020 Occupancy: | 93.8% (December 31, 2020) |
| 2019 Occupancy: | 93.2% (December 31, 2019) |
| 2018 Occupancy: | NAV |
| Financial Information | ||||||
| Tranche | Cut-off Date Balance | Balance per Unit Cut-off / Balloon |
LTV Cut-off / Balloon |
U/W DSCR NOI / NCF |
U/W Debt Yield NOI / NCF |
U/W Debt Yield at Balloon NOI / NCF |
| Mortgage Loan | $27,500,000 | $104,962 / $104,962 | 46.5% / 46.5% | 2.27x / 2.21x | 8.9% / 8.6% | 8.9% / 8.6% |
| Sources and Uses | ||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
| Mortgage Loan | $27,500,000 | 45.8% | Purchase Price | $59,000,000 | 98.3% | |
| Principal’s New Cash Contribution | 32,273,638 | 53.8 | Closing Costs | 683,449 | 1.1 | |
| Other Sources | 231,057 | 0.4 | Upfront Reserves | 321,245 | 0.5 | |
| Total Sources | $60,004,695 | 100.0% | Total Uses | $60,004,695 | 100.0% | |
The Borrower and the Borrower Sponsor. The borrower is CF Bala Woods Multifamily DST, a Delaware statutory trust and single purpose entity with one independent director. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the Bala Woods loan (the “Bala Woods Loan”). The borrower sponsor and non-recourse carveout guarantor is CF Real Estate Holdings, LLC.
CF Real Estate Holdings, LLC shares a similar ownership structure to and is owned by Cantor Fitzgerald Investors LLC. Cantor Fitzgerald Investors LLC is a subsidiary of Cantor Fitzgerald, L.P. which operates as its DST investment platform. Over the past decade, Cantor Fitzgerald has invested more than $2.0 billion in its commercial real estate business infrastructure. In 2020, Cantor Fitzgerald participated in more than $72.3 billion of total real estate transactions.
The Property. The Bala Woods property is a 262-unit multifamily garden style apartment complex with an approximately 490-space parking garage (1.87 spaces per unit) located at 23200 Forest North Drive in Kingwood, Texas (the “Bala Woods Property”). The improvements are situated on a 17.36-acre site. Unit amenities at the Bala Woods Property include granite countertops with black or stainless-steel appliances, along with laminate wood cabinets and laminate wood flooring. Further, tenants enjoy a best-in-class amenity package including a 24-hour fitness center, pool and spa, business center, tenant lounge, media room, picnic and grilling area, yoga studio and a dog park. The borrower master leases the Bala Woods Property to an affiliate, CF Bala Woods Master Tenant, LLC. For so long as the master lease is in effect, the borrower is entitled to receive only rents from the master lease, and not the underlying rents and other receipts from the Bala Woods Property. The U/W NOI Debt Yield and U/W NCF DSCR of the Bala Woods Loan, based only on the master lease rent, are 9.8% and 2.50x, respectively. The U/W NOI Debt Yield and U/W NCF DSCR of the Bala Woods Loan, based on the rents from the underlying tenants (and not the master lease rent), are 8.9% and 2.21x, respectively.
A-3-95
23200 Forest North Drive Kingwood, Texas 77339 |
Collateral Asset Summary – Loan No. 13 Bala Woods |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$27,500,000 46.5% 2.21x 8.9% |
COVID-19 Update. As of February 5, 2022, the Bala Woods Property is open and operating. The tenants at the Bala Woods Property are current on rent and have not missed any payments throughout the COVID-19 pandemic. The Bala Woods Loan is not subject to any modification or forbearance requests. The first payment date of the Bala Woods Loan is April 6, 2022.
| Multifamily Unit Mix(1)(2) | ||||||
| Unit Type | # of Units | % of Total Units | Occupancy(2) | Average
Unit Size (Sq. Ft.)(2) |
Average
Monthly U/W Rent per Unit(2) |
Average
U/W Rent PSF/Month(2) |
| 1BR/1BA | 130 | 49.6% | 96.2% | 855 | $1,175 | $1.37 |
| 2BR/2BA | 129 | 49.2% | 96.1% | 1,253 | $1,515 | $1.21 |
| 3BR/2BA | 3 | 1.1% | 66.7% | 1,402 | $2,034 | $1.45 |
| Total / Wtd. Avg. | 262 | 100.0% | 95.8% | $1,057 | $1,350 | $1.28 |
| (1) | Based on the underwritten rent roll dated February 5, 2022. |
| (2) | Occupancy, Average Unit Size (Sq. Ft.), Average Monthly Rent Per Unit and Average Rent PSF/Month represent a weighted average of the various unit type layouts. |
Cash Flow Analysis.
| Cash Flow Analysis(1) | |||||
| 2019 | 2020 | 2021 | U/W | U/W Per Unit | |
| Gross Potential Rent | $4,069,567 | $4,019,021 | $4,101,286 | $4,065,043 | $15,515 |
| Potential Income from Vacant Units | 0 | 0 | 0 | 204,624 | 781 |
| Other Loss | (282,840) | (253,539) | (221,300) | (213,483) | (815) |
| Net Rental Income | $3,786,727 | $3,765,482 | $3,879,986 | $4,056,183 | $15,482 |
| Other Income(2) | 327,860 | 343,863 | 420,807 | 420,807 | 1,606 |
| Effective Gross Income | $4,114,587 | $4,109,345 | $4,300,793 | $4,476,990 | $17,088 |
| Real Estate Taxes | 618,867 | 577,227 | 607,224 | 744,689 | 2,842 |
| Insurance | 54,849 | 70,254 | 86,704 | 209,688 | 800 |
| Management Fee | 123,438 | 123,280 | 129,024 | 134,310 | 513 |
| Other Expenses | 852,441 | 843,418 | 883,466 | 945,634 | 3,609 |
| Total Expenses | $1,649,594 | $1,614,179 | $1,706,417 | $2,034,321 | $7,765 |
| Net Operating Income | $2,464,992 | $2,495,166 | $2,594,376 | $2,442,670 | $9,323 |
| Replacement Reserves | 0 | 0 | 0 | 68,382 | 261 |
| Net Cash Flow | $2,464,992 | $2,495,166 | $2,594,376 | $2,374,288 | $9,062 |
| (1) | Based on the underwritten rent roll dated February 5, 2022. |
| (2) | Other Income includes income from parking and miscellaneous |
A-3-96
3964 Missouri Flat Road Placerville, CA 95667 |
Collateral Asset Summary – Loan No. 14 Prospector Plaza |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$23,432,443 68.1% 1.35x 8.6% |
| Mortgage Loan Information | |
| Loan Seller(1): | GACC |
| Loan Purpose: | Refinance |
| Borrower Sponsors: | Joseph W. Rich and Christopher D. Shane |
| Borrowers: | 3964 Placerville, LLC and GC Placerville, LLC, as tenants-in-common |
| Original Balance: | $23,500,000 |
| Cut-off Date Balance: | $23,432,443 |
| % by Initial UPB: | 2.6% |
| Interest Rate: | 4.26000% |
| Payment Date: | 6th of each month |
| First Payment Date: | March 6, 2022 |
| Maturity Date: | February 6, 2032 |
| Amortization: | Amortizing Balloon |
| Additional Debt: | None |
| Call Protection: | L(26),D(90),O(4) |
| Lockbox / Cash Management: | Hard / Springing |
| Reserves | |||
| Initial | Monthly | Cap | |
| Taxes: | $38,732 | $6,455 | NAP |
| Insurance: | $40,704 | $4,523 | NAP |
| Replacement: | $0 | $3,381 | NAP |
| TI/LC: | $253,595 | $8,451 | $253,595 |
| Other(2): | $405,579 | $0 | NAP |
| Property Information | |
| Single Asset / Portfolio: | Single Asset |
| Property Type: | Anchored Retail |
| Collateral: | Fee Simple |
| Location: | Placerville, CA |
| Year Built / Renovated: | 1982 / 2020 |
| Total Sq. Ft.: | 202,830 |
| Property Management: | Rich Development Enterprises, LLC |
| Underwritten NOI(3): | $2,013,613 |
| Underwritten NCF: | $1,871,632 |
| Appraised Value: | $34,400,000 |
| Appraisal Date: | November 23, 2021 |
| Historical NOI | |
| Most Recent NOI(3): | $1,795,402 (T-12 September 30, 2021) |
| 2020 NOI: | $1,829,096 (December 31, 2020) |
| 2019 NOI: | $604,746 (December 31, 2019) |
| 2018 NOI(4): | NAV |
| Historical Occupancy | |
| Most Recent Occupancy: | 98.3% (November 1, 2021) |
| 2020 Occupancy: | 92.0% (December 31, 2020) |
| 2019 Occupancy: | 54.0% (December 31, 2019) |
| 2018 Occupancy(4): | NAV |
| Financial Information | ||||||
| Tranche | Cut-off Date Balance | Balance per Sq. Ft. Cut-off / Balloon |
LTV Cut-off / Balloon |
U/W DSCR NOI / NCF |
U/W Debt Yield NOI / NCF |
U/W Debt Yield at Balloon NOI / NCF |
| Mortgage Loan | $23,432,443 | $116 / $93 | 68.1% / 54.8% | 1.45x / 1.35x | 8.6% / 8.0% | 10.7% / 9.9% |
| (1) | The Prospector Plaza loan was originated by Ladder Capital Finance LLC on January 12, 2022 and is being purchased by GACC. |
| (2) | Other Initial Reserves consists of (i) an Outstanding TI/LC Reserve of $330,163, (ii) a Free Rent Reserve of $50,837, (iii) an Unfunded Obligations Reserve of $6,704.07 and (iv) an Immediate Repairs reserve of $17,875. |
| (3) | The increase from Most Recent NOI to Underwritten NOI is attributable to rent steps and recent leasing. |
| (4) | 2018 NOI and 2018 Occupancy are not available due to the Prospector Plaza property being acquired by the borrower sponsor in 2019. |
| Sources and Uses | ||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
| Mortgage Loan | $23,500,000 | 100.0% | Loan Payoff | $20,634,319 | 87.8% | |
| Return of Equity | $1,699,835 | 7.2 | ||||
| Reserves | 738,610 | 3.1 | ||||
| Closing Costs | 427,236 | 1.8 | ||||
| Total Sources | $23,500,000 | 100.0% | Total Uses | $23,500,000 | 100.0% | |
The Borrowers and the Borrower Sponsors. The borrowers are 3964 Placerville, LLC and GC Placerville, LLC, as tenants-in-common. Each of the borrowers is a Delaware limited liability company and single purpose entity with one independent director in its organizational structure.
The borrower sponsors and non-recourse carveout guarantors are Joseph W. Rich and Christopher D. Shane. Joseph W. Rich is the principal and general partner of Rich Development Company which has developed and acquired over 3 million sq. ft. of single tenant, mid-sized, and multi-tenant retail commercial developments in Southern California and the Western United States. Christopher D. Shane is the founder and managing partner of Gryphon Capital and is responsible for developing and/or partnering on projects in various stages of development encompassing approximately 5.2 million sq. ft.
The Property. The Prospector Plaza property (the “Prospector Plaza Property”) is a 202,830 sq. ft. anchored retail center located in Placerville, California. The Prospector Plaza Property consists of three, single-story buildings across 15.71 acres and was constructed in 1982 and renovated in 2020. Since acquiring the Prospector Plaza Property in 2019, the borrower sponsors have invested approximately $2.5 million ($12 PSF) in upgrades including new landscaping, curbing, parking lot paving, exterior paint, lighting upgrades, roof replacements/repairs, signage, etc. In addition, the borrower sponsors added Tesla charging stations. The Prospector Plaza Property contains 797 parking spaces for a ratio of 3.93 spaces per 1,000 sq. ft. The retail center that includes the Prospector Plaza Property
A-3-97
3964 Missouri Flat Road Placerville, CA 95667 |
Collateral Asset Summary – Loan No. 14 Prospector Plaza |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$23,432,443 68.1% 1.35x 8.6% |
contains three additional non-collateral parcels, including a 25,536 sq. ft. CVS store which has a 2022 lease expiration, a 5,300 sq. ft. vacant box and a vacant pad site.
The Prospector Plaza Property is located approximately 2.9 miles southwest of downtown Placerville, 40 miles northeast of downtown Sacramento and 60 miles southwest of Lake Tahoe. The Prospector Plaza Property features signage and visibility along Interstate 50, which is a major east / west thoroughfare, which provides direct access to Sacramento, California to the west and Lake Tahoe to the east.
The Prospector Plaza Property is anchored by Target Corporation (“Target”) (42.6% of NRA; rated A/A2/A by Fitch/Moody’s/S&P), Save Mart Supermarkets (23.9% of NRA) and Ross Dress for Less, Inc. (12.3% of NRA; rated A2/A by Moody’s/S&P). Target, Save Mart Supermarkets and Ross Dress for Less, Inc. have a weighted average lease term of 10.4 years and account for 47.8% of the U/W base rent. The Save Mart Supermarkets has been at the property for over 40 years and reported 2020 sales of $438 PSF (2.2% occupancy cost). The in-line tenants consist of a blend of local, regional and national tenants including O’Reilly Auto Enterprises, First Light Fitness Corporation (doing business as Anytime Fitness), Bath and Body Works, AT&T and Mattress Firm. As of November 1, 2021, the Prospector Plaza Property was 98.3% leased to 16 tenants.
COVID-19 Update. As of March 6, 2022, the Prospector Plaza loan is not subject to any forbearance, modification or debt service relief request. The tenants at the Prospector Plaza Property are current on rent and have not missed any payments throughout the COVID-19 pandemic. The first payment date of the Prospector Plaza loan was March 6, 2022. The loan is current as of the most recent payment date. See “Risk Factors—Special Risks—Coronavirus Pandemic Has Adversely Affected the Global Economy and Will Likely Adversely Affect the Performance of the Mortgage Loans” in the Preliminary Prospectus.
The following table presents certain information relating to the tenants (of which, certain tenants may have cotenancy provisions) at the Prospector Plaza Property:
Tenant Summary.
| Tenant Summary(1) | ||||||||
| Tenant | Credit
Rating (Fitch/Moody’s/S&P)(2) |
Net
Rentable Area (Sq. Ft.) |
%
of Net Rentable Area |
In
Place Base Rent Per Sq. Ft. |
%
of Total In Place Base Rent |
Sales Per Sq. Ft. |
Occupancy Cost |
Lease Expiration |
| Target Corporation | A / A2 / A | 86,414 | 42.6% | $3.68 | 14.6% | NAV | NAV | 3/31/2035 |
| Save Mart Supermarkets | NR / NR / NR | 48,435 | 23.9 | $7.25 | 16.1% | $438 | 2.2% | 1/29/2032 |
| Ross Dress for Less, Inc. | NR / A2 / A | 25,000 | 12.3 | $15.00 | 17.2% | NAV | NAV | 1/31/2025 |
| O’Reilly Auto Enterprises | NR / NR / NR | 8,800 | 4.3 | $16.49 | 6.6% | NAV | NAV | 1/31/2025 |
| First Light Fitness Corporation(3) | NR / NR / NR | 4,267 | 2.1 | $27.00 | 5.3% | NAV | NAV | 12/31/2031 |
| Mattress Firm | NR / NR / NR | 3,913 | 1.9 | $37.00 | 6.6% | NAV | NAV | 10/31/2030 |
| New Cingular Wireless PCS, LLC | NR / NR / NR | 3,828 | 1.9 | $36.00 | 6.3% | NAV | NAV | 9/30/2026 |
| Bath and Body Works | NR / NR / NR | 3,613 | 1.8 | $26.50 | 4.4% | NAV | NAV | 4/30/2031 |
| Mountain Mike’s Pizza | NR / NR / NR | 3,040 | 1.5 | $26.40 | 3.7% | NAV | NAV | 3/31/2032 |
| The Habit Restaurants, LLC | NR / NR / NR | 3,000 | 1.5 | $42.00 | 5.8% | NAV | NAV | 9/30/2031 |
| Ten Largest Tenants | 190,310 | 93.8% | $9.93 | 86.5% | ||||
| Remaining Occupied | 9,080 | 4.5 | $32.35 | 13.5% | ||||
| Total / Wtd. Avg. | 199,390 | 98.3% | $10.95 | 100.0% | ||||
| Vacant | 3,440 | 1.7 | ||||||
| Total | 202,830 | 100.0% | ||||||
| (1) | Based on the underwritten rent roll dated November 1, 2021. |
| (2) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
| (3) | The tenant operates an Anytime Fitness fitness center. The use of the Prospector Plaza Property as a gym/fitness center by the tenant violates use restrictions under a declaration of restrictions and under certain other leases at the Prospector Plaza Property. The First Light Fitness Corporation lease provides that if the landlord receives a notice of default from any tenant, or from an adjacent property owner, on the grounds that the use by First Light Fitness Corporation violates the foregoing use restrictions, the landlord will have the right to terminate the lease upon 20 days’ notice and payment of a $100,000 termination fee to the tenant. |
A-3-98
3964 Missouri Flat Road Placerville, CA 95667 |
Collateral Asset Summary – Loan No. 14 Prospector Plaza |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$23,432,443 68.1% 1.35x 8.6% |
| Lease Rollover Schedule(1)(2) | ||||||||
| Year | # of Leases Expiring |
Total Expiring Sq. Ft. |
% of Total Sq. Ft. Expiring |
Cumulative Sq. Ft. Expiring |
Cumulative % of Sq. Ft. Expiring |
Annual
In PSF |
% In
Place Rolling |
Cumulative % of
In Place Base |
| MTM | 0 | 0 | 0.0% | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
| 2022 | 0 | 0 | 0.0% | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
| 2023 | 1 | 1,200 | 0.6% | 1,200 | 0.6% | $24.83 | 1.4% | 1.4% |
| 2024 | 1 | 1,600 | 0.8% | 2,800 | 1.4% | $28.64 | 2.1% | 3.5% |
| 2025 | 2 | 33,800 | 16.7% | 36,600 | 18.0% | $15.39 | 23.8% | 27.3% |
| 2026 | 3 | 5,508 | 2.7% | 42,108 | 20.8% | $37.82 | 9.5% | 36.8% |
| 2027 | 1 | 2,000 | 1.0% | 44,108 | 21.7% | $27.01 | 2.5% | 39.3% |
| 2028 | 0 | 0 | 0.0% | 44,108 | 21.7% | $0.00 | 0.0% | 39.3% |
| 2029 | 0 | 0 | 0.0% | 44,108 | 21.7% | $0.00 | 0.0% | 39.3% |
| 2030 | 1 | 3,913 | 1.9% | 48,021 | 23.7% | $37.00 | 6.6% | 45.9% |
| 2031 | 4 | 13,480 | 6.6% | 61,501 | 30.3% | $31.94 | 19.7% | 65.7% |
| 2032 | 2 | 51,475 | 25.4% | 112,976 | 55.7% | $8.38 | 19.8% | 85.4% |
| 2033 &Thereafter | 1 | 86,414 | 42.6% | 199,390 | 98.3% | $3.68 | 14.6% | 100.0% |
| Vacant | NAP | 3,440 | 1.7% | 202,830 | 100.0% | NAP | NAP | NAP |
| Total / Wtd. Avg. | 16 | 202,830 | 100.0% | $10.95 | 100.0% | |||
| (1) | Based on the underwritten rent roll dated November 1, 2021. |
| (2) | Certain tenants may have termination or contraction options (which may become exercisable prior to the originally stated expiration date of the tenant lease) that are not considered in the above Lease Rollover Schedule. |
Cash Flow Analysis.
| Cash Flow Analysis | |||||
| 2019 | 2020 | T-12 9/30/2021 | U/W | U/W per sq. ft. | |
| Base Rent(1) | $784,395 | $1,854,872 | $1,976,524 | $2,304,346 | $11.36 |
| Credit Tenant Rent Steps(2) | 0 | 0 | 0 | 2,852 | 0.01 |
| Expense Recoveries | 166,743 | 619,052 | 546,351 | 583,220 | 2.88 |
| Other Income | 5,500 | 250 | 250 | 0 | 0.00 |
| Gross Revenue | $956,638 | $2,474,175 | $2,523,125 | $2,890,418 | $14.25 |
| Vacancy & Credit Loss | $0 | 0 | 0 | (144,521) | (0.71) |
| Effective Gross Income | $956,638 | $2,474,175 | $2,523,125 | $2,745,897 | $13.54 |
| Total Operating Expenses | $351,892 | $645,078 | $727,724 | $732,284 | $3.61 |
| Net Operating Income(3) | $604,746 | $1,829,096 | $1,795,402 | $2,013,613 | $9.93 |
| Replacement Reserves | 0 | 0 | 0 | 40,566 | 0.20 |
| TI/LC | 0 | 0 | 0 | 101,415 | 0.50 |
| Net Cash Flow | $604,746 | $1,829,096 | $1,795,402 | $1,871,632 | $9.23 |
| (1) | Base Rent is based on the underwritten rent roll dated November 1, 2021. |
| (2) | Credit Tenant Rent Steps include straight-lined rent for Target. |
| (3) | The increase from the T-12 9/30/21 Net Operating Income to U/W Net Operating Income is primarily attributable to rent steps and recent leasing. |
A-3-99
800 Scudders Mill Road Plainsboro, NJ 08536
|
Collateral Asset Summary – Loan No. 15 Novo Nordisk HQ |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$22,167,000 63.8% 3.16x 9.2%
|
| Mortgage Loan Information | |
| Loan Seller: | GACC |
| Loan Purpose: | Refinance |
| Borrower Sponsor(1): | Hana Alternative Asset Management Co., Ltd. |
| Borrower: | Princeton HD Owner LLC |
| Original Balance(2): | $22,167,000 |
| Cut-off Date Balance(2): | $22,167,000 |
| % by Initial UPB: | 2.4% |
| Interest Rate(3): | 2.83800% |
| Payment Date: | 6th of each month |
| First Payment Date: | December 6, 2021 |
| Anticipated Repayment Date: | November 6, 2026 |
| Final Maturity Date: | April 6, 2031 |
| Amortization: | Interest Only - ARD |
| Additional Debt(2): | $188,500,000 Pari Passu Senior Notes |
| Call Protection: | L(29),D(26),O(5) |
| Lockbox / Cash Management: | Hard / Springing |
| Reserves(4) | |||
| Initial | Monthly | Cap | |
| Taxes: | $525,310 | $525,310 | NAP |
| Insurance: | $90,983 | $22,746 | NAP |
| CapEx: | $0 | $1,218 | NAP |
| TI/LC: | $0 | $0 | NAP |
| Other(4): | $27,146,846 | $0 | NAP |
| Property Information | |
| Single Asset / Portfolio: | Single Asset |
| Property Type: | Suburban Office |
| Collateral: | Fee Simple |
| Location: | Plainsboro, NJ |
| Year Built / Renovated: | 1985, 1989, 1994 / 2013 |
| Total Sq. Ft.: | 731,104 |
| Property Management: | Ivy Realty Services, LLC |
| Underwritten NOI: | $19,318,412 |
| Underwritten NCF: | $19,172,191 |
| Appraised Value(5): | $330,000,000 |
| Appraisal Date: | 9/21/2021 |
| Historical NOI | |
| Most Recent NOI: | $18,859,485 (T-12 September 30, 2021) |
| 2020 NOI: | $18,260,825 (December 31, 2020) |
| 2019 NOI: | $17,367,282 (December 31, 2019) |
| 2018 NOI: | $16,675,696 (December 31, 2018) |
| Historical Occupancy | |
| Most Recent Occupancy: | 77.0% (April 6, 2022) |
| 2020 Occupancy: | 77.0% (December 31, 2020) |
| 2019 Occupancy: | 77.0% (December 31, 2019) |
| 2018 Occupancy: | 77.0% (December 31, 2018) |
| Financial Information | ||||||
| Tranche | Cut-off Date Balance | Balance per Sq. Ft. Cut-off / Balloon |
LTV Cut-off / Balloon |
U/W DSCR NOI / NCF |
U/W Debt Yield NOI / NCF |
U/W Debt Yield at Balloon NOI / NCF |
| Mortgage Loan | $22,167,000 | |||||
| Pari Passu Notes | 188,500,000 | |||||
| Whole Loan | $210,667,000 | $288 / $288 | 63.8% / 63.8% | 3.19x / 3.16x | 9.2% / 9.1% | 9.2% / 9.1% |
| (1) | There is no non-recourse carveout guarantor or separate environmental indemnitor with respect to the Novo Nordisk HQ loan. |
| (2) | The Novo Nordisk HQ loan is part of a whole loan (the “Novo Nordisk HQ Whole Loan”) evidenced by six pari passu notes, with an aggregate outstanding principal balance as of the Cut-off Date of $210,667,000. For additional information, see the “Whole Loan Summary” chart herein. |
| (3) | The Novo Nordisk HQ Whole Loan is structured with an anticipated repayment date (“ARD”) of November 6, 2026 and a final maturity date of April 6, 2031. The initial interest rate for the Novo Nordisk HQ Whole Loan is 2.83800% per annum. From and after the ARD, the per annum interest rate will be equal to the greater of (i) the initial interest rate plus 2.50000% and (ii) the swap rate in effect on the ARD plus 4.19000% (the “Adjusted Rate”), however, interest accrued at the excess of the Adjusted Rate over the initial interest rate (“Excess Interest”) will be deferred and will not be payable currently. On or after the ARD, all excess cash flow will be required to be applied to the prepayment of the outstanding principal balance of the Novo Nordisk HQ Whole Loan until the outstanding principal balance has been reduced to zero, then to any Excess Interest until the Excess Interest has been reduced to zero. The metrics presented above are calculated based on the ARD. |
| (4) | Other Upfront reserve includes (i) an expansion reserve of approximately $14,146,846 and (ii) a seller credit reserve of $13,000,000. The seller credit reserve was deposited in connection with an agreement (the “Earnout Agreement”) between the prior owner of the Novo Nordisk HQ Property (the “Property Seller”) and the sole member of the borrower (the “Sole Member”), pursuant to which the Sole Member has agreed to pay all or a pro rata portion of such amount to the Property Seller if Novo Nordisk exercises all or a portion of its expansion option for 167,815 additional sq. ft. pursuant to its lease. The Sole Member has pledged its equity interest in the borrower to the Property Seller to secure such obligation. See “Description of the Mortgage Pool—Additional Indebtedness--Other Unsecured Indebtedness” in the Preliminary Prospectus. |
| (5) | The appraisal concluded to a “go dark” appraised value of $205,000,000, which results in a Cut-off Date LTV Ratio and Maturity Date LTV Ratio of 102.8%. |
| Whole Loan Summary | ||||
| Note | Original Balance | Cut-off Date Balance | Note Holder | Controlling Piece |
| Note A-4-2 | $22,167,000 | $22,167,000 | Benchmark 2022-B34 | No |
| Note A-1 | 75,000,000 | 75,000,000 | Benchmark 2021-B31 | Yes |
| Note A-2 | 47,500,000 | 47,500,000 | Benchmark 2022-B32 | No |
| Note A-3-1 | 12,500,000 | 12,500,000 | Benchmark 2022-B32 | No |
| Note A-3-2 | 12,500,000 | 12,500,000 | DBRI(1) | No |
| Note A-4-1 | 41,000,000 | 41,000,000 | Benchmark 2022-B33 | No |
| Whole Loan | $210,667,000 | $210,667,000 | ||
| (1) | Expected to be contributed to one or more future securitization transactions or may otherwise be transferred at any time. |
| Sources and Uses | ||||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |||
| Whole Loan Amount | $210,667,000 | 100.0% | Loan Payoff | $169,240,404 | 80.3% | |||
| Upfront Reserves | 27,763,140 | 13.2 | ||||||
| Return of Equity | 11,803,118 | 5.6 | ||||||
| Closing Costs | 1,860,338 | 0.9 | ||||||
| Total Sources | $210,667,000 | 100.0% | Total Uses | $210,667,000 | 100.0% | |||
A-3-100
800 Scudders Mill Road Plainsboro, NJ 08536
|
Collateral Asset Summary – Loan No. 15 Novo Nordisk HQ |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$22,167,000 63.8% 3.16x 9.2%
|
The Borrower and the Borrower Sponsor. The borrower is Princeton HD Owner LLC, a Delaware limited liability company and single purpose entity with two independent directors. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the Novo Nordisk HQ Whole Loan. There is no non-recourse carveout guarantor or separate environmental indemnitor with respect to the Novo Nordisk HQ Whole Loan. The borrower sponsor is Hana Alternative Asset Management Co., Ltd. (“Hana”). The Novo Nordisk HQ Property is indirectly owned by a joint venture between Mirae Asset Securities (28.78%), Hana Financial Investment (22.98%), Hyundai Motor Securities (19.15%), Heung Kuk Fire & Marine Insurance (19.03%) and Seoul Guaranty Insurance (10.05%). The borrower sponsor is ultimately controlled by Hana.
Hana, a subsidiary of Hana Financial Group, was founded in 2006 as the first asset management company to specialize in commercial real estate in Korea. As of November 2021, Hana had approximately $8.0 billion USD of assets under management of which 67.1% are investments in real estate.
The Property. The Novo Nordisk HQ property (the “Novo Nordisk HQ Property”) is a Class A office property totaling 731,104 sq.ft. across nine interconnected buildings on a 58.63-acre site located in Plainsboro, New Jersey. The Novo Nordisk HQ Property was originally built from 1985 to 1994 and in 2013 underwent a full redevelopment and modernization. The Novo Nordisk HQ Property is LEED Silver-certified and features modern technology, energy-efficient systems and design upgrades such as a new façade, 10-foot glass exterior walls and a two-story, 30-foot lobby with floor-to-ceiling glass. The campus amenities include a 267-seat full-service cafeteria, a fully-equipped fitness center, presidential suite and executive board room, a 4,000 sq.ft. rooftop terrace with kitchen and patio seating, concierge services, meeting spaces and 2,214 parking spaces (3.0 spaces per 1,000 sq.ft.), including a single-story parking garage.
As of April 6, 2022, the Novo Nordisk HQ Property is 77.0% leased to its sole tenant, Novo Nordisk (“Novo Nordisk”), the United States affiliate of the global healthcare company, Novo Nordisk A/S (NYSE: NVO; rated A1/AA- by Moody’s/S&P), which is the guarantor of the Novo Nordisk lease. Novo Nordisk occupies 563,289 sq.ft. or 100% of the sq.ft. of the space which it is obligated to lease under the terms of its lease. Novo Nordisk has the option to lease the remaining 167,815 sq.ft. at the Novo Nordisk HQ Property, which is located along the easterly side of the complex and is in “shell” condition. Novo Nordisk can exercise its right to expand into this space anytime during its lease term and as such, this expansion space cannot be marketed to another tenant without modifying the current Novo Nordisk lease. At loan origination, the borrower deposited approximately $14,146,846 into an expansion reserve and $13,000,000 into a seller credit reserve.
According to information provided by the property manager as of January 19, 2022, as of November 15, 2021, all employees were required to return to the Novo Nordisk HQ Property at least three days per week; however, employees have been permitted to work from home until further notice due to the recent surge in COVID-19 variants, and the building is closed Fridays for maintenance and cleaning. The Novo Nordisk HQ Property typically had a pre-pandemic full-time workforce of approximately 1,700 employees.
COVID-19 Update. As of March 6, 2022, the Novo Nordisk HQ Whole Loan is not subject to any forbearance, modification or debt service relief request. As of March 6, 2022, the sole tenant has not made any requests for lease modifications or rent relief. The Novo Nordisk HQ Whole Loan is current as of the payment date in March 2022. See “Risk Factors—Special Risks—Coronavirus Pandemic Has Adversely Affected the Global Economy and Will Likely Adversely Affect the Performance of the Mortgage Loans” in the Preliminary Prospectus.
Tenant Summary.
| Tenant Summary(1) | ||||||
| Tenant / Building | Ratings (Moody’s/Fitch/S&P)(2) |
Net Rentable Area (Sq. Ft.) |
% of Net Rentable Area |
U/W Base Rent per sq. ft. |
% of Total U/W Base Rent |
Lease Expiration |
| Novo Nordisk | A1 / NR / AA- | 563,289 | 77.0 | $32.81 | 100.0% | 4/30/2031 |
| Total / Wtd. Avg. Occupied Collateral | 563,289 | 77.0% | $32.81 | 100.0% | ||
| Vacant | 167,815 | 23.0 | ||||
| Total | 731,104 | 100.0% | ||||
| (1) | Based on the underwritten rent roll as of April 6, 2022. |
| (2) | The credit ratings are those of the direct parent company, Novo Nordisk A/S, which is the guarantor under the lease. |
A-3-101
800 Scudders Mill Road Plainsboro, NJ 08536
|
Collateral Asset Summary – Loan No. 15 Novo Nordisk HQ |
Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: |
$22,167,000 63.8% 3.16x 9.2%
|
| Lease Rollover Schedule(1) | ||||||||
| Year | # of Leases Expiring |
Total Expiring Sq. Ft. |
% of Total Sq. Ft. Expiring |
Cumulative Expiring |
Cumulative
% Sq. Ft. Expiring |
Annual U/W Base Rent per sq. ft. |
% U/W Rolling |
Cumulative % of U/W Base Rent |
| MTM & 2022 | 0 | 0 | 0.0 | 0 | 0.0% | 0.00 | 0.0% | 0.0% |
| 2023 | 0 | 0 | 0.0 | 0 | 0.0% | 0.00 | 0.0% | 0.0% |
| 2024 | 0 | 0 | 0.0 | 0 | 0.0% | 0.00 | 0.0% | 0.0% |
| 2025 | 0 | 0 | 0.0 | 0 | 0.0% | 0.00 | 0.0% | 0.0% |
| 2026 | 0 | 0 | 0.0 | 0 | 0.0% | 0.00 | 0.0% | 0.0% |
| 2027 | 0 | 0 | 0.0 | 0 | 0.0% | 0.00 | 0.0% | 0.0% |
| 2028 | 0 | 0 | 0.0 | 0 | 0.0% | 0.00 | 0.0% | 0.0% |
| 2029 | 0 | 0 | 0.0 | 0 | 0.0% | 0.00 | 0.0% | 0.0% |
| 2030 | 0 | 0 | 0.0 | 0 | 0.0% | 0.00 | 0.0% | 0.0% |
| 2031 | 1 | 563,289 | 77.0% | 563,289 | 77.0% | $32.81 | 100.0% | 100.0% |
| 2032 | 0 | 0 | 0.0 | 563,289 | 77.0% | 0.00 | 0.0% | 100.0% |
| 2033 & Thereafter | 0 | 0 | 0.0 | 563,289 | 77.0% | 0.00 | 0.0% | 100.0% |
| Vacant | NAP | 167,815 | 23.0 | 731,104 | 100.0% | NAP | NAP% | NAP |
| Total / Wtd. Avg. | 1 | 731,104 | 100.0% | $32.81 | 100.0% | |||
| (1) | Based on the underwritten rent roll dated April 6, 2022. |
Cash Flow Analysis.
| Cash Flow Analysis(1) | ||||||
| 2018 | 2019 | 2020 | T-12 9/30/2021 | U/W | U/W
per sq. ft. | |
| Base Rent | $17,302,360 | $17,649,722 | $18,002,716 | $18,271,218 | $18,481,512 | $25.28 |
| Rent Steps(2) | 0 | 0 | 0 | 0 | 371,771 | 0.51 |
| IG Rent Step Credit(3) | 0 | 0 | 0 | 0 | 465,129 | 0.64 |
| Vacant Income | 0 | 0 | 0 | 0 | 9,458,516 | 12.94 |
| Gross Potential Rent | $17,302,360 | $17,649,722 | $18,002,716 | $18,271,218 | $28,776,928 | $39.36 |
| Reimbursements | 12,185,965 | 13,111,052 | 13,295,581 | 14,312,454(4) | 13,331,718 | 18.24 |
| Vacancy | 0 | 0 | 0 | 0 | (9,458,516) | (12.94) |
| Effective Gross Income | $29,488,325 | $30,760,774 | $31,298,297 | $32,583,672 | $32,650,130 | $44.66 |
| Total Operating Expenses | 12,812,629 | 13,393,492 | 13,037,472 | 13,724,187 | 13,331,718 | 18.24 |
| Net Operating Income | $16,675,696 | $17,367,282 | $18,260,825 | $18,859,485 | $19,318,412 | $26.42 |
| Replacement Reserves | 0 | 0 | 0 | 0 | 146,221 | 0.20 |
| TI/LC | 0 | 0 | 0 | 0 | 0 | 0.00 |
| Net Cash Flow | $16,675,696 | $17,367,282 | $18,260,825 | $18,859,485 | $19,172,191 | $26.22 |
| (1) | Based on the underwritten rent roll dated April 6, 2022. |
| (2) | Based on contractual rent steps through October 1, 2022. |
| (3) | Based on the straight-line rent steps through the final maturity date of the Novo Nordisk HQ Whole Loan. |
| (4) | Reimbursements reflect reimbursements billed based on budgeted amounts. The borrower and the tenant reconcile the amount of reimbursements in the year following the year they are billed. Billed reimbursements exceed expenses and are expected to be reduced, and may be further reduced, upon such reconciliation. |
A-3-102
ANNEX B
FORM OF REPORT TO CERTIFICATEHOLDERS
(THIS PAGE INTENTIONALLY LEFT BLANK)
| Distribution Date: | 05/17/22 | Benchmark 2022-B34 Mortgage Trust |  |
| Determination Date: | 05/11/22 | ||
| Record Date: | 04/29/22 | Commercial Mortgage Pass-Through Certificates Series 2022-B34 | |
| Table of Contents | |
| Section | Pages |
| Certificate Distribution Detail | 2-3 |
| Certificate Factor Detail | 4 |
| Certificate Interest Reconciliation Detail | 5 |
| Additional Information | 6 |
| Bond / Collateral Reconciliation - Cash Flows | 7 |
| Bond / Collateral Reconciliation - Balances | 8 |
| Current Mortgage Loan and Property Stratification | 9-13 |
| Mortgage Loan Detail (Part 1) | 14 |
| Mortgage Loan Detail (Part 2) | 15 |
| Principal Prepayment Detail | 16 |
| Historical Detail | 17 |
| Delinquency Loan Detail | 18 |
| Collateral Stratification and Historical Detail | 19 |
| Specially Serviced Loan Detail - Part 1 | 20 |
| Specially Serviced Loan Detail - Part 2 | 21 |
| Modified Loan Detail | 22 |
| Historical Liquidated Loan Detail | 23 |
| Historical Bond / Collateral Loss Reconciliation Detail | 24 |
| Interest Shortfall Detail - Collateral Level | 25 |
| Supplemental Notes | 26 |
| Contacts | |||
| Role | Party and Contact Information | ||
| Depositor | Deutsche Mortgage & Asset Receiving Corporation | ||
| Helaine M. Kaplan | (212) 250-5270 | cmbs.requests@db.com | |
| 1 Columbus Circle | New York, NY 10019 | United States | |||
| Master Servicer | KeyBank National Association | ||
| Michael Tilden | michael_a_tilden@keybank.com | ||
| 11501 Outlook Street, Suite 300 | Overland Park, KS 66211 | United States | |||
| Special Servicer | LNR Partners, LLC | ||
| LNR CMBS Notices | (305) 695-5600 | lnr.cmbs.notices@lnrproperty.com | |
| 2340 Collins Avenue, Suite 700 | Miami Beach, FL 33139 | United States | |||
| Certificate Administrator | Computershare Trust Company, N.A. | ||
| Corporate Trust Services (CMBS) | cts.cmbs.bond.admin@wellsfargo.com; trustadministrationgroup@wellsfargo.com | ||
| 9062 Old Annapolis Road | Columbia, MD 21045 | United States | |||
| Trustee | Wilmington Trust, National Association | ||
| CMBS Trustee | (302) 636-4140 | CMBSTrustee@wilmingtontrust.com | |
| 1100 North Market Street | Wilmington, DE 19890 | United States | |||
| Asset Representations Reviewer & Operating Advisor | Park Bridge Lender Services LLC | ||
| CMBS Notices | cmbs.notices@parkbridgefinancial.com | ||
| 600 Third Avenue, 40th Floor | New York, NY 10016 | United States | |||
| This report is compiled by Computershare Trust Company, N.A. from information provided by third parties. Computershare Trust Company, N.A. has not independently confirmed the accuracy of the information. | |
| Please visit www.ctslink.com for additional information and if applicable, any special notices and any credit risk retention notices. In addition, certificate holders may register online for email notification when special notices are posted. For information or assistance please call 866-846-4526. |
| © 2021 Computershare. All rights reserved. Confidential. | Page 1 of 26 |
| Distribution Date: | 05/17/22 | Benchmark 2022-B34 Mortgage Trust | |
| Determination Date: | 05/11/22 | ||
| Record Date: | 04/29/22 | Commercial Mortgage Pass-Through Certificates Series 2022-B34 | |
Certificate Distribution Detail
| Class | CUSIP | Pass-Through Rate (2) |
Original Balance | Beginning Balance | Principal Distribution |
Interest Distribution |
Prepayment Penalties | Realized Losses | Total Distribution | Ending Balance | Current Credit Support¹ |
Original Credit Support¹ | |
| A-1 | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% | 0.00% | ||
| A-2 | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% | 0.00% | ||
| A-3 | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% | 0.00% | ||
| A-SB | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% | 0.00% | ||
| A-4 | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% | 0.00% | ||
| A-5 | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% | 0.00% | ||
| A-M | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% | 0.00% | ||
| B | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% | 0.00% | ||
| C | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% | 0.00% | ||
| D | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% | 0.00% | ||
| E | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% | 0.00% | ||
| F | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% | 0.00% | ||
| G | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% | 0.00% | ||
| H | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% | 0.00% | ||
| S | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% | 0.00% | ||
| R | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% | 0.00% | ||
| VRR Interest | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% | 0.00% | ||
| Regular SubTotal | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||
| X-A | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||
| X-B | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||
| X-D | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||
| X-F | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||
Certificate Distribution Detail continued to next page
| © 2021 Computershare. All rights reserved. Confidential. | Page 2 of 26 |
| Distribution Date: | 05/17/22 | Benchmark 2022-B34 Mortgage Trust | |
| Determination Date: | 05/11/22 | ||
| Record Date: | 04/29/22 | Commercial Mortgage Pass-Through Certificates Series 2022-B34 | |
Certificate Distribution Detail
| |||||||||||||
| Class | CUSIP | Pass-Through Rate (2) |
Original Balance | Beginning Balance | Principal Distribution |
Interest Distribution |
Prepayment
Penalties |
Realized Losses | Total Distribution | Ending Balance | Current Credit Support¹ |
Original Credit Support¹ | |
| X-G | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||
| X-H | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||
| Notional SubTotal | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||
| Deal Distribution Total | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||
| * | Denotes the Controlling Class (if required) | |
| (1) | Calculated by taking (A) the sum of the ending certificate balance of all classes in a series less (B) the sum of (i) the ending certificate balance of the designated class and (ii) the ending certificate balance of all classes which are not subordinate to the designated class and dividing the result by (A). | |
| (2) | Pass-Through Rates with respect to any Class of Certificates on next month’s Payment Date is expected to be the same as the current respective Pass-Through Rate, subject to any modifications on the underlying loans, any change in certificate or pool balance, any change in the underlying index (if and as applicable), and any other matters provided in the governing documents. |
| © 2021 Computershare. All rights reserved. Confidential. | Page 3 of 26 |
| Distribution Date: | 05/17/22 | Benchmark 2022-B34 Mortgage Trust | |
| Determination Date: | 05/11/22 | ||
| Record Date: | 04/29/22 | Commercial Mortgage Pass-Through Certificates Series 2022-B34 | |
| Certificate Factor Detail | ||||||||||
| Class | CUSIP | Beginning Balance | Principal Distribution | Interest Distribution | Interest Shortfalls / (Paybacks) | Cumulative Interest Shortfalls | Prepayment Penalties | Realized Losses | Total Distribution | Ending Balance |
| Regular Certificates | ||||||||||
| A-1 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |
| A-2 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |
| A-3 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |
| A-SB | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |
| A-4 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |
| A-5 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |
| A-M | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |
| B | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |
| C | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |
| D | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |
| E | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |
| F | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |
| G | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |
| H | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |
| S | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |
| R | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |
| VRR Interest | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |
| Notional Certificates | ||||||||||
| X-A | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |
| X-B | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |
| X-D | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |
| X-F | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |
| X-G | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |
| X-H | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |
| © 2021 Computershare. All rights reserved. Confidential. | Page 4 of 26 |
| Distribution Date: | 05/17/22 | Benchmark 2022-B34 Mortgage Trust | |
| Determination Date: | 05/11/22 | ||
| Record Date: | 04/29/22 | Commercial Mortgage Pass-Through Certificates Series 2022-B34 | |
| Certificate Interest Reconciliation Detail | ||||||||||||
| Class | Accrual Period | Accrual Days | Prior Cumulative Interest Shortfalls | Accrued Certificate Interest | Net Aggregate Prepayment Interest Shortfall | Distributable Certificate Interest | Interest Shortfalls / (Paybacks) | Payback of Prior Realized Losses | Additional Interest Distribution Amount | Interest Distribution | Cumulative Interest Shortfalls | |
| A-1 | MM/DD/YY-MM/DD/YY | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| A-2 | MM/DD/YY-MM/DD/YY | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| A-3 | MM/DD/YY-MM/DD/YY | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| A-SB | MM/DD/YY-MM/DD/YY | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| A-4 | MM/DD/YY-MM/DD/YY | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| A-5 | MM/DD/YY-MM/DD/YY | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| X-A | MM/DD/YY-MM/DD/YY | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| A-M | MM/DD/YY-MM/DD/YY | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| B | MM/DD/YY-MM/DD/YY | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| C | MM/DD/YY-MM/DD/YY | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| X-B | MM/DD/YY-MM/DD/YY | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| X-D | MM/DD/YY-MM/DD/YY | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| X-F | MM/DD/YY-MM/DD/YY | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| X-G | MM/DD/YY-MM/DD/YY | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| X-H | MM/DD/YY-MM/DD/YY | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| D | MM/DD/YY-MM/DD/YY | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| E | MM/DD/YY-MM/DD/YY | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| F | MM/DD/YY-MM/DD/YY | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| G | MM/DD/YY-MM/DD/YY | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| H | MM/DD/YY-MM/DD/YY | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| VRR Interest | MM/DD/YY-MM/DD/YY | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| Totals | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||
| © 2021 Computershare. All rights reserved. Confidential. | Page 5 of 26 |
| Distribution Date: | 05/17/22 | Benchmark 2022-B34 Mortgage Trust | |
| Determination Date: | 05/11/22 | ||
| Record Date: | 04/29/22 | Commercial Mortgage Pass-Through Certificates Series 2022-B34 | |
Additional Information
| Total Available Distribution Amount (1) | 0.00 |
| (1) | The Available Distribution Amount includes any Prepayment Premiums. |
| © 2021 Computershare. All rights reserved. Confidential. | Page 6 of 26 |
| Distribution Date: | 05/17/22 | Benchmark 2022-B34 Mortgage Trust | |
| Determination Date: | 05/11/22 | ||
| Record Date: | 04/29/22 | Commercial Mortgage Pass-Through Certificates Series 2022-B34 | |
Bond / Collateral Reconciliation - Cash Flows
| Total Funds Collected |
| Interest | |||
| Interest Paid or Advanced | 0.00 | ||
| Interest Reductions due to Nonrecoverability Determination | 0.00 | ||
| Interest Adjustments | 0.00 | ||
| Deferred Interest | 0.00 | ||
| ARD Interest | 0.00 | ||
| Net Prepayment Interest Excess / (Shortfall) | 0.00 | ||
| Extension Interest | 0.00 | ||
| Interest Reserve Withdrawal | 0.00 | ||
| Total Interest Collected | 0.00 | ||
| Principal | |||
| Scheduled Principal | 0.00 | ||
| Unscheduled Principal Collections | |||
| Principal Prepayments | 0.00 | ||
| Collection of Principal after Maturity Date | 0.00 | ||
| Recoveries From Liquidations and Insurance Proceeds | 0.00 | ||
| Excess of Prior Principal Amounts Paid | 0.00 | ||
| Curtailments | 0.00 | ||
| Negative Amortization | 0.00 | ||
| Principal Adjustments | 0.00 | ||
| Total Principal Collected | 0.00 | ||
| Other | |||
| Prepayment Penalties / Yield Maintenance | 0.00 | ||
| Gain on Sale / Excess Liquidation Proceeds | 0.00 | ||
| Borrower Option Extension Fees | 0.00 | ||
| Total Other Collected | 0.00 | ||
| Total Funds Collected | 0.00 |
| Total Funds Distributed |
| Fees | |||
| Master Servicing Fee | 0.00 | ||
| Certificate Administrator Fee | 0.00 | ||
| Trustee Fee | 0.00 | ||
| CREFC® Intellectual Property Royalty License Fee | 0.00 | ||
| Operating Advisor Fee | 0.00 | ||
| Asset Representations Reviewer Fee | 0.00 | ||
| Total Fees | 0.00 | ||
| Expenses/Reimbursements | |||
| Reimbursement for Interest on Advances | 0.00 | ||
| ASER Amount | 0.00 | ||
| Special Servicing Fees (Monthly) | 0.00 | ||
| Special Servicing Fees (Liquidation) | 0.00 | ||
| Special Servicing Fees (Work Out) | 0.00 | ||
| Legal Fees | 0.00 | ||
| Rating Agency Expenses | 0.00 | ||
| Taxes Imposed on Trust Fund | 0.00 | ||
| Non-Recoverable Advances | 0.00 | ||
| Workout Delayed Reimbursement Amounts | 0.00 | ||
| Other Expenses | 0.00 | ||
| Total Expenses/Reimbursements | 0.00 | ||
| Interest Reserve Deposit | 0.00 |
| Payments to Certificateholders and Others | |||
| Interest Distribution | 0.00 | ||
| Principal Distribution | 0.00 | ||
| Prepayment Penalties / Yield Maintenance | 0.00 | ||
| Total Payments to Certificateholders and Others | 0.00 | ||
| Total Funds Distributed | 0.00 |
| © 2021 Computershare. All rights reserved. Confidential. | Page 7 of 26 |
| Distribution Date: | 05/17/22 | Benchmark 2022-B34 Mortgage Trust | |
| Determination Date: | 05/11/22 | ||
| Record Date: | 04/29/22 | Commercial Mortgage Pass-Through Certificates Series 2022-B34 | |
Bond / Collateral Reconciliation - Balances
| Collateral Reconciliation |
| Total | ||||
| Beginning Scheduled Collateral Balance | 0.00 | 0.00 | ||
| (-) Scheduled Principal Collections | 0.00 | 0.00 | ||
| (-) Unscheduled Principal Collections | 0.00 | 0.00 | ||
| (-) Principal Adjustments (Cash) | 0.00 | 0.00 | ||
| (-) Principal Adjustments (Non-Cash) | 0.00 | 0.00 | ||
| (-) Realized Losses from Collateral | 0.00 | 0.00 | ||
| (-) Other Adjustments² | 0.00 | 0.00 | ||
| Ending Scheduled Collateral Balance | 0.00 | 0.00 | ||
| Beginning Actual Collateral Balance | 0.00 | 0.00 | ||
| Ending Actual Collateral Balance | 0.00 | 0.00 |
| Certificate Reconciliation |
| Total | ||
| Beginning Certificate Balance | 0.00 | |
| (-) Principal Distributions | 0.00 | |
| (-) Realized Losses | 0.00 | |
| Realized Loss and Realized Loss Adjustments on Collateral | 0.00 | |
| Current Period NRA¹ | 0.00 | |
| Current Period WODRA¹ | 0.00 | |
| Principal Used to Pay Interest | 0.00 | |
| Non-Cash Principal Adjustments | 0.00 | |
| Certificate Other Adjustments** | 0.00 | |
| Ending Certificate Balance | 0.00 | |
| NRA/WODRA Reconciliation | ||
| Non-Recoverable Advances (NRA) from Principal | Workout Delayed Reimbursement of Advances (WODRA) from Principal | |
| Beginning Cumulative Advances | 0.00 | 0.00 |
| Current Period Advances | 0.00 | 0.00 |
| Ending Cumulative Advances | 0.00 | 0.00 |
| Under / Over Collateralization Reconciliation | |
| Beginning UC / (OC) | 0.00 |
| UC / (OC) Change | 0.00 |
| Ending UC / (OC) | 0.00 |
| Net WAC Rate | 0.00% |
| UC / (OC) Interest | 0.00 |
| (1) | Current Period NRA and WODRA displayed will represent the portion applied as Realized Losses to the bonds. |
| (2) | Other Adjustments value will represent miscellaneous items that may impact the Scheduled Balance of the collateral. |
| ** | A negative value for Certificate Other Adjustments represents the payback of prior Principal Shortfalls, if any. |
| © 2021 Computershare. All rights reserved. Confidential. | Page 8 of 26 |
| Distribution Date: | 05/17/22 | Benchmark 2022-B34 Mortgage Trust | |
| Determination Date: | 05/11/22 | ||
| Record Date: | 04/29/22 | Commercial Mortgage Pass-Through Certificates Series 2022-B34 | |
Current Mortgage Loan and Property Stratification
Aggregate Pool
| Scheduled Balance | ||||||
|
Scheduled Balance |
# Of Loans |
Scheduled Balance |
% Of Agg. Bal. |
WAM² | WAC | Weighted Avg DSCR¹ |
| Totals | ||||||
| Debt Service Coverage Ratio¹ | ||||||
|
Debt Service Coverage Ratio |
# Of Loans |
Scheduled Balance |
% Of Agg. Bal. |
WAM² | WAC | Weighted Avg DSCR¹ |
| Totals | ||||||
| (1) | Debt Service Coverage Ratios are updated periodically as new NOI figures become available from borrowers on an asset level. In all cases the most current DSCR provided by the Servicer is used. To the extent that no DSCR is provided by the Servicer, information from the offering document is used. The debt service coverage ratio information was provided to the Certificate Administrator by the Master Servicer and the Certificate Administrator has not independently confirmed the accuracy of such information. |
| (2) | Anticipated Remaining Term and WAM are each calculated based upon the term from the current month to the earlier of the Anticipated Repayment Date, if applicable, and the Maturity Date. |
| (3) | Data in this table was calculated by allocating pro-rata the current loan information to the properties based upon the Cut Off Date Balance of each property as disclosed in the offering document. The Scheduled Balance Totals reflect the aggregate balances of all pooled loans as reported in the CREFC Loan Periodic Update File. To the extent that the Scheduled Balance Total figure for the “State” and “Property” stratification tables is not equal to the sum of the scheduled balance figures for each state or property, the difference is explained by loans that have been modified into a split loan structure. The “State” and “Property” stratification tables do not include the balance of the subordinate note (sometimes called the B-piece or a “hope note”) of a loan that has been modified into a split-loan structure. Rather, the scheduled balance for each state or property only reflects the balance of the senior note (sometimes called the A-piece) of a loan that has been modified into a split-loan structure. |
| © 2021 Computershare. All rights reserved. Confidential. | Page 9 of 26 |
| Distribution Date: | 05/17/22 | Benchmark 2022-B34 Mortgage Trust | |
| Determination Date: | 05/11/22 | ||
| Record Date: | 04/29/22 | Commercial Mortgage Pass-Through Certificates Series 2022-B34 | |
Current Mortgage Loan and Property Stratification
Aggregate Pool
| State³ | ||||||
| State |
# Of Properties |
Scheduled Balance |
% Of Agg. Bal. |
WAM² | WAC | Weighted Avg DSCR¹ |
| Totals |
| Property Type³ | ||||||
| Property Type |
# Of Properties |
Scheduled Balance |
% Of Agg. Bal. |
WAM² | WAC | Weighted Avg DSCR¹ |
| Totals | ||||||
Note: Please refer to footnotes on the next page of the report.
| © 2021 Computershare. All rights reserved. Confidential. | Page 10 of 26 |
| Distribution Date: | 05/17/22 | Benchmark 2022-B34 Mortgage Trust | |
| Determination Date: | 05/11/22 | ||
| Record Date: | 04/29/22 | Commercial Mortgage Pass-Through Certificates Series 2022-B34 | |
Current Mortgage Loan and Property Stratification
Aggregate Pool
| Note Rate | ||||||
| Note Rate |
# Of Loans |
Scheduled Balance |
% Of Agg. Bal. |
WAM² | WAC | Weighted Avg DSCR¹ |
| Totals | ||||||
| Seasoning | ||||||
| Seasoning |
# Of Loans |
Scheduled Balance |
% Of Agg. Bal. |
WAM² | WAC | Weighted Avg DSCR¹ |
| Totals | ||||||
| (1) | Debt Service Coverage Ratios are updated periodically as new NOI figures become available from borrowers on an asset level. In all cases the most current DSCR provided by the Servicer is used. To the extent that no DSCR is provided by the Servicer, information from the offering document is used. The debt service coverage ratio information was provided to the Certificate Administrator by the Master Servicer and the Certificate Administrator has not independently confirmed the accuracy of such information. |
| (2) | Anticipated Remaining Term and WAM are each calculated based upon the term from the current month to the earlier of the Anticipated Repayment Date, if applicable, and the Maturity Date. |
| (3) | Data in this table was calculated by allocating pro-rata the current loan information to the properties based upon the Cut Off Date Balance of each property as disclosed in the offering document. The Scheduled Balance Totals reflect the aggregate balances of all pooled loans as reported in the CREFC Loan Periodic Update File. To the extent that the Scheduled Balance Total figure for the “State” and “Property” stratification tables is not equal to the sum of the scheduled balance figures for each state or property, the difference is explained by loans that have been modified into a split loan structure. The “State” and “Property” stratification tables do not include the balance of the subordinate note (sometimes called the B-piece or a “hope note”) of a loan that has been modified into a split-loan structure. Rather, the scheduled balance for each state or property only reflects the balance of the senior note (sometimes called the A-piece) of a loan that has been modified into a split-loan structure. |
| © 2021 Computershare. All rights reserved. Confidential. | Page 11 of 26 |
| Distribution Date: | 05/17/22 | Benchmark 2022-B34 Mortgage Trust | |
| Determination Date: | 05/11/22 | ||
| Record Date: | 04/29/22 | Commercial Mortgage Pass-Through Certificates Series 2022-B34 | |
Current Mortgage Loan and Property Stratification
Aggregate Pool
| Anticipated Remaining Term (ARD and Balloon Loans) | ||||||
|
Anticipated Remaining Term |
# Of Loans |
Scheduled Balance |
% Of Agg. Bal. |
WAM² | WAC | Weighted Avg DSCR¹ |
| Totals | ||||||
| Remaining Amortization Term (ARD and Balloon Loans) | ||||||
|
Remaining Amortization Term |
# Of Loans |
Scheduled Balance |
% Of Agg. Bal. |
WAM² | WAC | Weighted Avg DSCR¹ |
| Totals | ||||||
| (1) | Debt Service Coverage Ratios are updated periodically as new NOI figures become available from borrowers on an asset level. In all cases the most current DSCR provided by the Servicer is used. To the extent that no DSCR is provided by the Servicer, information from the offering document is used. The debt service coverage ratio information was provided to the Certificate Administrator by the Master Servicer and the Certificate Administrator has not independently confirmed the accuracy of such information. |
| (2) | Anticipated Remaining Term and WAM are each calculated based upon the term from the current month to the earlier of the Anticipated Repayment Date, if applicable, and the Maturity Date. |
| (3) | Data in this table was calculated by allocating pro-rata the current loan information to the properties based upon the Cut Off Date Balance of each property as disclosed in the offering document. The Scheduled Balance Totals reflect the aggregate balances of all pooled loans as reported in the CREFC Loan Periodic Update File. To the extent that the Scheduled Balance Total figure for the “State” and “Property” stratification tables is not equal to the sum of the scheduled balance figures for each state or property, the difference is explained by loans that have been modified into a split loan structure. The “State” and “Property” stratification tables do not include the balance of the subordinate note (sometimes called the B-piece or a “hope note”) of a loan that has been modified into a split-loan structure. Rather, the scheduled balance for each state or property only reflects the balance of the senior note (sometimes called the A-piece) of a loan that has been modified into a split-loan structure. |
| © 2021 Computershare. All rights reserved. Confidential. | Page 12 of 26 |
| Distribution Date: | 05/17/22 | Benchmark 2022-B34 Mortgage Trust | |
| Determination Date: | 05/11/22 | ||
| Record Date: | 04/29/22 | Commercial Mortgage Pass-Through Certificates Series 2022-B34 | |
Current Mortgage Loan and Property Stratification
Aggregate Pool
| Age of Most Recent NOI | ||||||
|
Age of Most Recent NOI |
# Of Loans |
Scheduled Balance |
% Of Agg. Bal. |
WAM² | WAC | Weighted Avg DSCR¹ |
| Totals | ||||||
| Remaining Stated Term (Fully Amortizing Loans) | ||||||
|
Age of Most Recent NOI |
# Of Loans |
Scheduled Balance |
% Of Agg. Bal. |
WAM² | WAC | Weighted Avg DSCR¹ |
| Totals | ||||||
| (1) | Debt Service Coverage Ratios are updated periodically as new NOI figures become available from borrowers on an asset level. In all cases the most current DSCR provided by the Servicer is used. To the extent that no DSCR is provided by the Servicer, information from the offering document is used. The debt service coverage ratio information was provided to the Certificate Administrator by the Master Servicer and the Certificate Administrator has not independently confirmed the accuracy of such information. |
| (2) | Anticipated Remaining Term and WAM are each calculated based upon the term from the current month to the earlier of the Anticipated Repayment Date, if applicable, and the Maturity Date. |
| (3) | Data in this table was calculated by allocating pro-rata the current loan information to the properties based upon the Cut Off Date Balance of each property as disclosed in the offering document. The Scheduled Balance Totals reflect the aggregate balances of all pooled loans as reported in the CREFC Loan Periodic Update File. To the extent that the Scheduled Balance Total figure for the “State” and “Property” stratification tables is not equal to the sum of the scheduled balance figures for each state or property, the difference is explained by loans that have been modified into a split loan structure. The “State” and “Property” stratification tables do not include the balance of the subordinate note (sometimes called the B-piece or a “hope note”) of a loan that has been modified into a split-loan structure. Rather, the scheduled balance for each state or property only reflects the balance of the senior note (sometimes called the A-piece) of a loan that has been modified into a split-loan structure. |
| © 2021 Computershare. All rights reserved. Confidential. | Page 13 of 26 |
| Distribution Date: | 05/17/22 | Benchmark 2022-B34 Mortgage Trust | |
| Determination Date: | 05/11/22 | ||
| Record Date: | 04/29/22 | Commercial Mortgage Pass-Through Certificates Series 2022-B34 | |
Mortgage Loan Detail (Part 1)
| ||||||||||||||||
| Pros ID | Loan ID | Loan Group | Prop Type (1) | City | State | Interest Accrual Type | Gross Rate | Scheduled Interest | Scheduled Principal | Principal Adjustments |
Anticipated Repay Date | Original Maturity Date | Adjusted Maturity Date | Beginning Scheduled Balance | Ending Scheduled Balance | Paid Through Date |
| Totals | ||||||||||||||||
| 1 Property Type Codes | |||||
| HC - Health Care | MU - Mixed Use | WH - Warehouse | MF - Multi-Family | ||
| SS - Self Storage | LO - Lodging | RT - Retail | SF - Single Family Rental | ||
| 98 - Other | IN - Industrial | OF - Office | MH - Mobile Home Park | ||
| SE - Securities | CH - Cooperative Housing | ZZ - Missing Information/Undefined | |||
| © 2021 Computershare. All rights reserved. Confidential. | Page 14 of 26 |
| Distribution Date: | 05/17/22 | Benchmark 2022-B34 Mortgage Trust | |
| Determination Date: | 05/11/22 | ||
| Record Date: | 04/29/22 | Commercial Mortgage Pass-Through Certificates Series 2022-B34 | |
| Mortgage Loan Detail (Part 2) | |||||||||||||
| Pros ID | Loan Group | Most Recent Fiscal NOI | Most Recent NOI | Most Recent NOI Start Date | Most Recent NOI End Date | Appraisal Reduction Date | Appraisal Reduction Amount | Cumulative ASER | Current P&I Advances | Cumulative P&I Advances | Cumulative Servicer Advances | Current NRA/WODRA from Principal | Defease Status |
| Totals | |||||||||||||
| © 2021 Computershare. All rights reserved. Confidential. | Page 15 of 26 |
| Distribution Date: | 05/17/22 | Benchmark 2022-B34 Mortgage Trust | |
| Determination Date: | 05/11/22 | ||
| Record Date: | 04/29/22 | Commercial Mortgage Pass-Through Certificates Series 2022-B34 | |
| Principal Prepayment Detail | |||||||
| Unscheduled Principal | Prepayment Premiums | ||||||
| Pros ID | Loan Number | Loan Group |
Amount | Prepayment / Liquidation Code | Prepayment Premium Amount | Yield Maintenance Amount | |
| Totals | |||||||
| Note: Principal Prepayment Amount listed here may include Principal Adjustment Amounts on the loan in addition to the Unscheduled Principal Amount. |
| © 2021 Computershare. All rights reserved. Confidential. | Page 16 of 26 |
| Distribution Date: | 05/17/22 | Benchmark 2022-B34 Mortgage Trust | |
| Determination Date: | 05/11/22 | ||
| Record Date: | 04/29/22 | Commercial Mortgage Pass-Through Certificates Series 2022-B34 | |
| Historical Detail | |||||||||||||||||||
| Delinquencies¹ | Prepayments | Rate and Maturities | |||||||||||||||||
| 30-59 Days | 60-89 Days | 90 Days or More | Foreclosure | REO | Modifications | Curtailments | Payoff | Next Weighted Avg. | |||||||||||
| Distribution Date | # | Balance | # | Balance | # | Balance | # | Balance | # | Balance | # | Balance | # | Amount | # | Amount | Coupon | Remit | WAM¹ |
| (1) | Foreclosure and REO Totals are included in the delinquencies aging categories. |
| © 2021 Computershare. All rights reserved. Confidential. | Page 17 of 26 |
| Distribution Date: | 05/17/22 | Benchmark 2022-B34 Mortgage Trust | |
| Determination Date: | 05/11/22 | ||
| Record Date: | 04/29/22 | Commercial Mortgage Pass-Through Certificates Series 2022-B34 | |
| Delinquency Loan Detail | |||||||||||||
| Pros ID | Loan ID | Paid Through Date | Months Delinquent | Mortgage Loan Status¹ |
Current P&I Advances | Outstanding P&I Advances |
Outstanding Servicer Advances |
Actual Principal Balance |
Servicing Transfer Date |
Resolution Strategy Code² |
Bankruptcy Date | Foreclosure Date | REO Date |
| Totals | |||||||||||||
| 1 Mortgage Loan Status | ||||
| A - Payment Not Received But Still in Grace Period | 0 - Current | 4 - Performing Matured Balloon | ||
| B - Late Payment But Less Than 30 days Delinquent | 1 - 30-59 Days Delinquent | 5 - Non Performing Matured Balloon | ||
| 2 - 60-89 Days Delinquent | 6 - 121+ Days Delinquent | |||
| 3 - 90-120 Days Delinquent | ||||
| 2 Resolution Strategy Code | ||||
| 1 - Modification | 6 - DPO | 10 - Deed in Lieu of Foreclosures | ||
| 2 - Foreclosure | 7 - REO | 11- Full Payoff | ||
| 3 - Bankruptcy | 8 - Resolved | 12 - Reps and Warranties | ||
| 4 - Extension | 9 - Pending Return to Master Servicer | 13 - TBD | ||
| 5 - Note Sale | 98 - Other | |||
| Note: Outstanding P & I Advances include the current period advance. |
| © 2021 Computershare. All rights reserved. Confidential. | Page 18 of 26 |
| Distribution Date: | 05/17/22 | Benchmark 2022-B34 Mortgage Trust | |
| Determination Date: | 05/11/22 | ||
| Record Date: | 04/29/22 | Commercial Mortgage Pass-Through Certificates Series 2022-B34 | |
Collateral Stratification and Historical Detail
| Maturity Dates and Loan Status¹ |
| Total | Performing | Non-Performing | REO/Foreclosure | |
 |
 |
 | ||
| Past Maturity | 0 | 0 | 0 | 0 |
| 0 - 6 Months | 0 | 0 | 0 | 0 |
| 7 - 12 Months | 0 | 0 | 0 | 0 |
| 13 - 24 Months | 0 | 0 | 0 | 0 |
| 25 - 36 Months | 0 | 0 | 0 | 0 |
| 37 - 48 Months | 0 | 0 | 0 | 0 |
| 49 - 60 Months | 0 | 0 | 0 | 0 |
| > 60 Months | 0 | 0 | 0 | 0 |
| Historical Delinquency Information |
| Total | Current | 30-59 Days | 60-89 Days | 90+ Days | REO/Foreclosure | |
 |
 |
 |
 |
 | ||
| May-22 | 0 | 0 | 0 | 0 | 0 | 0 |
| Apr-22 | 0 | 0 | 0 | 0 | 0 | 0 |
| Mar-22 | 0 | 0 | 0 | 0 | 0 | 0 |
| Feb-22 | 0 | 0 | 0 | 0 | 0 | 0 |
| Jan-22 | 0 | 0 | 0 | 0 | 0 | 0 |
| Dec-21 | 0 | 0 | 0 | 0 | 0 | 0 |
| Nov-21 | 0 | 0 | 0 | 0 | 0 | 0 |
| Oct-21 | 0 | 0 | 0 | 0 | 0 | 0 |
| Sep-21 | 0 | 0 | 0 | 0 | 0 | 0 |
| Aug-21 | 0 | 0 | 0 | 0 | 0 | 0 |
| Jul-21 | 0 | 0 | 0 | 0 | 0 | 0 |
| Jun-21 | 0 | 0 | 0 | 0 | 0 | 0 |
| (1) | Maturity dates used in this chart are based on the dates provided by the Master Servicer in the Loan Periodic File. |
| © 2021 Computershare. All rights reserved. Confidential. | Page 19 of 26 |
| Distribution Date: | 05/17/22 | Benchmark 2022-B34 Mortgage Trust | |
| Determination Date: | 05/11/22 | ||
| Record Date: | 04/29/22 | Commercial Mortgage Pass-Through Certificates Series 2022-B34 | |
| Specially Serviced Loan Detail - Part 1 | ||||||||||
| Pros ID | Loan ID | Ending Scheduled Balance | Actual Balance | Appraisal Value | Appraisal Date | Net Operating Income | DSCR | DSCR Date | Maturity Date |
Remaining Amort Term |
| Totals | ||||||||||
| © 2021 Computershare. All rights reserved. Confidential. | Page 20 of 26 |
| Distribution Date: | 05/17/22 | Benchmark 2022-B34 Mortgage Trust | |
| Determination Date: | 05/11/22 | ||
| Record Date: | 04/29/22 | Commercial Mortgage Pass-Through Certificates Series 2022-B34 | |
| Specially Serviced Loan Detail - Part 2 | ||||||
| Pros ID | Loan ID | Property Type¹ | State |
Servicing Transfer Date |
Resolution Strategy Code² | Special Servicing Comments |
| 1 Property Type Codes | ||||
| HC - Health Care | MU - Mixed Use | WH - Warehouse | ||
| MF - Multi-Family | SS - Self Storage | LO - Lodging | ||
| RT - Retail | SF - Single Family Rental | 98 - Other | ||
| IN - Industrial | OF - Office | MH - Mobile Home Park | ||
| SE - Securities | CH - Cooperative Housing | ZZ - Missing Information/Undefined | ||
| 2 Resolution Strategy Code | ||||
| 1 - Modification | 6 - DPO | 10 - Deed in Lieu of Foreclosures | ||
| 2 - Foreclosure | 7 - REO | 11- Full Payoff | ||
| 3 - Bankruptcy | 8 - Resolved | 12 - Reps and Warranties | ||
| 4 - Extension | 9 - Pending Return to Master Servicer | 13 - TBD | ||
| 5 - Note Sale | 98 - Other | |||
| © 2021 Computershare. All rights reserved. Confidential. | Page 21 of 26 |
| Distribution Date: | 05/17/22 | Benchmark 2022-B34 Mortgage Trust | |
| Determination Date: | 05/11/22 | ||
| Record Date: | 04/29/22 | Commercial Mortgage Pass-Through Certificates Series 2022-B34 | |
Modified Loan Detail
| Pre-Modification | Post-Modification | |||||||||
| Pros ID | Loan Number | Balance | Rate | Balance | Rate |
Modification Code¹ |
Modification Booking Date |
Modification Date |
Modification Date | |
| Totals | ||||||||||
| 1 Modification Codes | ||||
| 1 - Maturity Date Extension | 5 - Temporary Rate Reduction | 8 - Other | ||
| 2 - Amortization Change | 6 - Capitalization on Interest | 9 - Combination | ||
| 3 - Principal Write-Off | 7 - Capitalization on Taxes | 10 - Forbearance | ||
| Note: Please refer to Servicer Reports for modification comments. |
| © 2021 Computershare. All rights reserved. Confidential. | Page 22 of 26 |
| Distribution Date: | 05/17/22 | Benchmark 2022-B34 Mortgage Trust | |
| Determination Date: | 05/11/22 | ||
| Record Date: | 04/29/22 | Commercial Mortgage Pass-Through Certificates Series 2022-B34 | |
| Historical Liquidated Loan Detail | |||||||||||||
| Pros ID¹ |
Loan Number |
Dist.Date |
Loan Beginning Scheduled Balance |
Most Recent Appraised Value or BPO |
Gross Sales Proceeds or Other Proceeds |
Fees, Advances, and Expenses |
Net Proceeds Received on Liquidation |
Net Proceeds Available for Distribution |
Realized Loss to Loan |
Current Period Adjustment to Loan |
Cumulative Adjustment to Loan |
Loss to Loan with Cumulative Adjustment |
Percent of Original Loan Balance |
| Current Period Totals | |||||||||||
| Cumulative Totals |
| Note: Fees, Advances and Expenses also include outstanding P & I advances and unpaid fees (servicing, trustee, etc.). |
| © 2021 Computershare. All rights reserved. Confidential. | Page 23 of 26 |
| Distribution Date: | 05/17/22 | Benchmark 2022-B34 Mortgage Trust | |
| Determination Date: | 05/11/22 | ||
| Record Date: | 04/29/22 | Commercial Mortgage Pass-Through Certificates Series 2022-B34 | |
| Historical Bond / Collateral Loss Reconciliation Detail | |||||||||||
| Pros ID |
Loan Number |
Distribution Date |
Certificate Interest Paid from Collateral Principal Collections |
Reimb of Prior Realized Losses from Collateral Interest Collections |
Aggregate Realized Loss to Loan |
Loss Covered by Credit Support/Deal Structure |
Loss Applied to Certificate Interest Payment |
Loss Applied to Certificate Balance |
Non-Cash Principal Adjustment |
Realized Losses from NRA/WODRA |
Total Loss Applied to Certificate Balance |
| Current Period Totals | |||||||||||
| Cumulative Totals | |||||||||||
| © 2021 Computershare. All rights reserved. Confidential. | Page 24 of 26 |
| Distribution Date: | 05/17/22 | Benchmark 2022-B34 Mortgage Trust | |
| Determination Date: | 05/11/22 | ||
| Record Date: | 04/29/22 | Commercial Mortgage Pass-Through Certificates Series 2022-B34 | |
Interest Shortfall Detail - Collateral Level
| Pros ID |
Interest Adjustments |
Deferred Interest Collected |
Special Servicing Fees | ASER | PPIS / (PPIE) |
Non- Recoverable Interest |
Interest on Advances |
Reimbursement of Advances from Interest |
Other Shortfalls / (Refunds) |
Modified Interest Reduction / (Excess) | ||
| Monthly | Liquidation | Work Out | ||||||||||
| Total | ||||||||||||
| Note: Interest Adjustments listed for each loan do not include amounts that were used to adjust the Weighted Average Net Rate of the mortgage loans. | Collateral Shortfall Total | 0.00 | ||||||||||
| © 2021 Computershare. All rights reserved. Confidential. | Page 25 of 26 |
| Distribution Date: | 05/17/22 | Benchmark 2022-B34 Mortgage Trust | |
| Determination Date: | 05/11/22 | ||
| Record Date: | 04/29/22 | Commercial Mortgage Pass-Through Certificates Series 2022-B34 | |
Supplemental Notes
| None |
| © 2021 Computershare. All rights reserved. Confidential. | Page 26 of 26 |
ANNEX C
FORM OF OPERATING ADVISOR ANNUAL REPORT1
Report
Date: If during the prior calendar year, any Mortgage Loan (other than a Non-Serviced Mortgage Loan) or Serviced Whole Loan
was a Specially Serviced Loan at any time, this report will be delivered no later than [INSERT DATE], pursuant to the terms and
conditions of the Pooling and Servicing Agreement, dated as of April 1, 2022 (the “Pooling and Servicing Agreement”),
among Deutsche Mortgage & Asset Receiving Corporation, as the depositor, KeyBank National Association, as the master servicer,
LNR Partners, LLC, as the special servicer, Computershare Trust Company, N.A., as the certificate administrator, Wilmington Trust,
National Association, as the trustee and Park Bridge Lender Services LLC, as the operating advisor and as the asset representations
reviewer.
Transaction: Benchmark 2022-B34 Mortgage Trust Commercial Mortgage Pass-Through Certificates, Series 2022-B34
Operating Advisor: Park Bridge Lender Services LLC
Special Servicer for period: LNR Partners, LLC
Trust Directing Holder: Eightfold Real Estate Capital Fund V, L.P. (or its affiliate)
| I. | Population of Mortgage Loans that Were Considered in Compiling this Report |
| 1. | The Special Servicer has notified the Operating Advisor that [●] Specially Serviced Loans were transferred to special servicing in the prior calendar year [INSERT YEAR]. |
| a. | [●] of those Specially Serviced Loans are still being analyzed by the Special Servicer as part of the development of [a Final] Asset Status Report. |
| b. | [Final] Asset Status Reports were issued with respect to [●] of such Specially Serviced Loans. This report is based only on the Specially Serviced Loans in respect of which [a Final] Asset Status Report has been issued. The [Final] Asset Status Reports may not yet be fully implemented. |
| 2. | The Special Servicer has notified the Operating Advisor that it has completed a Major Decision with respect to [●] Specially Serviced Loans, and provided the Major Decision Reporting Package or Asset Status Report with respect to [●] Specially Serviced Loans to the operating advisor. |
| II. | Executive Summary |
Based on the requirements and qualifications set forth in the Pooling and Servicing Agreement, as well as the items listed below, the Operating Advisor (in accordance with the Operating Advisor’s analysis requirements outlined in the Pooling and Servicing Agreement) has undertaken a limited review of the Special Servicer’s reported actions on the loans identified in this report. Based solely on such limited review and subject to the assumptions, limitations and qualifications set forth herein, the Operating Advisor believes, in its sole discretion exercised in good faith, that the Special Servicer [is/is not] operating in compliance with the Servicing Standard with respect to its performance of its duties under the Pooling and Servicing Agreement during the prior calendar year on a “asset-level basis” with respect to the resolution or liquidation of any Specially Serviced Loans that the special servicer is responsible for servicing under the PSA. [The Operating Advisor believes, in its sole discretion exercised in good faith, that the Special Servicer has failed to comply with the Servicing Standard as a result of the following material deviations.]
| ● | [LIST OF MATERIAL DEVIATION ITEMS] |
1 This report is an indicative report and does not reflect the final form of annual report to be used in any particular year. The Operating Advisor will have the ability to modify or alter the organization and content of any particular report, subject to the compliance with the terms of the Pooling and Servicing Agreement, including, without limitation, provisions relating to Privileged Information.
C-1
In addition, the Operating Advisor notes the following: [PROVIDE SUMMARY OF ANY ADDITIONAL MATERIAL INFORMATION].
| ● | [ADD RECOMMENDATION OF REPLACEMENT OF SPECIAL SERVICER, IF APPLICABLE] |
| III. | List of Items that Were Considered in Compiling this Report |
In rendering our assessment herein, we examined and relied upon the accuracy and completeness of the items listed below:
| 1. | Any Major Decision Reporting Package that is delivered or made available to the Operating Advisor by the Special Servicer pursuant to the Pooling and Servicing Agreement. |
| 2. | Reports by the Special Servicer made available to Privileged Persons that are posted on the certificate administrator’s website that is relevant to the operating advisor’s obligations under the Pooling and Servicing Agreement and certain information it has reasonably requested from the special servicer and each Final Asset Status Report, in each case, delivered or made available to the Operating Advisor pursuant to the terms of the Pooling and Servicing Agreement. |
| 3. | The Special Servicer’s assessment of compliance report, attestation report by a third party regarding the Special Servicer’s compliance with its obligations, and non-discretionary portions of net present value calculations and Appraisal Reduction Amount calculations delivered or made available to the Operating Advisor pursuant to the terms of the Pooling and Servicing Agreement. |
| 4. | [LIST OTHER REVIEWED INFORMATION] |
NOTE: The Operating Advisor’s review of the above materials should be considered a limited review and not be considered a full or limited audit, legal review or legal opinion. For instance, we did not review each page of the Special Servicer’s policy and procedure manuals (including amendments and appendices), review underlying lease agreements or similar underlying documents, re-engineer the quantitative aspects of their net present value calculation, visit any related property, visit the Special Servicer, visit the Directing Holder or interact with any borrower. In addition, our review of the net present value calculations and Appraisal Reduction calculations is limited to the mathematical accuracy of the calculations and the corresponding application of the non-discretionary portions of the applicable formulas, and as such, does not take into account the reasonableness of the discretionary portions of such formulas.
| IV. | Qualifications and Disclaimers Related to the Work Product Undertaken and Opinions Related to this Report |
| 1. | As provided in the Pooling and Servicing Agreement, the Operating Advisor is not required to report on instances of non-compliance with, or deviations from, the Servicing Standard or the special servicer’s obligations under the Pooling and Servicing Agreement that the Operating Advisor determines, in its sole discretion exercised in good faith, to be immaterial. |
| 2. | In rendering our assessment herein, we have assumed that all executed factual statements, instruments, and other documents that we have relied upon in rendering this assessment have been executed by persons with legal capacity to execute such documents. |
| 3. | Other than the receipt of any Major Decision Reporting Package or any Asset Status Report that is delivered or made available to the Operating Advisor pursuant to the terms of the Pooling and Servicing Agreement, the Operating Advisor did not participate in, or have access to, the Special Servicer’s and Directing Holder’s discussion(s) regarding any Specially Serviced Loan. The Operating Advisor does not have authority to speak with the Directing Holder or borrower directly. As such, the Operating Advisor relied upon the information delivered to it by the Special Servicer as well as its interaction with the Special Servicer, if any, in gathering the relevant information to |
C-2
| generate this report. The services that we perform are not designed and cannot be relied upon to detect fraud or illegal acts should any exist. |
| 4. | The Special Servicer has the legal authority and responsibility to service any Specially Serviced Loans pursuant to the Pooling and Servicing Agreement. The Operating Advisor has no responsibility or authority to alter the standards set forth in the Pooling and Servicing Agreement or the actions of the Special Servicer. |
| 5. | Confidentiality and other contractual limitations limit the Operating Advisor’s ability to outline the details or substance of any communication held between it and the Special Servicer regarding any Specially Serviced Loans and certain information it reviewed in connection with its duties under the Pooling and Servicing Agreement. As a result, this report may not reflect all the relevant information that the Operating Advisor is given access to by the Special Servicer. |
| 6. | There are many tasks that the Special Servicer undertakes on an ongoing basis related to Specially Serviced Loans. These include, but are not limited to, assumptions, ownership changes, collateral substitutions, capital reserve changes, etc. The Operating Advisor does not participate in any discussions regarding such actions. As such, Operating Advisor has not assessed the Special Servicer’s operational compliance with respect to those types of actions. |
| 7. | The Operating Advisor is not empowered to speak with any investors directly. If the investors have questions regarding this report, they should address such questions to the certificate administrator through the certificate administrator’s website. |
| 8. | This report does not constitute recommendations to buy, sell or hold any security, nor does the Operating Advisor take into account market prices of securities or financial markets generally when performing its limited review of the Special Servicer as described above. The Operating Advisor does not have a fiduciary relationship with any Certificateholder or any other party or individual. Nothing is intended to or should be construed as creating a fiduciary relationship between the Operating Advisor and any Certificateholder, party or individual. |
Terms used but not defined herein have the meaning set forth in the Pooling and Servicing Agreement.
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ANNEX D-1
GERMAN
AMERICAN CAPITAL CORPORATION AND CITI REAL ESTATE FUNDING INC.
MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES
Each of CREFI and GACC (referred to as a “Mortgage Loan Seller” in the representations and warranties below) will make, as of the Cut-off Date or such other date as set forth below, with respect to each Mortgage Loan sold by it to us (referred to as the “Purchaser” in the representations and warranties below) that we include in the issuing entity, representations and warranties generally to the effect set forth below. Prior to the execution of the related final Mortgage Loan Purchase Agreement, there may be additions, subtractions or other modifications to the representations, warranties and exceptions. The exceptions to the representations and warranties set forth below are identified on Annex D-2 and Annex D-3, respectively, to this prospectus. Capitalized terms used but not otherwise defined in this Annex D-1 will have the meanings set forth in this prospectus or, if not defined in this prospectus, in the related Mortgage Loan Purchase Agreement. For the avoidance of doubt references to “Mortgage Loan” and “Mortgage Loans” in this Annex D-1 and the related exceptions set forth in Annex D-2 or Annex D-3, as applicable, exclude the GSMC Mortgage Loans and the JPMCB Mortgage Loans. In addition, solely for purposes of this Annex D-1 and the related exceptions set forth in Annex D-2 or Annex D-3, as applicable, the term “Mortgage Loans” and “Mortgage Notes” will refer to such Mortgage Loans sold by the applicable Mortgage Loan Seller and the related promissory note(s).
Each Mortgage Loan Purchase Agreement, together with the related representations and warranties (subject to the exceptions to such representations and warranties), serves to contractually allocate risk between the related Mortgage Loan Seller, on the one hand, and the issuing entity, on the other. We present the related representations and warranties set forth below for the sole purpose of describing some of the terms and conditions of that risk allocation. The presentation of representations and warranties below is not intended as statements regarding the actual characteristics of the Mortgage Loans, the Mortgaged Properties or other matters. We cannot assure you that the Mortgage Loans actually conform to the statements made in the representations and warranties that we present below.
1. Whole Loan; Ownership of Mortgage Loans. Except with respect to a Mortgage Loan that is part of a Whole Loan, each Mortgage Loan is a whole loan and not a participation interest in a Mortgage Loan. Each Mortgage Loan that is part of a Whole Loan is a portion of a whole loan evidenced by a Mortgage Note. At the time of the sale, transfer and assignment to the Purchaser, no Mortgage Note or Mortgage was subject to any assignment (other than assignments to the Mortgage Loan Seller or, with respect to any Non-Serviced Mortgage Loan, to the trustee for the related Non-Serviced Securitization Trust), participation or pledge, and the Mortgage Loan Seller had good title to, and was the sole owner of, each Mortgage Loan free and clear of any and all liens, charges, pledges, encumbrances, participations, any other ownership interests on, in or to such Mortgage Loan other than any servicing rights appointment or similar agreement. The Mortgage Loan Seller has full right and authority to sell, assign and transfer each Mortgage Loan, and the assignment to the Purchaser constitutes a legal, valid and binding assignment of such Mortgage Loan free and clear of any and all liens, pledges, charges or security interests of any nature encumbering such Mortgage Loan.
2. Loan Document Status. Each related Mortgage Note, Mortgage, Assignment of Leases, Rents and Profits (if a separate instrument), guaranty and other agreement executed by or on behalf of the related borrower, guarantor or other obligor in connection with such Mortgage Loan is the legal, valid and binding obligation of the related borrower, guarantor or other obligor (subject to any non-recourse provisions contained in any of the foregoing agreements and any applicable state anti-deficiency or market value limit deficiency legislation), as applicable, and is enforceable in accordance with its terms, except (i) as such enforcement may be limited by (a) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (b) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law) and (ii) that certain provisions in such Mortgage Loan documents (including, without limitation, provisions requiring the payment of default interest, late fees or
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prepayment/yield maintenance fees, charges and/or premiums) are, or may be, further limited or rendered unenforceable by or under applicable law, but (subject to the limitations set forth in clause (i) above) such limitations or unenforceability will not render such Mortgage Loan documents invalid as a whole or materially interfere with the mortgagee’s realization of the principal benefits and/or security provided thereby (clauses (i) and (ii) collectively, the “Standard Qualifications”).
Except as set forth in the immediately preceding sentences, there is no valid offset, defense, counterclaim or right of rescission available to the related borrower with respect to any of the related Mortgage Notes, Mortgages or other Mortgage Loan documents, including, without limitation, any such valid offset, defense, counterclaim or right based on intentional fraud by the Mortgage Loan Seller in connection with the origination of the Mortgage Loan, that would deny the mortgagee the principal benefits intended to be provided by the Mortgage Note, Mortgage or other Mortgage Loan documents.
3. Mortgage Provisions. The Mortgage Loan documents for each Mortgage Loan contain provisions that render the rights and remedies of the holder thereof adequate for the practical realization against the Mortgaged Property of the principal benefits of the security intended to be provided thereby, including realization by judicial or, if applicable, non-judicial foreclosure subject to the limitations set forth in the Standard Qualifications.
4. Mortgage Status; Waivers and Modifications. Since origination and except by written instruments set forth in the related Mortgage File or as otherwise provided in the related Mortgage Loan documents (a)(1) there has been no forbearance, waiver or modification of the material terms of the Mortgage Loan which such forbearance, waiver or modification relates to the COVID-19 Emergency and (2) other than as related to the COVID-19 Emergency, the material terms of such Mortgage, Mortgage Note, Mortgage Loan guaranty, and related Mortgage Loan documents have not been waived, impaired, modified, altered, satisfied, canceled, subordinated or rescinded in any respect; (b) no related Mortgaged Property or any portion thereof has been released from the lien of the related Mortgage in any manner which materially interferes with the security intended to be provided by such Mortgage or the use or operation of the remaining portion of such Mortgaged Property; and (c) neither the related borrower nor the related guarantor has been released from its material obligations under the Mortgage Loan.
5. Lien; Valid Assignment. Subject to the Standard Qualifications, each assignment of Mortgage and assignment of Assignment of Leases, Rents and Profits to the issuing entity (or, with respect to a Non-Serviced Mortgage Loan, to the related Non-Serviced Trustee) constitutes a legal, valid and binding assignment to the issuing entity (or, with respect to a Non-Serviced Mortgage Loan, to the related Non-Serviced Trustee). Each related Mortgage and Assignment of Leases, Rents and Profits is freely assignable without the consent of the related borrower. Each related Mortgage is a legal, valid and enforceable first lien on the related borrower’s fee or leasehold interest in the Mortgaged Property in the principal amount of such Mortgage Loan or allocated loan amount (subject only to Permitted Encumbrances (as defined below) and the exceptions to paragraph (6) set forth in Annex D-2 or Annex D-3 (each such exception, a “Title Exception”)), except as the enforcement thereof may be limited by the Standard Qualifications. Such Mortgaged Property (subject to and excepting Permitted Encumbrances and the Title Exceptions) as of origination was, and as of the Cut-off Date, to the Mortgage Loan Seller’s knowledge, is free and clear of any recorded mechanics’ liens, recorded materialmen’s liens and other recorded encumbrances which are prior to or equal with the lien of the related Mortgage (which lien secures the related Whole Loan, in the case of a Mortgage Loan that is part of a Whole Loan), except those which are bonded over, escrowed for or insured against by a lender’s title insurance policy (as described below), and, to the Mortgage Loan Seller’s knowledge and subject to the rights of tenants (as tenants only)(subject to and excepting Permitted Encumbrances and the Title Exceptions), no rights exist which under law could give rise to any such lien or encumbrance that would be prior to or equal with the lien of the related Mortgage, except those which are bonded over, escrowed for or insured against by a lender’s title insurance policy (as described below). Notwithstanding anything in this prospectus to the contrary, no representation is made as to the perfection of any security interest in rents or other personal property to the extent that possession or control of such items or actions other than the filing of Uniform Commercial Code (“UCC”) financing statements is required in order to effect such perfection.
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6. Permitted Liens; Title Insurance. Each Mortgaged Property securing a Mortgage Loan is covered by an American Land Title Association loan title insurance policy or a comparable form of loan title insurance policy approved for use in the applicable jurisdiction (or, if such policy is yet to be issued, by a pro forma policy, a preliminary title policy with escrow instructions or a “marked up” commitment, in each case binding on the title insurer) (the “Title Policy”) in the original principal amount of such Mortgage Loan (or with respect to a Mortgage Loan secured by multiple properties, an amount equal to at least the allocated loan amount with respect to the Title Policy for each such property) after all advances of principal (including any advances held in escrow or reserves), that insures for the benefit of the owner of the indebtedness secured by the Mortgage, the first priority lien of the Mortgage (which lien secures the related Whole Loan, in the case of a Mortgage Loan that is part of a Whole Loan), which lien is subject only to (a) the lien of current real property taxes, water charges, sewer rents and assessments not yet due and payable; (b) covenants, conditions and restrictions, rights of way, easements and other matters of public record; (c) the exceptions (general and specific) and exclusions set forth in such Title Policy; (d) other matters to which like properties are commonly subject; (e) the rights of tenants (as tenants only) under leases (including subleases) pertaining to the related Mortgaged Property and condominium declarations; and (f) if the related Mortgage Loan is cross-collateralized and cross-defaulted with another Mortgage Loan (each a “Crossed Mortgage Loan”), the lien of the Mortgage for such other Mortgage Loan that is cross-collateralized and cross-defaulted with such Crossed Mortgage Loan, provided that none of which items (a) through (f), individually or in the aggregate, materially and adversely interferes with the value or current use of the Mortgaged Property or the security intended to be provided by such Mortgage or the borrower’s ability to pay its obligations when they become due (collectively, the “Permitted Encumbrances”). Except as contemplated by clause (f) of the preceding sentence, none of the Permitted Encumbrances are mortgage liens that are senior to or coordinate and co-equal with the lien of the related Mortgage. Such Title Policy (or, if it has yet to be issued, the coverage to be provided thereby) is in full force and effect, all premiums thereon have been paid and no claims have been made by the Mortgage Loan Seller thereunder and no claims have been paid thereunder. Neither the Mortgage Loan Seller, nor to the Mortgage Loan Seller’s knowledge, any other holder of the Mortgage Loan, has done, by act or omission, anything that would materially impair the coverage under such Title Policy.
7. Junior Liens. It being understood that B notes secured by the same Mortgage as a Mortgage Loan are not subordinate mortgages or junior liens, except for any Crossed Mortgage Loan, there are, as of origination, and to the Mortgage Loan Seller’s knowledge, as of the Cut-off Date, no subordinate mortgages or junior liens securing the payment of money encumbering the related Mortgaged Property (other than Permitted Encumbrances and the Title Exceptions, taxes and assessments, mechanics and materialmen’s liens (which are the subject of the representation in paragraph (5) above), and equipment and other personal property financing). Except as set forth on Schedule D-1 to Annex D-1, the Mortgage Loan Seller has no knowledge of any mezzanine debt secured directly by interests in the related borrower.
8. Assignment of Leases, Rents and Profits. There exists as part of the related Mortgage File an Assignment of Leases, Rents and Profits (either as a separate instrument or incorporated into the related Mortgage). Subject to the Permitted Encumbrances and the Title Exceptions (and, in the case of a Mortgage Loan that is part of a Whole Loan, subject to the related Assignment of Leases, Rents and Profits constituting security for the entire Whole Loan), each related Assignment of Leases, Rents and Profits creates a valid first-priority collateral assignment of, or a valid first-priority lien or security interest in, rents and certain rights under the related lease or leases, subject only to a license granted to the related Borrower to exercise certain rights and to perform certain obligations of the lessor under such lease or leases, including the right to operate the related leased property, except as the enforcement thereof may be limited by the Standard Qualifications. The related Mortgage or related Assignment of Leases, Rents and Profits, subject to applicable law, provides that, upon an event of default under the Mortgage Loan, a receiver is permitted to be appointed for the collection of rents or for the related mortgagee to enter into possession to collect the rents or for rents to be paid directly to the mortgagee.
9. UCC Filings. If the related Mortgaged Property is operated as a hospitality property, the Mortgage Loan Seller has filed and/or recorded or caused to be filed and/or recorded (or, if not filed and/or recorded, have been submitted in proper form for filing and/or recording), UCC financing statements in
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the appropriate public filing and/or recording offices necessary at the time of the origination of the Mortgage Loan to perfect a valid security interest in all items of physical personal property reasonably necessary to operate such Mortgaged Property owned by such borrower and located on the related Mortgaged Property (other than any non-material personal property, any personal property subject to a purchase money security interest, a sale and leaseback financing arrangement as permitted under the terms of the related Mortgage Loan documents or any other personal property leases applicable to such personal property), to the extent perfection may be effected pursuant to applicable law by recording or filing, as the case may be. Subject to the Standard Qualifications, each related Mortgage (or equivalent document) creates a valid and enforceable lien and security interest on the items of personalty described above. No representation is made as to the perfection of any security interest in rents or other personal property to the extent that possession or control of such items or actions other than the filing of UCC financing statements are required in order to effect such perfection.
10. Condition of Property. The Mortgage Loan Seller or the originator of the Mortgage Loan inspected or caused to be inspected each related Mortgaged Property within six months of origination of the Mortgage Loan and within twelve months of the Cut-off Date.
An engineering report or property condition assessment was prepared in connection with the origination of each Mortgage Loan no more than twelve months prior to the Cut-off Date. To the Mortgage Loan Seller’s knowledge, based solely upon due diligence customarily performed in connection with the origination of comparable mortgage loans, as of the Closing Date, each related Mortgaged Property was free and clear of any material damage (other than (i) any damage or deficiency that is estimated to cost less than $50,000 to repair, (ii) any deferred maintenance for which escrows were established at origination and (iii) any damage fully covered by insurance) that would affect materially and adversely the use or value of such Mortgaged Property as security for the Mortgage Loan.
11. Taxes and Assessments. All taxes, governmental assessments and other outstanding governmental charges (including, without limitation, water and sewage charges), or installments thereof, that could be a lien on the related Mortgaged Property that would be of equal or superior priority to the lien of the Mortgage and that prior to the Cut-off Date have become delinquent in respect of each related Mortgaged Property have been paid, or an escrow of funds has been established in an amount sufficient to cover such payments and reasonably estimated interest and penalties, if any, thereon. For purposes of this representation and warranty, real estate taxes and governmental assessments and other outstanding governmental charges and installments thereof will not be considered delinquent until the earlier of (a) the date on which interest and/or penalties would first be payable thereon and (b) the date on which enforcement action is entitled to be taken by the related taxing authority.
12. Condemnation. As of the date of origination and to the Mortgage Loan Seller’s knowledge as of the Cut-off Date, there is no proceeding pending, and, to the Mortgage Loan Seller’s knowledge as of the date of origination and as of the Cut-off Date, there is no proceeding threatened, for the total or partial condemnation of such Mortgaged Property that would have a material adverse effect on the value, use or operation of the Mortgaged Property.
13. Actions Concerning Mortgage Loan. As of the date of origination and to the Mortgage Loan Seller’s knowledge as of the Cut-off Date, there was no pending or filed action, suit or proceeding, arbitration or governmental investigation involving any borrower, guarantor, or borrower’s interest in the Mortgaged Property, an adverse outcome of which would reasonably be expected to materially and adversely affect (a) such borrower’s title to the Mortgaged Property, (b) the validity or enforceability of the Mortgage, (c) such borrower’s ability to perform under the related Mortgage Loan, (d) such guarantor’s ability to perform under the related guaranty, (e) the principal benefit of the security intended to be provided by the Mortgage Loan documents or (f) the current principal use of the Mortgaged Property.
14. Escrow Deposits. All escrow deposits and payments required to be escrowed with the lender pursuant to each Mortgage Loan are in the possession, or under the control, of the Mortgage Loan Seller or its servicer, and there are no deficiencies (subject to any applicable grace or cure periods) in connection therewith, and all such escrows and deposits (or the right thereto) that are required to be escrowed with lender under the related Mortgage Loan documents are being conveyed by the Mortgage
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Loan Seller to the Purchaser or its servicer (or, with respect to any Non-Serviced Mortgage Loan, to the depositor or servicer for the related Non-Serviced Securitization Trust).
15. No Holdbacks. The Stated Principal Balance as of the Cut-off Date of the Mortgage Loan set forth on the mortgage loan schedule attached as an exhibit to the related Mortgage Loan Purchase Agreement has been fully disbursed as of the Closing Date and there is no requirement for future advances thereunder (except in those cases where the full amount of the Mortgage Loan has been disbursed but a portion thereof is being held in escrow or reserve accounts pending the satisfaction of certain conditions relating to leasing, repairs or other matters with respect to the related Mortgaged Property, the borrower or other considerations determined by the Mortgage Loan Seller to merit such holdback).
16. Insurance. Each related Mortgaged Property is, and is required pursuant to the related Mortgage to be, insured by a property insurance policy providing coverage for loss in accordance with coverage found under a “special cause of loss form” or “all risk form” that includes replacement cost valuation issued by an insurer meeting the requirements of the related Mortgage Loan documents and having a claims-paying or financial strength rating meeting the Insurance Ratings Requirements (as defined below), in an amount (subject to a customary deductible) not less than the lesser of (1) the original principal balance of the Mortgage Loan and (2) the full insurable value on a replacement cost basis of the improvements, furniture, furnishings, fixtures and equipment owned by the borrower and included in the Mortgaged Property (with no deduction for physical depreciation), but, in any event, not less than the amount necessary or containing such endorsements as are necessary to avoid the operation of any coinsurance provisions with respect to the related Mortgaged Property.
“Insurance Ratings Requirements” means either (i) a claims paying or financial strength rating of any of the following; (a) at least “A-:VIII” from A.M. Best Company, (b) at least “A3” (or the equivalent) from Moody’s Investors Service, Inc. or (c) at least “A-” from S&P Global Ratings or (ii) the Syndicate Insurance Ratings Requirements. “Syndicate Insurance Ratings Requirements” means insurance provided by a syndicate of insurers, as to which (i) if such syndicate consists of 5 or more members, at least 60% of the coverage is provided by insurers that meet the Insurance Ratings Requirements (under clause (i) of the definition of such term) and up to 40% of the coverage is provided by insurers that have a claims paying or financial strength rating of at least “BBB-” by S&P Global Ratings or at least “Baa3” by Moody’s Investors Service, Inc., and (ii) if such syndicate consists of 4 or fewer members, at least 75% of the coverage is provided by insurers that meet the Insurance Ratings Requirements (under clause (i) of the definition of such term) and up to 25% of the coverage is provided by insurers that have a claims paying or financial strength rating of at least “BBB-” by S&P Global Ratings or at least “Baa3” by Moody’s Investors Service, Inc.
Each related Mortgaged Property is also covered, and required to be covered pursuant to the related Mortgage Loan documents, by business interruption or rental loss insurance which (subject to a customary deductible) covers a period of not less than 12 months (or with respect to each Mortgage Loan on a single asset with a principal balance of $50 million or more, 18 months).
If any material part of the improvements, exclusive of a parking lot, located on a Mortgaged Property is in an area identified in the Federal Register by the Federal Emergency Management Agency as having special flood hazards, the related borrower is required to maintain insurance in the maximum amount available under the National Flood Insurance Program, plus such additional excess flood coverage in an amount as is generally required by the Mortgage Loan Seller originating mortgage loans for securitization.
If the Mortgaged Property is located within 25 miles of the coast of the Gulf of Mexico or the Atlantic coast of Florida, Georgia, South Carolina or North Carolina, the related borrower is required to maintain coverage for windstorm and/or windstorm related perils and/or “named storms” issued by an insurer meeting the Insurance Rating Requirements or endorsement covering damage from windstorm and/or windstorm related perils and/or named storms, in an amount not less than the lesser of (1) the original principal balance of the Mortgage Loan and (2) 100% of the full insurable value on a replacement cost basis of the improvements and personalty and fixtures owned by the borrower and included in the related Mortgaged Property by an insurer meeting the Insurance Rating Requirements.
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The Mortgaged Property is covered, and required to be covered pursuant to the related Mortgage Loan documents, by a commercial general liability insurance policy issued by an insurer meeting the Insurance Rating Requirements including coverage for property damage, contractual damage and personal injury (including bodily injury and death) in amounts as are generally required by the Mortgage Loan Seller for loans originated for securitization, and in any event not less than $1 million per occurrence and $2 million in the aggregate.
An architectural or engineering consultant has performed an analysis of each of the Mortgaged Properties located in seismic zones 3 or 4 in order to evaluate the structural and seismic condition of such property, for the sole purpose of assessing either the scenario expected limit (“SEL”) or the probable maximum loss (“PML”) for the Mortgaged Property in the event of an earthquake. In such instance, the SEL or PML, as applicable, was based on a 475-year return period, an exposure period of 50 years and a 10% probability of exceedance. If the resulting report concluded that the SEL or PML, as applicable, would exceed 20% of the amount of the replacement costs of the improvements, earthquake insurance on such Mortgaged Property was obtained by an insurer rated at least “A:VIII” by A.M. Best Company or “A3” (or the equivalent) from Moody’s Investors Service, Inc. or “A-” by S&P Global Ratings in an amount not less than 100% of the SEL or PML, as applicable.
The Mortgage Loan documents require insurance proceeds in respect of a property loss to be applied either (a) to the repair or restoration of all or part of the related Mortgaged Property, with respect to all property losses in excess of 5% of the then outstanding principal amount of the related Mortgage Loan (or Whole Loan, if applicable), the lender (or a trustee appointed by it) having the right to hold and disburse such proceeds as the repair or restoration progresses, or (b) to the payment of the outstanding principal balance of such Mortgage Loan (or Whole Loan, if applicable) together with any accrued interest thereon.
All premiums on all insurance policies referred to in this section required to be paid as of the Cut-off Date have been paid, and such insurance policies name the lender under the Mortgage Loan and its successors and assigns as a loss payee under a mortgagee endorsement clause or, in the case of the general liability insurance policy, as named or additional insured. Such insurance policies will inure to the benefit of the Trustee (or, in the case of a Mortgage Loan that is a Non-Serviced Mortgage Loan, the applicable Non-Serviced Trustee). Each related Mortgage Loan obligates the related borrower to maintain, or cause to be maintained, all such insurance and, at such borrower’s failure to do so, authorizes the lender to maintain such insurance at the borrower’s cost and expense and to charge such borrower for related premiums. All such insurance policies (other than commercial liability policies) require at least 10 days’ prior notice to the lender of termination or cancellation arising because of nonpayment of a premium and at least 30 days prior notice to the lender of termination or cancellation (or such lesser period, not less than 10 days, as may be required by applicable law) arising for any reason other than non-payment of a premium and no such notice has been received by the Mortgage Loan Seller.
17. Access; Utilities; Separate Tax Lots. Each Mortgaged Property (a) is located on or adjacent to a public road and has direct legal access to such road, or has access via an irrevocable easement or irrevocable right of way permitting ingress and egress to/from a public road, (b) is served by or has uninhibited access rights to public or private water and sewer (or well and septic) and all required utilities, all of which are appropriate for the current use of the Mortgaged Property, and (c) constitutes one or more separate tax parcels which do not include any property which is not part of the Mortgaged Property or is subject to an endorsement under the related Title Policy insuring the Mortgaged Property, or in certain cases, an application has been, or will be, made to the applicable governing authority for creation of separate tax lots, in which case the Mortgage Loan requires the borrower to escrow an amount sufficient to pay taxes for the existing tax parcel of which the Mortgaged Property is a part until the separate tax lots are created.
18. No Encroachments. To the Mortgage Loan Seller’s knowledge based solely on surveys obtained in connection with origination and the lender’s Title Policy (or, if such policy is not yet issued, a pro forma title policy, a preliminary title policy with escrow instructions or a “marked up” commitment) obtained in connection with the origination of each Mortgage Loan, all material improvements that were included for the purpose of determining the appraised value of the related Mortgaged Property at the time of the origination of such Mortgage Loan are within the boundaries of the related Mortgaged Property, except
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encroachments that do not materially and adversely affect the value or current use of such Mortgaged Property or for which insurance or endorsements were obtained under the Title Policy. No improvements on adjoining parcels encroach onto the related Mortgaged Property except for encroachments that do not materially and adversely affect the value or current use of such Mortgaged Property or for which insurance or endorsements were obtained under the Title Policy. No improvements encroach upon any easements except for encroachments the removal of which would not materially and adversely affect the value or current use of such Mortgaged Property or for which insurance or endorsements obtained with respect to the Title Policy.
19. No Contingent Interest or Equity Participation. No Mortgage Loan has a shared appreciation feature, any other contingent interest feature or a negative amortization feature (except that an ARD Loan may provide for the accrual of the portion of interest in excess of the rate in effect prior to the Anticipated Repayment Date) or an equity participation by the Mortgage Loan Seller.
20. REMIC. The Mortgage Loan is a “qualified mortgage” within the meaning of Section 860G(a)(3) of the Code (but determined without regard to the rule in the U.S. Department of Treasury Regulations Section 1.860G-2(f)(2) (the “Treasury Regulations”) that treats certain defective mortgage loans as qualified mortgages), and, accordingly, (A) the issue price of the Mortgage Loan to the related borrower at origination did not exceed the non-contingent principal amount of the Mortgage Loan and (B) either: (a) such Mortgage Loan is secured by an interest in real property (including permanently affixed buildings and structural components, such as wiring, plumbing systems and central heating and air-conditioning systems, that are integrated into such buildings, serve such buildings in their passive functions and do not produce or contribute to the production of income other than consideration for the use or occupancy of space, but excluding personal property) having a fair market value (i) at the date the Mortgage Loan (or related Whole Loan) was originated at least equal to 80% of the adjusted issue price of the Mortgage Loan (or related Whole Loan) on such date or (ii) at the Closing Date at least equal to 80% of the adjusted issue price of the Mortgage Loan (or related Whole Loan) on such date, provided that for purposes hereof, the fair market value of the real property interest must first be reduced by (A) the amount of any lien on the real property interest that is senior to the Mortgage Loan and (B) a proportionate amount of any lien that is in parity with the Mortgage Loan; or (b) substantially all of the proceeds of such Mortgage Loan were used to acquire, improve or protect the real property which served as the only security for such Mortgage Loan (other than a recourse feature or other third-party credit enhancement within the meaning of Treasury Regulations Section 1.860G-2(a)(1)(ii)). If the Mortgage Loan was “significantly modified” prior to the Closing Date so as to result in a taxable exchange under Section 1001 of the Code, it either (x) was modified as a result of the default or reasonably foreseeable default of such Mortgage Loan or (y) satisfies the provisions of either sub-clause (B)(a)(i) above (substituting the date of the last such modification for the date the Mortgage Loan was originated) or sub-clause (B)(a)(ii), including the proviso thereto. For purposes of the preceding sentence, a Mortgage Loan will not be considered “significantly modified” solely by reason of the borrower having been granted a COVID-19 related forbearance prior to October 1, 2021 (or prior to such later date as may be provided by the IRS in a future guidance) provided that: (a) such Mortgage Loan forbearance is covered by Revenue Procedure 2020-26 (as extended by Revenue Procedure 2021-12) by reason of satisfying the requirements for such coverage stated in Section 5.02(2) of Revenue Procedure 2020-26; and (b) the Mortgage Loan Seller identifies such Mortgage Loan and provides (x) the date on which such forbearance was granted, (y) the length in months of the forbearance, and (z) how the payments in forbearance will be paid (that is, by extension of maturity, change of amortization schedule, etc.). Any prepayment premium and yield maintenance charges applicable to the Mortgage Loan constitute “customary prepayment penalties” within the meaning of Treasury Regulations Section 1.860G-1(b)(2). All terms used in this paragraph will have the same meanings as set forth in the related Treasury Regulations.
21. Compliance with Usury Laws. The Mortgage Rate (exclusive of any default interest, late charges, yield maintenance charge, or prepayment premiums) of such Mortgage Loan complied as of the date of origination with, or was exempt from, applicable state or federal laws, regulations and other requirements pertaining to usury.
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22. Authorized to do Business. To the extent required under applicable law, as of the Cut-off Date or as of the date that such entity held the Mortgage Note, each holder of the Mortgage Note was authorized to transact and do business in the jurisdiction in which each related Mortgaged Property is located, or the failure to be so authorized does not materially and adversely affect the enforceability of such Mortgage Loan by the issuing entity.
23. Trustee under Deed of Trust. With respect to each Mortgage which is a deed of trust, as of the date of origination and, to the Mortgage Loan Seller’s knowledge, as of the Closing Date, a trustee, duly qualified under applicable law to serve as such, currently so serves and is named in the deed of trust or has been substituted in accordance with the Mortgage and applicable law or may be substituted in accordance with the Mortgage and applicable law by the related mortgagee.
24. Local Law Compliance. To the Mortgage Loan Seller’s knowledge, based upon any of a letter from any governmental authorities, a legal opinion, an architect’s letter, a zoning consultant’s report, an endorsement to the related Title Policy, or other affirmative investigation of local law compliance consistent with the investigation conducted by the Mortgage Loan Seller for similar commercial, multifamily or, if applicable, manufactured housing community mortgage loans intended for securitization, with respect to the improvements located on or forming part of each Mortgaged Property securing a Mortgage Loan as of the date of origination of such Mortgage Loan and as of the Cut-off Date, there are no material violations of applicable zoning ordinances, building codes and land laws (collectively “Zoning Regulations”) other than those which (i) constitute a legal non-conforming use or structure, as to which as the Mortgaged Property may be restored or repaired to the full extent necessary to maintain the use of the structure immediately prior to a casualty or the inability to restore or repair to the full extent necessary to maintain the use or structure immediately prior to the casualty would not materially and adversely affect the use or operation of the Mortgaged Property, (ii) are insured by the Title Policy or other insurance policy, (iii) are insured by law and ordinance insurance coverage in amounts customarily required by the Mortgage Loan Seller for loans originated for securitization that provides coverage for additional costs to rebuild and/or repair the property to current Zoning Regulations or (iv) would not have a material adverse effect on the Mortgage Loan. The terms of the Mortgage Loan documents require the borrower to comply in all material respects with all applicable governmental regulations, zoning and building laws.
25. Licenses and Permits. Each borrower covenants in the Mortgage Loan documents that it will keep all material licenses, permits and applicable governmental authorizations necessary for its operation of the Mortgaged Property in full force and effect, and to the Mortgage Loan Seller’s knowledge based upon a letter from any government authorities, zoning consultant’s report or other affirmative investigation of local law compliance consistent with the investigation conducted by the Mortgage Loan Seller for similar commercial, multifamily or, if applicable, manufactured housing community mortgage loans intended for securitization, all such material licenses, permits and applicable governmental authorizations are in effect. The Mortgage Loan requires the related borrower to be qualified to do business in the jurisdiction in which the related Mortgaged Property is located.
26. Recourse Obligations. The Mortgage Loan documents for each Mortgage Loan provide that (a) the related borrower and at least one individual or entity will be fully liable for actual losses, liabilities, costs and damages arising from certain acts of the related borrower and/or its principals specified in the related Mortgage Loan documents, which acts generally include the following: (i) acts of fraud or intentional material misrepresentation, (ii) misapplication or misappropriation of rents (if after an event of default under the Mortgage Loan), insurance proceeds or condemnation awards, (iii) intentional material physical waste of the Mortgaged Property (but, in some cases, only to the extent there is sufficient cash flow generated by the related Mortgaged Property to prevent such waste), and (iv) any breach of the environmental covenants contained in the related Mortgage Loan documents, and (b) the Mortgage Loan will become full recourse to the related borrower and at least one individual or entity, if the related borrower files a voluntary petition under federal or state bankruptcy or insolvency law.
27. Mortgage Releases. The terms of the related Mortgage or related Mortgage Loan documents do not provide for release of any material portion of the Mortgaged Property from the lien of the Mortgage except (a) a partial release, accompanied by principal repayment, or partial Defeasance (as defined in paragraph (32)), in each case, of not less than a specified percentage at least equal to the lesser of (i)
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110% of the related allocated loan amount of such portion of the Mortgaged Property and (ii) the outstanding principal balance of the Mortgage Loan, (b) upon payment in full of such Mortgage Loan, (c) upon a Defeasance (as defined in paragraph (32)), (d) releases of out-parcels that are unimproved or other portions of the Mortgaged Property which will not have a material adverse effect on the underwritten value of the Mortgaged Property and which were not afforded any material value in the appraisal obtained at the origination of the Mortgage Loan and are not necessary for physical access to the Mortgaged Property or compliance with zoning requirements, or (e) as required pursuant to an order of condemnation or taking by a State or any political subdivision or authority thereof. With respect to any partial release (including in connection with any partial Defeasance) under the preceding clauses (a) or (d), either: (x) such release of collateral (i) would not constitute a “significant modification” of the subject Mortgage Loan within the meaning of Section 1.860G-2(b)(2) of the Treasury Regulations and (ii) would not cause the subject Mortgage Loan to fail to be a “qualified mortgage” within the meaning of Code Section 860G(a)(3)(A); or (y) the mortgagee or servicer can, in accordance with the related Mortgage Loan documents, condition such release of collateral on the related borrower’s delivery of an opinion of tax counsel to the effect specified in the immediately preceding clause (x). For purposes of the preceding clause (x), if the fair market value of the real property constituting such Mortgaged Property (reduced by (1) the amount of any lien on the real property that is senior to the Mortgage Loan and (2) a proportionate amount of any lien on the real property that is in parity with the Mortgage Loan) after the release is not equal to at least 80% of the principal balance of the Mortgage Loan (or Whole Loan, as applicable) outstanding after the release, the borrower is required to make a payment of principal in an amount not less than the amount required by the REMIC Provisions.
In the case of any Mortgage Loan, in the event of a condemnation or taking of any portion of a Mortgaged Property by a State or any political subdivision or authority thereof, whether by legal proceeding or by agreement, the borrower can be required to pay down the principal balance of the Mortgage Loan in an amount not less than the amount required by the REMIC Provisions and, to such extent, condemnation proceeds may not be required to be applied to the restoration of the Mortgaged Property or released to the borrower, if, immediately after the release of such portion of the Mortgaged Property from the lien of the Mortgage (but taking into account the planned restoration) the fair market value of the real property constituting the remaining Mortgaged Property (reduced by (1) the amount of any lien on the real property that is senior to the Mortgage Loan and (2) a proportionate amount of any lien on the real property that is in parity with the Mortgage Loan) is not equal to at least 80% of the remaining principal balance of the Mortgage Loan (or Whole Loan, as applicable).
No Mortgage Loan that is secured by more than one Mortgaged Property or that is a Crossed Mortgage Loan permits the release of cross-collateralization of the related Mortgaged Properties or a portion thereof, including due to a partial condemnation, other than in compliance with the loan-to-value ratio and other requirements of the REMIC Provisions.
28. Financial Reporting and Rent Rolls. Each Mortgage Loan requires the borrower to provide the owner or holder of the Mortgage with quarterly (other than for single-tenant properties) and annual operating statements, and quarterly (other than for single-tenant properties) rent rolls for properties that have leases contributing more than 5% of the in-place base rent and annual financial statements.
29. Acts of Terrorism Exclusion. With respect to each Mortgage Loan over $20 million, the related special-form all-risk insurance policy and business interruption policy (issued by an insurer meeting the Insurance Rating Requirements) do not specifically exclude Acts of Terrorism, as defined in the Terrorism Risk Insurance Act of 2002, as amended by the Terrorism Risk Insurance Program Reauthorization Act of 2019 (collectively referred to as “TRIA”), from coverage, or if such coverage is excluded, it is covered by a separate terrorism insurance policy. With respect to each other Mortgage Loan, the related special-form all-risk insurance policy and business interruption policy (issued by an insurer meeting the Insurance Rating Requirements) did not, as of the date of origination of the Mortgage Loan, and, to the Mortgage Loan Seller’s knowledge, do not, as of the Cut-off Date, specifically exclude Acts of Terrorism, as defined in TRIA, from coverage, or if such coverage is excluded, it is covered by a separate terrorism insurance policy. With respect to each Mortgage Loan, the related Mortgage Loan documents do not expressly waive or prohibit the mortgagee from requiring coverage for Acts of Terrorism, as defined in TRIA, or
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damages related thereto except to the extent that any right to require such coverage may be limited by commercial availability on commercially reasonable terms, or as otherwise indicated in Annex D-2 or Annex D-3, as applicable; provided, however, that if TRIA or a similar or subsequent statute is not in effect, then, provided that terrorism insurance is commercially available, the borrower under each Mortgage Loan is required to carry terrorism insurance, but in such event the borrower will not be required to spend on terrorism insurance coverage more than two times the amount of the insurance premium that is payable in respect of the property and business interruption/rental loss insurance required under the related Mortgage Loan documents (without giving effect to the cost of terrorism and earthquake components of such casualty and business interruption/rental loss insurance) at such time, and if the cost of terrorism insurance exceeds such amount, the borrower is required to purchase the maximum amount of terrorism insurance available with funds equal to such amount.
30. Due on Sale or Encumbrance. Subject to specific exceptions set forth below, each Mortgage Loan contains a “due on sale” or other such provision for the acceleration of the payment of the unpaid principal balance of such Mortgage Loan if, without the consent of the holder of the Mortgage (which consent, in some cases, may not be unreasonably withheld) and/or complying with the requirements of the related Mortgage Loan documents (which provide for transfers without the consent of the lender which are customarily acceptable to the Mortgage Loan Seller lending on the security of property comparable to the related Mortgaged Property, including, without limitation, transfers of worn-out or obsolete furnishings, fixtures, or equipment promptly replaced with property of equivalent value and functionality and transfers by leases entered into in accordance with the Mortgage Loan documents), (a) the related Mortgaged Property, or any equity interest of greater than 50% in the related borrower, is directly or indirectly pledged, transferred or sold (in each case, a “Transfer”), other than as related to (i) family and estate planning Transfers or Transfers upon death or legal incapacity, (ii) Transfers to certain affiliates as defined in the related Mortgage Loan documents, (iii) Transfers of less than, or other than, a controlling interest in the related borrower, (iv) Transfers to another holder of direct or indirect equity in the borrower, a specific Person designated in the related Mortgage Loan documents or a Person satisfying specific criteria identified in the related Mortgage Loan documents, such as a qualified equityholder, (v) Transfers of stock or similar equity units in publicly traded companies, (vi) a substitution or release of collateral within the parameters of paragraphs (27) and (32) in this Annex D-1 or the exceptions thereto set forth in Annex D-2 or Annex D-3, or (vii) by reason of any mezzanine debt that existed at the origination of the related Mortgage Loan as set forth on Schedule D-1 to Annex D-1, or future permitted mezzanine debt in each case as set forth on Schedule D-2 to Annex D-1 or (b) the related Mortgaged Property is encumbered with a subordinate lien or security interest against the related Mortgaged Property, other than (i) any Companion Loan or any subordinate debt that existed at origination and is permitted under the related Mortgage Loan documents, (ii) purchase money security interests, (iii) any Crossed Mortgage Loan as set forth on Schedule D-3 to Annex D-1 or (iv) Permitted Encumbrances. The Mortgage or other Mortgage Loan documents provide that to the extent any Rating Agency fees are incurred in connection with the review of and consent to any transfer or encumbrance, the borrower is responsible for such payment along with all other reasonable fees and expenses incurred by the Mortgagee relative to such transfer or encumbrance.
31. Single-Purpose Entity. Each Mortgage Loan requires the borrower to be a Single-Purpose Entity for at least as long as the Mortgage Loan is outstanding. Both the Mortgage Loan documents and the organizational documents of the borrower with respect to each Mortgage Loan with a Cut-off Date Stated Principal Balance in excess of $5 million provide that the borrower is a Single-Purpose Entity, and each Mortgage Loan with a Cut-off Date Stated Principal Balance of $20 million or more has a counsel’s opinion regarding non-consolidation of the borrower. For this purpose, a “Single-Purpose Entity” means an entity, other than an individual, whose organizational documents (or if the Mortgage Loan has a Cut-off Date Stated Principal Balance equal to $5 million or less, its organizational documents or the related Mortgage Loan documents) provide substantially to the effect that it was formed or organized solely for the purpose of owning and operating one or more of the Mortgaged Properties securing the Mortgage Loans and prohibit it from engaging in any business unrelated to such Mortgaged Property or Properties, and whose organizational documents further provide, or which entity represented in the related Mortgage Loan documents, substantially to the effect that it does not have any assets other than those related to its interest in and operation of such Mortgaged Property or Properties, or any indebtedness other than as
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permitted by the related Mortgage(s) or the other related Mortgage Loan documents, that it has its own books and records and accounts separate and apart from those of any other person (other than a borrower for a Crossed Mortgage Loan), and that it holds itself out as a legal entity, separate and apart from any other person or entity.
32. Defeasance. With respect to any Mortgage Loan that, pursuant to the Mortgage Loan documents, can be defeased (a “Defeasance”), (i) the Mortgage Loan documents provide for Defeasance as a unilateral right of the borrower, subject to satisfaction of conditions specified in the Mortgage Loan documents; (ii) the Mortgage Loan cannot be defeased within two years after the Closing Date; (iii) the borrower is permitted to pledge only United States “government securities” within the meaning of Section 1.860G-2(a)(8)(ii) of the Treasury Regulations, the revenues from which will, in the case of a full Defeasance, be sufficient to make all scheduled payments under the Mortgage Loan when due, including the entire remaining principal balance on the maturity date (or on or after the first date on which payment may be made without payment of a yield maintenance charge or prepayment penalty) or, if the Mortgage Loan is an ARD Loan, the entire principal balance outstanding on the Anticipated Repayment Date (or on or after the first date on which payment may be made without payment of a yield maintenance charge or prepayment penalty), and if the Mortgage Loan permits partial releases of real property in connection with partial Defeasance, the revenues from the collateral will be sufficient to pay all such scheduled payments calculated on a principal amount equal to a specified percentage at least equal to the lesser of (a) 110% of the allocated loan amount for the real property to be released and (b) the outstanding principal balance of the Mortgage Loan; (iv) the borrower is required to provide a certification from an independent certified public accountant that the collateral is sufficient to make all scheduled payments under the Mortgage Note as set forth in clause (iii) above; (v) if the borrower would continue to own assets in addition to the defeasance collateral, the portion of the Mortgage Loan secured by defeasance collateral is required to be assumed (or the mortgagee may require such assumption) by a Single-Purpose Entity; (vi) the Borrower is required to provide an opinion of counsel that the mortgagee has a perfected security interest in such collateral prior to any other claim or interest; and (vii) the borrower is required to pay all rating agency fees associated with Defeasance (if rating confirmation is a specific condition precedent thereto) and all other reasonable expenses associated with Defeasance, including, but not limited to, accountant’s fees and opinions of counsel.
33. Fixed Interest Rates. Each Mortgage Loan bears interest at a rate that remains fixed throughout the remaining term of such Mortgage Loan, except in the case of any ARD Loan and situations where default interest is imposed.
34. Ground Leases. For purposes of this Annex D-1, a “Ground Lease” will mean a lease creating a leasehold estate in real property where the fee owner as the ground lessor conveys for a term or terms of years its entire interest in the land, or with respect to air rights leases, the air, and buildings and other improvements, if any, comprising the premises demised under such lease to the ground lessee (who may, in certain circumstances, own the building and improvements on the land), subject to the reversionary interest of the ground lessor as fee owner and does not include industrial development agency (IDA) or similar leases for purposes of conferring a tax abatement or other benefit.
With respect to any Mortgage Loan where the Mortgage Loan is secured by a leasehold estate under a Ground Lease in whole or in part, and the related Mortgage does not also encumber the related lessor’s fee interest in such Mortgaged Property, based upon the terms of the Ground Lease and any estoppel or other agreement received from the ground lessor in favor of the Mortgage Loan Seller, its successors and assigns, the Mortgage Loan Seller represents and warrants that:
(a) The Ground Lease or a memorandum regarding such Ground Lease has been duly recorded or submitted for recordation in a form that is acceptable for recording in the applicable jurisdiction. The Ground Lease or an estoppel or other agreement received from the ground lessor permits the interest of the lessee to be encumbered by the related Mortgage and does not restrict the use of the related Mortgaged Property by such lessee, its successors or assigns in a manner that would materially adversely affect the security provided by the related Mortgage;
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(b) The lessor under such Ground Lease has agreed in a writing included in the related Mortgage File (or in such Ground Lease) that the Ground Lease may not be amended or modified, or canceled or terminated by agreement of lessor and lessee, without the prior written consent of the lender, and no such consent has been granted by the Mortgage Loan Seller since the origination of the Mortgage Loan except as reflected in any written instruments which are included in the related Mortgage File;
(c) The Ground Lease has an original term (or an original term plus one or more optional renewal terms, which, under all circumstances, may be exercised, and will be enforceable, by either borrower or the mortgagee) that extends not less than 20 years beyond the stated maturity of the related Mortgage Loan, or 10 years past the stated maturity if such Mortgage Loan fully amortizes by the stated maturity (or with respect to a Mortgage Loan that accrues on an actual 360 basis, substantially amortizes);
(d) The Ground Lease either (i) is not subject to any liens or encumbrances superior to, or of equal priority with, the Mortgage, except for the related fee interest of the ground lessor and the Permitted Encumbrances, or (ii) is subject to a subordination, non-disturbance and attornment agreement to which the mortgagee on the lessor’s fee interest in the Mortgaged Property is subject;
(e) The Ground Lease does not place commercially unreasonable restrictions on the identity of the Mortgagee and the Ground Lease is assignable to the holder of the Mortgage Loan and its successors and assigns without the consent of the lessor thereunder, and in the event it is so assigned, it is further assignable by the holder of the Mortgage Loan and its successors and assigns without the consent of the lessor;
(f) The Mortgage Loan Seller has not received any written notice of material default under or notice of termination of such Ground Lease. To the Mortgage Loan Seller’s knowledge, there is no material default under such Ground Lease and no condition that, but for the passage of time or giving of notice, would result in a material default under the terms of such Ground Lease and to the Mortgage Loan Seller’s knowledge, such Ground Lease is in full force and effect as of the Closing Date;
(g) The Ground Lease or ancillary agreement between the lessor and the lessee requires the lessor to give to the lender written notice of any default, and provides that no notice of default or termination is effective against the lender unless such notice is given to the lender;
(h) A lender is permitted a reasonable opportunity (including, where necessary, sufficient time to gain possession of the interest of the lessee under the Ground Lease through legal proceedings) to cure any default under the Ground Lease which is curable after the lender’s receipt of notice of any default before the lessor may terminate the Ground Lease;
(i) The Ground Lease does not impose any restrictions on subletting that would be viewed as commercially unreasonable by the Mortgage Loan Seller in connection with loans originated for securitization;
(j) Under the terms of the Ground Lease, an estoppel or other agreement received from the ground lessor and the related Mortgage (taken together), any related insurance proceeds or the portion of the condemnation award allocable to the ground lessee’s interest (other than (i) de minimis amounts for minor casualties or (ii) in respect of a total or substantially total loss or taking as addressed in clause (k) below) will be applied either to the repair or to restoration of all or part of the related Mortgaged Property with (so long as such proceeds are in excess of the threshold amount specified in the related Mortgage Loan documents) the lender or a trustee appointed by it having the right to hold and disburse such proceeds as repair or restoration progresses, or to the payment of the outstanding principal balance of the Mortgage Loan, together with any accrued interest;
(k) In the case of a total or substantially total taking or loss, under the terms of the Ground Lease, an estoppel or other agreement and the related Mortgage (taken together), any related
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insurance proceeds, or portion of the condemnation award allocable to ground lessee’s interest in respect of a total or substantially total loss or taking of the related Mortgaged Property to the extent not applied to restoration, will be applied first to the payment of the outstanding principal balance of the Mortgage Loan, together with any accrued interest; and
(l) Provided that the lender cures any defaults which are susceptible to being cured, the ground lessor has agreed to enter into a new lease with lender upon termination of the Ground Lease for any reason, including rejection of the Ground Lease in a bankruptcy proceeding.
35. Servicing. The servicing and collection practices used by the Mortgage Loan Seller with respect to the Mortgage Loan have been, in all respects, legal and have met customary industry standards for servicing of commercial loans for conduit loan programs.
36. Origination and Underwriting. The origination practices of the Mortgage Loan Seller (or the related originator if the Mortgage Loan Seller was not the originator) with respect to each Mortgage Loan have been, in all material respects, legal and as of the date of its origination, such Mortgage Loan and the origination thereof complied in all material respects with, or was exempt from, all requirements of federal, state or local law relating to the origination of such Mortgage Loan; provided that such representation and warranty does not address or otherwise cover any matters with respect to federal, state or local law otherwise covered in this Annex D-1.
37. No Material Default; Payment Record. No Mortgage Loan has been more than 30 days delinquent, without giving effect to any grace or cure period, in making required payments since origination, and no Mortgage Loan is more than 30 days delinquent (beyond any applicable grace or cure period) in making required payments as of the Closing Date. To the Mortgage Loan Seller’s knowledge, there is (a) no material default, breach, violation or event of acceleration existing under the related Mortgage Loan, or (b) no event (other than payments due but not yet delinquent) which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a material default, breach, violation or event of acceleration, which default, breach, violation or event of acceleration, in the case of either clause (a) or clause (b), materially and adversely affects the value of the Mortgage Loan or the value, use or operation of the related Mortgaged Property, provided, however, that this representation and warranty does not cover any default, breach, violation or event of acceleration that specifically pertains to or arises out of an exception scheduled to any other representation and warranty made by the Mortgage Loan Seller in this Annex D-1. No person other than the holder of such Mortgage Loan may declare any event of default under the Mortgage Loan or accelerate any indebtedness under the Mortgage Loan documents.
38. Bankruptcy. As of the date of origination of the related Mortgage Loan and to the Mortgage Loan Seller’s knowledge as of the Cut-off Date, no borrower, guarantor or tenant occupying a single-tenant property is a debtor in state or federal bankruptcy, insolvency or similar proceeding.
39. Organization of Borrower. With respect to each Mortgage Loan, in reliance on certified copies of the organizational documents of the borrower delivered by the borrower in connection with the origination of such Mortgage Loan, the borrower is an entity organized under the laws of a state of the United States of America, the District of Columbia or the Commonwealth of Puerto Rico. Except with respect to any Crossed Mortgage Loan, no Mortgage Loan has a borrower that is an Affiliate of another borrower under another Mortgage Loan. (An “Affiliate” for purposes of this paragraph (39) means, a borrower that is under direct or indirect common ownership and control with another borrower.)
40. Environmental Conditions. A Phase I environmental site assessment (or update of a previous Phase I and or Phase II site assessment) and, with respect to certain Mortgage Loans, a Phase II environmental site assessment (collectively, an “ESA”) meeting ASTM requirements conducted by a reputable environmental consultant in connection with such Mortgage Loan within 12 months prior to its origination date (or an update of a previous ESA was prepared), and such ESA either (i) did not identify the existence of recognized environmental conditions (as such term is defined in ASTM E1527-13 or its successor, hereinafter “Environmental Condition”) at the related Mortgaged Property or the need for further investigation with respect to any Environmental Condition that was identified, or (ii) if the existence
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of an Environmental Condition or need for further investigation was indicated in any such ESA, then at least one of the following statements is true: (A) an amount reasonably estimated by a reputable environmental consultant to be sufficient to cover the estimated cost to cure any material noncompliance with applicable environmental laws or the Environmental Condition has been escrowed by the related borrower and is held or controlled by the related lender; (B) if the only Environmental Condition relates to the presence of asbestos-containing materials, radon in indoor air, lead based paint or lead in drinking water, and the only recommended action in the ESA is the institution of such a plan, an operations or maintenance plan has been required to be instituted by the related borrower that can reasonably be expected to mitigate the identified risk; (C) the Environmental Condition identified in the related environmental report was remediated or abated in all material respects prior to the Cut-Off Date, and, if and as appropriate, a no further action or closure letter was obtained from the applicable governmental regulatory authority (or the Environmental Condition affecting the related Mortgaged Property was otherwise listed by such governmental authority as “closed” or a reputable environmental consultant has concluded that no further action is required); (D) a secured creditor environmental policy or a pollution legal liability insurance policy that covers liability for the Environmental Condition was obtained from an insurer rated no less than A- (or the equivalent) by Moody’s, S&P and/or Fitch; (E) a party not related to the borrower was identified as the responsible party for such Environmental Condition and such responsible party has financial resources reasonably estimated to be adequate to address the situation; or (F) a party related to the borrower having financial resources reasonably estimated to be adequate to address the situation is required to take action. To the Mortgage Loan Seller’s knowledge, except as set forth in the ESA, there is no Environmental Condition (as such term is defined in ASTM E1527-13 or its successor) at the related Mortgaged Property.
41. Appraisal. The Servicing File contains an appraisal of the related Mortgaged Property with an appraisal date within 6 months of the Mortgage Loan origination date, and within 12 months of the Closing Date. The appraisal is signed by an appraiser who is either a Member of the Appraisal Institute (“MAI”) and/or has been licensed and certified to prepare appraisals in the state where the Mortgaged Property is located. Each appraiser has represented in such appraisal or in a supplemental letter that the appraisal satisfies the requirements of the “Uniform Standards of Professional Appraisal Practice” as adopted by the Appraisal Standards Board of the Appraisal Foundation and has certified that such appraiser had no interest, direct or indirect, in the Mortgaged Property or the borrower or in any loan made on the security thereof, and its compensation is not affected by the approval or disapproval of the Mortgage Loan.
42. Mortgage Loan Schedule. The information pertaining to each Mortgage Loan which is set forth in the mortgage loan schedule attached as an exhibit to the related Mortgage Loan Purchase Agreement is true and correct in all material respects as of the Cut-off Date and contains all information required by the Mortgage Loan Purchase Agreement to be contained therein.
43. Cross-Collateralization. No Mortgage Loan is cross-collateralized or cross-defaulted with any mortgage loan that is outside the issuing entity, except as set forth on Schedule D-3 to Annex D-1.
44. Hospitality Provisions. The Mortgage Loan documents for each Mortgage Loan that is secured by a hospitality property operated pursuant to a franchise or license agreement includes an executed comfort letter or similar agreement signed by the related borrower and franchisor or licensor of such property that, subject to the applicable terms of such franchise or license agreement and comfort letter or similar agreement, is enforceable by the issuing entity (or, in the case of a Non-Serviced Mortgage Loan, by the related Non-Serviced Trustee) against such franchisor or licensor either (A) directly or as an assignee of the originator, or (B) upon the Mortgage Loan Seller’s or its designee’s providing notice of the transfer of the Mortgage Loan to the Trust (or, in the case of a Non-Serviced Mortgage Loan, by the seller of the note which is contributed to the related Non-Serviced Securitization Trust or its designee providing notice of the transfer of such note to the related Non-Serviced Securitization Trust) in accordance with the terms of such executed comfort letter or similar agreement, which the Mortgage Loan Seller or its designee (except in the case of a Non-Serviced Mortgage Loan) will provide, or if neither (A) nor (B) is applicable, except in the case of a Non-Serviced Mortgage Loan, the Mortgage Loan Seller or its designee will apply for, on the issuing entity’s behalf, a new comfort letter or similar agreement as of the
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Closing Date. The mortgage or related security agreement for each Mortgage Loan secured by a hospitality property creates a security interest in the revenues of such property for which a UCC financing statement has been filed in the appropriate filing office. For the avoidance of doubt, no representation is made as to the perfection of any security interest in revenues to the extent that possession or control of such items or actions other than the filing of Uniform Commercial Code financing statements is required to effect such perfection.
45. Advance of Funds by the Mortgage Loan Seller. After origination, no advance of funds has been made by the Mortgage Loan Seller to the related borrower other than in accordance with the Mortgage Loan documents, and, to the Mortgage Loan Seller’s knowledge, no funds have been received from any person other than the related borrower or an affiliate for, or on account of, payments due on the Mortgage Loan (other than as contemplated by the Mortgage Loan documents, such as, by way of example and not in limitation of the foregoing, amounts paid by the tenant(s) into a lender-controlled lockbox if required or contemplated under the related lease or Mortgage Loan documents). Neither the Mortgage Loan Seller nor any affiliate thereof has any obligation to make any capital contribution to any borrower under a Mortgage Loan, other than contributions made on or prior to the Closing Date.
46. Compliance with Anti-Money Laundering Laws. The Mortgage Loan Seller has complied in all material respects with all applicable anti-money laundering laws and regulations, including without limitation the USA Patriot Act of 2001 with respect to the origination of the Mortgage Loan, the failure to comply with which would have a material adverse effect on the Mortgage Loan.
For purposes of these representations and warranties, the phrases “the Mortgage Loan Seller’s knowledge” or “the Mortgage Loan Seller’s belief” and other words and phrases of like import mean, except where otherwise expressly set forth in these representations and warranties, the actual state of knowledge or belief of the Mortgage Loan Seller, its officers and employees directly responsible for the underwriting, origination, servicing or sale of the Mortgage Loans regarding the matters expressly set forth in these representations and warranties.
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ANNEX D-2
EXCEPTIONS TO GACC MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES
| Annex A-1 ID# | Mortgage Loans | Representations | Exceptions |
| 4 | Romaine & Orange Square | (5) Lien; Valid Assignment
(6) Permitted Liens; Title Insurance |
The largest tenant, Kaiser Foundation Health Plan, Inc., has a right of first refusal to purchase the related Mortgaged Property if the landlord offers to sell or lease the Mortgaged Property. Pursuant to a subordination, non-disturbance and attornment agreement, such right will not be exercisable in connection with an exercise of remedies by the lender, including a purchase of the Mortgaged Property at a foreclosure sale, a transfer of the Mortgaged Property to the lender or its designee pursuant to a deed-in-lieu of foreclosure or any subsequent sale of the Mortgaged Property by the lender or its designee after such foreclosure or deed-in-lieu of foreclosure. However, such right will apply to subsequent transfers. |
| 14 | Prospector Plaza | (5) Lien; Valid Assignment
(6) Permitted Liens; Title Insurance |
The tenant Save Mart Supermarkets has a right of first refusal to purchase or lease any portion of the Mortgaged Property if the landlord offers to sell or lease that portion of the Mortgaged Property for the operation of a gas station. |
| 30 | 1201 Main | (5) Lien; Valid Assignment
(6) Permitted Liens; Title Insurance |
The tenant at the commercial space at the Mortgaged Property has a right of first refusal to purchase the commercial unit at the Mortgaged Property, but only in the event the landlord converts the Mortgaged Property into a condominium regime. |
| 15 | Novo Nordisk HQ | (7) Junior Liens | In connection with the sale of the Mortgaged Property to the related Borrower, such Borrower’s sole member (the “Sole Member”) entered into an earnout agreement (the “Novo Earnout Agreement”) with the prior owner of the Mortgaged Property (the “Novo Seller”) whereby the Sole Member agreed to make a payment to the Novo Seller if the tenant at the Mortgaged Property ever exercised all or a portion of its remaining expansion option under its lease (the “Novo Earnout Obligation”). The Novo Earnout Obligation is secured by a pledge of the Sole Member’s 100% ownership interest in the Borrower pursuant to a pledge agreement (the “Novo Earnout Pledge Agreement”). At origination, (i) the lender under the Mortgage Loan funded a reserve (the “Seller Credit Reserve”) equal to the Novo Earnout Obligation, which amount is required to be released to the Novo Seller, provided no event of default is continuing under the loan documents, as and when such amounts are due and payable under the Novo Earnout Agreement and (ii) the lender under the Mortgage Loan entered into a recognition agreement with the Novo Seller whereby the lender agreed, among other things, (w) to send all notices under the loan documents to the Novo Seller, (x) to allow the Novo Seller to foreclose on the pledge and take over the Borrower so long as a preapproved control party will own/control such Borrower after foreclosure and so long as the permitted transfer provisions of the loan agreement and recognition agreement are satisfied, (y) to allow the Novo Seller to purchase the Mortgage Loan upon notice to the Novo Seller that an event of default under the Mortgage Loan is continuing (for payment of the full outstanding amount of the debt, including all default interest, fees and expenses) and (z) to accept payment of the monthly interest payment or any other payment obligation by the Novo Seller (as and when such payment is due and payable by the borrower) but no more than two times during the term of the Mortgage Loan. |
| 33 | STK Chicago | (10) Condition of Property | The originator of the Mortgage Loan inspected or caused to be inspected the STK Chicago property more than 12 months before the Cut-off Date.
An engineering report or property condition assessment was prepared in connection with the origination of the Mortgage Loan more than 12 months prior to the Cut-off Date. |
| 1 | 601 Lexington Avenue | (16) Insurance | The Mortgage Loan documents permit a property insurance deductible up to $250,000. |
D-2-1
| Annex A-1 ID# | Mortgage Loans | Representations | Exceptions |
| 15 | Novo Nordisk HQ | (16) Insurance | The Borrower may rely on self-insurance provided by the sole tenant, Novo Nordisk, Inc., in lieu of the insurance policies otherwise required under the Mortgage Loan documents, to the extent that the tenant or any lease guarantor of the tenant maintains a rating of “A-“ or better by S&P.
In addition, pursuant to a subordination, non-disturbance and attornment agreement with Novo Nordisk, Inc., the lender has agreed that in the event of a casualty to the Mortgaged Property, provided certain conditions are satisfied, including no event of default by the tenant that could have been cured by the payment of money, no bankruptcy proceeding of the Borrower or the tenant, and neither the landlord nor tenant has exercised a right to terminate the lease, insurance proceeds will be made available for the restoration of the Mortgaged Property, provided that the lender, the Borrower and the tenant have agreed upon commercially reasonable disbursement procedures (which the parties have agreed to negotiate in good faith). Accordingly, it is possible that the insurance proceeds will not be held and disbursed by the lender (or a trustee appointed by it). |
| 14 | Prospector Plaza | (16) Insurance | With respect to the premises leased by Save Mart Supermarkets (“Save Mart”), the Borrower’s obligation to provide required insurance is suspended so long as, among other conditions, Save Mart maintains the insurance required under its lease and such insurance complies with the insurance requirements under the loan documents, other than the requirement for business interruption insurance (which is required to be maintained by the Borrower), or is otherwise acceptable to the lender. The lender acknowledged in the Mortgage Loan documents that the insurance maintained by Save Mart as of the origination date (other than business interruption insurance, which is required to be maintained by the Borrower) was acceptable to the lender. As of the origination date, Save Mart’s property insurance had a deductible of $500,000. |
| 33 | STK Chicago | (16) Insurance | The Mortgaged Property constitutes a condominium unit in a condominium. The general liability insurance policy held by the related condominium association on the common elements of the condominium does not name the lender under the Mortgage Loan and its successors and assigns (the “Lender”) as an additional insured. The Lender is named as an additional insured on the general liability insurance policy covering the portion of the collateral that is the unit in the condominium, but not the common areas in the condominium. |
| 1 | 601 Lexington Avenue | (26) Recourse Obligations | There is no non-recourse carveout guarantor or separate environmental indemnitor with respect to the Mortgage Loan or related Whole Loan. |
| 15 | Novo Nordisk HQ | (26) Recourse Obligations | There is no non-recourse carveout guarantor or separate environmental indemnitor with respect to the Mortgage Loan or related Whole Loan. |
| Various | All GACC Mortgage Loans | (26) Recourse Obligations | In most cases, the Mortgage Loans being sold by German American Capital Corporation do not provide for recourse for misapplication of rents, insurance proceeds or condemnation awards. |
D-2-2
| Annex A-1 ID# | Mortgage Loans | Representations | Exceptions |
| 1 | 601 Lexington Avenue | (29) Acts of Terrorism Exclusion | Terrorism insurance may be maintained by the Borrower with a nonrated captive insurance company owned by Boston Properties Limited Partnership (or any affiliate thereof), subject to certain conditions set forth in the Mortgage Loan documents, including but not limited to (A) TRIPRA is in full force and effect; (B) the terrorism policy issued by such captive insurer, together with any other qualified terrorism policies in-place, provide per occurrence limit in an amount not less than replacement cost and rent loss coverage as otherwise required; (C) covered losses that are not reinsured by the federal government under TRIPRA and paid to the captive insurer will be reinsured with a cut-through endorsement by an insurance company rated S&P “A”/ Moody’s “A2” or better or such higher rating as the rating agency may require not to exceed S&P “A+”/ Moody’s “A1”; (D) all reinsurance agreements between the captive insurer and other reinsurance providers are reasonably acceptable to lender; and (E) such captive insurer is licensed in the State of Vermont or other jurisdiction to the extent reasonably approved by lender and qualified to issue the terrorism policy in accordance with applicable legal requirements. |
| Various | All GACC Mortgage Loans | (29) Acts of Terrorism Exclusion | All exceptions to Representation 16 are also exceptions to this Representation 29. |
| 1 | 601 Lexington Avenue | (30) Due on Sale or Encumbrance | The Mortgage Loan documents permit, without the lender’s consent, (i) transfers of direct or indirect interests in the Borrower, provided that after giving effect to any such transfer, (A) Boston Properties Limited Partnership (“BPLP”) and/or Norges Bank Investment Management (“Norges”) will, directly or indirectly, own at least twenty percent of the interests in the Borrower; and (B) BPLP and/or Norges will, directly or indirectly, retain the day-to-day management and operational control rights over the Borrower (subject to customary major decision consent rights of certain indirect owners of the Borrower); (ii) a merger, consolidation, sale of all or substantially all assets, or similar transactions as to BPLP and/or Boston Properties, Inc.(“BPI”) resulting in BPLP and/or BPI, as applicable, not being the surviving entity and (iii) conversion of equity interests in any entity holding an interest in the Borrower into equity interests of a publicly traded entity, in which event such equity interests are freely transferable so long as listed on the New York Stock Exchange or another publicly traded stock exchange. |
| 1 | 601 Lexington Avenue | (31) Single Purpose Entity | The Borrower has an obligation to purchase the ground leased portion of the Mortgaged Property for a purchase price of $23,284,421 on April 30, 2036. In addition, upon the condemnation or taking of any portion of the ground leased portion of the Mortgaged Property, the Borrower is required to purchase the ground leased portion of the Mortgaged Property at the foregoing purchase price discounted to the date of the condemnation or taking at a discount rate of 6%. |
| 14 | Prospector Plaza | (31) Single Purpose Entity | Immediately prior to the origination of the Mortgage Loan, the Borrower owned additional real property that is not a part of the Mortgaged Property. In addition, the Mortgage Loan is in excess of $20,000,000 and a non-consolidation opinion has not been obtained. |
| 33 | STK Chicago | (32) Defeasance | The Mortgage Loan may be defeased after August 27, 2023, which is less than two years after the Closing Date but is two years after the startup day of the related loan REMIC. |
D-2-3
| Annex A-1 ID# | Mortgage Loans | Representations | Exceptions |
| 1 | 601 Lexington Avenue | (34) Ground Leases | The Mortgaged Property includes the Borrower’s leasehold interest in an approximately 18,038 square foot portion of a condominium unit owned by Saint Peter’s Lutheran Church of Manhattan (“Saint Peter’s”) pursuant to a ground lease between Saint Peter’s and the Borrower (the “Saint Peter’s Ground Lease”).
Representation 34(b): The Saint Peter’s Ground Lease may be amended/modified without the Leasehold Mortgagee’s (as defined below) prior consent but any modification or amendment of the Saint Peter’s Ground Lease will not be binding on the Leasehold Mortgagee without the Leasehold Mortgagee’s prior written consent.
Representation 34(c): The Saint Peter’s Ground Lease expires April 30, 2036, which is less than 20 years following the maturity date of the Mortgage Loan. The Borrower is required to purchase the ground leased portion of the Mortgaged Property from Saint Peter’s as described in the exception to Representation 31 with respect to the 601 Lexington Avenue Mortgage Loan.
Representation 34(e): A Mortgage on the leasehold interest under the Saint Peter’s Ground Lease may be made only to a state or federally regulated bank, savings and loan association, insurance company, pension fund, credit union, real estate investment trust, or other institutional lender (each an “Institutional Lender,” and a leasehold lender that is an Institutional Lender is hereinafter referred to as a “Leasehold Mortgagee”). If a Leasehold Mortgagee forecloses upon the leasehold, the Leasehold Mortgagee’s initial assignment of its interest does not require the ground lessor’s consent; however, any subsequent transfers of the leasehold interest require the ground lessor’s consent.
Representation 34(g): The Saint Peter’s Ground Lease requires the ground lessor to provide Leasehold Mortgagee notice of any default by tenant under the ground lease but does not specifically provide that any notice of default or termination is ineffective against the Leasehold Mortgagee unless such notice is given to the Leasehold Mortgagee.
Representation 34(l): The Saint Peter’s Ground Lease does not provide that the lender is entitled to a new lease either generally upon a termination of the Saint Peter’s Ground Lease or specifically upon a rejection of the Saint Peter’s Ground Lease in bankruptcy. |
| Various | All GACC Mortgage Loans | (37) No Material Default; Payment Record | With respect to any covenants under the related Mortgage Loan that require the Borrower to ensure a tenant or Mortgaged Property is operating or to enforce the terms of leases, the Borrower may be in default of one or more of such covenants due to closures mandated or recommended by governmental authorities and moratoriums imposed by governmental authorities on real estate remedies or due to the Borrower forbearing to enforce rent payment obligations on tenants failing to pay rent as a result of such closures. |
| 33 | STK Chicago | (41) Appraisal | The appraisal date is more than 12 months before the Closing Date. |
D-2-4
SCHEDULE
D-1
GERMAN AMERICAN CAPITAL CORPORATION
LOANS WITH EXISTING MEZZANINE DEBT
None.
D-2-5
SCHEDULE
D-2
GERMAN AMERICAN CAPITAL CORPORATION
MORTGAGE LOANS WITH RESPECT TO WHICH MEZZANINE DEBT IS PERMITTED IN THE FUTURE
Loan No. |
Mortgage Loan |
| 4 | Romaine & Orange Square |
D-2-6
SCHEDULE
D-3
GERMAN AMERICAN CAPITAL CORPORATION
CROSSED MORTGAGE LOANS
None.
D-2-7
(THIS PAGE INTENTIONALLY LEFT BLANK)
ANNEX D-3
EXCEPTIONS TO CREFI MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES
| Annex
A-1 ID# |
Mortgage Loans | Representations | Exceptions |
| 7 | InCommercial Net Lease Portfolio #5 | (6) Permitted Liens; Title Insurance | The sole tenant at each of the Walgreens, Meridian, ID Mortgaged Property and Walgreens, Mount Pleasant, SC Mortgaged Property, Walgreen Co., has a right of first refusal to purchase the applicable Mortgaged Property upon the borrower’s receipt of an offer from an unaffiliated third party to purchase the Mortgaged Property. Walgreen Co., has, pursuant to a subordination, non-disturbance and attornment agreement, agreed that such right of first refusal shall be expressly inapplicable to any foreclosure of the related mortgage, deed-in-lieu thereof, or any other enforcement of the mortgage.
The sole tenant at each of the Tractor Supply Co, Kewaunee, WI Mortgaged Property, the Tractor Supply Co, Oconto, WI Mortgaged Property and the Tractor Supply Co, Ogdensbg, NY Mortgaged Property, Tractor Supply Company, has a right of first refusal to purchase the applicable Mortgaged Property upon the borrower’s receipt of an offer from an unaffiliated third party to purchase the Mortgaged Property. Tractor Supply Company, has, pursuant to a subordination, non-disturbance and attornment agreement, agreed that such right of first refusal shall be expressly subordinate to the mortgage. |
| 10 | Hall Road Crossing | (6) Permitted Liens; Title Insurance | The lease for the largest tenant at the Mortgaged Property, Amazon Fresh, representing approximately 20.1% of the net rentable area, provides such tenant with a right of first offer to purchase the Mortgaged Property upon the Mortgagor’s desire to sell the Mortgaged Property. Pursuant to the terms of such tenant’s lease, the right of first offer does not apply to any foreclosure sale of the Mortgagor’s interest in the Mortgaged Property, or any transfer of the Mortgaged Property to any mortgagee or trustee of a mortgage or deed of trust encumbering Mortgagor’s interest in the Mortgaged Property, or any purchaser at a foreclosure sale. |
| 31 | Walgreens New Castle & Oneonta | (6) Permitted Liens; Title Insurance | Under the lease for the sole tenant at each of the Walgreens Oneonta Mortgaged Property and the Walgreens New Castle Mortgaged Property, Walgreens, has a right of first refusal to purchase the applicable Mortgaged Property at any time after October 20, 2022 upon the borrower’s receipt of an offer from an unaffiliated third party to purchase the Mortgaged Property. Such right is exercisable at any time after September 20, 2022 with respect to the Walgreens New Castle Mortgaged Property, and at any time after October 13, 2022 with respect to the Walgreens Oneonta Mortgaged Property. Walgreens has, pursuant to a subordination, non-disturbance and attornment agreement, agreed that such rights of first refusal shall be expressly inapplicable to any foreclosure of the related mortgage, deed-in-lieu thereof, or any other enforcement of the mortgage. |
| 34 | 905 Medical Park Drive | (6) Permitted Liens; Title Insurance | The lease for the sole tenant at the Mortgaged Property, Cancer Care Specialists, grants such tenant the option to purchase the Mortgaged Property at the end of such tenant’s lease term, August 31, 2028, for the fair market value, provided that all other terms of sale can be agreed by the parties within 60 days after notice of tenant’s intent to exercise such purchase option. Cancer Care Specialists has, pursuant to a subordination, non-disturbance and attornment agreement, subordinated the lease to the Mortgage Loan documents and has agreed to attorn to Mortgagor in the event that Mortgagor becomes the owner of the Mortgaged Property by foreclosure, conveyance in lieu of foreclosure or otherwise. |
D-3-1
| Annex
A-1 ID# |
Mortgage Loans | Representations | Exceptions |
| Various | All CREFI Mortgage Loans | (16) Insurance | The Mortgage Loan documents may permit the related Mortgagor to cause the insurance required at the related Mortgaged Property under the Mortgage Loan documents to be maintained by a tenant, or by a condominium board or association, at the related Mortgaged Property. |
| 1 | 601 Lexington Avenue | (16) Insurance | The Mortgage Loan documents permit a property insurance deductible up to $250,000. |
| 5 | Shoreline Square | (16) Insurance | The Mortgaged Property includes the borrower’s leasehold interest pursuant to a ground lease between Terra Funding – Shoreline Square, LP, a Delaware limited partnership, as the lessor, and the borrower, as the lessee (the “Shoreline Square Ground Lease”).
The Shoreline Square Ground Lease does not provide that the lender or a trustee appointed by it has the right to disburse insurance proceeds and condemnation awards as the repair or restoration progresses. All insurance proceeds or condemnation awards in excess of $100,000 are held by a trust company (or other financial institution with a trust department) located in the State of California and reasonably acceptable to lessor, borrower, lessor’s mortgagee and borrower’s mortgagee.
|
| 7 | InCommercial Net Lease Portfolio #5 | (16) Insurance | With respect to any Mortgaged Property leased to Walgreens, the Mortgage Loan documents permit the sole tenant, Walgreens Co., provided such tenant’s lease is in effect, to maintain the property insurance required pursuant to the Mortgage Loan documents through self-insurance, so long as certain conditions are met, including, without limitation, (i) no default beyond any applicable notice and cure period has occurred and is continuing under the Walgreens Co. lease, (ii) Walgreens, Co. remains fully liable for the obligations and liabilities under the related lease and Walgreens, Co. or Walgreens Boots Alliance, Inc. maintains a rating from S&P of at least “BBB-”, and (iii) Walgreens, Co. maintains, either through a program of self-insurance or otherwise, the insurance required to be maintained by it under the Walgreens Co.’s lease, and (iv) following a casualty, Walgreens Co. is obligated per the terms of its lease to rebuild and/or repair the applicable Mortgaged Property at its sole cost and expense and is entitled to no period of rent abatement or right of termination.
The Mortgage Loan documents provide that, if the lease for a tenant which leases all or substantially all of a building located on any Mortgaged Property entitles such tenant to use or possession of any net proceeds or awards in respect of a property loss, such lease will control in the event of a conflict between the Mortgage Loan documents such that Walgreens Co. will have the right to hold to and disburse such proceeds as the repair or restoration progresses, in each case provided that (i) such tenant is not in material default under its lease, (ii) such tenant has not given notice or its intention to terminate its lease as a result of the casualty or condemnation, (iii) such tenant remains liable for the obligations under its lease notwithstanding the casualty or condemnation, and (iv) such tenant will use all such net proceeds or awards for the restoration of the applicable Mortgaged Property.
|
D-3-2
| Annex
A-1 ID# |
Mortgage Loans | Representations | Exceptions |
| 31 | Walgreens New Castle & Oneonta | (16) Insurance | The Mortgage Loan documents permit the sole tenant at each of the Walgreens Oneonta Mortgaged Property and the Walgreens New Castle Mortgaged Property, Walgreens, provided such leases are in effect, to maintain the property insurance required pursuant to the Mortgage Loan documents through self-insurance, so long as certain conditions are met, including, without limitation, (i) no default beyond any applicable notice and cure period has occurred and is continuing under the leases, (ii) Walgreens remains fully liable for the obligations and liabilities under the related leases and maintains a rating from S&P of at least “BBB-”, (iii) the applicable Walgreens lease will remain in full force and effect following a casualty and Walgreens is obligated per the terms of its applicable Lease to rebuild and/or repair the respective Mortgaged Property at its sole cost and expense and is entitled to no period of rent abatement or right of termination due to such casualty, and (iv) Walgreens maintains, either through a program of self-insurance or otherwise, the insurance required to be maintained by it under its lease.
The Mortgage Loan documents provide that, if the lease for a tenant which leases all or substantially all of a building located on any Mortgaged Property entitles such tenant to use or possession of any net proceeds or awards in respect of a property loss, such lease will control in the event of a conflict between the Mortgage Loan documents such that Walgreens will have the right to hold to and disburse such proceeds as the repair or restoration progresses, in each case provided that (i) such tenant is not in material default under its lease, (ii) such tenant has not given notice or its intention to terminate its lease as a result of the casualty or condemnation, (iii) such tenant remains liable for the obligations under its lease notwithstanding the casualty or condemnation, and (iv) such tenant will use all such net proceeds or awards for the restoration of the applicable Mortgaged Property. |
| 7 | InCommercial Net Lease Portfolio #5 | (18) No Encroachments | The borrower did not deliver a final signed and sealed survey at origination of the Mortgage Loan for the Tractor Supply Co, Lake Charles, LA Mortgaged Property. The borrower is required to deliver a final signed and sealed survey for such Mortgaged Property by March 24, 2022. |
| 7 | InCommercial Net Lease Portfolio #5 | (24) Local Law Compliance | The Dollar General, Rushford, NY Mortgaged Property is legal non-conforming as to use. In the event of a casualty as to 50% or more of its existing floor area, the Mortgaged Property may not be rebuilt as to its current use.
The borrower did not deliver a final zoning report at origination of the Mortgage Loan for the Tractor Supply Co, Lake Charles, LA Mortgaged Property. The borrower is required to deliver a final zoning report by March 24, 2022.
|
| 17 | 35 Crosby Street and 70 Carmine Street | (24) Local Law Compliance | The 35 Crosby Street Mortgaged Property is legal non-conforming by virtue of the following characteristics: (a) residential use is not a permitted use, (b) the rear setback is deficient an estimated 6 feet, (c) the building height is in excess of that permitted within the initial setback from the street, and (d) the FAR exceeds by 1.76 (or an excess floor area of 2,745 SF). In the event of a casualty as to 50% or more of its assessed value, the warehouse may not be rebuilt as to its current use. |
| 17 | 35 Crosby Street and 70 Carmine Street | (25) Licenses and Permits | At origination of the Mortgage Loan, the Mortgagor had not completed the publication requirement for limited liability companies under and pursuant to the New York Limited Liability Company Law. The borrower is required to complete such requirements and deliver proof of such compliance to the lender within four months of origination of the Mortgage Loan, provided that the Mortgagor will be given additional time, as necessary, to deliver such proof, if the Mortgagor demonstrates that it is diligently arranging for publication and has paid all required fees in connection therewith. |
D-3-3
| Annex
A-1 ID# |
Mortgage Loans | Representations | Exceptions |
| Various | All CREFI Mortgage Loans | (26) Recourse Obligations | The Mortgage Loan documents with respect to certain of the Mortgage Loans provide loss recourse for any material breach of the environmental covenants contained in the Mortgage Loan documents. |
| 1 | 601 Lexington Avenue | (26) Recourse Obligations | There is no non-recourse carveout guarantor or separate environmental indemnitor with respect to the Mortgage Loan or the related Whole Loan. |
| Various | All CREFI Mortgage Loans | (29) Acts of Terrorism Exclusion | All exceptions to Representation 16 are also exceptions to this Representation 29. |
| 1 | 601 Lexington Avenue | (29) Acts of Terrorism Exclusion | Terrorism insurance may be maintained by the Borrower with a non-rated captive insurance company owned by Boston Properties Limited Partnership (or any affiliate thereof), subject to certain conditions set forth in the Mortgage Loan documents, including but not limited to (A) TRIPRA is in full force and effect; (B) the terrorism policy issued by such captive insurer, together with any other qualified terrorism policies in-place, provide per occurrence limit in an amount not less than replacement cost and rent loss coverage as otherwise required; (C) covered losses that are not reinsured by the federal government under TRIPRA and paid to the captive insurer will be reinsured with a cut-through endorsement by an insurance company rated S&P “A”/ Moody’s “A2” or better or such higher rating as the rating agency may require not to exceed S&P “A+”/ Moody’s “A1”; (D) all reinsurance agreements between the captive insurer and other reinsurance providers are reasonably acceptable to lender; and (E) such captive insurer is licensed in the State of Vermont or other jurisdiction to the extent reasonably approved by lender and qualified to issue the terrorism policy in accordance with applicable legal requirements. |
| 1 | 601 Lexington Avenue | (30) Due on Sale or Encumbrance | The Mortgage Loan documents permit, without the lender’s consent, (i) transfers of direct or indirect interests in the Mortgagor, provided that after giving effect to any such transfer, (A) Boston Properties Limited Partnership (“BPLP”) and/or Norges Bank Investment Management (“Norges”) will, directly or indirectly, own at least twenty percent of the interests in the Mortgagor; and (B) BPLP and/or Norges will, directly or indirectly, retain the day-to-day management and operational control rights over the Mortgagor (subject to customary major decision consent rights of certain indirect owners of the Mortgagor); (ii) a merger, consolidation, sale of all or substantially all assets, or similar transactions as to BPLP and/or Boston Properties, Inc.(“BPI”) resulting in BPLP and/or BPI, as applicable, not being the surviving entity and (iii) conversion of equity interests in any entity holding an interest in the Mortgagor into equity interests of a publicly traded entity, in which event such equity interests are freely transferable so long as listed on the New York Stock Exchange or another publicly traded stock exchange. |
| 1 | 601 Lexington Avenue | (31) Single Purpose Entity | The Mortgagor has an obligation to purchase the ground leased portion of the Mortgaged Property for a purchase price of $23,284,421 on April 30, 2036. In addition, upon the condemnation or taking of any portion of the ground leased portion of the Mortgaged Property, the Mortgagor is required to purchase the ground leased portion of the Mortgaged Property at the foregoing purchase price discounted to the date of the condemnation or taking at a discount rate of 6%. |
| 10 | Hall Road Crossing | (31) Single Purpose Entity | No non-consolidation opinion was delivered in connection with the origination of the Mortgage Loan.
The Borrower previously owned certain other outparcels adjacent to the collateral in addition to the collateral for the related Mortgage Loan. The Mortgage Loan is recourse to the related Borrower for losses in connection with the prior ownership of such outparcels.
|
D-3-4
| Annex
A-1 ID# |
Mortgage Loans | Representations | Exceptions |
| 12 | 285 & 355 Riverside Ave | (31) Single-Purpose Entity | No non-consolidation opinion was obtained in connection with the origination of the Mortgage Loan. |
| 1 | 601 Lexington Avenue | (34) Ground Leases | The Mortgaged Property includes the Borrower’s leasehold interest in an approximately 18,038 square foot portion of a condominium unit owned by Saint Peter’s Lutheran Church of Manhattan (“Saint Peter’s”) pursuant to a ground lease between Saint Peter’s and the Borrower (the “Saint Peter’s Ground Lease”).
Representation 35(b): The Saint Peter’s Ground Lease may be amended/modified without the Leasehold Mortgagee’s prior consent but any modification or amendment of the Saint Peter’s Ground Lease will not be binding on the Leasehold Mortgagee without the Leasehold Mortgagee’s prior written consent.
Representation 35(c): The Saint Peter’s Ground Lease expires April 30, 2036, which is less than 20 years following the maturity date of the Mortgage Loan. The Borrower is required to purchase the ground leased portion of the Mortgaged Property from Saint Peter’s as described in the Exception to Representation 32 with respect to the 601 Lexington Avenue Mortgage Loan.
Representation 35(e): A Mortgage on the leasehold interest under the Saint Peter’s Ground Lease may be made only to a state or federally regulated bank, savings and loan association, insurance company, pension fund, credit union, real estate investment trust, or other institutional lender (each an “Institutional Lender,” and a leasehold lender that is an Institutional Lender is hereinafter referred to as a “Leasehold Mortgagee”).
If a Leasehold Mortgagee forecloses upon the leasehold, the Leasehold Mortgagee’s initial assignment of its interest does not require the ground lessor’s consent; however, any subsequent transfers of the leasehold interest require the ground lessor’s consent.
Representation 35(g): The Saint Peter’s Ground Lease requires the ground lessor to provide Leasehold Mortgagee notice of any default by tenant under the ground lease but does not specifically provide that any notice of default or termination is ineffective against the Leasehold Mortgagee unless such notice is given to the Leasehold Mortgagee.
Representation 35(l): The Saint Peter’s Ground Lease does not provide that the lender is entitled to a new lease either generally upon a termination of the Saint Peter’s Ground Lease or specifically upon a rejection of the Saint Peter’s Ground Lease in bankruptcy.
|
| Various | All CREFI Mortgage Loans | (37) No Material Default; Payment Record | With respect to any covenants under the related Mortgage Loan that require the Borrower to ensure a tenant or Mortgaged Property is operating or to enforce the terms of leases, the Borrower may be in default of one or more of such covenants due to closures mandated or recommended by governmental authorities and moratoriums imposed by governmental authorities on real estate remedies or due to the Borrower forbearing to enforce rent payment obligations on tenants failing to pay rent as a result of such closures. |
| 28, 5 | Glen Forest Office Portfolio
Shoreline Square |
(39) Organization of Mortgagor | The related mortgagors are affiliated. |
D-3-5
SCHEDULE
D-1
CITI REAL ESTATE FUNDING INC.
LOANS WITH EXISTING MEZZANINE DEBT
None.
D-3-6
SCHEDULE
D-2
CITI REAL ESTATE FUNDING INC.
MORTGAGE LOANS WITH RESPECT TO WHICH MEZZANINE DEBT IS PERMITTED IN THE FUTURE
Loan No. |
Mortgage Loan |
| 28 | Glen Forest Office Portfolio |
D-3-7
SCHEDULE
D-3
CITI REAL ESTATE FUNDING INC.
CROSSED MORTGAGE LOANS
None.
D-3-8
ANNEX E-1
JPMORGAN
CHASE BANK, NATIONAL ASSOCIATION
MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES
JPMCB (referred to as the related “Mortgage Loan Seller” in the representations and warranties below) will make, as of the Cut-off Date or such other date as set forth below, with respect to each JPMCB Mortgage Loan that we (referred to as the “Purchaser” in the representations and warranties below) include in the issuing entity, representations and warranties generally to the effect set forth below. Prior to the execution of the related final Mortgage Loan Purchase Agreement, there may be additions, subtractions or other modifications to the representations, warranties and exceptions. The exceptions to the representations and warranties set forth below are identified on Annex E-2 to this prospectus. Capitalized terms used but not otherwise defined in this Annex E-1 will have the meanings set forth in this prospectus or, if not defined in this prospectus, in the related Mortgage Loan Purchase Agreement.
The related Mortgage Loan Purchase Agreement, together with the related representations and warranties (subject to the exceptions thereto), serves to contractually allocate risk between JPMCB, on the one hand, and the issuing entity, on the other. We present the related representations and warranties set forth below for the sole purpose of describing some of the terms and conditions of that risk allocation. The presentation of representations and warranties below is not intended as statements regarding the actual characteristics of the JPMCB Mortgage Loans, the related Mortgaged Properties or other matters. We cannot assure you that the JPMCB Mortgage Loans actually conform to the statements made in the representations and warranties that we present below.
1. Complete Servicing File. All documents comprising the Servicing File will be or have been delivered to the Master Servicer with respect to each JPMCB Mortgage Loan by the deadlines set forth in the PSA and/or the Mortgage Loan Purchase Agreement.
2. Whole Loan; Ownership of Mortgage Loans. Except with respect to each JPMCB Mortgage Loan that is part of a Whole Loan, each JPMCB Mortgage Loan is a whole loan and not an interest in a JPMCB Mortgage Loan. Each JPMCB Mortgage Loan that is part of a Whole Loan is a senior portion (or a pari passu portion of a senior portion) of a whole mortgage loan. Immediately prior to the sale, transfer and assignment to depositor, no Mortgage Note or Mortgage was subject to any assignment (other than assignments to the Mortgage Loan Seller or, with respect to any JPMCB Mortgage Loan that is a Non-Serviced Mortgage Loan, to the related Non-Serviced Trustee), participation (other than with respect to Serviced JPMCB Mortgage Loans) or pledge, and the Mortgage Loan Seller had good and marketable title to, and was the sole owner of, each JPMCB Mortgage Loan free and clear of any and all liens, charges, pledges, encumbrances, participations (other than with respect to agreements among noteholders with respect to a Whole Loan) (subject to certain agreements regarding servicing and/or defeasance successor borrower rights as provided in the PSA, subservicing agreements permitted thereunder and that certain servicing rights purchase agreement, dated as of the Closing Date between the Master Servicer and the Mortgage Loan Seller), any other ownership interests and other interests on, in or to such JPMCB Mortgage Loan (subject to certain agreements regarding servicing and/or defeasance successor borrower rights as provided in the PSA, subservicing agreements permitted thereunder and that certain servicing rights purchase agreement, dated as of the Closing Date between the Master Servicer and the Mortgage Loan Seller). The Mortgage Loan Seller has full right and authority to sell, assign and transfer each JPMCB Mortgage Loan, and the assignment to depositor constitutes a legal, valid and binding assignment of such JPMCB Mortgage Loan free and clear of any and all liens, pledges, charges or security interests of any nature encumbering such JPMCB Mortgage Loan (subject to certain agreements regarding servicing and/or defeasance successor borrower rights as provided in the PSA, subservicing agreements permitted thereunder and that certain servicing rights purchase agreement, dated as of the Closing Date between the Master Servicer and the Mortgage Loan Seller).
3. Loan Document Status. Each related Mortgage Note, Mortgage, Assignment of Leases (if a separate instrument), guaranty and other agreement executed by or on behalf of the related borrower,
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guarantor or other obligor in connection with such JPMCB Mortgage Loan is the legal, valid and binding obligation of the related borrower, guarantor or other obligor (subject to any non-recourse provisions contained in any of the foregoing agreements and any applicable state anti-deficiency or market value limit deficiency legislation), as applicable, and is enforceable in accordance with its terms, except as such enforcement may be limited by (i) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law and except that certain provisions in such Mortgage Loan documents (including, without limitation, provisions requiring the payment of default interest, late fees or prepayment/yield maintenance premiums) may be further limited or rendered unenforceable by applicable law (clauses (i) and (ii) collectively, the “Insolvency Qualifications”).
Except as set forth in the immediately preceding sentences, there is no valid offset, defense, counterclaim or right of rescission available to the related borrower with respect to any of the related Mortgage Notes, Mortgages or other Mortgage Loan documents, including, without limitation, any such valid offset, defense, counterclaim or right based on intentional fraud by the Mortgage Loan Seller in connection with the origination of the JPMCB Mortgage Loan, that would deny the mortgagee the principal benefits intended to be provided by the Mortgage Note, Mortgage or other Mortgage Loan documents.
4. Mortgage Provisions. The Mortgage Loan documents for each JPMCB Mortgage Loan contain provisions that render the rights and remedies of the holder thereof adequate for the practical realization against the Mortgaged Property of the principal benefits of the security intended to be provided thereby, including realization by judicial or, if applicable, nonjudicial foreclosure subject to the limitations set forth in the Insolvency Qualifications.
5. Hospitality Provisions. The Mortgage Loan documents for each JPMCB Mortgage Loan that is secured by a hospitality property operated pursuant to a franchise agreement includes an executed comfort letter or similar agreement signed by the borrower and franchisor of such property enforceable by the trust against such franchisor, either directly or as an assignee of the originator. The Mortgage or related security agreement for each JPMCB Mortgage Loan secured by a hospitality property creates a security interest in the revenues of such property for which a UCC financing statement has been filed in the appropriate filing office.
6. Mortgage Status; Waivers and Modifications. Since origination and except by written instruments set forth in the related Mortgage File or as otherwise provided in the related Mortgage Loan documents (a) (1) there has been no forbearance, waiver or modification of the material terms of the Mortgage Loan which such forbearance, waiver or modification relates to the COVID-19 Emergency and (2) other than as related to the COVID-19 Emergency, the material terms of such Mortgage, Mortgage Note, Mortgage Loan guaranty, and related Mortgage Loan documents have not been waived, impaired, modified, altered, satisfied, canceled, subordinated or rescinded in any respect; (b) no related Mortgaged Property or any portion thereof has been released from the lien of the related Mortgage in any manner which materially interferes with the security intended to be provided by such Mortgage or the use or operation of such Mortgaged Property; and (c) neither borrower nor guarantor has been released from its obligations under the JPMCB Mortgage Loan. With respect to each Mortgage Loan, except as contained in a written document included in the related Mortgage File, there have been no modifications, amendments or waivers that could be reasonably expected to have a material adverse effect on such Mortgage Loan that have been consented to by the Mortgage Loan Seller on or after October 20, 2021.
7. Lien; Valid Assignment. Subject to the Insolvency Qualifications, each endorsement and assignment of Mortgage and assignment of Assignment of Leases (if a separate instrument from the Mortgage) to the issuing entity (or, with respect to any JPMCB Mortgage Loan that is a Non-Serviced Mortgage Loan, to the related Non-Serviced Trustee) constitutes a legal, valid and binding endorsement or assignment to the Trust (or, with respect to any JPMCB Mortgage Loan that is a Non-Serviced Mortgage Loan, to the related Non-Serviced Trustee). Each related Mortgage and Assignment of Leases is freely assignable without the consent of the related borrower. Each related Mortgage is a legal, valid and enforceable first lien on the related borrower’s fee (or if identified on the Mortgage Loan Schedule,
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leasehold) interest in the Mortgaged Property in the principal amount of such JPMCB Mortgage Loan or allocated loan amount (subject only to Permitted Encumbrances (as defined below)), except as the enforcement thereof may be limited by the Insolvency Qualifications. Such Mortgaged Property (subject to Permitted Encumbrances) as of origination was, and as of the Cut-off Date to the Mortgage Loan Seller’s knowledge, is free and clear of any recorded mechanics’ liens, recorded materialmen’s liens and other recorded encumbrances, and to the Mortgage Loan Seller’s knowledge and subject to the rights of tenants, no rights exist which under law could give rise to any such lien or encumbrance that would be prior to or equal with the lien of the related Mortgage, except those which are insured against by a lender’s title insurance policy (as described below). Any security agreement, chattel mortgage or equivalent document related to and delivered in connection with the JPMCB Mortgage Loan establishes and creates a valid and enforceable lien on property described therein subject to Permitted Encumbrances, except as such enforcement may be limited by Insolvency Qualifications subject to the limitations described in clause (11) below. Notwithstanding anything herein to the contrary, no representation is made as to the perfection of any security interest in rents or other personal property to the extent that possession or control of such items or actions other than the filing of Uniform Commercial Code financing statements is required in order to effect such perfection.
The assignment of the JPMCB Mortgage Loans to the Depositor validly and effectively transfers and conveys all legal and beneficial ownership of the JPMCB Mortgage Loans to the Depositor free and clear of any pledge, lien, encumbrance or security interest (subject to certain agreements regarding servicing as provided in the PSA, subservicing agreements permitted thereunder and that certain servicing rights purchase agreement, dated as of the Closing Date between the Master Servicer and the Mortgage Loan Seller).
8. Permitted Liens; Title Insurance. Each Mortgaged Property securing a JPMCB Mortgage Loan is covered by an American Land Title Association loan title insurance policy or a comparable form of loan title insurance policy approved for use in the applicable jurisdiction (or, if such policy is yet to be issued, by a pro forma policy, a preliminary title policy with escrow instructions or a “marked up” commitment, in each case binding on the title insurer) (the “Title Policy”) in the original principal amount of such JPMCB Mortgage Loan (or with respect to a JPMCB Mortgage Loan secured by multiple properties, an amount equal to at least the allocated loan amount with respect to the Title Policy for each such property) after all advances of principal (including any advances held in escrow or reserves), that insures for the benefit of the owner of the indebtedness secured by the Mortgage, the first priority lien of the Mortgage, which lien is subject only to (a) the lien of current real property taxes, water charges, sewer rents and assessments not yet due and payable; (b) covenants, conditions and restrictions, rights of way, easements and other matters of public record specifically identified in the Title Policy; (c) the exceptions (general and specific) and exclusions set forth in such Title Policy; (d) other matters to which like properties are commonly subject; (e) the rights of tenants (as tenants only) under leases (including subleases) pertaining to the related Mortgaged Property which the Mortgage Loan documents do not require to be subordinated to the lien of such Mortgage; and (f) if the related JPMCB Mortgage Loan constitutes a cross-collateralized JPMCB Mortgage Loan, the lien of the Mortgage for another JPMCB Mortgage Loan contained in the same cross-collateralized group, provided that none of which items (a) through (f), individually or in the aggregate, materially interferes with the value, current use or operation of the Mortgaged Property or the security intended to be provided by such Mortgage or with the current ability of the related Mortgaged Property to generate net cash flow sufficient to service the related JPMCB Mortgage Loan or the borrower’s ability to pay its obligations when they become due (collectively, the “Permitted Encumbrances”). Except as contemplated by clause (f) of the preceding sentence none of the Permitted Encumbrances are mortgage liens that are senior to or coordinate and co-equal with the lien of the related Mortgage. Such Title Policy (or, if it has yet to be issued, the coverage to be provided thereby) is in full force and effect, all premiums thereon have been paid and no claims have been made by the Mortgage Loan Seller thereunder and no claims have been paid thereunder. Neither the Mortgage Loan Seller, nor to the Mortgage Loan Seller’s knowledge, any other holder of the JPMCB Mortgage Loan, has done, by act or omission, anything that would materially impair the coverage under such Title Policy. Each Title Policy contains no exclusion for, or affirmatively insures (except for any Mortgaged Property located in a jurisdiction where such affirmative insurance is not available in which case such exclusion may exist), (a) that the Mortgaged Property shown on the survey is the same as the property legally
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described in the Mortgage, and (b) to the extent that the Mortgaged Property consists of two or more adjoining parcels, such parcels are contiguous.
9. Junior Liens. It being understood that B notes secured by the same Mortgage as a JPMCB Mortgage Loan are not subordinate mortgages or junior liens, there are no subordinate mortgages or junior liens encumbering the related Mortgaged Property. The Mortgage Loan Seller has no knowledge of any mezzanine debt related to the Mortgaged Property and secured directly by the ownership interests in the borrower.
10. Assignment of Leases and Rents. There exists as part of the related Mortgage File an Assignment of Leases (either as a separate instrument or incorporated into the related Mortgage). Each related Assignment of Leases creates a valid first-priority collateral assignment of, or a valid first-priority lien or security interest in, rents and certain rights under the related lease or leases, subject only to a license granted to the related borrower to exercise certain rights and to perform certain obligations of the lessor under such lease or leases, including the right to operate the related leased property, except as the enforcement thereof may be limited by the Insolvency Qualifications; no person other than the related borrower owns any interest in any payments due under such lease or leases that is superior to or of equal priority with the lender’s interest therein. The related Mortgage or related Assignment of Leases, subject to applicable law, provides for, upon an event of default under the JPMCB Mortgage Loan, a receiver to be appointed for the collection of rents or for the related mortgagee to enter into possession to collect the rents or for rents to be paid directly to the mortgagee.
11. Financing Statements. Each JPMCB Mortgage Loan or related security agreement establishes a valid security interest in, and a UCC-1 financing statement has been filed (except, in the case of fixtures, the Mortgage constitutes a fixture filing) in all places necessary to perfect a valid security interest in, the personal property (the creation and perfection of which is governed by the UCC) owned by the borrower and necessary to operate any Mortgaged Property in its current use other than (1) non-material personal property, (2) personal property subject to purchase money security interests and (3) personal property that is leased equipment. Each UCC-1 financing statement, if any, filed with respect to personal property constituting a part of the related Mortgaged Property and each UCC-3 assignment, if any, filed with respect to such financing statement was in suitable form for filing in the filing office in which such financing statement was filed.
12. Condition of Property. The Mortgage Loan Seller or the originator of the JPMCB Mortgage Loan inspected or caused to be inspected each related Mortgaged Property within four months of origination of the JPMCB Mortgage Loan and within twelve months of the Cut-off Date.
An engineering report or property condition assessment was prepared in connection with the origination of each JPMCB Mortgage Loan no more than twelve months prior to the Cut-off Date, which indicates that, except as set forth in such engineering report or with respect to which repairs were required to be reserved for or made, all building systems for the improvements of each related Mortgaged Property are in good working order, and further indicates that each related Mortgaged Property (a) is free of any material damage, (b) is in good repair and condition, and (c) is free of structural defects, except to the extent (i) any damage or deficiencies that would not materially and adversely affect the use, operation or value of the Mortgaged Property or the security intended to be provided by such Mortgage or repairs with respect to such damage or deficiencies estimated to cost less than $50,000 in the aggregate per Mortgaged Property; (ii) such repairs have been completed; or (iii) escrows in an aggregate amount consistent with the standards utilized by the Mortgage Loan Seller with respect to similar loans it originates for securitization have been established, which escrows will in all events be in an aggregate amount not less than the estimated cost of such repairs. The Mortgage Loan Seller has no knowledge of any material issues with the physical condition of the Mortgaged Property that the Mortgage Loan Seller believes would have a material adverse effect on the use, operation or value of the Mortgaged Property other than those disclosed in the engineering report and those addressed in sub-clauses (i), (ii) and (iii) of the preceding sentence.
13. Taxes and Assessments. As of the date of origination and as of the Closing Date, all taxes and governmental assessments and other outstanding governmental charges (including, without limitation,
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water and sewage charges) due with respect to the Mortgaged Property (excluding any related personal property) securing a JPMCB Mortgage Loan that is or if left unpaid could become a lien on the related Mortgaged Property that would be of equal or superior priority to the lien of the Mortgage and that became due and delinquent and owing prior to the Cut-off Date with respect to each related Mortgaged Property have been paid, or, if the appropriate amount of such taxes or charges is being appealed or is otherwise in dispute, the unpaid taxes or charges are covered by an escrow of funds or other security sufficient to pay such tax or charge and reasonably estimated interest and penalties, if any, thereon. For purposes of this representation and warranty, real property taxes, governmental assessments and other outstanding governmental charges will not be considered delinquent until the date on which interest and/or penalties would be payable thereon.
14. Condemnation. As of the date of origination and to the Mortgage Loan Seller’s knowledge as of the Closing Date, there is no proceeding pending or threatened for the total or partial condemnation of such Mortgaged Property that would have a material adverse effect on the use or operation of the Mortgaged Property.
15. Actions Concerning Mortgage Loan. As of the date of origination and to the Mortgage Loan Seller’s knowledge as of the Closing Date, there was no pending, filed or threatened action, suit or proceeding, arbitration or governmental investigation involving any borrower, guarantor, or Mortgaged Property, an adverse outcome of which would reasonably be expected to materially and adversely affect (a) title to the Mortgaged Property, (b) the validity or enforceability of the Mortgage, (c) such borrower’s ability to perform under the related JPMCB Mortgage Loan, (d) such guarantor’s ability to perform under the related guaranty, (e) the use, operation or value of the Mortgaged Property, (f) the principal benefit of the security intended to be provided by the Mortgage Loan documents, (g) the current ability of the Mortgaged Property to generate net cash flow sufficient to service such JPMCB Mortgage Loan, or (h) the current principal use of the Mortgaged Property.
16. Escrow Deposits. All escrow deposits and payments required pursuant to each JPMCB Mortgage Loan (including capital improvements and environmental remediation reserves) are in the possession, or under the control, of the Mortgage Loan Seller or its servicer, and there are no deficiencies (subject to any applicable grace or cure periods) in connection therewith, and all such escrows and deposits (or the right thereto) that are required under the related Mortgage Loan documents are being conveyed by the Mortgage Loan Seller to depositor or its servicer (or, with respect to any JPMCB Mortgage Loan that is a Non-Serviced Mortgage Loan, to the depositor or servicer for the related Non-Serviced Securitization Trust) and identified as such with appropriate detail. Any and all requirements under the JPMCB Mortgage Loan as to completion of any material improvements and as to disbursements of any funds escrowed for such purpose, which requirements were to have been complied with on or before Closing Date, have been complied with in all material respects or the funds so escrowed have not been released unless such release was consistent with proper and prudent commercial mortgage servicing practices or such released funds were otherwise used for their intended purpose. No other escrow amounts have been released except in accordance with the terms and conditions of the related Mortgage Loan documents.
17. No Holdbacks. The principal amount of the JPMCB Mortgage Loan stated on the Mortgage Loan Schedule has been fully disbursed as of the Closing Date and there is no requirement for future advances thereunder (except in those cases where the full amount of the JPMCB Mortgage Loan has been disbursed but a portion thereof is being held in escrow or reserve accounts pending the satisfaction of certain conditions relating to leasing, repairs, occupancy, performance or other matters with respect to the related Mortgaged Property).
18. Insurance. Each related Mortgaged Property is, and is required pursuant to the related Mortgage to be, insured by a property insurance policy providing coverage for loss in accordance with coverage found under a “special cause of loss form” or “all-risk form” that includes replacement cost valuation issued by an insurer meeting the requirements of the related Mortgage Loan documents and having a claims-paying or financial strength rating of at least “A-:VIII” (for a JPMCB Mortgage Loan with a principal balance below $35 million) and “A:VIII” (for a JPMCB Mortgage Loan with a principal balance of $35 million or more) from A.M. Best Company or “A3” (or the equivalent) from Moody’s Investors Service, Inc.
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or “A-” from S&P Global Ratings (collectively the “Insurance Rating Requirements”), in an amount not less than the lesser of (1) the original principal balance of the JPMCB Mortgage Loan and (2) the full insurable value on a replacement cost basis of the improvements, furniture, furnishings, fixtures and equipment owned by the mortgagor and included in the Mortgaged Property (with no deduction for physical depreciation), but, in any event, not less than the amount necessary or containing such endorsements as are necessary to avoid the operation of any coinsurance provisions with respect to the related Mortgaged Property.
Each related Mortgaged Property is also covered, and required to be covered pursuant to the related Mortgage Loan documents, by business interruption or rental loss insurance which (i) covers a period beginning on the date of loss and continuing until the earlier to occur of restoration of the Mortgaged Property or the expiration of 12 months (or with respect to each JPMCB Mortgage Loan with a principal balance of $35 million or more, 18 months); (ii) for a JPMCB Mortgage Loan with a principal balance of $50 million or more contains a 180-day “extended period of indemnity”; and (iii) covers the actual loss sustained (or in certain cases, an amount sufficient to cover the period set forth in (i) above) during restoration.
If any material part of the improvements, exclusive of a parking lot, located on a Mortgaged Property is in an area identified in the Federal Register by the Federal Emergency Management Agency as having special flood hazards, the related borrower is required to maintain insurance in the maximum amount available under the National Flood Insurance Program, plus such additional excess flood coverage in an amount as-is generally required by the Mortgage Loan Seller originating mortgage loans for securitization.
If windstorm and/or windstorm related perils and/or “named storms” are excluded from the primary property damage insurance policy, the Mortgaged Property is insured by a separate windstorm insurance policy issued by an insurer meeting the Insurance Rating Requirements or endorsement covering damage from windstorm and/or windstorm related perils and/or named storms, in an amount at least equal to 100% of the full insurable value on a replacement cost basis of the Improvements and personalty and fixtures owned by the mortgagor and included in the related Mortgaged Property by an insurer meeting the Insurance Rating Requirements.
The Mortgaged Property is covered, and required to be covered pursuant to the related Mortgage Loan documents, by a commercial general liability insurance policy issued by an insurer meeting the Insurance Rating Requirements including broad-form coverage for property damage, contractual damage and personal injury (including bodily injury and death) in amounts as are generally required by the Mortgage Loan Seller for loans originated for securitization, and in any event not less than $1 million per occurrence and $2 million in the aggregate.
An architectural or engineering consultant has performed an analysis of each of the Mortgaged Properties located in seismic zones 3 or 4 in order to evaluate the structural and seismic condition of such property, for the sole purpose of assessing the probable maximum loss (“PML”) for the Mortgaged Property in the event of an earthquake. In such instance, the PML or equivalent was based on a 475-year return period, an exposure period of 50 years and a 10% probability of exceedance. If the resulting report concluded that the PML or equivalent would exceed 20% of the amount of the replacement costs of the improvements, earthquake insurance on such Mortgaged Property was obtained by an insurer rated at least “A:VIII” by A.M. Best Company or “A3” (or the equivalent) from Moody’s Investors Service, Inc. or “A-” by S&P Global Ratings in an amount not less than 100% of the PML or the equivalent.
The Mortgage Loan documents require insurance proceeds in respect of a property loss to be applied either (a) to the repair or restoration of all or part of the related Mortgaged Property, with respect to all property losses in excess of 5% of the then-outstanding principal amount of the related JPMCB Mortgage Loan, the lender (or a trustee appointed by it) having the right to hold and disburse such proceeds as the repair or restoration progresses, or (b) to the payment of the outstanding principal balance of such JPMCB Mortgage Loan together with any accrued interest thereon.
All premiums on all insurance policies referred to in this section required to be paid as of the Cut-off Date have been paid, and such insurance policies name the lender under the JPMCB Mortgage Loan and
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its successors and assigns as a loss payee under a mortgagee endorsement clause or, in the case of the general liability insurance policy, as named or additional insured. Each related JPMCB Mortgage Loan obligates the related borrower to maintain all such insurance and, at such borrower’s failure to do so, authorizes the lender to maintain such insurance at the borrower’s cost and expense and to charge such borrower for related premiums. All such insurance policies (other than commercial liability policies) require at least 10 days’ prior notice to the lender of termination or cancellation arising because of nonpayment of a premium and at least 30 days’ prior notice to the lender of termination or cancellation (or such lesser period, not less than 10 days, as may be required by applicable law) arising for any reason other than non-payment of a premium and no such notice has been received by the Mortgage Loan Seller.
19. Access; Utilities; Separate Tax Lots. Each Mortgaged Property (a) is located on or adjacent to a public road and has direct legal access to such road, or has access via an irrevocable easement or irrevocable right of way permitting ingress and egress to/from a public road, (b) is served by or has uninhibited access rights to public or private water and sewer (or well and septic) and all required utilities, all of which are appropriate for the current use of the Mortgaged Property, and (c) constitutes one or more separate tax parcels which do not include any property which is not part of the Mortgaged Property or is subject to an endorsement under the related Title Policy insuring the Mortgaged Property, or in certain cases, an application has been made to the applicable governing authority for creation of separate tax lots, in which case the JPMCB Mortgage Loan requires the borrower to escrow an amount sufficient to pay taxes for the existing tax parcel of which the Mortgaged Property is a part until the separate tax lots are created.
20. No Encroachments. To the Mortgage Loan Seller’s knowledge and based solely on surveys obtained in connection with origination and the lender’s Title Policy (or, if such policy is not yet issued, a pro forma title policy, a preliminary title policy with escrow instructions or a “marked up” commitment) obtained in connection with the origination of each JPMCB Mortgage Loan, (a) all material improvements that were included for the purpose of determining the appraised value of the related Mortgaged Property at the time of the origination of such JPMCB Mortgage Loan are within the boundaries of the related Mortgaged Property, except encroachments that do not materially and adversely affect the value or current use of such Mortgaged Property, or are insured by applicable provisions of the Title Policy, (b) no improvements on adjoining parcels encroach onto the related Mortgaged Property except for encroachments that do not materially and adversely affect the value or current use of such Mortgaged Property, or are insured by applicable provisions of the Title Policy and (c) no improvements encroach upon any easements except for encroachments the removal of which would not materially and adversely affect the value or current use of such Mortgaged Property or are insured by applicable provisions of the Title Policy.
21. No Contingent Interest or Equity Participation. No JPMCB Mortgage Loan has a shared appreciation feature, any other contingent interest feature or a negative amortization feature (except that an ARD Loan may provide for the accrual of the portion of interest in excess of the rate in effect prior to the Anticipated Repayment Date), any other contingent interest feature or a negative amortization feature or an equity participation by the Mortgage Loan Seller.
22. REMIC. The JPMCB Mortgage Loan is a “qualified mortgage” within the meaning of Section 860G(a)(3) of the Code (but determined without regard to the rule in Treasury Regulations Section 1.860G-2(f)(2) that treats certain defective mortgage loans as qualified mortgages), and, accordingly, (A) the issue price of the JPMCB Mortgage Loan to the related borrower at origination did not exceed the non-contingent principal amount of the JPMCB Mortgage Loan and (B) either: (a) such JPMCB Mortgage Loan or Whole Loan is secured by an interest in real property (including permanently affixed buildings and structural components, such as wiring, plumbing systems and central heating and air-conditioning systems, that are integrated into such buildings, serve such buildings in their passive functions and do not produce or contribute to the production of income other than consideration for the use or occupancy of space, but excluding personal property) having a fair market value (i) at the date the JPMCB Mortgage Loan or Whole Loan was originated at least equal to 80% of the adjusted issue price of the JPMCB Mortgage Loan or Whole Loan on such date or (ii) at the Closing Date at least equal to 80% of the adjusted issue price of the JPMCB Mortgage Loan or Whole Loan on such date, provided that for
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purposes hereof, the fair market value of the real property interest must first be reduced by (1) the amount of any lien on the real property interest that is senior to the JPMCB Mortgage Loan and (2) a proportionate amount of any lien that is in parity with the JPMCB Mortgage Loan; or (b) substantially all of the proceeds of such JPMCB Mortgage Loan were used to acquire, improve or protect the real property which served as the only security for such JPMCB Mortgage Loan (other than a recourse feature or other third-party credit enhancement within the meaning of Treasury Regulations Section 1.860G-2(a)(1)(ii)). If the JPMCB Mortgage Loan or Whole Loan was “significantly modified” prior to the Closing Date so as to result in a taxable exchange under Section 1001 of the Code, it either (x) was modified as a result of the default or reasonably foreseeable default of such JPMCB Mortgage Loan or Whole Loan or (y) satisfies the provisions of either sub-clause (B)(a)(i) above (substituting the date of the last such modification for the date the JPMCB Mortgage Loan or Whole Loan was originated) or sub-clause (B)(a)(ii), including the proviso thereto. For purposes of the preceding sentence, a JPMCB Mortgage Loan will not be considered “significantly modified” solely by reason of the borrower having been granted a COVID-19 related forbearance prior to October 1, 2021 (or prior to such later date as may be provided by the IRS in a future guidance) provided that: (a) such JPMCB Mortgage Loan forbearance is covered by Revenue Procedure 2020-26 (as extended by Revenue Procedure 2021-12) by reason of satisfying the requirements for such coverage stated in Section 5.02(2) of Revenue Procedure 2020-26; and (b) JPMCB identifies such JPMCB Mortgage Loan and provides (x) the date on which such forbearance was granted, (y) the length in months of the forbearance, and (z) how the payments in forbearance will be paid (that is, by extension of maturity, change of amortization schedule, etc.). Any prepayment premium and yield maintenance charges applicable to the JPMCB Mortgage Loan or Whole Loan constitute “customary prepayment penalties” within the meaning of Treasury Regulations Section 1.860G-1(b)(2). All terms used in this paragraph will have the same meanings as set forth in the related Treasury Regulations.
23. Compliance. The terms of the Mortgage Loan documents evidencing such JPMCB Mortgage Loan, comply in all material respects with all applicable local, state and federal laws and regulations, and the Mortgage Loan Seller has complied with all material requirements pertaining to the origination of the JPMCB Mortgage Loans, including but not limited to, usury and any and all other material requirements of any federal, state or local law to the extent non-compliance would have a material adverse effect on the JPMCB Mortgage Loan.
24. Authorized to do Business. To the extent required under applicable law, as of the Closing Date or as of the date that such entity held the Mortgage Note, each holder of the Mortgage Note was authorized to transact and do business in the jurisdiction in which each related Mortgaged Property is located, or the failure to be so authorized does not materially and adversely affect the enforceability of such JPMCB Mortgage Loan.
25. Trustee under Deed of Trust. With respect to each Mortgage which is a deed of trust, a trustee, duly qualified under applicable law to serve as such, currently so serves and is named in the deed of trust or has been substituted in accordance with the Mortgage and applicable law or may be substituted in accordance with the Mortgage and applicable law by the related mortgagee, and except in connection with a trustee’s sale after a default by the related borrower or in connection with any full or partial release of the related Mortgaged Property or related security for such JPMCB Mortgage Loan, no fees are payable to such trustee except for reasonable fees paid by the borrower.
26. Local Law Compliance. To the Mortgage Loan Seller’s knowledge, based solely upon any of a letter from any governmental authorities, a legal opinion, an architect’s letter, a zoning consultant’s report, an endorsement to the related Title Policy, or other affirmative investigation of local law compliance consistent with the investigation conducted by the Mortgage Loan Seller for similar commercial and multifamily mortgage loans intended for securitization, the improvements located on or forming part of each Mortgaged Property securing a JPMCB Mortgage Loan are in material compliance with applicable laws, zoning ordinances, rules, covenants, and restrictions (collectively “Zoning Regulations”) governing the occupancy, use, and operation of such Mortgaged Property or constitute a legal non-conforming use or structure and any non-conformity with zoning laws constitutes a legal non-conforming use or structure which does not materially and adversely affect the use or operation of such Mortgaged Property. In the event of casualty or destruction, (a) the Mortgaged Property may be restored or repaired to the extent
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necessary to maintain the use of the structure immediately prior to such casualty or destruction, (b) law and ordinance insurance coverage has been obtained for the Mortgaged Property in amounts customarily required by the Mortgage Loan Seller for loans originated for securitization that provides coverage for additional costs to rebuild and/or repair the property to current Zoning Regulations, (c) the inability to restore the Mortgaged Property to the full extent of the use or structure immediately prior to the casualty would not materially and adversely affect the use or operation of such Mortgaged Property, or (d) title insurance coverage has been obtained for such nonconformity.
27. Licenses and Permits. Each borrower covenants in the Mortgage Loan documents that it will keep all material licenses, permits, franchises, certificates of occupancy, consents, and other approvals necessary for the operation of the Mortgaged Property in full force and effect, and to the Mortgage Loan Seller’s knowledge based upon any of a letter from any government authorities or other affirmative investigation of local law compliance consistent with the investigation conducted by the Mortgage Loan Seller for similar commercial and multifamily mortgage loans intended for securitization; all such material licenses, permits, franchises, certificates of occupancy, consents, and other approvals are in effect or the failure to obtain or maintain such material licenses, permits, franchises or certificates of occupancy does not materially and adversely affect the use and/or operation of the Mortgaged Property as it was used and operated as of the date of origination of the JPMCB Mortgage Loan or the rights of a holder of the related JPMCB Mortgage Loan. The JPMCB Mortgage Loan requires the related borrower to be qualified to do business in the jurisdiction in which the related Mortgaged Property is located and for the borrower and the Mortgaged Property to be in compliance in all material respects with all regulations, zoning and building laws.
28. Recourse Obligations. The Mortgage Loan documents for each JPMCB Mortgage Loan provide that such JPMCB Mortgage Loan (a) becomes full recourse to the borrower and guarantor (which is a natural person or persons, or an entity distinct from the borrower (but may be affiliated with the Borrower) that has assets other than equity in the related Mortgaged Property that are not de minimis) in any of the following events: (i) if any petition for bankruptcy, insolvency, dissolution or liquidation pursuant to federal bankruptcy law, or any similar federal or state law, will be filed by, consented to, or acquiesced in by, the borrower; (ii) borrower or guarantor will have colluded with other creditors to cause an involuntary bankruptcy filing with respect to the borrower or (iii) transfers of either the Mortgaged Property or equity interests in borrower made in violation of the Mortgage Loan documents; and (b) contains provisions providing for recourse against the borrower and guarantor (which is a natural person or persons, or an entity distinct from the borrower (but may be affiliated with the borrower) that has assets other than equity in the related Mortgaged Property that are not de minimis), for losses and damages sustained in the case of (i) (A) misapplication, misappropriation or conversion of insurance proceeds or condemnation awards or of rents following an event of default, or (B) any security deposits not delivered to lender upon foreclosure or action in lieu thereof (except to the extent applied in accordance with leases prior to a Mortgage Loan event of default); (ii) the borrower’s fraud or intentional misrepresentation; (iii) willful misconduct by the borrower or guarantor; (iv) breaches of the environmental covenants in the Mortgage Loan documents; or (v) commission of material physical waste at the Mortgaged Property, which may, with respect to this clause (v), in certain instances, be limited to the extent there is sufficient cash flow generated by the related Mortgaged Property to prevent such waste or acts or omissions of the related borrower, guarantor, property manager or their affiliates, employees or agents.
29. Mortgage Releases. The terms of the related Mortgage or related Mortgage Loan documents do not provide for release of any material portion of the Mortgaged Property from the lien of the Mortgage except (a) a partial release, accompanied by principal repayment, or partial Defeasance (as defined in paragraph (34)), in each case, of not less than a specified percentage at least equal to 115% of the related allocated loan amount of such portion of the Mortgaged Property, (b) upon payment in full of such JPMCB Mortgage Loan, (c) upon a Defeasance (as defined in paragraph (34)), (d) releases of out-parcels that are unimproved or other portions of the Mortgaged Property which will not have a material adverse effect on the underwritten value of the Mortgaged Property and which were not afforded any material value in the appraisal obtained at the origination of the JPMCB Mortgage Loan and are not necessary for physical access to the Mortgaged Property or compliance with zoning requirements, or (e) as required pursuant to an order of condemnation. With respect to any partial release (including in connection with
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any partial Defeasance) under the preceding clauses (a) or (d), either: (x) such release of collateral (i) would not constitute a “significant modification” of the subject JPMCB Mortgage Loan within the meaning of Treasury Regulations Section 1.860G-2(b)(2) and (ii) would not cause the subject JPMCB Mortgage Loan to fail to be a “qualified mortgage” within the meaning of Section 860G(a)(3)(A) of the Code; or (y) the mortgagee or servicer can, in accordance with the related Mortgage Loan documents, condition such release of collateral on the related borrower’s delivery of an opinion of tax counsel to the effect specified in the immediately preceding clause (x). For purposes of the preceding clause (x), for any JPMCB Mortgage Loan originated after December 6, 2010, if the fair market value of the real property constituting such Mortgaged Property (reduced by (1) the amount of any lien on the real property that is senior to the JPMCB Mortgage Loan and (2) a proportionate amount of any lien on the real property that is in parity with the lien of the JPMCB Mortgage Loan) after the release is not equal to at least 80% of the principal balance of the JPMCB Mortgage Loan or Whole Loan outstanding after the release, the borrower is required to make a payment of principal in an amount not less than the amount required by the REMIC provisions.
In the case of any JPMCB Mortgage Loan originated after December 6, 2010, in the event of a taking of any portion of a Mortgaged Property by a State or any political subdivision or authority thereof, whether by legal proceeding or by agreement, the borrower can be required to pay down the principal balance of the JPMCB Mortgage Loan or Whole Loan in an amount not less than the amount required by the REMIC provisions and, to such extent, such amount may not be required to be applied to the restoration of the Mortgaged Property or released to the borrower, if, immediately after the release of such portion of the Mortgaged Property from the lien of the Mortgage (but taking into account the planned restoration) the fair market value of the real property constituting the remaining Mortgaged Property (reduced by (1) the amount of any lien on the real property that is senior to the JPMCB Mortgage Loan and (2) a proportionate amount of any lien on the real property that is in parity with the lien of the JPMCB Mortgage Loan) is not equal to at least 80% of the remaining principal balance of the JPMCB Mortgage Loan or Whole Loan.
In the case of any JPMCB Mortgage Loan originated after December 6, 2010, no such JPMCB Mortgage Loan that is secured by more than one Mortgaged Property or that is cross-collateralized with another JPMCB Mortgage Loan permits the release of cross-collateralization of the related Mortgaged Properties or a portion thereof, including due to a partial condemnation, other than in compliance with the loan-to-value ratio and other requirements of the REMIC provisions.
30. Financial Reporting and Rent Rolls. Each Mortgage requires the borrower to provide the owner or holder of the Mortgage with quarterly (other than for single-tenant properties) and annual operating statements, and quarterly (other than for single-tenant properties) rent rolls for properties that have leases contributing more than 5% of the in-place base rent and annual financial statements, which annual financial statements (i) with respect to each JPMCB Mortgage Loan with more than one borrower are in the form of an annual combined balance sheet of the borrower entities (and no other entities), together with the related combined statements of operations, members’ capital and cash flows, including a combining balance sheet and statement of income for the Mortgaged Properties on a combined basis and (ii) for each JPMCB Mortgage Loan with an original principal balance greater than $50 million will be audited by an independent certified public accountant upon the request of the owner or holder of the Mortgage.
31. Acts of Terrorism Exclusion. With respect to each JPMCB Mortgage Loan over $20 million, the related special-form all-risk insurance policy and business interruption policy (issued by an insurer meeting the Insurance Rating Requirements) do not specifically exclude Acts of Terrorism, as defined in the Terrorism Risk Insurance Act of 2002, as amended by the Terrorism Risk Insurance Program Reauthorization Act of 2019 (collectively referred to as “TRIA”), from coverage, or if such coverage is excluded, it is covered by a separate terrorism insurance policy. With respect to each other JPMCB Mortgage Loan, the related special all-risk insurance policy and business interruption policy (issued by an insurer meeting the Insurance Rating Requirements) did not, as of the date of origination of the JPMCB Mortgage Loan, and, to the Mortgage Loan Seller’s knowledge, do not, as of the Cut-off Date, specifically exclude Acts of Terrorism, as defined in TRIA, from coverage, or if such coverage is excluded, it is
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covered by a separate terrorism insurance policy. With respect to each JPMCB Mortgage Loan, the related Mortgage Loan documents do not expressly waive or prohibit the mortgagee from requiring coverage for Acts of Terrorism, as defined in TRIA, or damages related thereto, except to the extent that any right to require such coverage may be limited by availability on commercially reasonable terms.
32. Due on Sale or Encumbrance. Subject to specific exceptions set forth below, each JPMCB Mortgage Loan contains a “due-on-sale” or other such provision for the acceleration of the payment of the unpaid principal balance of such JPMCB Mortgage Loan if, without the consent of the holder of the Mortgage and/or complying with the requirements of the related Mortgage Loan documents (which provide for transfers without the consent of the lender which are customarily acceptable to the Mortgage Loan Seller lending on the security of property comparable to the related Mortgaged Property, such as transfers of worn-out or obsolete furnishings, fixtures, or equipment promptly replaced with property of equivalent value and functionality and transfers by leases entered into in accordance with the Mortgage Loan documents), (a) the related Mortgaged Property, or any controlling equity interest in the related borrower, is directly or indirectly pledged, transferred or sold, other than as related to (i) family and estate planning transfers or transfers upon death or legal incapacity, (ii) transfers to certain affiliates as defined in the related Mortgage Loan documents, (iii) transfers of less than a controlling interest in a borrower, (iv) transfers to another holder of direct or indirect equity in the borrower, a specific Person designated in the related Mortgage Loan documents or a Person satisfying specific criteria identified in the related Mortgage Loan documents, (v) transfers of common stock in publicly traded companies, (vi) a substitution or release of collateral within the parameters of paragraphs (29) and (34) in this Annex E-1, or (vii) by reason of any mezzanine debt that existed at the origination of the related JPMCB Mortgage Loan, or future permitted mezzanine debt or (b) the related Mortgaged Property is encumbered with a subordinate lien or security interest against the related Mortgaged Property, other than (i) any companion interest of any JPMCB Mortgage Loan or any subordinate debt that existed at origination and is permitted under the related Mortgage Loan documents, (ii) purchase money security interests (iii) any JPMCB Mortgage Loan that is cross-collateralized and cross-defaulted with another JPMCB Mortgage Loan or (iv) Permitted Encumbrances. The Mortgage or other Mortgage Loan documents provide that to the extent any Rating Agency fees are incurred in connection with the review of and consent to any transfer or encumbrance, the borrower is responsible for such payment along with all other reasonable fees and expenses incurred by the mortgagee relative to such transfer or encumbrance.
33. Single-Purpose Entity. Each JPMCB Mortgage Loan requires the borrower to be a Single-Purpose Entity for at least as long as the JPMCB Mortgage Loan is outstanding. Both the Mortgage Loan documents and the organizational documents of the borrower with respect to each JPMCB Mortgage Loan with a Cut-off Date Balance in excess of $5 million provide that the borrower is a Single-Purpose Entity, and each JPMCB Mortgage Loan with a Cut-off Date Balance of $20 million or more has a counsel’s opinion regarding non-consolidation of the borrower. For this purpose, a “Single-Purpose Entity” will mean an entity, other than an individual, whose organizational documents (or if the JPMCB Mortgage Loan has a Cut-off Date Balance equal to $5 million or less, its organizational documents or the related Mortgage Loan documents) provide substantially to the effect that it was formed or organized solely for the purpose of owning and operating one or more of the Mortgaged Properties securing the JPMCB Mortgage Loans and prohibit it from engaging in any business unrelated to such Mortgaged Property or Properties, and whose organizational documents further provide, or which entity represented in the related Mortgage Loan documents, substantially to the effect that it does not have any assets other than those related to its interest in and operation of such Mortgaged Property or Properties, or any indebtedness other than as permitted by the related Mortgage(s) or the other related Mortgage Loan documents, that it has its own books and records and accounts separate and apart from those of any other person (other than a borrower for a JPMCB Mortgage Loan that is cross-collateralized and cross-defaulted with the related JPMCB Mortgage Loan), and that it holds itself out as a legal entity, separate and apart from any other person or entity.
34. Defeasance. With respect to any JPMCB Mortgage Loan that, pursuant to the Mortgage Loan documents, can be defeased (a “Defeasance”), (i) the Mortgage Loan documents provide for Defeasance as a unilateral right of the borrower, subject to satisfaction of conditions specified in the Mortgage Loan documents; (ii) the JPMCB Mortgage Loan cannot be defeased within two years after the Closing Date;
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(iii) the borrower is permitted to pledge only United States “government securities” within the meaning of Treasury Regulations Section 1.860G-2(a)(8)(ii), the revenues from which will, in the case of a full Defeasance, be sufficient to make all scheduled payments under the JPMCB Mortgage Loan when due, including the entire remaining principal balance on (A) the maturity date, (B) on or after the first date on which payment may be made without payment of a yield maintenance charge or prepayment penalty; or (C) if the JPMCB Mortgage Loan is an ARD Loan, the entire principal balance outstanding on the related Anticipated Repayment Date, and if the JPMCB Mortgage Loan permits partial releases of real property in connection with partial Defeasance, the revenues from the collateral will be sufficient to pay all such scheduled payments calculated on a principal amount equal to a specified percentage at least equal to 115% of the allocated loan amount for the real property to be released; (iv) the defeasance collateral is not permitted to be subject to prepayment, call, or early redemption; (v) the borrower is required to provide a certification from an independent certified public accountant that the collateral is sufficient to make all scheduled payments under the Mortgage Note as set forth in (iii) above, (vi) if the borrower would continue to own assets in addition to the defeasance collateral, the portion of the JPMCB Mortgage Loan secured by defeasance collateral is required to be assumed (or the mortgagee may require such assumption) by a Single-Purpose Entity; (vii) the borrower is required to provide an opinion of counsel that the mortgagee has a perfected security interest in such collateral prior to any other claim or interest; and (viii) the borrower is required to pay all rating agency fees associated with Defeasance (if rating confirmation is a specific condition precedent thereto) and all other reasonable out-of-pocket expenses associated with Defeasance, including, but not limited to, accountant’s fees and opinions of counsel.
35. Fixed Interest Rates. Each JPMCB Mortgage Loan bears interest at a rate that remains fixed throughout the remaining term of such JPMCB Mortgage Loan, except in the case of an ARD Loan and situations where default interest is imposed.
36. Ground Leases. For purposes of the Mortgage Loan Purchase Agreement, a “Ground Lease” will mean a leasehold estate in real property where the fee owner as the ground lessor conveys for a term or terms of years its entire interest in the land and buildings and other improvements, if any, to the ground lessee (who may, in certain circumstances, own the building and improvements on the land), subject to the reversionary interest of the ground lessor as fee owner.
With respect to any JPMCB Mortgage Loan where the JPMCB Mortgage Loan is secured by a ground leasehold estate in whole or in part, and the related Mortgage does not also encumber the related lessor’s fee interest in such Mortgaged Property, based upon the terms of the ground lease and any estoppel or other agreement received from the ground lessor in favor of the Mortgage Loan Seller, its successors and assigns:
(a) The ground lease or a memorandum regarding such ground lease has been duly recorded or submitted for recordation in a form that is acceptable for recording in the applicable jurisdiction. The ground lease or an estoppel or other agreement received from the ground lessor permits the interest of the lessee to be encumbered by the related Mortgage and does not restrict the use of the related Mortgaged Property by such lessee, its successors or assigns in a manner that would adversely affect the security provided by the related Mortgage. To the Mortgage Loan Seller’s knowledge, no material change in the terms of the ground lease had occurred since its recordation, except by any written instruments which are included in the related Mortgage File;
(b) The lessor under such ground lease has agreed in a writing included in the related Mortgage File (or in such ground lease) that the ground lease may not be amended, modified, canceled or terminated without the prior written consent of the lender and that any such action without such consent is not binding on the lender, its successors or assigns;
(c) The ground lease has an original term (or an original term plus one or more optional renewal terms, which, under all circumstances, may be exercised, and will be enforceable, by either borrower or the mortgagee) that extends not less than 20 years beyond the stated maturity of the related JPMCB Mortgage Loan, or 10 years past the stated maturity if such JPMCB Mortgage Loan fully amortizes by the stated maturity (or with respect to a JPMCB Mortgage Loan that accrues on an actual 360 basis, substantially amortizes);
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(d) The ground lease is not subject to any interests, estates, liens or encumbrances superior to, or of equal priority with, the Mortgage, except for the related fee interest of the ground lessor and the Permitted Encumbrances;
(e) The ground lease does not place commercially unreasonable restrictions on the identity of the mortgagee and the ground lease is assignable to the holder of the JPMCB Mortgage Loan and its successors and assigns without the consent of the lessor thereunder, and in the event it is so assigned, it is further assignable by the holder of the JPMCB Mortgage Loan and its successors and assigns without the consent of the lessor;
(f) The Mortgage Loan Seller has not received any written notice of default under or notice of termination of such ground lease. To the Mortgage Loan Seller’s knowledge, there is no default under such ground lease and no condition that, but for the passage of time or giving of notice, would result in a default under the terms of such ground lease. Such ground lease is in full force and effect as of the Closing Date;
(g) The ground lease or ancillary agreement between the lessor and the lessee requires the lessor to give to the lender written notice of any default, provides that no notice of default or termination is effective unless such notice is given to the lender, and requires that the ground lessor will supply an estoppel;
(h) A lender is permitted a reasonable opportunity (including, where necessary, sufficient time to gain possession of the interest of the lessee under the ground lease through legal proceedings) to cure any default under the ground lease which is curable after the lender’s receipt of notice of any default before the lessor may terminate the ground lease;
(i) The ground lease does not impose any restrictions on subletting that would be viewed as commercially unreasonable by the Mortgage Loan Seller in connection with loans originated for securitization;
(j) Under the terms of the ground lease, an estoppel or other agreement received from the ground lessor and the related Mortgage (taken together), any related insurance proceeds or the portion of the condemnation award allocable to the ground lessee’s interest (other than in respect of a total or substantially total loss or taking as addressed in subpart (k)) will be applied either to the repair or to restoration of all or part of the related Mortgaged Property with (so long as such proceeds are in excess of the threshold amount specified in the related Mortgage Loan documents) the lender or a trustee appointed by it having the right to hold and disburse such proceeds as repair or restoration progresses, or to the payment of the outstanding principal balance of the JPMCB Mortgage Loan, together with any accrued interest;
(k) In the case of a total or substantial taking or loss, under the terms of the ground lease, an estoppel or other agreement and the related Mortgage (taken together), any related insurance proceeds, or portion of the condemnation award allocable to ground lessee’s interest in respect of a total or substantially total loss or taking of the related Mortgaged Property to the extent not applied to restoration, will be applied first to the payment of the outstanding principal balance of the JPMCB Mortgage Loan, together with any accrued interest; and
(l) Provided that the lender cures any defaults which are susceptible to being cured, the ground lessor has agreed to enter into a new lease with lender upon termination of the ground lease for any reason, including rejection of the ground lease in a bankruptcy proceeding.
37. Servicing. The servicing and collection practices used by the Mortgage Loan Seller in respect of each JPMCB Mortgage Loan complied in all material respects with all applicable laws and regulations and was in all material respects legal, proper and prudent, in accordance with Mortgage Loan Seller’s customary commercial mortgage servicing practices.
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38. ARD Loan. Each JPMCB Mortgage Loan identified in the Mortgage Loan Schedule as an ARD Loan starts to amortize no later than the Due Date of the calendar month immediately after the calendar month in which such ARD Loan closed and substantially fully amortizes over its stated term, which term is at least 60 months after the related Anticipated Repayment Date. Each ARD Loan has an Anticipated Repayment Date not less than five years following the origination of such JPMCB Mortgage Loan. If the related borrower elects not to prepay its ARD Loan in full on or prior to the Anticipated Repayment Date pursuant to the existing terms of the JPMCB Mortgage Loan or a unilateral option (as defined in Treasury Regulations under Section 1001 of the Code) in the JPMCB Mortgage Loan exercisable during the term of the JPMCB Mortgage Loan, (i) the JPMCB Mortgage Loan’s interest rate will step up to an interest rate per annum as specified in the related JPMCB Mortgage Loan documents; provided, however, that payment of such Excess Interest will be deferred until the principal of such ARD Loan has been paid in full; (ii) all or a substantial portion of the excess cash flow (which is net of certain costs associated with owning, managing and operating the related Mortgaged Property) collected after the Anticipated Repayment Date will be applied towards the prepayment of such ARD Loan and once the principal balance of an ARD Loan has been reduced to zero all excess cash flow will be applied to the payment of accrued Excess Interest; and (iii) if the property manager for the related Mortgaged Property can be removed by or at the direction of the mortgagee on the basis of a debt service coverage test, the subject debt service coverage ratio will be calculated without taking account of any increase in the related mortgage interest rate on such JPMCB Mortgage Loan’s Anticipated Repayment Date. No ARD Loan provides that the property manager for the related Mortgaged Property can be removed by or at the direction of the mortgagee solely because of the passage of the related Anticipated Repayment Date.
39. Rent Rolls; Operating Histories. The Mortgage Loan Seller has obtained a rent roll (each, a “Certified Rent Roll”) other than with respect to hospitality properties certified by the related Borrower or the related guarantor(s) as accurate and complete in all material respects as of a date within 180 days of the date of origination of the related JPMCB Mortgage Loan. The Mortgage Loan Seller has obtained operating histories (the “Certified Operating Histories”) with respect to each Mortgaged Property certified by the related borrower or the related guarantor(s) as accurate and complete in all material respects as of a date within 180 days of the date of origination of the related JPMCB Mortgage Loan. The Certified Operating Histories collectively report on operations for a period equal to (a) at least a continuous three-year period or (b) in the event the Mortgaged Property was owned, operated or constructed by the borrower or an affiliate for less than three years then for such shorter period of time, it being understood that for mortgaged properties acquired with the proceeds of a JPMCB Mortgage Loan, Certified Operating Histories may not have been available.
40. No Material Default; Payment Record. No JPMCB Mortgage Loan has been more than 30 days delinquent, without giving effect to any grace or cure period, in making required payments since origination, and as of the Closing Date, no JPMCB Mortgage Loan is delinquent (beyond any applicable grace or cure period) in making required payments. To the Mortgage Loan Seller’s knowledge, there is (a) no, and since origination there has been no, material default, breach, violation or event of acceleration existing under the related JPMCB Mortgage Loan, or (b) no event (other than payments due but not yet delinquent) which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a material default, breach, violation or event of acceleration, provided, however, that this representation and warranty does not cover any default, breach, violation or event of acceleration that specifically pertains to or arises out of an exception scheduled to any other representation and warranty made by the Mortgage Loan Seller in this Annex E-1. No person other than the holder of such JPMCB Mortgage Loan may declare any event of default under the JPMCB Mortgage Loan or accelerate any indebtedness under the Mortgage Loan documents.
41. Bankruptcy. In respect of each JPMCB Mortgage Loan, the related borrower is not a debtor in any bankruptcy, receivership, conservatorship, reorganization, insolvency, moratorium or similar proceeding.
42. Organization of Borrower. The Mortgage Loan Seller has obtained an organizational chart or other description of each borrower which identifies all beneficial controlling owners of the borrower (i.e., managing members, general partners or similar controlling person for such borrower) (the “Controlling
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Owner”) and all owners that hold a 25% or greater direct ownership share (i.e., the “Major Sponsors”). The Mortgage Loan Seller (1) required questionnaires to be completed by each Controlling Owner and guarantor or performed other processes designed to elicit information from each Controlling Owner and guarantor regarding such Controlling Owner’s or guarantor’s prior history for at least 10 years regarding any bankruptcies or other insolvencies, any felony convictions, and (2) performed or caused to be performed searches of the public records or services such as Lexis/Nexis, or a similar service designed to elicit information about each Controlling Owner, Major Sponsor and guarantor regarding such Controlling Owner’s, Major Sponsor’s or guarantor’s prior history for at least 10 years regarding any bankruptcies or other insolvencies, any felony convictions, and provided, however, that records searches were limited to the last 10 years. (clauses (1) and (2) collectively, the “Sponsor Diligence”). Based solely on the Sponsor Diligence, to the knowledge of the Mortgage Loan Seller, no Major Sponsor or guarantor (i) was in a state of federal bankruptcy or insolvency proceeding, (ii) had a prior record of having been in a state of federal bankruptcy or insolvency, or (iii) had been convicted of a felony.
43. Environmental Conditions. At origination, each borrower represented and warranted that to its knowledge no hazardous materials or any other substances or materials which are included under or regulated by environmental laws are located on, or have been handled, manufactured, generated, stored, processed, or disposed of on or released or discharged from the Mortgaged Property, except as disclosed by a Phase I environmental assessment (or a Phase II environmental assessment, if applicable) delivered in connection with the origination of the JPMCB Mortgage Loan or except for those substances commonly used in the operation and maintenance of properties of kind and nature similar to those of the Mortgaged Property in compliance with all environmental laws and in a manner that does not result in contamination of the Mortgaged Property. A Phase I environmental site assessment (or update of a previous Phase I and or Phase II site assessment) and, with respect to certain JPMCB Mortgage Loans, a Phase II environmental site assessment (collectively, an “ESA”) meeting ASTM requirements conducted by a reputable environmental consultant in connection with such JPMCB Mortgage Loan within 12 months prior to its origination date (or an update of a previous ESA was prepared), and such ESA (i) did not reveal any known circumstance or condition that rendered the Mortgaged Property at the date of the ESA in material noncompliance with applicable environmental laws or the existence of recognized environmental conditions (as such term is defined in ASTM E1527-05 or its successor, hereinafter “Environmental Condition”) or the need for further investigation, or (ii) if any material noncompliance with environmental laws or the existence of an Environmental Condition or need for further investigation was indicated in any such ESA, then at least one of the following statements is true: (A) 125% of the funds reasonably estimated by a reputable environmental consultant to be sufficient to cover the estimated cost to cure any material noncompliance with applicable environmental laws or the Environmental Condition has been escrowed by the related borrower and is held by the related lender; (B) if the only Environmental Condition relates to the presence of asbestos-containing materials, radon in indoor air, lead based paint, or lead in drinking water, and the only recommended action in the ESA is the institution of such a plan, an operations or maintenance plan has been required to be instituted by the related borrower that can reasonably be expected to mitigate the identified risk; (C) the Environmental Condition identified in the related environmental report was remediated or abated in all material respects prior to the Cut-off Date, and, as appropriate, a no further action or closure letter was obtained from the applicable governmental regulatory authority (or the environmental issue affecting the related Mortgaged Property was otherwise listed by such governmental authority as administratively “closed” or a reputable environmental consultant has concluded that no further action is required); (D) an environmental policy or a lender’s pollution legal liability insurance policy meeting the requirements set forth below that covers liability for the identified circumstance or condition was obtained from an insurer rated no less than A- (or the equivalent) by Moody’s Investors Service, Inc., S&P Global Ratings and/or Fitch Ratings, Inc.; (E) a party not related to the borrower with assets reasonably estimated to be adequate to effect all necessary remediation was identified as the responsible party for such condition or circumstance; or (F) a party related to the borrower with assets reasonably estimated to be adequate to effect all necessary remediation was identified as the responsible party for such condition or circumstance is required to take action. The ESA will be part of the Servicing File; and to the Mortgage Loan Seller’s knowledge, except as set forth in the ESA, there is no (i) known circumstance or condition that rendered the Mortgaged Property in material noncompliance with applicable environmental laws, (ii) Environmental Conditions (as such term is defined in ASTM E1527-05 or its successor), or (iii) need for further investigation.
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In the case of each JPMCB Mortgage Loan set forth on Schedule E-1, (i) such JPMCB Mortgage Loan is the subject of an environmental insurance policy, issued by the issuer set forth on Schedule E-1 (the “Policy Issuer”) and effective as of the date thereof (the “Environmental Insurance Policy”), (ii) as of the Cut-off Date the Environmental Insurance Policy is in full force and effect, there is no deductible and the trustee is a named insured under such policy, (iii)(a) a property condition or engineering report was prepared, if the related Mortgaged Property was constructed prior to 1985, with respect to asbestos-containing materials (“ACM”) and, if the related Mortgaged Property is a multifamily property, with respect to radon gas (“RG”) and lead-based paint (“LBP”), and (b) if such report disclosed the existence of a material and adverse LBP, ACM or RG environmental condition or circumstance affecting the related Mortgaged Property, the related borrower (A) was required to remediate the identified condition prior to closing the JPMCB Mortgage Loan or provide additional security or establish with the mortgagee a reserve in an amount deemed to be sufficient by the Mortgage Loan Seller, for the remediation of the problem, and/or (B) agreed in the Mortgage Loan documents to establish an operations and maintenance plan after the closing of the JPMCB Mortgage Loan that should reasonably be expected to mitigate the environmental risk related to the identified LBP, ACM or RG condition, (iv) on the effective date of the Environmental Insurance Policy, the Mortgage Loan Seller as originator had no knowledge of any material and adverse environmental condition or circumstance affecting the Mortgaged Property (other than the existence of LBP, ACM or RG) that was not disclosed to the Policy Issuer in one or more of the following: (a) the application for insurance, (b) a borrower questionnaire that was provided to the Policy Issuer, or (c) an engineering or other report provided to the Policy Issuer, and (v) the premium of any Environmental Insurance Policy has been paid through the maturity of the policy’s term and the term of such policy extends at least five years beyond the maturity of the JPMCB Mortgage Loan.
44. Lease Estoppels. With respect to each JPMCB Mortgage Loan predominantly secured by a retail, office or industrial property leased to a single tenant, the Mortgage Loan Seller reviewed such estoppel obtained from such tenant no earlier than 90 days prior to the origination date of the related JPMCB Mortgage Loan, and to the Mortgage Loan Seller’s knowledge based solely on the related estoppel certificate, the related lease is in full force and effect or if not in full force and effect, the related space was underwritten as vacant, subject to customary reservations of tenant’s rights, such as, without limitation, with respect to common area maintenance (“CAM”) and pass-through audits and verification of landlord’s compliance with co-tenancy provisions. With respect to each JPMCB Mortgage Loan predominantly secured by a retail, office or industrial property, the Mortgage Loan Seller has received lease estoppels executed within 90 days of the origination date of the related JPMCB Mortgage Loan that collectively account for at least 65% of the in-place base rent for the Mortgaged Property or set of cross-collateralized properties that secure a JPMCB Mortgage Loan that is represented on the Certified Rent Roll. To the Mortgage Loan Seller’s knowledge, each lease represented on the Certified Rent Roll is in full force and effect, subject to customary reservations of tenant’s rights, such as with respect to CAM and pass-through audits and verification of landlord’s compliance with co-tenancy provisions.
45. Appraisal. The Mortgage File contains an appraisal of the related Mortgaged Property with an appraisal date within 6 months of the JPMCB Mortgage Loan origination date, and within 12 months of the Closing Date. The appraisal is signed by an appraiser who is a Member of the Appraisal Institute (“MAI”) and, to the Mortgage Loan Seller’s knowledge, had no interest, direct or indirect, in the Mortgaged Property or the borrower or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the JPMCB Mortgage Loan. Each appraiser has represented in such appraisal or in a supplemental letter that the appraisal satisfies the requirements of the “Uniform Standards of Professional Appraisal Practice” as adopted by the Appraisal Standards Board of the Appraisal Foundation.
46. Mortgage Loan Schedule. The information pertaining to each JPMCB Mortgage Loan which is set forth in the Mortgage Loan Schedule attached as an exhibit to the Mortgage Loan Purchase Agreement is true and correct in all material respects as of the Cut-off Date and contains all information required by the PSA to be contained therein.
47. Cross-Collateralization. No JPMCB Mortgage Loan is cross-collateralized or cross-defaulted with any other mortgage loan that is outside the Mortgage Pool.
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48. Advance of Funds by the Mortgage Loan Seller. No advance of funds has been made by the Mortgage Loan Seller to the related borrower, and no funds have been received from any person other than the related borrower or an affiliate, directly, or, to the knowledge of the Mortgage Loan Seller, indirectly for, or on account of, payments due on the JPMCB Mortgage Loan. Neither the Mortgage Loan Seller nor any affiliate thereof has any obligation to make any capital contribution to any borrower under a JPMCB Mortgage Loan, other than contributions made on or prior to the Closing Date.
49. Compliance with Anti-Money Laundering Laws. The Mortgage Loan Seller has complied with its internal procedures with respect to all applicable anti-money laundering laws and regulations, including without limitation the USA Patriot Act of 2001 in connection with the origination of the JPMCB Mortgage Loan.
For purposes of these representations and warranties, the phrases “the Mortgage Loan Seller’s knowledge” or “the Mortgage Loan Seller’s belief” and other words and phrases of like import mean, except where otherwise expressly set forth in these representations and warranties, the actual state of knowledge or belief of the Mortgage Loan Seller, its officers and employees directly responsible for the underwriting, origination, servicing or sale of the Mortgage Loans regarding the matters expressly set forth in these representations and warranties. All information contained in documents which are part of or required to be part of a Servicing File, as specified in the PSA (to the extent such documents exist or existed), will be deemed to be within the Mortgage Loan Seller’s knowledge including but not limited to any written notices from or on behalf of the borrower.
For purposes of these representations and warranties, “Servicing File” means a copy of the Mortgage File and documents and records not otherwise required to be contained in the Mortgage File that (i) relate to the origination and/or servicing and administration of the JPMCB Mortgage Loans, (ii) are reasonably necessary for the ongoing administration and/or servicing of the JPMCB Mortgage Loans or for evidencing or enforcing any of the rights of the holder of the JPMCB Mortgage Loans or holders of interests therein and (iii) are in the possession or under the control of the Mortgage Loan Seller, provided that the Mortgage Loan Seller will not be required to deliver any draft documents, privileged or other communications, credit underwriting, due diligence analyses or data or internal worksheets, memoranda, communications or evaluations.
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SCHEDULE
E-1
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
MORTGAGED PROPERTY FOR WHICH ENVIRONMENTAL INSURANCE IS MAINTAINED
None.
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ANNEX E-2
EXCEPTIONS TO JPMCB MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES
| Annex
A-1 ID# |
Mortgage Loans | Representations | Exceptions |
| 3 | Bedrock Portfolio | (7) Lien; Valid Assignment | The related Mortgages and any related assignments of leases secure the subject Mortgage Loan and the related Pari Passu Companion Loan(s) on a pari passu basis. |
| 3 | Bedrock Portfolio | (10) Assignment of Leases and Rents | The related Mortgage and assignment of leases secures the subject Mortgage Loan and the related Pari Passu Companion Loan(s) on a pari passu basis. |
| 18 | 1340 Lafayette | (26) Local Law Compliance | Pursuant to the zoning report provided in connection with the origination of the Mortgage Loan, the Mortgaged Property has two open Office of Administrative Trials and Hearings/Environmental Control Board violations related to certain unallowed occupancy and chain-linked fence that is not in compliance. The borrower is require to resolve and clear each open violation within 90 days following the origination date of the Mortgage Loan. |
| 3 | Bedrock Portfolio | (28) Recourse Obligations | The loss recourse carveout with respect to the Mortgagor’s fraud or intentional misrepresentation is limited to fraud or intentional misrepresentation to disclose a material fact by or on behalf of any individual Mortgagor in connection with the Mortgage Loan, provided, however, with respect to such intentional misrepresentation, so long as the lender has no reasonable basis to suspect that such agent or representative was not authorized to provide such information.
The following triggers only a loss recourse carveout instead of a full recourse carveout: if at any time during the term of the Whole Loan the beneficial ownership of each of the individual Mortgagor (each, an “Individual Mortgagor”) is not identical to the other Individual Mortgagors, whether following a transfer of any direct or indirect ownership interest in any Individual Mortgagor pursuant to the Mortgage Loan documents or otherwise, and a claim is made by a creditor of an Individual Mortgagor or any owner of any beneficial interest in an Individual Mortgagor, or a defense is raised by an Individual Mortgagor that the cross-collateralization of the Mortgages as described in the Mortgage Loan documents constitutes a fraudulent conveyance because the indirect beneficial ownership of each of the Individual Mortgagors is not identical or (b) an Individual Mortgagor or the related master tenant fails to obtain the lender’s prior consent to any transfer of any individual Mortgaged Property or any interest therein or any transfer of any direct or indirect interest in any Individual Mortgagor or the master tenant.
The indemnification obligations of the Mortgagor under the environmental indemnity will terminate on the date that is two years after the date of defeasance or repayment of the Mortgage Loan in full upon satisfaction of certain conditions set forth in the environmental indemnity agreement, including, without limitation, the Mortgagor’s delivery of an updated environmental report satisfactory to the indemnitee in accordance with the environmental indemnity agreement.
|
| 18 | 1340 Lafayette | (28) Recourse Obligations | The indemnification obligations of the Mortgagor under the environmental indemnity will terminate on the date that is two years after the date of repayment of the Mortgage Loan in full upon satisfaction of certain conditions set forth in the environmental indemnity agreement, including, without limitation, the Mortgagor’s delivery of an updated environmental report satisfactory to the indemnitee in accordance with the environmental indemnity agreement. |
| 24 | Crossroads Village | (28) Recourse Obligations | The Mortgage Loan guarantors, Gary Sakwa (the “Sakwa Guarantor”), Christopher Brochert (“Brochert”), and Daniel Stern (“Stern”, together with Brochert, the “Stern/Brochert Guarantor”; the Sakwa Guarantor and the Stern/Brochert Guarantor, each, a “Several Guarantor”) are severally but not jointly liable for the guaranteed obligations, and the liability of each guarantor is limited as follows: each Several Guarantor |
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| Annex
A-1 ID# |
Mortgage Loans | Representations | Exceptions |
will not be liable for any guaranteed obligations of Mortgagor if (i) the acts or omissions of such Several Guarantor did not give rise to the related recourse liability or (ii) such Several Guarantor did not expressly relinquish any right or ability to prevent or consent to such act or omission prior to occurrence of such act or omission (such as resigning as a manager of the Mortgagor while alive and competent or executing a consent resolution expressly approving such action or omission), and (iii) at the time any claim is made against such Several Guarantor, there is no default of the financial covenants of such Several Guarantor; provided, however, if by virtue of the foregoing provisions neither Several Guarantor is liable for the related guaranteed obligations of Mortgagor, then the Sakwa Guarantor will be severally liable for fifty percent (50%) and the Stern/Brochert Guarantor will be severally liable for fifty percent (50%) of such guaranteed obligations of the Mortgagor. Stern and Brochert are jointly and severally liable for all obligations and liabilities of the Stern/Brochert guarantor.
The loss recourse carveout for material physical waste is limited to material physical waste caused by acts or omissions of the Mortgagor, guarantor, or any of the exculpated parties. | |||
| 3 | Bedrock Portfolio | (30) Financial Reporting and Rent Rolls | The Mortgage Loan documents do not expressly require the annual financial statements to be provided on a combined basis.
The Mortgage Loan documents provide that, provided Detroit Real Estate Holdings Company I LLC continues to own a direct or indirect interest in each Mortgagor, the Mortgagors may, in lieu of providing audited annual financial statements for each Mortgagor, provide (i) annual financial statements for each Mortgagor prepared by such Mortgagor, (ii) the annual financial statements of Detroit Real Estate Holdings Company I LLC audited by Plante Moran LLC, a “Big Four” accounting firm or another independent certified public accountant reasonably acceptable to Lender, in accordance with GAAP (or such other accounting basis acceptable to Lender), which must include appropriate notations to indicate the separateness of each individual Mortgagor, and (iii) all footnotes to the audited annual financial statements for Detroit Real Estate Holdings Company I LLC other than those footnotes that solely relate to properties that are not collateral for the Whole Loan).
|
| 3 | Bedrock Portfolio | (31) Acts of Terrorism Exclusion | If TRIPRA or a similar or subsequent statute is not in effect, then provided that terrorism insurance is commercially available, the Mortgagors will not be required to spend on terrorism insurance coverage more than two times the amount of the insurance premium that is payable at such time in respect of the Mortgaged Properties and business interruption/rental loss insurance required hereunder on a stand-alone basis (without giving effect to the cost of terrorism and windstorm components of such property and flood loss insurance), and if the cost of terrorism insurance exceeds such amount, the Mortgagors will be required to purchase the maximum amount of terrorism insurance available with funds equal to such amount. |
| 3 | Bedrock Portfolio | (36) Ground Leases | The One Woodward Avenue individual Mortgaged Property contains two separate leasehold parcels. Parcel B covers the southwest portion of the building and patio and incorporates approximately 1/6th of the building’s footprint. Parcel C is covered by a lease with the City of Detroit and contains the sidewalk area around the building, including the ramp to the underground parking.
The related ground lease for Parcel C is silent with respect to any restrictions on the identity of the mortgagee and whether the ground lease is assignable to the holder of the Mortgage Loan and its successors and assigns without the consent of the lessor thereunder, and in the event it is so assigned, it is further assignable by the holder of the Mortgage Loan and its successors and assigns without the consent of the lessor. |
E-2-2
| Annex
A-1 ID# |
Mortgage Loans | Representations | Exceptions |
The related ground lease for Parcel B does not require that the ground lessor will supply an estoppel. The related ground lease for Parcel C is silent with respect to whether lessor is required to give to the lender written notice of any default, no notice of default or termination is effective unless such notice is given to the lender, and requires that the ground lessor will supply an estoppel.
Neither the related ground lease for Parcel B nor the related ground lease for Parcel C permits a reasonable opportunity to cure any default under the ground lease which is curable after the lender’s receipt of notice of any default before the lessor may terminate the ground lease.
The related ground lease for Parcel C is silent with respect to whether the ground lessor has agreed to enter into a new lease with lender upon termination of the ground lease for any reason, provided that the lender cures any defaults which are susceptible to being cured.
The related ground lease for each of Parcel B and Parcel C is silent with respect to (a) whether the ground lease may not be amended, modified, canceled or terminated without the prior written consent of the lender and that any such action without such consent is not binding on the lender, its successors or assigns; (b) restrictions on subletting; (c) the allocation of any related insurance proceeds or the portion of the condemnation award allocable to the ground lessee’s interest to the repair or restoration of the Mortgaged Property and in the case of a total or substantial taking or loss. | |||
| 3 | Bedrock Portfolio | (37) Servicing | Under the Mortgage Loan documents, in no instance may (a) the annual special servicing fees exceed 0.25% of the outstanding amount of the Mortgage Loan per annum, (b) any workout fees exceed 0.50% of each collection of interest and principal of the Mortgage Loan, and (c) liquidation fees exceed the amount, if any, by which 0.50% of liquidation proceeds exceeds amounts previously paid in respect of workout fees. |
| 3, 18, 24 | All JPMCB Mortgage Loans | (40) No Material Default; Payment Record | With respect to any covenants under the related Mortgage Loan that require the Mortgagor to ensure a tenant or Mortgaged Property is operating or to enforce the terms of leases, such Mortgagor may be in default of one or more of such covenants due to closures mandated or recommended by governmental authorities and moratoriums imposed by governmental authorities on real estate remedies. |
| 3 | Bedrock Portfolio | (47) Cross Collateralization | The Mortgage Loan is cross-collateralized and cross-defaulted with the related Companion Loans. |
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ANNEX F-1
GOLDMAN
SACHS MORTGAGE COMPANY
MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES
GSMC will in its MLPA, with respect to each GSMC Mortgage Loan, make the representations and warranties set forth below as of the Cut-off Date or such other date specified below, in each case subject to the exceptions to those representations and warranties that are described on Annex F-2. Prior to the execution of the related final MLPA, there may be additions, subtractions or other modifications to the representations, warranties and exceptions. These representations, warranties and exceptions should not be read alone, but should only be read in conjunction with the prospectus. Capitalized terms used but not otherwise defined in this Annex F-1 will have the meanings set forth in this prospectus or, if not defined in this prospectus, in the related MLPA.
The related MLPA, together with the related representations and warranties (subject to the exceptions thereto), serves to contractually allocate risk between GSMC, on the one hand, and the issuing entity, on the other. The representations and warranties are not intended to be disclosure statements regarding the characteristics of the related mortgage loans, Mortgaged Properties or other subjects discussed, but rather are intended as a risk allocation mechanism. We cannot assure you that the mortgage loans actually conform to the statements made in the representations and warranties that are presented below. The representations, warranties and exceptions have been provided to you for informational purposes only and prospective investors should not rely on the representations, warranties and exceptions as a basis for any investment decision. For disclosure regarding the characteristics, risks and other information regarding the mortgage loans, Mortgaged Properties and the certificates, you should read and rely solely on the prospectus. None of the depositor or the underwriters or their respective affiliates makes any representation regarding the accuracy or completeness of the representations, warranties and exceptions.
1. Whole Loan; Ownership of Mortgage Loans. Except with respect to a GSMC Mortgage Loan that is part of a Whole Loan, each GSMC Mortgage Loan is a whole loan and not a participation interest in a GSMC Mortgage Loan. Each GSMC Mortgage Loan that is part of a Whole Loan is a senior or pari passu portion of a whole loan evidenced by a senior or pari passu note. At the time of the sale, transfer and assignment to the depositor, no Mortgage Note or Mortgage was subject to any assignment (other than assignments to GSMC), participation or pledge, and GSMC had good title to, and was the sole owner of, each GSMC Mortgage Loan free and clear of any and all liens, charges, pledges, encumbrances, participations, any other ownership interests on, in or to such GSMC Mortgage Loan other than any servicing rights appointment, or similar agreement, any Non-Serviced PSA with respect to a GSMC Mortgage Loan and rights of the holder of a related Companion Loan pursuant to a Co-Lender Agreement. GSMC has full right and authority to sell, assign and transfer each GSMC Mortgage Loan, and the assignment to Depositor constitutes a legal, valid and binding assignment of each GSMC Mortgage Loan free and clear of any and all liens, pledges, charges or security interests of any nature encumbering any GSMC Mortgage Loan other than the rights of the holder of a related Companion Loan pursuant to a Co-Lender Agreement.
2. Loan Document Status. Each related Mortgage Note, Mortgage, assignment of leases (if a separate instrument), guaranty and other agreement executed by or on behalf of the related mortgagor, guarantor or other obligor in connection with such GSMC Mortgage Loan is the legal, valid and binding obligation of the related mortgagor, guarantor or other obligor (subject to any non-recourse provisions contained in any of the foregoing agreements and any applicable state anti-deficiency or market value limit deficiency legislation), as applicable, and is enforceable in accordance with its terms, except (i) as such enforcement may be limited by (a) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (b) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law) and (ii) that certain provisions in such Mortgage Loan documents (including, without limitation, provisions requiring the payment of default interest, late fees or prepayment/yield maintenance fees,
F-1-1
charges and/or premiums) are, or may be, further limited or rendered unenforceable by or under applicable law, but (subject to the limitations set forth in clause (i) above) such limitations or unenforceability will not render such Mortgage Loan documents invalid as a whole or materially interfere with the Mortgagee’s realization of the principal benefits and/or security provided thereby (clauses (i) and (ii) collectively, the “Standard Qualifications”).
Except as set forth in the immediately preceding sentence, there is no valid offset, defense, counterclaim or right of rescission available to the related mortgagor with respect to any of the related Mortgage Notes, Mortgages or other Mortgage Loan documents, including, without limitation, any such valid offset, defense, counterclaim or right based on intentional fraud by GSMC in connection with the origination of any GSMC Mortgage Loan, that would deny the Mortgagee the principal benefits intended to be provided by the Mortgage Note, Mortgage or other Mortgage Loan documents.
3. Mortgage Provisions. The Mortgage Loan documents for each GSMC Mortgage Loan contain provisions that render the rights and remedies of the holder thereof adequate for the practical realization against the related Mortgaged Property of the principal benefits of the security intended to be provided thereby, including realization by judicial or, if applicable, nonjudicial foreclosure subject to the limitations set forth in the Standard Qualifications.
4. Mortgage Status; Waivers and Modifications. Since origination and except by written instruments set forth in the related Mortgage File (a)(1) there has been no forbearance, waiver or modification of the material terms of the Mortgage Loan which such forbearance, waiver or modification relates to the COVID-19 Emergency and (2) other than as related to the COVID-19 Emergency, the material terms of such Mortgage, Mortgage Note, GSMC Mortgage Loan guaranty, and related Mortgage Loan documents have not been waived, impaired, modified, altered, satisfied, canceled, subordinated or rescinded in any respect which materially interferes with the security intended to be provided by such Mortgage; (b) no related Mortgaged Property or any portion thereof has been released from the lien of the related Mortgage in any manner which materially interferes with the security intended to be provided by such Mortgage or the use or operation of the remaining portion of such Mortgaged Property; and (c) neither the related Mortgagor nor the related guarantor has been released from its material obligations under the related GSMC Mortgage Loan. With respect to each Mortgage Loan, except as contained in a written document included in the related Mortgage File, there have been no modifications, amendments or waivers that could be reasonably expected to have a material adverse effect on such Mortgage Loan that have been consented to by GSMC on or after October 20, 2021.
5. Lien; Valid Assignment. Subject to the Standard Qualifications, each assignment of Mortgage and assignment of assignment of leases to the issuing entity (or, with respect to a Non-Serviced Mortgage Loan, to the related Non-Serviced Trustee) constitutes a legal, valid and binding assignment to the issuing entity (or, with respect to a Non-Serviced Mortgage Loan, to the related Non-Serviced Trustee). Each related Mortgage and assignment of leases is freely assignable without the consent of the related mortgagor. Each related Mortgage is a legal, valid and enforceable first lien on the related Mortgagor’s fee (or if identified on the mortgage loan schedule attached to the related MLPA, leasehold) interest in the related Mortgaged Property in the principal amount of such GSMC Mortgage Loan or allocated loan amount (subject only to Permitted Encumbrances (as defined below) and the exceptions to paragraph (6) set forth on Annex F-2 (each such exception, a “Title Exception”)), except as the enforcement thereof may be limited by the Standard Qualifications. Such Mortgaged Property (subject to and excepting Permitted Encumbrances and the Title Exceptions) as of origination was, and as of the Cut-off Date, to GSMC’s knowledge, is free and clear of any recorded mechanics’ liens, recorded materialmen’s liens and other recorded encumbrances which are prior to or equal with the lien of the related Mortgage, except those which are bonded over, escrowed for or insured against by a lender’s title insurance policy (as described below), and, to GSMC’s knowledge and subject to the rights of tenants (as tenants only) (subject to and excepting Permitted Encumbrances and the Title Exceptions), no rights exist which under law could give rise to any such lien or encumbrance that would be prior to or equal with the lien of the related Mortgage, except those which are bonded over, escrowed for or insured against by a lender’s title insurance policy (as described below). Notwithstanding anything in this representation to the contrary, no representation is made as to the perfection of any security interest in rents or other personal
F-1-2
property to the extent that possession or control of such items or actions other than the filing of Uniform Commercial Code financing statements is required in order to effect such perfection.
6. Permitted Liens; Title Insurance. Each Mortgaged Property securing a GSMC Mortgage Loan is covered by an American Land Title Association loan title insurance policy or a comparable form of loan title insurance policy approved for use in the applicable jurisdiction (or, if such policy is yet to be issued, by a pro forma policy, a preliminary title policy with escrow instructions or a “marked up” commitment, in each case binding on the title insurer) (the “Title Policy”) in the original principal amount of such GSMC Mortgage Loan (or with respect to a GSMC Mortgage Loan secured by multiple properties, an amount equal to at least the allocated loan amount with respect to the Title Policy for each such property) after all advances of principal (including any advances held in escrow or reserves), that insures for the benefit of the owner of the indebtedness secured by the Mortgage, the first priority lien of the Mortgage, which lien is subject only to (a) the lien of current real property taxes, water charges, sewer rents and assessments due and payable but not yet delinquent; (b) covenants, conditions and restrictions, rights of way, easements and other matters of public record; (c) the exceptions (general and specific) and exclusions set forth in such Title Policy; (d) other matters to which like properties are commonly subject; (e) the rights of tenants (as tenants only) under leases (including subleases) pertaining to the related Mortgaged Property and condominium declarations; (f) if the related GSMC Mortgage Loan constitutes a cross-collateralized GSMC Mortgage Loan, the lien of the Mortgage for another GSMC Mortgage Loan contained in the same Crossed Group; and (g) if the related GSMC Mortgage Loan is part of a Whole Loan, the rights of the holder(s) of any related Companion Loan(s) pursuant to the related Co-Lender Agreement; provided that none of items (a) through (g), individually or in the aggregate, materially and adversely interferes with the value or current use of the Mortgaged Property or the security intended to be provided by such Mortgage or the mortgagor’s ability to pay its obligations when they become due (collectively, the “Permitted Encumbrances”). Except as contemplated by clauses (f) and (g) of the preceding sentence, none of the Permitted Encumbrances are mortgage liens that are senior to or coordinate and co-equal with the lien of the related Mortgage. Such Title Policy (or, if it has yet to be issued, the coverage to be provided thereby) is in full force and effect, all premiums thereon have been paid and no claims have been made by GSMC thereunder and no claims have been paid thereunder. Neither GSMC, nor to GSMC’s knowledge, any other holder of a GSMC Mortgage Loan, has done, by act or omission, anything that would materially impair the coverage under such Title Policy.
7. Junior Liens. It being understood that B notes secured by the same Mortgage as a GSMC Mortgage Loan are not subordinate mortgages or junior liens, except for any GSMC Mortgage Loan that is cross-collateralized and cross-defaulted with another GSMC Mortgage Loan, there are no subordinate mortgages or junior liens securing the payment of money encumbering the related Mortgaged Property (other than Permitted Encumbrances and the Title Exceptions, taxes and assessments, mechanics and materialmens liens (which are the subject of the representation in paragraph (5) above), and equipment and other personal property financing). Except as set forth on Schedule F-1 to this Annex F-1, GSMC has no knowledge of any mezzanine debt secured directly by interests in the related mortgagor.
8. Assignment of Leases and Rents. There exists as part of the related Mortgage File an assignment of leases (either as a separate instrument or incorporated into the related Mortgage). Subject to the Permitted Encumbrances and the Title Exceptions, each related assignment of leases creates a valid first-priority collateral assignment of, or a valid first-priority lien or security interest in, rents and certain rights under the related lease or leases, subject only to a license granted to the related mortgagor to exercise certain rights and to perform certain obligations of the lessor under such lease or leases, including the right to operate the related leased property, except as the enforcement thereof may be limited by the Standard Qualifications. The related Mortgage or related assignment of leases, subject to applicable law, provides that, upon an event of default under each GSMC Mortgage Loan, a receiver is permitted to be appointed for the collection of rents or for the related Mortgagee to enter into possession to collect the rents or for rents to be paid directly to the Mortgagee.
9. UCC Filings. If the related Mortgaged Property is operated as a hospitality property, GSMC has filed and/or recorded or caused to be filed and/or recorded (or, if not filed and/or recorded, submitted in proper form for filing and/or recording), UCC financing statements in the appropriate public filing and/or
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recording offices necessary at the time of the origination of the related GSMC Mortgage Loan to perfect a valid security interest in all items of physical personal property reasonably necessary to operate such Mortgaged Property owned by such mortgagor and located on the related Mortgaged Property (other than any non-material personal property, any personal property subject to a purchase money security interest, a sale and leaseback financing arrangement as permitted under the terms of the related Mortgage Loan documents or any other personal property leases applicable to such personal property), to the extent perfection may be effected pursuant to applicable law by recording or filing, as the case may be. Subject to the Standard Qualifications, each related Mortgage (or equivalent document) creates a valid and enforceable lien and security interest on the items of personalty described above. No representation is made as to the perfection of any security interest in rents or other personal property to the extent that possession or control of such items or actions other than the filing of UCC financing statements are required in order to effect such perfection.
10. Condition of Property. GSMC or the originator of each GSMC Mortgage Loan inspected or caused to be inspected each related Mortgaged Property within six months of origination of the related GSMC Mortgage Loan and within thirteen months of the Cut-off Date.
An engineering report or property condition assessment was prepared in connection with the origination of each GSMC Mortgage Loan no more than thirteen months prior to the Cut-off Date. To GSMC’s knowledge, based solely upon due diligence customarily performed in connection with the origination of comparable mortgage loans, as of the Closing Date, each related Mortgaged Property was free and clear of any material damage (other than deferred maintenance for which escrows were established at origination) that would affect materially and adversely the use or value of such Mortgaged Property as security for the GSMC Mortgage Loan.
11. Taxes and Assessments. All taxes, governmental assessments and other outstanding governmental charges (including, without limitation, water and sewage charges), or installments thereof, which could be a lien on the related Mortgaged Property that would be of equal or superior priority to the lien of the Mortgage and that prior to the Cut-off Date have become delinquent in respect of each related Mortgaged Property have been paid, or an escrow of funds has been established in an amount sufficient to cover such payments and reasonably estimated interest and penalties, if any, thereon. For purposes of this representation and warranty, real estate taxes and governmental assessments and other outstanding governmental charges and installments thereof will not be considered delinquent until the earlier of (a) the date on which interest and/or penalties would first be payable thereon and (b) the date on which enforcement action is entitled to be taken by the related taxing authority.
12. Condemnation. As of the date of origination and to GSMC’s knowledge as of the Cut-off Date, there is no proceeding pending, and, to GSMC’s knowledge as of the date of origination and as of the Cut-off Date, there is no proceeding threatened, for the total or partial condemnation of any Mortgaged Property that would have a material adverse effect on the value, use or operation of such Mortgaged Property.
13. Actions Concerning Mortgage Loan. As of the date of origination and to GSMC’s knowledge as of the Cut-off Date, there was no pending or filed action, suit or proceeding, arbitration or governmental investigation involving any mortgagor, guarantor, or mortgagor’s interest in the related Mortgaged Property, an adverse outcome of which would reasonably be expected to materially and adversely affect (a) such mortgagor’s title to such Mortgaged Property, (b) the validity or enforceability of the Mortgage, (c) such mortgagor’s ability to perform under the related GSMC Mortgage Loan, (d) such guarantor’s ability to perform under the related guaranty, (e) the principal benefit of the security intended to be provided by the related Mortgage Loan documents or (f) the current principal use of such Mortgaged Property.
14. Escrow Deposits. All escrow deposits and payments required to be escrowed with any Mortgagee pursuant to each GSMC Mortgage Loan are in the possession, or under the control, of GSMC or its servicer, and there are no deficiencies (subject to any applicable grace or cure periods) in connection therewith, and all such escrows and deposits (or the right thereto) that are required to be escrowed with the related Mortgagee under the related Mortgage Loan documents are being conveyed by GSMC to the Depositor or its servicer.
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15. No Holdbacks. The principal amount of each GSMC Mortgage Loan stated on the mortgage loan schedule attached to the related MLPA has been fully disbursed as of the Closing Date and there is no requirement for future advances thereunder (except in those cases where the full amount of the GSMC Mortgage Loan has been disbursed but a portion thereof is being held in escrow or reserve accounts pending the satisfaction of certain conditions relating to leasing, repairs or other matters with respect to the related Mortgaged Property, the mortgagor or other considerations determined by GSMC to merit such holdback).
16. Insurance. Each related Mortgaged Property is, and is required pursuant to the related Mortgage to be, insured by a property insurance policy providing coverage for loss in accordance with coverage found under a “special cause of loss form” or “all risk form” that includes replacement cost valuation issued by an insurer meeting the requirements of the related Mortgage Loan documents and meeting the Insurance Rating Requirements (as defined below), in an amount (subject to a customary deductible) not less than the lesser of (1) the original principal balance of the related GSMC Mortgage Loan and (2) the full insurable value on a replacement cost basis of the improvements, furniture, furnishings, fixtures and equipment owned by the related mortgagor and included in such Mortgaged Property (with no deduction for physical depreciation), but, in any event, not less than the amount necessary or containing such endorsements as are necessary to avoid the operation of any coinsurance provisions with respect to the related Mortgaged Property.
“Insurance Rating Requirements” means either (i) a claims paying or financial strength rating of at least “A-:VIII” from A.M. Best Company or “A3” (or the equivalent) from Moody’s Investors Service, Inc. or “A-” from S&P Global Ratings or (ii) the Syndicate Insurance Rating Requirements. “Syndicate Insurance Rating Requirements” means insurance provided by a syndicate of insurers, as to which (i) if such syndicate consists of 5 or more members, at least 60% of the coverage is provided by insurers that meet the Insurance Rating Requirements (under clause (i) of the definition of such term) and up to 40% of the coverage is provided by insurers that have a claims paying or financial strength rating of at least “BBB-” by S&P Global Ratings, acting through Standard & Poor’s Financial Services LLC or at least “Baa3” by Moody’s Investors Service, Inc., and (ii) if such syndicate consists of 4 or fewer members, at least 75% of the coverage is provided by insurers that meet the Insurance Rating Requirements (under clause (i) of the definition of such term) and up to 25% of the coverage is provided by insurers that have a claims paying or financial strength rating of at least “BBB-” by S&P Global Ratings, acting through Standard & Poor’s Financial Services LLC or at least “Baa3” by Moody’s Investors Service, Inc.
Each related Mortgaged Property is also covered, and required to be covered pursuant to the related Mortgage Loan documents, by business interruption or rental loss insurance which (subject to a customary deductible) covers a period of not less than 12 months (or with respect to each GSMC Mortgage Loan on a single asset with a principal balance of $50 million or more, 18 months).
If any material part of the improvements, exclusive of a parking lot, located on a Mortgaged Property is in an area identified in the Federal Register by the Federal Emergency Management Agency as a “Special Flood Hazard Area,” the related mortgagor is required to maintain insurance in the maximum amount available under the National Flood Insurance Program (irrespective of whether such coverage is provided pursuant to a National Flood Insurance Program policy or through a private policy), plus such additional flood coverage in an amount as is generally required by GSMC for comparable mortgage loans intended for securitization.
If a Mortgaged Property is located within 25 miles of the coast of the Gulf of Mexico or the Atlantic coast of Florida, Georgia, South Carolina or North Carolina, the related mortgagor is required to maintain coverage for windstorm and/or windstorm related perils and/or “named storms” issued by an insurer meeting the Insurance Rating Requirements or endorsement covering damage from windstorm and/or windstorm related perils and/or named storms, in an amount not less than the lesser of (1) the original principal balance of the related GSMC Mortgage Loan and (2) 100% of the full insurable value on a replacement cost basis of the improvements and personalty and fixtures included in the related Mortgaged Property by an insurer meeting the Insurance Rating Requirements.
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Each Mortgaged Property is covered, and required to be covered pursuant to the related Mortgage Loan documents, by a commercial general liability insurance policy issued by an insurer meeting the Insurance Rating Requirements including coverage for property damage, contractual damage and personal injury (including bodily injury and death) in amounts as are generally required by prudent institutional commercial mortgage lenders, and in any event not less than $1 million per occurrence and $2 million in the aggregate.
An architectural or engineering consultant has performed an analysis of each Mortgaged Property located in seismic zones 3 or 4 in order to evaluate the structural and seismic condition of such property, for the sole purpose of assessing the scenario expected limit (“SEL”) for the related Mortgaged Property in the event of an earthquake. In such instance, the SEL was based on a 475-year return period, an exposure period of 50 years and a 10% probability of exceedance. If the resulting report concluded that the SEL would exceed 20% of the amount of the replacement costs of the improvements, earthquake insurance on such Mortgaged Property was obtained from an insurer rated at least “A:VIII” by A.M. Best Company or “A3” (or the equivalent) from Moody’s Investors Service, Inc. or “A-” by S&P Global Ratings, acting through Standard & Poor’s Financial Services LLC in an amount not less than 100% of the SEL.
The Mortgage Loan documents for each GSMC Mortgage Loan require insurance proceeds in respect of a property loss to be applied either (a) to the repair or restoration of all or part of the related Mortgaged Property, with respect to all property losses in excess of 5% of the original or then outstanding principal amount of the related GSMC Mortgage Loan (or related Whole Loan), the Mortgagee (or a trustee appointed by it) having the right to hold and disburse such proceeds as the repair or restoration progresses, or (b) to the payment of the outstanding principal balance of such GSMC Mortgage Loan together with any accrued interest thereon.
All premiums on all insurance policies referred to in this section required to be paid as of the Cut-off Date have been paid, and such insurance policies name the Mortgagee under each GSMC Mortgage Loan and its successors and assigns as a loss payee under a Mortgagee endorsement clause or, in the case of the general liability insurance policy, as named or additional insured. Such insurance policies will inure to the benefit of the trustee (or, in the case of a Mortgage Loan that is a Non-Serviced Mortgage Loan, the applicable Non-Serviced Trustee). Each related GSMC Mortgage Loan obligates the related mortgagor to maintain (or cause to be maintained) all such insurance and, at such mortgagor’s failure to do so, authorizes the Mortgagee to maintain such insurance at the mortgagor’s reasonable cost and expense and to charge such mortgagor for related premiums. All such insurance policies (other than commercial liability policies) require at least 10 days’ prior notice to the Mortgagee of termination or cancellation arising because of nonpayment of a premium and at least 30 days’ prior notice to the Mortgagee of termination or cancellation (or such lesser period, not less than 10 days, as may be required by applicable law) arising for any reason other than non-payment of a premium and no such notice has been received by GSMC.
17. Access; Utilities; Separate Tax Lots. Each Mortgaged Property (a) is located on or adjacent to a public road and has direct legal access to such road, or has access via an irrevocable easement or irrevocable right of way permitting ingress and egress to/from a public road, (b) is served by or has uninhibited access rights to public or private water and sewer (or well and septic) and all required utilities, all of which are appropriate for the current use of such Mortgaged Property, and (c) constitutes one or more separate tax parcels which do not include any property which is not part of the Mortgaged Property or is subject to an endorsement under the related Title Policy insuring the Mortgaged Property, or in certain cases, an application has been, or will be, made to the applicable governing authority for creation of separate tax lots, in which case the related GSMC Mortgage Loan requires the mortgagor to escrow an amount sufficient to pay taxes for the existing tax parcel of which such Mortgaged Property is a part until the separate tax lots are created.
18. No Encroachments. To GSMC’s knowledge based solely on surveys obtained in connection with origination and the Mortgagee’s Title Policy (or, if such policy is not yet issued, a pro forma title policy, a preliminary title policy with escrow instructions or a “marked up” commitment) obtained in connection with the origination of each GSMC Mortgage Loan, all material improvements that were included for the purpose of determining the appraised value of the related Mortgaged Property at the time of the
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origination of such GSMC Mortgage Loan are within the boundaries of the related Mortgaged Property, except encroachments that do not materially and adversely affect the value or current use of such Mortgaged Property or for which insurance or endorsements were obtained under the Title Policy. No improvements on adjoining parcels encroach onto the related Mortgaged Property except for encroachments that do not materially and adversely affect the value or current use of such Mortgaged Property or for which insurance or endorsements were obtained under the Title Policy. No improvements encroach upon any easements except for encroachments the removal of which would not materially and adversely affect the value or current use of such Mortgaged Property or for which insurance or endorsements were obtained under the Title Policy.
19. No Contingent Interest or Equity Participation. No GSMC Mortgage Loan has a shared appreciation feature, any other contingent interest feature or a negative amortization feature (except that an ARD Loan may provide for the accrual of the portion of interest in excess of the rate in effect prior to the Anticipated Repayment Date) or an equity participation by GSMC.
20. REMIC. Each GSMC Mortgage Loan is a “qualified mortgage” within the meaning of Section 860G(a)(3) of the Code (but determined without regard to the rule in Treasury Regulations Section 1.860G-2(f)(2) that treats certain defective mortgage loans as qualified mortgages), and, accordingly, (A) the issue price of the GSMC Mortgage Loan to the related Mortgagor at origination did not exceed the non-contingent principal amount of the GSMC Mortgage Loan and (B) either: (a) such GSMC Mortgage Loan is secured by an interest in real property (including buildings and structural components thereof, but excluding personal property) having a fair market value (i) at the date the GSMC Mortgage Loan (or related Whole Loan) was originated at least equal to 80% of the adjusted issue price of the GSMC Mortgage Loan (or related Whole Loan) on such date or (ii) at the Closing Date at least equal to 80% of the adjusted issue price of the GSMC Mortgage Loan (or related Whole Loan) on such date, provided that for purposes hereof, the fair market value of the real property interest must first be reduced by (A) the amount of any lien on the real property interest that is senior to the GSMC Mortgage Loan and (B) a proportionate amount of any lien that is in parity with the GSMC Mortgage Loan; or (b) substantially all of the proceeds of such GSMC Mortgage Loan were used to acquire, improve or protect the real property which served as the only security for such GSMC Mortgage Loan (other than a recourse feature or other third party credit enhancement within the meaning of Treasury Regulations Section 1.860G-2(a)(1)(ii)). If the GSMC Mortgage Loan was “significantly modified” prior to the Closing Date so as to result in a taxable exchange under Section 1001 of the Code, it either (x) was modified as a result of the default or reasonably foreseeable default of such GSMC Mortgage Loan or (y) satisfies the provisions of either sub-clause (B)(a)(i) above (substituting the date of the last such modification for the date the GSMC Mortgage Loan was originated) or sub-clause (B)(a)(ii), including the proviso thereto. For purposes of the preceding sentence, a GSMC Mortgage Loan will not be considered “significantly modified” solely by reason of the borrower having been granted a COVID-19 related forbearance prior to October 1, 2021 (or prior to such later date as may be provided by the IRS in a future guidance) provided that: (a) such GSMC Mortgage Loan forbearance is covered by Revenue Procedure 2020-26 (as extended by Revenue Procedure 2021-12) by reason of satisfying the requirements for such coverage stated in Section 5.02(2) of Revenue Procedure 2020-26; and (b) GSMC identifies such GSMC Mortgage Loan and provides (x) the date on which such forbearance was granted, (y) the length in months of the forbearance, and (z) how the payments in forbearance will be paid (that is, by extension of maturity, change of amortization schedule, etc.). Any prepayment premium and yield maintenance charges applicable to the GSMC Mortgage Loan constitute “customary prepayment penalties” within the meaning of Treasury Regulations Section 1.860G-1(b)(2). All terms used in this paragraph will have the same meanings as set forth in the related Treasury Regulations.
21. Compliance with Usury Laws. The Mortgage Rate (exclusive of any default interest, late charges, yield maintenance charge, or prepayment premiums) of each GSMC Mortgage Loan complied as of the date of origination with, or was exempt from, applicable state or federal laws, regulations and other requirements pertaining to usury.
22. Authorized to do Business. To the extent required under applicable law, as of the Cut-off Date or as of the date that such entity held the Mortgage Note, each holder of the Mortgage Note was authorized
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to originate, acquire and/or hold (as applicable) the Mortgage Note in the jurisdiction in which each related Mortgaged Property is located, or the failure to be so authorized does not materially and adversely affect the enforceability of such GSMC Mortgage Loan by the issuing entity.
23. Trustee under Deed of Trust. With respect to each Mortgage which is a deed of trust, as of the date of origination and, to GSMC’s knowledge, as of the Closing Date, a trustee, duly qualified under applicable law to serve as such, currently so serves and is named in the deed of trust or has been substituted in accordance with the Mortgage and applicable law or may be substituted in accordance with the Mortgage and applicable law by the related Mortgagee.
24. Local Law Compliance. To GSMC’s knowledge, based upon any of a letter from any governmental authorities, a legal opinion, an architect’s letter, a zoning consultant’s report, an endorsement to the related Title Policy, or other affirmative investigation of local law compliance consistent with the investigation conducted by GSMC for similar commercial and multifamily mortgage loans intended for securitization, there are no material violations of applicable zoning ordinances, building codes and land laws (collectively “Zoning Regulations”) with respect to the improvements located on or forming part of each Mortgaged Property securing a GSMC Mortgage Loan as of the date of origination of such GSMC Mortgage Loan (or related Whole Loan, as applicable) and as of the Cut-off Date, other than those which (i) are insured by the Title Policy or a law and ordinance insurance policy or (ii) would not have a material adverse effect on the value, operation or net operating income of the related Mortgaged Property. The terms of the related Mortgage Loan documents require the mortgagor to comply in all material respects with all applicable governmental regulations, zoning and building laws.
25. Licenses and Permits. Each mortgagor covenants in the related Mortgage Loan documents that it will keep all material licenses, permits and applicable governmental authorizations necessary for its operation of the related Mortgaged Property in full force and effect, and to GSMC’s knowledge based upon any of a letter from any government authorities or other affirmative investigation of local law compliance consistent with the investigation conducted by GSMC for similar commercial and multifamily mortgage loans intended for securitization, all such material licenses, permits and applicable governmental authorizations are in effect. Each GSMC Mortgage Loan requires the related mortgagor to be qualified to do business in the jurisdiction in which the related Mortgaged Property is located.
26. Recourse Obligations. The Mortgage Loan documents for each GSMC Mortgage Loan provide that such GSMC Mortgage Loan (a) becomes full recourse to the mortgagor and guarantor (which is a natural person or persons, or an entity distinct from the mortgagor (but may be affiliated with the mortgagor) that has assets other than equity in the related Mortgaged Property that are not de minimis) in any of the following events: (i) if any voluntary petition for bankruptcy, insolvency, dissolution or liquidation pursuant to federal bankruptcy law, or any similar federal or state law, will be filed by the related mortgagor; (ii) the related mortgagor or guarantor will have colluded with (or, alternatively, solicited or caused to be solicited) other creditors to cause an involuntary bankruptcy filing with respect to such mortgagor or (iii) voluntary transfers of either the Mortgaged Property or equity interests in the mortgagor made in violation of the related Mortgage Loan documents; and (b) contains provisions providing for recourse against the mortgagor and guarantor (which is a natural person or persons, or an entity distinct from the mortgagor (but may be affiliated with the mortgagor) that has assets other than equity in the related Mortgaged Property that are not de minimis), for losses and damages sustained by reason of such mortgagor’s (i) misappropriation of rents after the occurrence of an event of default under the related GSMC Mortgage Loan; (ii) misappropriation of (A) insurance proceeds or condemnation awards or (B) security deposits or, alternatively, the failure of any security deposits to be delivered to the Mortgagee upon foreclosure or action in lieu thereof (except to the extent applied in accordance with leases prior to a GSMC Mortgage Loan event of default); (iii) fraud or intentional material misrepresentation; (iv) breaches of the environmental covenants in the Mortgage Loan documents; or (v) commission of intentional material physical waste at the related Mortgaged Property (but, in some cases, only to the extent there is sufficient cash flow generated by the related Mortgaged Property to prevent such waste).
27. Mortgage Releases. The terms of the related Mortgage or related Mortgage Loan documents do not provide for release of any material portion of the related Mortgaged Property from the lien of the
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Mortgage except (a) a partial release, accompanied by principal repayment, or partial Defeasance (as defined in paragraph (32)), in each case, of not less than a specified percentage at least equal to the lesser of (i) 110% of the related allocated loan amount of such portion of the Mortgaged Property and (ii) the outstanding principal balance of the related GSMC Mortgage Loan, (b) upon payment in full of such GSMC Mortgage Loan, (c) upon a Defeasance (as defined in (32) below), (d) releases of out-parcels that are unimproved or other portions of the related Mortgaged Property which will not have a material adverse effect on the underwritten value of such Mortgaged Property and which were not afforded any material value in the appraisal obtained at the origination of the GSMC Mortgage Loan and are not necessary for physical access to the Mortgaged Property or compliance with zoning requirements, or (e) as required pursuant to an order of condemnation or taking by a State or any political subdivision or authority thereof. With respect to any partial release (including in connection with any partial Defeasance) under the preceding clauses (a) or (d), either: (x) such release of collateral (i) would not constitute a “significant modification” of the subject GSMC Mortgage Loan within the meaning of Section 1.860G-2(b)(2) of the Treasury Regulations and (ii) would not cause the subject GSMC Mortgage Loan to fail to be a “qualified mortgage” within the meaning of Code Section 860G(a)(3)(A); or (y) the Mortgagee or servicer can, in accordance with the related Mortgage Loan documents, condition such release of collateral on the related mortgagor’s delivery of an opinion of tax counsel to the effect specified in the immediately preceding clause (x). For purposes of the preceding clause (x), for all GSMC Mortgage Loans originated after December 6, 2010, if the fair market value of the real property constituting such Mortgaged Property (reduced by (1) the amount of any lien on the real property that is senior to the GSMC Mortgage Loan and (2) a proportionate amount of any lien on the real property that is in parity with the lien of the GSMC Mortgage Loan) after the release is not equal to at least 80% of the principal balance of the GSMC Mortgage Loan (or related Whole Loan) outstanding after the release, the related mortgagor is required to make a payment of principal in an amount not less than the amount required by the REMIC provisions of the Code.
With respect to any partial release under the preceding clause (e), for all GSMC Mortgage Loans originated after December 6, 2010, the mortgagor can be required to pay down the principal balance of the related GSMC Mortgage Loan in an amount not less than the amount required by the REMIC provisions of the Code and, to such extent, such amount may not be required to be applied to the restoration of the Mortgaged Property or released to the mortgagor, if, immediately after the release of such portion of the Mortgaged Property from the lien of the Mortgage (but taking into account the planned restoration) the fair market value of the real property constituting the remaining Mortgaged Property is not equal to at least 80% of the remaining principal balance of the GSMC Mortgage Loan (or related Whole Loan).
No GSMC Mortgage Loan that is secured by more than one Mortgaged Property or that is cross-collateralized with another GSMC Mortgage Loan permits the release of cross-collateralization of the related Mortgaged Properties or a portion thereof, including due to partial condemnation, other than in compliance with the REMIC provisions of the Code.
28. Financial Reporting and Rent Rolls. The GSMC Mortgage Loan documents for each GSMC Mortgage Loan require the related mortgagor to provide the owner or holder of the Mortgage with quarterly (other than for single-tenant properties) and annual operating statements, and quarterly (other than for single-tenant properties) rent rolls for properties that have leases contributing more than 5% of the in-place base rent and annual financial statements, which annual financial statements with respect to each GSMC Mortgage Loan with more than one mortgagor are in the form of an annual combined balance sheet of the mortgagor entities (and no other entities), together with the related combined statements of operations, members’ capital and cash flows, including a combining balance sheet and statement of income for the Mortgaged Properties on a combined basis.
29. Acts of Terrorism Exclusion. With respect to each GSMC Mortgage Loan over $20 million, the related special-form all-risk insurance policy and business interruption policy (issued by an insurer meeting the Insurance Rating Requirements) do not specifically exclude Acts of Terrorism, as defined in the Terrorism Risk Insurance Act of 2002, as amended by the Terrorism Risk Insurance Program Reauthorization Act of 2007, as amended by the Terrorism Risk Insurance Program Reauthorization Act
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of 2015 (collectively referred to as “TRIA”), from coverage, or if such coverage is excluded, it is covered by a separate terrorism insurance policy. With respect to each other GSMC Mortgage Loan, the related special all-risk insurance policy and business interruption policy (issued by an insurer meeting the Insurance Rating Requirements) did not, as of the date of origination of the GSMC Mortgage Loan, and, to GSMC’s knowledge, do not, as of the Cut-off Date, specifically exclude Acts of Terrorism, as defined in TRIA, from coverage, or if such coverage is excluded, it is covered by a separate terrorism insurance policy. With respect to each GSMC Mortgage Loan, the related Loan Documents do not expressly waive or prohibit the Mortgagee from requiring coverage for Acts of Terrorism, as defined in TRIA, or damages related thereto; provided, however, that if TRIA or a similar or subsequent statute is not in effect, then provided that terrorism insurance is commercially available, the Mortgagor under each GSMC Mortgage Loan is required to carry terrorism insurance, but in such event the Mortgagor will not be required to spend more than the Terrorism Cap Amount on terrorism insurance coverage, and if the cost of terrorism insurance exceeds the Terrorism Cap Amount, the Mortgagor is required to purchase the maximum amount of terrorism insurance available with funds equal to the Terrorism Cap Amount. The “Terrorism Cap Amount” is the specified percentage (which is at least equal to 200%) of the amount of the insurance premium that is payable at such time in respect of the property and business interruption/rental loss insurance required under the related Loan Documents (without giving effect to the cost of terrorism and earthquake components of such casualty and business interruption/rental loss insurance).
30. Due on Sale or Encumbrance. Subject to specific exceptions set forth below, each GSMC Mortgage Loan contains a “due on sale” or other such provision for the acceleration of the payment of the unpaid principal balance of such GSMC Mortgage Loan if, without the consent of the holder of the Mortgage (which consent, in some cases, may not be unreasonably withheld) and/or complying with the requirements of the related Mortgage Loan documents (which provide for transfers without the consent of the Mortgagee which are customarily acceptable to prudent commercial and multifamily mortgage lending institutions lending on the security of property comparable to the related Mortgaged Property, including, without limitation, transfers of worn-out or obsolete furnishings, fixtures, or equipment promptly replaced with property of equivalent value and functionality and transfers by leases entered into in accordance with the Mortgage Loan documents), (a) the related Mortgaged Property, or any equity interest of greater than 50% in the related mortgagor, is directly or indirectly pledged, transferred or sold, other than as related to (i) family and estate planning transfers or transfers upon death or legal incapacity, (ii) transfers to certain affiliates as defined in the related Mortgage Loan documents, (iii) transfers of less than, or other than, a controlling interest in the related mortgagor, (iv) transfers to another holder of direct or indirect equity in the Mortgagor, a specific Person designated in the related Mortgage Loan documents or a Person satisfying specific criteria identified in the related Mortgage Loan documents, such as a qualified equityholder, (v) transfers of stock or similar equity units in publicly traded companies, (vi) a substitution or release of collateral within the parameters of paragraphs (27) and (32) in this Annex F-1 or the exceptions thereto set forth on Annex F-2, or (vii) any mezzanine debt that existed at the origination of the related GSMC Mortgage Loan as set forth on Schedule F-1 to this Annex F-1, or future permitted mezzanine debt as set forth on Schedule F-2 to this Annex F-1 or (b) the related Mortgaged Property is encumbered with a subordinate lien or security interest against the related Mortgaged Property, other than (i) any Companion Loan of any GSMC Mortgage Loan or any subordinate debt that existed at origination and is permitted under the related Mortgage Loan documents, (ii) purchase money security interests (iii) any GSMC Mortgage Loan that is cross-collateralized and cross-defaulted with another GSMC Mortgage Loan, as set forth on Schedule F-3 to this Annex F-1 or (iv) Permitted Encumbrances. The Mortgage or other Mortgage Loan documents provide that, to the extent any Rating Agency fees are incurred in connection with the review of and consent to any transfer or encumbrance, the related mortgagor is responsible for such payment along with all other reasonable out-of-pocket fees and expenses incurred by the Mortgagee relative to such transfer or encumbrance.
31. Single-Purpose Entity. Each GSMC Mortgage Loan requires the related mortgagor to be a Single-Purpose Entity for at least as long as the related GSMC Mortgage Loan is outstanding. Both the Mortgage Loan documents and the organizational documents of the mortgagor with respect to each GSMC Mortgage Loan with a Cut-off Date Balance in excess of $5 million provide that such mortgagor is a Single-Purpose Entity, and each GSMC Mortgage Loan with a Cut-off Date Balance of $20 million or more has a counsel’s opinion regarding non-consolidation of the related mortgagor. For this purpose, a
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“Single-Purpose Entity” means an entity, other than an individual, whose organizational documents (or if the GSMC Mortgage Loan has a Cut-off Date Balance equal to $5 million or less, its organizational documents or the related Mortgage Loan documents) provide substantially to the effect that it was formed or organized solely for the purpose of owning and operating one or more of the Mortgaged Properties securing the GSMC Mortgage Loans and prohibit it from engaging in any business unrelated to such Mortgaged Property or Properties, and whose organizational documents further provide, or which entity represented in the related Mortgage Loan documents, substantially to the effect that it does not have any assets other than those related to its interest in and operation of such Mortgaged Property or Properties, or any indebtedness other than as permitted by the related Mortgage(s) or the other related Mortgage Loan documents, that it has its own books and records and accounts separate and apart from those of any other person (other than a mortgagor for a GSMC Mortgage Loan that is cross-collateralized and cross-defaulted with the related GSMC Mortgage Loan), and that it holds itself out as a legal entity, separate and apart from any other person or entity.
32. Defeasance. With respect to any GSMC Mortgage Loan that, pursuant to the Mortgage Loan documents, can be defeased (a “Defeasance”), (i) the related Mortgage Loan documents provide for defeasance as a unilateral right of the mortgagor, subject to satisfaction of conditions specified in the Mortgage Loan documents; (ii) such GSMC Mortgage Loan cannot be defeased within two years after the Closing Date; (iii) the mortgagor is permitted to pledge only United States “government securities” within the meaning of Treasury Regulations Section 1.860G-2(a)(8)(ii), the revenues from which will, in the case of a full Defeasance, be sufficient to make all scheduled payments under the GSMC Mortgage Loan when due, including the entire remaining principal balance on the maturity date or, if the GSMC Mortgage Loan is an ARD Loan, the entire principal balance outstanding on the related Anticipated Repayment Date (or on or after the first date on which payment may be made without payment of a yield maintenance charge or prepayment penalty), and if the GSMC Mortgage Loan permits partial releases of real property in connection with partial defeasance, the revenues from the collateral will be sufficient to pay all such scheduled payments calculated on a principal amount equal to a specified percentage at least equal to the lesser of (A) 110% of the allocated loan amount for the real property to be released and (B) the outstanding principal balance of the related GSMC Mortgage Loan; (iv) the mortgagor is required to provide a certification from an independent certified public accountant that the collateral is sufficient to make all scheduled payments under the Mortgage Note as set forth in (iii) above, (v) if the mortgagor would continue to own assets in addition to the defeasance collateral, the portion of the GSMC Mortgage Loan secured by defeasance collateral is required to be assumed (or the Mortgagee may require such assumption) by a Single-Purpose Entity; (vi) the mortgagor is required to provide an opinion of counsel that the Mortgagee has a perfected security interest in such collateral prior to any other claim or interest; and (vii) the mortgagor is required to pay all rating agency fees associated with Defeasance (if rating confirmation is a specific condition precedent thereto) and all other reasonable out-of-pocket expenses associated with Defeasance, including, but not limited to, accountant’s fees and opinions of counsel.
33. Fixed Interest Rates. Each GSMC Mortgage Loan bears interest at a rate that remains fixed throughout the remaining term of such GSMC Mortgage Loan, except in the case of any ARD Loan and situations where default interest is imposed.
34. Ground Leases. For purposes of this Annex F-1, a “Ground Lease” means a lease creating a leasehold estate in real property where the fee owner as the ground lessor conveys for a term or terms of years its entire interest in the land and buildings and other improvements, if any, comprising the premises demised under such lease to the ground lessee (who may, in certain circumstances, own the building and improvements on the land), subject to the reversionary interest of the ground lessor as fee owner and does not include industrial development agency (IDA) or similar leases for purposes of conferring a tax abatement or other benefit.
With respect to any GSMC Mortgage Loan where the GSMC Mortgage Loan is secured by a leasehold estate under a Ground Lease in whole or in part, and the related Mortgage does not also encumber the related lessor’s fee interest in such Mortgaged Property, based upon the terms of the Ground Lease and any estoppel or other agreement received from the ground lessor in favor of GSMC, its successors and assigns, GSMC represents and warrants that:
F-1-11
(a) The Ground Lease or a memorandum regarding such Ground Lease has been duly recorded or submitted for recordation in a form that is acceptable for recording in the applicable jurisdiction. The Ground Lease or an estoppel or other agreement received from the ground lessor permits the interest of the lessee to be encumbered by the related Mortgage and does not restrict the use of the related Mortgaged Property by such lessee, its successors or assigns in a manner that would materially adversely affect the security provided by the related Mortgage. No material change in the terms of the Ground Lease had occurred since the origination of the GSMC Mortgage Loan, except as reflected in any written instruments which are included in the related Mortgage File;
(b) The lessor under such Ground Lease has agreed in a writing included in the related Mortgage File (or in such Ground Lease) that the Ground Lease may not be amended or modified, or canceled or terminated by agreement of lessor and lessee, without the prior written consent of the Mortgagee;
(c) The Ground Lease has an original term (or an original term plus one or more optional renewal terms, which, under all circumstances, may be exercised, and will be enforceable, by either mortgagor or the Mortgagee) that extends not less than 20 years beyond the stated maturity of the related GSMC Mortgage Loan, or 10 years past the stated maturity if such GSMC Mortgage Loan fully amortizes by the stated maturity (or with respect to a GSMC Mortgage Loan that accrues on an actual 360 basis, substantially amortizes);
(d) The Ground Lease either (i) is not subject to any liens or encumbrances superior to, or of equal priority with, the Mortgage, except for the related fee interest of the ground lessor and the Permitted Encumbrances or (ii) is subject to a subordination, non-disturbance and attornment agreement to which the Mortgagee on the lessor’s fee interest in the Mortgaged Property is subject;
(e) The Ground Lease does not place commercially unreasonably restrictions on the identity of the Mortgagee and the Ground Lease is assignable to the holder of the GSMC Mortgage Loan and its successors and assigns without the consent of the lessor thereunder (provided that proper notice is delivered to the extent required in accordance with the Ground Lease), and in the event it is so assigned, it is further assignable by the holder of the GSMC Mortgage Loan and its successors and assigns without the consent of (but with prior notice to) the lessor;
(f) GSMC has not received any written notice of material default under or notice of termination of such Ground Lease. To GSMC’s knowledge, there is no material default under such Ground Lease and no condition that, but for the passage of time or giving of notice, would result in a material default under the terms of such Ground Lease and to GSMC’s knowledge, such Ground Lease is in full force and effect as of the Closing Date;
(g) The Ground Lease or ancillary agreement between the lessor and the lessee requires the lessor to give to the Mortgagee written notice of any default, and provides that no notice of default or termination is effective against the Mortgagee unless such notice is given to the Mortgagee;
(h) The Mortgagee is permitted a reasonable opportunity (including, where necessary, sufficient time to gain possession of the interest of the lessee under the Ground Lease through legal proceedings) to cure any default under the Ground Lease which is curable after the Mortgagee’s receipt of notice of any default before the lessor may terminate the Ground Lease;
(i) The Ground Lease does not impose any restrictions on subletting that would be viewed as commercially unreasonable by a prudent commercial mortgage lender;
(j) Under the terms of the Ground Lease, an estoppel or other agreement received from the ground lessor and the related Mortgage (taken together), any related insurance proceeds or the portion of the condemnation award allocable to the ground lessee’s interest (other than (i) de minimis amounts for minor casualties or (ii) in respect of a total or substantially total loss or taking
F-1-12
as addressed in clause (k) below) will be applied either to the repair or to restoration of all or part of the related Mortgaged Property with (so long as such proceeds are in excess of the threshold amount specified in the related Mortgage Loan documents) the Mortgagee or a trustee appointed by it having the right to hold and disburse such proceeds as repair or restoration progresses, or to the payment of the outstanding principal balance of the GSMC Mortgage Loan, together with any accrued interest;
(k) In the case of a total or substantially total taking or loss, under the terms of the Ground Lease, an estoppel or other agreement and the related Mortgage (taken together), any related insurance proceeds, or portion of the condemnation award allocable to the ground lessee’s interest in respect of a total or substantially total loss or taking of the related Mortgaged Property to the extent not applied to restoration, will be applied first to the payment of the outstanding principal balance of the GSMC Mortgage Loan, together with any accrued interest; and
(l) Provided that the Mortgagee cures any defaults which are susceptible to being cured, the ground lessor has agreed to enter into a new lease with the Mortgagee upon termination of the Ground Lease for any reason, including rejection of the Ground Lease in a bankruptcy proceeding.
35. Servicing. The servicing and collection practices used by GSMC with respect to the GSMC Mortgage Loans have been, in all respects, legal and have met customary industry standards for servicing of commercial loans for conduit loan programs.
36. Origination and Underwriting. The origination practices of GSMC (or the related originator if GSMC was not the originator) with respect to each GSMC Mortgage Loan have been, in all material respects, legal and as of the date of its origination, such GSMC Mortgage Loan (or the related Whole Loan, as applicable) and the origination thereof complied in all material respects with, or was exempt from, all requirements of federal, state or local law relating to the origination of such GSMC Mortgage Loan; provided that such representation and warranty does not address or otherwise cover any matters with respect to federal, state or local law otherwise covered in this Annex F-1.
37. No Material Default; Payment Record. No GSMC Mortgage Loan has been more than 30 days delinquent, without giving effect to any grace or cure period, in making required debt service payments since origination, and no GSMC Mortgage Loan is more than 30 days delinquent (beyond any applicable grace or cure period) in making required payments as of the Closing Date. To GSMC’s knowledge, there is (a) no material default, breach, violation or event of acceleration existing under any GSMC Mortgage Loan, or (b) no event (other than payments due but not yet delinquent) which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a material default, breach, violation or event of acceleration, which default, breach, violation or event of acceleration, in the case of either clause (a) or clause (b), materially and adversely affects the value of any GSMC Mortgage Loan or the value, use or operation of the related Mortgaged Property, provided, however, that this representation and warranty does not cover any default, breach, violation or event of acceleration that specifically pertains to or arises out of an exception scheduled to any other representation and warranty made by GSMC in this Annex F-1 (including, but not limited to, the prior sentence). No person other than the holder of any GSMC Mortgage Loan may declare any event of default under the related GSMC Mortgage Loan or accelerate any indebtedness under such Mortgage Loan documents.
38. Bankruptcy. As of the date of origination of the related GSMC Mortgage Loan and to the GSMC’s knowledge as of the Cut-off Date, neither the Mortgaged Property (other than any tenants of such Mortgaged Property), nor any portion thereof, is the subject of, and no mortgagor, guarantor or tenant occupying a single-tenant property is a debtor in state or federal bankruptcy, insolvency or similar proceeding.
39. Organization of Mortgagor. With respect to each GSMC Mortgage Loan, in reliance on certified copies of the organizational documents of the related mortgagor delivered by such mortgagor in connection with the origination of such GSMC Mortgage Loan (or the related Whole Loan, as applicable), the mortgagor is an entity organized under the laws of a state of the United States of America, the District
F-1-13
of Columbia or the Commonwealth of Puerto Rico. Except with respect to any GSMC Mortgage Loan that is cross-collateralized and cross-defaulted with another GSMC Mortgage Loan, no GSMC Mortgage Loan has a mortgagor that is an affiliate of another mortgagor under another GSMC Mortgage Loan.
40. Environmental Conditions. A Phase I environmental site assessment (or update of a previous Phase I and or Phase II site assessment) and, with respect to certain GSMC Mortgage Loans, a Phase II environmental site assessment (collectively, an “ESA”) meeting ASTM requirements were conducted by a reputable environmental consultant in connection with such GSMC Mortgage Loan within 12 months prior to its origination date (or an update of a previous ESA was prepared), and such ESA (i) did not identify the existence of recognized environmental conditions (as such term is defined in ASTM E1527-05 or its successor, an “Environmental Condition”) at the related Mortgaged Property or the need for further investigation, or (ii) if the existence of an Environmental Condition or need for further investigation was indicated in any such ESA, then at least one of the following statements is true: (A) an amount reasonably estimated by a reputable environmental consultant to be sufficient to cover the estimated cost to cure any material noncompliance with applicable Environmental Laws or the Environmental Condition has been escrowed by the related Mortgagor and is held or controlled by the related Mortgagee; (B) if the only Environmental Condition relates to the presence of asbestos-containing materials, radon in indoor air, lead based paint or lead in drinking water, the only recommended action in the ESA is the institution of such a plan, an operations or maintenance plan has been required to be instituted by the related Mortgagor that, based on the ESA, can reasonably be expected to mitigate the identified risk; (C) the Environmental Condition identified in the related environmental report was remediated or abated in all material respects prior to the Cut-off Date, and, if and as appropriate, a no further action or closure letter was obtained from the applicable governmental regulatory authority (or the environmental issue affecting the related Mortgaged Property was otherwise listed by such governmental authority as “closed” or a reputable environmental consultant has concluded that no further action is required); (D) an environmental policy or a lender’s pollution legal liability insurance policy meeting the requirements set forth below that covers liability for the identified circumstance or condition was obtained from an insurer rated no less than “A-” (or the equivalent) by Moody’s Investors Service, Inc., S&P Global Ratings, acting through Standard & Poor’s Financial Services LLC and/or Fitch Ratings, Inc.; (E) a party not related to the Mortgagor was identified as the responsible party for such condition or circumstance and such responsible party has financial resources reasonably estimated to be adequate to address the situation; or (F) a party related to the Mortgagor having financial resources reasonably estimated to be adequate to address the situation is required to take action. To GSMC’s knowledge, except as set forth in the ESA, there is no Environmental Condition (as such term is defined in ASTM E1527-05 or its successor) at the related Mortgaged Property.
41. Appraisal. The Mortgage File contains an appraisal of the related Mortgaged Property with an appraisal date within 6 months of the GSMC Mortgage Loan origination date, and within 12 months of the Closing Date. The appraisal is signed by an appraiser who is a Member of the Appraisal Institute (“MAI”) and, to GSMC’s knowledge, had no interest, direct or indirect, in the Mortgaged Property or the mortgagor or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the GSMC Mortgage Loan. Each appraiser has represented in such appraisal or in a supplemental letter that the appraisal satisfies the requirements of the “Uniform Standards of Professional Appraisal Practice” as adopted by the Appraisal Standards Board of the Appraisal Foundation. Each appraisal contains a statement, or is accompanied by a letter from the appraiser, to the effect that the appraisal was performed in accordance with the requirements of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as in effect on the date such GSMC Mortgage Loan was originated.
42. Mortgage Loan Schedule. The information pertaining to each GSMC Mortgage Loan which is set forth on the mortgage loan schedule attached to the related MLPA is true and correct in all material respects as of the Cut-off Date and contains all information required by the PSA to be contained on the mortgage loan schedule attached to the related MLPA.
F-1-14
43. Cross-Collateralization. Except with respect to a GSMC Mortgage Loan that is part of a Whole Loan no GSMC Mortgage Loan is cross-collateralized or cross-defaulted with any other mortgage loan that is outside the Mortgage Pool, except as set forth on Annex F-2.
44. Advance of Funds by the Sponsor. After origination, no advance of funds has been made by GSMC to the related mortgagor other than in accordance with the related Mortgage Loan documents, and, to GSMC’s knowledge, no funds have been received from any person other than the related mortgagor or an affiliate for, or on account of, payments due on the GSMC Mortgage Loan (other than as contemplated by the related Mortgage Loan documents, such as, by way of example and not in limitation of the foregoing, amounts paid by the tenant(s) into a Mortgagee-controlled lockbox if required or contemplated under the related lease or Mortgage Loan documents). Neither GSMC nor any affiliate thereof has any obligation to make any capital contribution to any mortgagor under a GSMC Mortgage Loan, other than contributions made on or prior to the Closing Date.
45. Compliance with Anti-Money Laundering Laws. GSMC has complied in all material respects with all applicable anti-money laundering laws and regulations, including without limitation the USA Patriot Act of 2001 with respect to the origination of the GSMC Mortgage Loans.
For purposes of these representations and warranties, “Mortgagee” means the mortgagee, grantee or beneficiary under any Mortgage, any holder of legal title to any portion of any GSMC Mortgage Loan or, if applicable, any agent or servicer on behalf of such party.
For purposes of these representations and warranties, the phrases “GSMC’s knowledge” or “GSMC’s belief” and other words and phrases of like import mean, except where otherwise expressly set forth in this Annex F-1, the actual state of knowledge or belief of GSMC, its officers and employees directly responsible for the underwriting, origination, servicing or sale of the GSMC Mortgage Loans regarding the matters expressly set forth in this Annex F-1.
F-1-15
(THIS PAGE INTENTIONALLY LEFT BLANK)
ANNEX F-2
EXCEPTIONS TO GSMC MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES
| Annex
A-1 ID# |
Mortgage Loans | Representations | Exceptions |
| 6 | Tharp Portfolio | (5) Lien; Valid Assignment | The largest tenant at the Jiffy and Dollar Mortgaged Property, Dollar Tree, has a right of first refusal to purchase its leased premises in the event of a proposed sale of such premises. Pursuant to a subordination, non-disturbance and attornment agreement, the right of first refusal is not exercisable in the event of or in connection with (i) a foreclosure and sale or other suit, sale or proceeding under the Mortgage Loan, (ii) any deed-in-lieu of foreclosure that may be given to the lender or its designee, (iii) any other taking of title to the premises by the lender or its designee, or (iv) to the extent the lender or its designee obtains title to the premises, any subsequent transfer of the premises. |
| 6 | Tharp Portfolio | (6) Permitted Liens; Title Insurance | See exception to Representation and Warranty No. 5, above. |
| 16 | JW Marriott Desert Springs | (24) Local Law Compliance | The Mortgagee has not yet received the final zoning report for the Mortgaged Property. The draft zoning report confirms that the Mortgaged Property is legal conforming but the draft report noted that the report is incomplete because it has not yet received all municipal information from the local jurisdiction. The Mortgage Loan documents require the Mortgagor to deliver to the Mortgagee within 30 days of loan origination a letter from the relevant municipality confirming that the Mortgaged Property is in material compliance with all zoning laws and regulation. |
| Various | All GSMC Mortgage Loans | (37) No Material Default; Payment Record | With respect to any covenants under the related Mortgage Loan that require the Mortgagor to ensure a tenant or mortgaged property is operating or to enforce the terms of leases, such Mortgagor may be in default of one or more of such covenants due to closures mandated or recommended by governmental authorities and moratoriums imposed by governmental authorities on real estate remedies. |
| 11 | Gem Tower | (16) Insurance | The Mortgage Loan documents permit the Mortgagor to rely on the insurance coverage maintained by the related condominium board for some of the insurance coverage required under the Mortgage Loan documents, including with respect to the core and shell of the related building and common areas, subject to satisfaction of certain conditions set forth in the Mortgage Loan documents.
In addition, the Mortgagee is not named as a mortgagee/loss payee on the property insurance policies or as additional insured on the general liability policy maintained by the condominium board. Instead, the Mortgagee is listed “as its interest may appear” on each of the noted policies.
|
F-2-1
Schedule F-1 to Annex F-1
GOLDMAN SACHS MORTGAGE COMPANY
MORTGAGE LOANS WITH EXISTING MEZZANINE DEBT
None.
F-2-2
Schedule F-2 to Annex F-1
GOLDMAN SACHS MORTGAGE COMPANY
MORTGAGE
LOANS WITH RESPECT TO WHICH MEZZANINE DEBT
IS PERMITTED IN THE FUTURE
Loan No. |
Mortgage Loan |
| 11 | Gem Tower |
F-2-3
SCHEDULE F-3 to Annex F-1
GOLDMAN SACHS MORTGAGE COMPANY
CROSS-COLLATERALIZED MORTGAGE LOANS
None.
F-2-4
ANNEX G
CLASS A-SB PLANNED PRINCIPAL BALANCE SCHEDULE
Period |
Balance($) |
Period |
Balance($) | |
| 1 | 18,021,000.00 | 60 | 17,731,322.33 | |
| 2 | 18,021,000.00 | 61 | 17,419,333.24 | |
| 3 | 18,021,000.00 | 62 | 17,127,867.65 | |
| 4 | 18,021,000.00 | 63 | 16,813,686.26 | |
| 5 | 18,021,000.00 | 64 | 16,519,947.02 | |
| 6 | 18,021,000.00 | 65 | 16,225,105.42 | |
| 7 | 18,021,000.00 | 66 | 15,907,644.60 | |
| 8 | 18,021,000.00 | 67 | 15,610,504.22 | |
| 9 | 18,021,000.00 | 68 | 15,290,810.38 | |
| 10 | 18,021,000.00 | 69 | 14,991,354.11 | |
| 11 | 18,021,000.00 | 70 | 14,690,773.90 | |
| 12 | 18,021,000.00 | 71 | 14,346,411.73 | |
| 13 | 18,021,000.00 | 72 | 14,043,409.16 | |
| 14 | 18,021,000.00 | 73 | 13,718,020.80 | |
| 15 | 18,021,000.00 | 74 | 13,412,658.70 | |
| 16 | 18,021,000.00 | 75 | 13,084,978.29 | |
| 17 | 18,021,000.00 | 76 | 12,777,239.08 | |
| 18 | 18,021,000.00 | 77 | 12,468,344.64 | |
| 19 | 18,021,000.00 | 78 | 12,137,232.94 | |
| 20 | 18,021,000.00 | 79 | 11,825,935.10 | |
| 21 | 18,021,000.00 | 80 | 11,492,488.74 | |
| 22 | 18,021,000.00 | 81 | 11,178,769.60 | |
| 23 | 18,021,000.00 | 82 | 10,863,444.64 | |
| 24 | 18,021,000.00 | 83 | 10,508,969.12 | |
| 25 | 18,021,000.00 | 84 | 10,211,765.78 | |
| 26 | 18,021,000.00 | 85 | 9,893,989.86 | |
| 27 | 18,021,000.00 | 86 | 9,594,475.81 | |
| 28 | 18,021,000.00 | 87 | 9,274,455.26 | |
| 29 | 18,021,000.00 | 88 | 8,972,613.28 | |
| 30 | 18,021,000.00 | 89 | 8,669,637.44 | |
| 31 | 18,021,000.00 | 90 | 8,346,254.11 | |
| 32 | 18,021,000.00 | 91 | 8,040,924.54 | |
| 33 | 18,021,000.00 | 92 | 7,715,254.80 | |
| 34 | 18,021,000.00 | 93 | 7,407,553.95 | |
| 35 | 18,021,000.00 | 94 | 7,098,697.10 | |
| 36 | 18,021,000.00 | 95 | 6,731,443.09 | |
| 37 | 18,021,000.00 | 96 | 6,432,234.64 | |
| 38 | 18,021,000.00 | 97 | 6,113,567.25 | |
| 39 | 18,021,000.00 | 98 | 5,812,029.77 | |
| 40 | 18,021,000.00 | 99 | 5,491,099.93 | |
| 41 | 18,021,000.00 | 100 | 5,187,215.99 | |
| 42 | 18,021,000.00 | 101 | 4,882,186.84 | |
| 43 | 18,021,000.00 | 102 | 4,557,865.14 | |
| 44 | 18,021,000.00 | 103 | 4,250,463.43 | |
| 45 | 18,021,000.00 | 104 | 3,923,836.99 | |
| 46 | 18,021,000.00 | 105 | 3,614,044.98 | |
| 47 | 18,021,000.00 | 106 | 3,303,085.33 | |
| 48 | 18,021,000.00 | 107 | 2,937,100.76 | |
| 49 | 18,021,000.00 | 108 | 2,623,587.49 | |
| 50 | 18,021,000.00 | 109 | 2,291,024.20 | |
| 51 | 18,021,000.00 | 110 | 1,975,074.91 | |
| 52 | 18,021,000.00 | 111 | 1,640,145.23 | |
| 53 | 18,021,000.00 | 112 | 1,321,741.69 | |
| 54 | 18,021,000.00 | 113 | 1,002,137.85 | |
| 55 | 18,021,000.00 | 114 | 663,658.10 | |
| 56 | 18,021,000.00 | 115 | 341,572.67 | |
| 57 | 18,021,000.00 | 116 and thereafter | 0.00 | |
| 58 | 18,021,000.00 | |||
| 59 | 18,020,531.07 |
G-1
No dealer, salesman or other person is authorized to give any information or to represent anything not contained in this prospectus. You must not rely on any unauthorized information or representations. This prospectus is an offer to sell only the securities offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.
TABLE OF CONTENTS
| SUMMARY OF CERTIFICATES | 3 |
| IMPORTANT NOTICE REGARDING THE OFFERED CERTIFICATES | 13 |
| IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS | 14 |
| SUMMARY OF TERMS | 23 |
| SUMMARY OF RISK FACTORS | 59 |
| RISK FACTORS | 61 |
| DESCRIPTION OF THE MORTGAGE POOL | 148 |
| TRANSACTION PARTIES | 220 |
| CREDIT RISK RETENTION | 269 |
| DESCRIPTION OF THE CERTIFICATES | 272 |
| DESCRIPTION OF THE MORTGAGE LOAN PURCHASE AGREEMENTS | 309 |
| POOLING AND SERVICING AGREEMENT | 320 |
| CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS | 425 |
| CERTAIN AFFILIATIONS, RELATIONSHIPS AND RELATED TRANSACTIONS INVOLVING TRANSACTION PARTIES | 442 |
| PENDING LEGAL PROCEEDINGS INVOLVING TRANSACTION PARTIES | 443 |
| USE OF PROCEEDS | 443 |
| YIELD AND MATURITY CONSIDERATIONS | 444 |
| MATERIAL FEDERAL INCOME TAX CONSIDERATIONS | 456 |
| CERTAIN STATE AND LOCAL TAX CONSIDERATIONS | 469 |
| METHOD OF DISTRIBUTION (CONFLICTS OF INTEREST) | 469 |
| INCORPORATION OF CERTAIN INFORMATION BY REFERENCE | 472 |
| WHERE YOU CAN FIND MORE INFORMATION | 472 |
| FINANCIAL INFORMATION | 472 |
| CERTAIN ERISA CONSIDERATIONS | 473 |
| LEGAL INVESTMENT | 476 |
| LEGAL MATTERS | 477 |
| RATINGS | 477 |
| INDEX OF DEFINED TERMS | 480 |
| ANNEX A-1 | CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES | A-1-1 |
| ANNEX A-2 | CERTAIN POOL CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES | A-2-1 |
| ANNEX A-3 | DESCRIPTION OF TOP FIFTEEN MORTGAGE LOANS AND ADDITIONAL MORTGAGE LOAN INFORMATION | A-3-1 |
| ANNEX B | FORM OF REPORT TO CERTIFICATEHOLDERS | B-1 |
| ANNEX C | FORM OF OPERATING ADVISOR ANNUAL REPORT | C-1 |
| ANNEX D-1 | GERMAN AMERICAN CAPITAL CORPORATION AND CITI REAL ESTATE FUNDING INC. MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES | D-1-1 |
| ANNEX D-2 | EXCEPTIONS TO GACC MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES | D-2-1 |
| ANNEX D-3 | EXCEPTIONS TO CREFI MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES | D-3-1 |
| ANNEX E-1 | JPMORGAN CHASE BANK, NATIONAL ASSOCIATION MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES | E-1-1 |
| ANNEX E-2 | EXCEPTIONS TO JPMCB MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES | E-2-1 |
| ANNEX F-1 | GOLDMAN SACHS MORTGAGE COMPANY MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES | F-1-1 |
| ANNEX F-2 | EXCEPTIONS TO GSMC MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES | F-2-1 |
| ANNEX G | CLASS A-SB PLANNED PRINCIPAL BALANCE SCHEDULE | G-1 |
Dealers will be required to deliver a prospectus when acting as underwriters of these certificates and with respect to unsold allotments or subscriptions. In addition, all dealers selling these certificates will deliver a prospectus until the date that is ninety days from the date of this prospectus.
$650,391,000
(Approximate)
Deutsche Mortgage & Asset Receiving Corporation
Depositor
Benchmark 2022-B34 Mortgage Trust
Issuing Entity
Benchmark
2022-B34
Mortgage Trust Commercial Mortgage Pass-Through Certificates,
Series 2022-B34
| Class A-1 | $13,310,000 |
| Class A-2 | $114,778,000 |
| Class A-SB | $18,021,000 |
| Class A-4 | $0 – $110,716,000 |
| Class A-5 | $241,475,000 – $352,191,000 |
| Class X-A | $675,717,000 |
| Class A-M | $67,354,000 |
| Class B | $43,455,000 |
| Class C | $41,282,000 |
PROSPECTUS
Deutsche Bank Securities
Co-Lead Manager and Joint Bookrunner
Citigroup
Co-Lead Manager and Joint Bookrunner
Goldman Sachs & Co. LLC
Co-Lead Manager and Joint Bookrunner
J.P. Morgan
Co-Lead Manager and Joint Bookrunner
Academy Securities
Co-Manager
Drexel Hamilton
Co-Manager
March [_], 2022