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CMBS Presentation_Jianhao Zeng
This document compares two commercial mortgage backed securities (CMBS) pools, Morgan Stanley 1416 and Wells Fargo 1416. After analyzing key metrics like weighted average interest rates, maturities, loan-to-value ratios, debt service coverage ratios, and top loan exposures, the author determines that the Wells Fargo 1416 pool is better suited for their clients given its stronger performance across several metrics. The document provides detailed analyses of the top ten loans in each pool.
CMBS Presentation_Jianhao Zeng
- 1. Contact: Jianhao Michael Zeng M.S.in Real Estate Finance Class of 2015 NYUSchack Institute of Real Estate michael.j.zeng@nyu.edu 001 347-997-0664 JADS Capital, LLC
- 2. About JADS Capital,LLC • Medium sized Asset Management Firm • Seeking relatively defensive investments with potential for capital appreciation • Specializing in Commercially Mortgage Backed Securities
- 3. Our Investment Choice •Comparison done between Morgan Stanley 1416 and Wells Fargo 1416 pool • After careful analysis, we are confident that the Wells Fargo pool is the most well suited investment vehicle for our clients
- 4. Morgan Stanley 1416Wells Fargo 1416 Trustee US Bank, National Association Wilmington Trust, National Association Master Servicer Wells Fargo Wells Fargo Special Servicer LNR Partners LNR Partners B – Piece Buyer N/A N/A Rating Agencies Kroll, Moody’s Kroll, Moody’s, Dominion Bond Original Lenders Morgan Stanley Mortgage Capital Holdings, B of A Wells Fargo, Ladder Capital Finance, RBS, Rialto Primary Servicers LNR Partners LNR Partners More than one Master Servicer No No More than one Special Servicer No No
- 5. 5.74% 6.40% 4.29% 4.30% 4.78% 4.92% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% MS1416WF1416 Weighted Average Interest Rate
- 6. 14.50 Years 9.70 Years 4.33Years 4.43 Years 8.79 Years 8.85 Years 0.00 Years 2.00 Years 4.00 Years 6.00 Years 8.00 Years 10.00 Years 12.00 Years 14.00 Years 16.00 Years MS1416 WF1416 Weighted Average Maturity Time
- 7. • Fitch providedratings for the Master and Special Servicers. • Master: Wells Fargo Bank rated ‘CMS2’. • - Level 2 – Servicer demonstrates high performance in servicing ability. • Special: LNR Partners LLC - Commercial Special: STRONG - Construction loan special: ABOVE AVERAGE - Financial position: SUFFICIENT - Management and Organization: STRONG - Loan administration: STRONG/ABOVE AVERAGE - Outlook: STABLE and POSITIVE Servicer Ratings
- 10. Weight of TopTen Loans: MS1416 Arundel Mills & Marketplace, 11.4% State Farm Portfolio, 7.9% Green Hills Corporate Center, 5.1% Outlets of Mississippi, 4.9% Marriott Philadelphia Downtown, 4.7% Hilton San Francisco Financial District, 4.1% La Concha Hotel & Tower, 3.3% Aspen Heights - Stillwater, 3.0% Thunder Hollow Apartments, 2.4% Sprague Hotel Portfolio, 2.2% Other 66 Loans, 50.9%
- 11. Weight of TopTen Loans by asset class: MS1416 Retail 16% Hospitality 14% Office 13% Multifamily 6% Other Loans 51% Retail Hospitality Office Multifamily Other Loans
- 12. Weight of TopTen Loans: WF1416 Woodbridge Center, 12.3% Soho Beach House, 5.6% Montgomery Mall, 5.5% Pacific Design Center, 5.1% Purgatory Creek Apartments, 3.2% Weatherford Ridge, 3.2% Harlequin Plaza, 2.9% Market Square at Montrose, 2.6% JL Holdings - Burger King Portfolio - 90, 2.3% Security Self Storage SPX Portfolio, 2.3% Other 72 Loans, 52.4%
- 13. Weight of TopTen Loans by asset class: WF1416 Retail 26% Hospitality 6% Mixed Use 5% Multifamily 3% Office 3% Self Storage 2% Other Loans 55% Retail Hospitality Mixed Use Multifamily Office Self Storage Other Loans
- 14. Loan 1 MS1416 WF1416 PropertyName Arundel Mills & Marketplace Woodbridge Center Occupancy 99.6% 97.1% % of pool Balance 11.4% 12.3% Asset Type Retail Retail Amortization Interest Only 36 Month IO/360 Month Amortization DSCR 2.66x 1.16x Memo: Anchored Property & Super Regional Mall. High Quality Tenants. Bankruptcy or Economic Decline of anchor tenant exposure. Regional Mall & High Quality Tenants and Location. Low DSCR ( 1.16x)
- 15. Loan 2 MS1416 WF1416 PropertyName State Farm Portfolio Soho Beach House Occupancy 100% 85.6% % of pool Balance 7.9% 5.6% Asset Type Office Hospitality Amortization Interest Only 21 Month IO/401 Month Amortization DSCR 1.62x 0.95x Memo: Diversification/Exposure to different markets. Regulations in every state is different Great Location, demand for hotels. Old Building, low DSCR 0.95x(negative cash-flow), Volatile market.
- 16. Loan 3 MS1416 WF1416 PropertyName Green Hills Corporate Center Montgomery Mall Occupancy 99.1% 92.4% % of pool Balance 5.1% 5.5% Asset Type Office Retail Amortization Full Amortization-360 Month Interest Only 120 Month DSCR 1.79x 2.6x Memo: Fully occupy, strong tenants (2). Location, depended on their 2 tenants Strong DSCR 2.6x. Bankruptcy or Economic Decline of anchor tenant exposure.
- 17. Loan 4 MS1416 WF1416 PropertyName Outlets of Mississippi Pacific Design Center Occupancy 95.4% 72.7% % of pool Balance 4.9% 5.1% Asset Type Retail Office Amortization IO-60 month & Amortization 60 Month IO/ 360 Amortization DSCR 1.42x 1.05x Memo: Strong Tenants ( Saks Fifth Avenue, Forever 21 etc), benefits from weak market conditions, Demand, New Building. Bankruptcy or Economic Decline of anchor tenant exposure. Mixed used (Design Center/office) Low Occupancy, low DSCR, Largest tenant restaurant.
- 18. Loan 5 MS1416 WF1416 PropertyName Marriott Philadelphia Downtown Purgatory Creek Apartment Occupancy 77.3% 94.4% % of pool Balance 4.7% 3.2% Asset Type Hospitality Multifamily Amortization Full Amortization-360 Month 30 Month IO/ 360 Month Amortization DSCR 1.56x 1.23x Memo: Adjacent to Penn Convention Center Two miles from Texas State University
- 19. Loan 6 MS1416 WF1416 PropertyName Hilton San Francisco Weatherford Ridge Occupancy 91.2% 97% % of pool Balance 4.1% 3.2% Asset Type Hospitality Retail Amortization IO-60 month & Amortization 36 Month IO/360 Month Amortization DSCR 1.34x 1.34x Memo: 91% average occupancy rate 27% increase in RevPar Nationally recognized tenant roster
- 20. Loan 7 MS1416 WF1416 PropertyName La Concha Hotel & Tower Harlequin Plaza Occupancy 90.1% 88.6% % of pool Balance 3.3% 2.9% Asset Type Hospitality Office Amortization Full Amortization-360 Month 120 Month IO DSCR 1.57x 2.16X Memo: Hotel in San Juan, Puerto Rico 93% average occupancy rate Sponsored by Paulson Management, LLC Cherry Creek Mortgage & Bellco Credit Union
- 21. Loan 8 MS1416 WF1416 PropertyName Aspen Hights - Stillwater Market Square at Montrose Occupancy 98.2% 98.3% % of pool Balance 3% 2.6% Asset Type Multifamily Retail Amortization IO-60 month & Amortization 36 Month IO/360 month Amortization DSCR 1.06x 1.36x Memo: Student Housing for OSU New Development Strong growth for demand Below Market Lease High Occupancy
- 22. Loan 9 MS1416 WF1416 PropertyName Thunder Hollow Apartments JL Holdings – Burger King Portfolio Occupancy 88.7% 100% % of pool Balance 2.4% 2.3% Asset Type Multifamily Retail – Single Tenant Amortization IO-12 month & Amortization 240 month Amortization DSCR 1.21x 1.41x Memo: Good market 4.125M Mezzanine debt, High LTV Collateralized by 90 Burger Kings Low LTV Age of assets B-note exist in this loan
- 23. Loan 10 MS1416 WF1416 PropertyName Sprague Hotel Portfolio Security Self Storage SPX Portfolio Occupancy 71.9% 88.9% % of pool Balance 2.2% 2.3% Asset Type Hospitality Self Storage Amortization Full Amortization-240 Month 360 Month Amortization DSCR 1.25x 1.37x Memo: Cross Collateralized Experienced Management – Holiday Inn High RevPAR Full Amortization High Occupancy Well diversified High LTV
- 24. Key Metrics 64.50% 65.00% 65.50% 66.00% 66.50% 67.00% 67.50% 68.00% 68.50% 69.00% 69.50% Morgan StanleyWells Fargo 69.30% 66.30% LTV LTV 1.62 1.64 1.66 1.68 1.7 1.72 1.74 1.76 1.78 Morgan Stanley Wells Fargo 1.77x 1.68x DSCR DSCR
- 25. Call Protection 82% 13% 5% Wells Fargo PermitsDefeasance Yield Maintenance Both85% 15% Morgan Stanley
- 26. Interest Only Loans: MORGANSTANLEY WELLS FARGO 24.70% 9% 40.60% 47.30% 35% 44% Interest Only IO & Amortization Pure Amortization
- 27. Morgan Stanley -Cross Collateralization -24% of pool balance is secured by multiple properties -Arundel Mills loan secured by regional mall and shopping center -Sprague Hotel Portfolio (3 hotels, 345 guestrooms)
- 28. Wells Fargo Cross-Collateralization -9.7%of pool balance are secured by multiple properties -2.2% are cross collateralized loans -Burger King portfolio (90 properties) -Security Self Storage Portfolio (eight properties in CO, KS and TX)