bmo22c03_8k-05102023.htm - Generated by SEC Publisher for SEC Filing

Central Index Key Number of the issuing entity: 0001942599
BMO 2022-C3 Mortgage Trust
(Exact name of issuing entity)

Central Index Key Number of the registrant: 0001861132
BMO Commercial Mortgage Securities LLC
(Exact name of registrant as specified in its charter)

Central Index Key Number of the sponsor: 0000927971
Bank of Montreal
(Exact name of sponsor as specified in its charter)

Central Index Key Number of the sponsor: 0001701238
Citi Real Estate Funding Inc.
(Exact name of sponsor as specified in its charter)

Central Index Key Number of the sponsor: 0001840727
3650 Real Estate Investment Trust 2 LLC
(Exact name of sponsor as specified in its charter)

Central Index Key Number of the sponsor: 0001592182
LMF Commercial, LLC
(Exact name of sponsor as specified in its charter)

Central Index Key Number of the sponsor: 0001685185
UBS AG
(Exact name of sponsor as specified in its charter)

Central Index Key Number of the sponsor: 0001942310
Sabal Capital II, LLC
(Exact name of sponsor as specified in its charter)

Central Index Key Number of the sponsor: 0001527590
ReadyCap Commercial, LLC
(Exact name of sponsor as specified in its charter)

Central Index Key Number of the sponsor: 0001527590
Sutherland Asset I, LLC
(Exact name of sponsor as specified in its charter)

Central Index Key Number of the sponsor: 0001548405
Starwood Mortgage Capital LLC
(Exact name of sponsor as specified in its charter)

New York		333-255934-03		38-4238334 38-4238335
(State or other jurisdiction of incorporation of issuing entity)		(Commission File Number of issuing entity)		(I.R.S. Employer Identification Numbers)

c/o Computershare Trust Company, N.A., as agent for
Wells Fargo Bank, National Association
9062 Old Annapolis Road
Columbia, MD 21045

(Address of principal executive offices of the issuing entity)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act(17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act(17 CFR 240.13e-4(c))

Title of each class	Trading Symbol(s)	Name of each exchange on which registered

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised Financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Reference is hereby made to the Pooling and Servicing Agreement (the “BMO 2022-C3 PSA”), dated as of October 1, 2022, by and among BMO Commercial Mortgage Securities LLC, as depositor, Midland Loan Services, a Division of PNC Bank, National Association, as master servicer, Midland Loan Services, a Division of PNC Bank, National Association, as special servicer, Park Bridge Lender Services LLC, as operating advisor and as asset representations reviewer, and Computershare Trust Company, National Association, as certificate administrator and as trustee, relating to the issuing entity known as BMO 2022-C3 Mortgage Trust (the “Issuing Entity” or the “BMO 2022-C3 securitization trust”) and the series of commercial mortgage-pass through certificates known as the BMO 2022-C3 Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2022-C3. Capitalized terms used but not defined herein shall have the meanings assigned to them in the BMO 2022-C3 PSA. The BMO 2022-C3 PSA was filed as Exhibit 4.1 to the Current Report on Form 8-K with respect to the Issuing Entity dated October 7, 2022 under Commission File No. 333-255934-03.

Pursuant to Section 6.08(a) of the BMO 2022-C3 PSA, KKR Real Estate Credit Opportunity Partners II L.P., in its capacity as the Directing Holder (other than with respect to the Whole Loan secured by the Mortgaged Property identified on the Mortgage Loan Schedule as La Habra Marketplace (the “La Habra Marketplace Whole Loan”)), has terminated Midland Loan Services, a Division of PNC Bank as Special Servicer (other than with respect to the La Habra Marketplace Whole Loan) under the BMO 2022-C3 PSA, and has appointed K-Star Asset Management LLC to act as successor Special Servicer (other than with respect to the La Habra Marketplace Whole Loan) under the BMO 2022-C3 PSA effective as of May 10, 2023. A copy of the related Special Servicer Acknowledgment and Assumption dated May 10, 2023 is attached hereto as Exhibit 20.1.

Effective as of May 10, 2023, K-Star Asset Management LLC, a Delaware limited liability company (“K-Star”), will act as special servicer under the BMO 2022-C3 PSA, replacing Midland Loan Services, a Division of PNC Bank, National Association. K-Star was appointed at the direction of KKR Real Estate Credit Opportunity Partners II L.P., the controlling class representative under the BMO 2022-C3 PSA. In such capacity, K-Star will be responsible for the servicing and administration of specially serviced mortgage loans serviced under the BMO 2022-C3 PSA (and the servicing and administration of any related REO property) and processing and performing certain reviews of material actions with respect to the mortgage loans serviced under the BMO 2022-C3 PSA when such mortgage loans are not specially serviced. Capitalized terms used but not defined herein shall have the meanings assigned to them in the BMO 2022-C3 PSA.

K-Star maintains its principal servicing office at 5949 Sherry Lane, Suite 950, Dallas, Texas 75225. K-Star was formed and organized on April 6, 2022 and began to be engaged in the servicing of commercial mortgage loans as of March 16, 2023. K-Star currently has a commercial mortgage-backed securities special servicer rating of CSS3 by Fitch Ratings, Inc., an AVERAGE commercial mortgage loan special servicer ranking from S&P Global Ratings, a Standard & Poor’s Financial Services LLC business, a MOR CS3 commercial mortgage special servicer rating from DBRS, Inc. and is also an approved special servicer by Kroll Bond Rating Agency, LLC and Moody’s Investors Service, Inc. As of March 31, 2023, K-Star has approximately 34 employees and is headquartered in Dallas, Texas.

K-Star is an affiliate of (x) KKR Real Estate Credit Opportunity Partners II L.P., the controlling class representative under the BMO 2022-C3 PSA and (y) KKR CMBS II Aggregator Type 1 L.P., the third party purchaser and the retaining party with respect to the transaction contemplated by the BMO 2022-C3 PSA (the “BMO 2022-C3 securitization”).

K-Star has detailed operating policies and procedures which, pursuant to such policies and procedures, are scheduled to be reviewed at least annually and updated as appropriate. These policies and procedures for the performance of its special servicing obligations are, among other things, in compliance with the applicable servicing criteria set forth in Item 1122 of Regulation AB under the Securities Act. K-Star has developed strategies and procedures for managing delinquent loans, loans subject to bankruptcies of the borrowers and other breaches by borrowers of the underlying loan documents that are designed to maximize value from the assets for the benefit of the applicable 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 related servicing standard. The strategy pursued by K-Star for any particular mortgage loan depends upon, among other things, the terms and provisions of the underlying loan documents, the jurisdiction where the underlying property is located and the condition and type of underlying property.

K-Star is subject to an annual external audit. Pursuant to K-Star’s policies and procedures, the first such annual external audit is scheduled to commence in the last calendar quarter of 2023.

K-Star maintains a cloud-based surveillance and asset management system that contains performance information at the portfolio, loan and property levels on the various loans that it services, which system also has the capacity to aggregate performance information on any REO assets that it may service. K-Star’s key servicing application is hosted and supported by a third party and its disaster recovery and business continuity programs have been reviewed and vetted. K-Star utilizes its parent’s existing technology, engineering and data teams for its crisis management and business continuity programs.

As of March 31, 2023, K-Star serves as the special servicer with respect to 11 commercial real estate securitizations, with a cumulative unpaid principal balance of $5,424,256,074.00. K-Star does not currently service any commercial mortgage loans other than as described in the preceding sentence.

In its capacity as the special servicer, K-Star will not have primary responsibility for custody services of original documents evidencing the underlying specially serviced loans. K-Star may from time to time have custody of certain such documents as necessary for enforcement actions involving particular underlying specially serviced loans or otherwise. To the extent that K-Star has custody of any such documents for any such servicing purposes, such documents will be maintained in a manner consistent with the servicing standard set forth in the BMO 2022-C3 PSA.

K-Star does not have any material advancing rights or obligations with respect to the commercial mortgage-backed securities pools as to which it is acting as special servicer. In certain instances, K-Star may have the right to make property related servicing advances in emergency situations with respect to certain commercial mortgage-backed securities pools as to which it acts as special servicer. Generally, K-Star’s servicing functions under pooling and servicing agreements will not include collection on the pool assets, however K-Star will 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.

There are, to the actual current knowledge of K-Star, no special or unique factors of a material nature involved in special servicing the particular types of assets included in the BMO 2022-C3 securitization trust, as compared to the types of assets included in other commercial mortgage-backed securitization pools generally. K-Star’s processes and procedures with respect to the BMO 2022-C3 securitization trust will not materially differ from the processes and procedures to be employed by K-Star in connection with its special servicing of commercial mortgage-backed securitization pools generally. There have not been any material changes to the policies or procedures of K-Star in the servicing function it will perform under the BMO 2022-C3 PSA for assets of the same type included in the BMO 2022-C3 securitization trust since the implementation of such policies and procedures on September 19, 2022.

No securitization transaction in which K-Star was acting as special servicer has experienced a servicer termination event as a result of any action or inaction of K-Star as special servicer, including as a result of a failure by K-Star to comply with the applicable servicing criteria in connection with any securitization transaction. K-Star has not been terminated as special servicer in any securitization, either due to a servicer termination event or the application of a servicing performance test or trigger. K-Star has not yet been required to make an advance with respect to any securitization transaction. There has been no previous disclosure of material noncompliance with the applicable servicing criteria by K-Star in connection with any securitization in which K-Star was acting as special servicer.

K-Star does not believe that its financial condition will have any adverse effect on the performance of its duties under the BMO 2022-C3 PSA and, accordingly, K-Star believes that its financial condition will not have any material impact on the mortgage pool performance or the performance of the certificates.

From time to time K-Star may be 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. K-Star 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 BMO 2022-C3 PSA. There are currently no legal proceedings pending, and no legal proceedings known to be contemplated by governmental authorities, against K-Star or of which any of its property is the subject, that are material to the certificateholders.

K-Star may occasionally engage consultants to perform property inspections and to provide surveillance on a property and its local market. K-Star currently does not have any plans to engage sub-servicers to perform on its behalf any of its duties with respect to this transaction with the exception of some outsourced base servicing functions.

In the commercial mortgage-backed securitizations in which K-Star acts as special servicer, K-Star 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, K-Star’s appointment as special servicer under the applicable servicing agreement and limitations on such person’s right to replace K-Star as the special servicer.

Except as disclosed herein, there are no specific relationships that are material involving or relating to the BMO 2022-C3 securitization or the related specially serviced loans between K-Star or any of its affiliates, on the one hand, the depositor and the issuing entity, the sponsors, the trustee, the certificate administrator, the custodian, any originator, any significant obligor, the master servicer, the primary 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 herein, 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 the BMO 2022-C3 securitization – between K-Star or any of its affiliates, on the one hand, and the issuing entity, 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.

From time to time, K-Star and/or its affiliates may purchase securities, including CMBS certificates. K-Star and/or its affiliates may from time to time purchase any such certificates, including in the secondary market. Any such party will have the right to dispose of such certificates at any time, subject to any relevant restrictions that may be applicable to the transfer of such certificates as a result of the credit risk retention rules.

The information above set forth under this heading "The Special Servicer" has been provided by K-Star.

A description of additional material terms of the BMO 2022-C3 PSA regarding the role of the special servicer, including limitations on the special servicer's liability under the BMO 2022-C3 and terms regarding the special servicer's removal, replacement, resignation or transfer, is included in the prospectus with respect to the Issuing Entity filed on October 7, 2022 pursuant to Rule 424(b)(2) under Commission File No. 333-255934-03.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

/s/ Paul Vanderslice
Paul Vanderslice, Chief Executive Officer

Date: May 10, 2023

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549

FORM 8-K

CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934