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U.S. CMBS: Remote Work And The Evolution Of Manhattan's Office Market

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U.S. BSL CLO Obligors: Corporate Rating Actions Tracker 2024 (As Of June 21)

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Australian RMBS And The Growing SMSF Factor

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Weekly European CLO Update

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Table Of Contents: S&P Global Ratings Credit Rating Models


U.S. CMBS: Remote Work And The Evolution Of Manhattan's Office Market

Manhattan's office market, which comprises approximately 500 million square feet (sq. ft.), is crucial for investors because of its high exposure in U.S. single-asset single-borrower (SASB) and conduit commercial mortgage-backed securities (CMBS) transactions. Approximately $125 billion in office SASB and conduit loans have been securitized in the U.S. since 2017 (see chart). Of the 75 U.S. office SASB transactions currently rated by S&P Global Ratings, almost half (excluding defeased loans) are located in Manhattan.

The COVID-19 pandemic's impact on the demand for office space has varied across markets and industries, as well as at the individual building level. However, office loan performance has generally remained stable despite the rise in remote work and the uptick in the overall CMBS delinquency rate since the start of the pandemic, and there have been no rating actions (negative or positive) on the U.S. CMBS transactions we rate. We believe this stable performance primarily reflects the generally long-term leases in place for institutional quality and/or investment-grade (rated 'BBB-' and above) tenants, who have generally remained current on their rents even though their space utilization rates remain low. Still, there is anecdotal evidence suggesting that overall demand is slowing, including recent reports that the General Services Administration is giving back about 5% of its space in California. We also believe properties that have relatively high near-term lease expiries or lack in-demand physical infrastructure for hybrid and remote work face greater risks of tenants rolling over to fill vacancies in higher-class office spaces, many of which are still offering concessions.

Our analysis of office loans focuses on four key areas: the sustainability of in-place occupancy and rent levels, a given property's market appeal, the level of concessions available to tenants (such as free rent or tenant improvement dollars and capital expenditures), and the valuation impact of real estate taxes. We also expect environmental, social, and governance (ESG) credit factors to emerge as an additional concern over time--a move that may be accelerated by New York City's Local Law 97 (LL97), which has a stated goal of reducing greenhouse emissions from New York City real estate.

We believe the evolution of office space demand will remain a hot topic for the foreseeable future. We will continue to evaluate office loan performance and market trends, including tenant rollover, lease expiration timing, and managers' ability to fill vacancies should they arise, as well as assess the likelihood of the rated loans being refinanced by their maturity dates.

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Remote Work Trends Drive Demand

We believe Manhattan's class B and C office stock are most at risk from the emerging trends in office utilization. CoStar's one- to three-star classification (which we equate to class B and C) represents 131.0 million sq. ft., or approximately 30.5%, of Manhattan's total office space. These buildings mostly lack the physical infrastructure tenants are seeking in a post-pandemic world (better HVAC, more flexible floor plan arrangements, significant amenity packages, and concierge areas). They are also generally tenanted by companies that haven't made a firm commitment to in-place work, compared with tenants in the class A buildings (investment banks, law firms, investment funds, etc.) in newer areas such as Hudson Yards. While the emergence of the omicron variant slowed the return-to-office trend that began in 2021, many offices are now targeting a February through April 2022 date.

However, not all class A buildings will escape the pressures of hybrid and remote work, which we believe are firmly here to stay for a significant portion of office users. The class A buildings that fall into this category will focus on attracting tenants from challenged class B properties. Existing class B tenants who have elected to remain physical users of space will be eager to trade up to better quality, better located class A properties, spurred by increasingly attractive concession packages and higher vacancies in class B and lesser class A buildings.

Table 1 shows CoStar's breakdown of the Manhattan office market by submarket (for a distribution of S&P Global Ratings' rated office SASBs by submarket, see Appendix I).

Table 1

Manhattan Office Submarket Breakdown
Submarket(i) SASBs rated by S&P Global Ratings (no.) Vacancy rate (%) Availability rate (%) Market rent per sq. ft. ($) Annual rent growth (%) Inventory sq. ft. (mil.) 12-mo. delivered sq. ft. (000s) Under construction sq. ft. (000s) Under construction (% of inventory) 12-mo. absorption sq. ft. (000s) Market sale price per sq. ft. 12-mo. sales volume (mil. $) 12-mo. sales volume growth (%) Market cap rate (%)
Grand Central 9 12.9 18.3 76.3 0.0 59.5 0 0 0 (1,900) 927 70 (95.8) 4.5
Plaza District 6 14.1 16.6 88.0 (1.8) 90.9 75 2,600 3 (2,800) 1,100 1,200 316.0 4.4
Columbus Circle 4 9.6 15.2 74.8 (2.0) 36.5 22 0 0 (370) 948 53 (84.0) 4.6
Times Square 3 11.9 21.2 78.1 (1.9) 50.1 0 0 0 (2,600) 993 461 20.3 4.5
Financial District 3 17.6 26.0 56.6 (2.3) 42.7 0 0 0 (2,900) 696 0 (100.0) 4.5
Penn Plaza/Garment(ii) 2 11.0 18.1 66.1 (2.7) 81.5 277 10,400 13 (945) 903 1,800 15.7 4.5
Hudson Square 2 8.2 11.4 73.5 (2.1) 13.3 0 2,700 20 (490) 935 314 202.0 4.5
Chelsea 1 12.9 17.8 64.3 (2.3) 45.3 73 1,100 3 (816) 904 966 251.0 4.4
World Trade Center 1 11.6 16.4 64.5 (3.0) 37.7 0 50 0 (876) 841 190 (18.9) 4.4
Gramercy Park 1 10.6 16.2 70.0 (2.3) 28.9 0 269 1 (533) 853 106 (83.9) 4.5
Murray Hill 1 19.1 24.3 55.2 (3.5) 16.1 0 37 0 (1,400) 724 413 2,824.0 4.7
Greenwich Village 1 12.2 11.4 72.7 (2.3) 7.3 182 54 1 164 999 4 - 4.5
Upper East Side 1 5.3 5.2 67.3 (2.5) 5.4 0 0 0 (48) 1,100 22 (75.3) 4.5
City Hall 0 6.3 6.4 54.2 (3.5) 19.5 0 19 0 (215) 1,000 37 (31.4) 4.6
Soho 0 15.2 18.1 67.6 (2.3) 12.4 249 191 2 (22) 1,000 374 (31.6) 4.6
Tribeca 0 7.2 9.4 70.3 (2.6) 10.1 0 0 0 (612) 867 46 154.0 4.5
Insurance District 0 10.7 22.1 53.2 (2.8) 12.9 0 0 0 (452) 676 15 (52.4) 4.5
Harlem/North Manhattan 0 8.9 14.7 44.2 (2.5) 7.8 0 1,200 15 (172) 680 3 (92.1) 4.8
U.N. Plaza 0 4.8 11.8 61.8 (3.5) 5.1 191 0 0 192 831 5 (63.4) 4.6
(i)Data as of December 2021. (ii)Including Hudson Yards. SASBs--Single-asset single-borrower transactions. Mo.--Month. Source: CoStar Group.

Concession Levels Remain High

Attracting new tenants and keeping existing ones have become increasingly expensive for office landlords. Many newer class A buildings in New York have been offering unusually high concession packages, which we believe temper any increase in value. While varying from building to building and lease to lease, we estimate that net effective rents across the market are 15%-25% below face rents, considering the amount of free rent given and tenant improvements and leasing commissions paid. We have seen greater discounts as well.

We consider capital expenditures for pre-builds, agreements to pay a tenant's rent in another property as an inducement to relocate, and free rent given mid- or end-of-lease as tenant concession costs, contrary to suggestions by some that those costs should be ignored when determining effective rents. Existing properties that offer more dated amenity packages are having to spend very significant sums on capital expenditures beyond the typical roof replacement or switching out an old elevator system for a new one. Lobbies are being dramatically reconfigured, revenue-generating tenant floors are being turned into amenity and conference space (which usually does not replace the prior income), and available rooftop and balcony areas are being structurally reinforced at great expense to serve as additional tenant offerings.

We may make a valuation deduction for properties that haven't taken those measures--similar to what we do in the lodging space for hotels without funded property improvement plans (for more details about our approach to valuation, see our criteria "CMBS Global Property Evaluation Methodology," published Sept. 5, 2012). Valuing new construction is more complicated because it can be difficult to parse what is a construction cost and what is a build-out for a specific tenant. However, we generally account for these considerations in our valuations by increasing (often significantly) our tenant improvements/leasing commission cash flow deduction using shorter lease terms or by applying a higher vacancy factor. In specific cases, we may make other significant adjustments.

Lower Tax Assessments: A Temporary Reprieve

The role taxes play in valuation has become a secondary concern, eclipsed by questions and concerns about the impact of remote work on future office demand. However, we believe it is important to not lose sight of the moderating effect taxes have had on office valuations in recent years. We believe the recent pandemic-related tax reprieve will be short-lived, and taxes will continue to grind ever higher, with greater direct impact now that shifting tenant demand is putting pressure on rents and occupancies.

In 2020, at the height of the COVID-19 pandemic, commercial real estate owners in New York City saw their taxable assessments, and ensuing real estate tax bills, decline sharply, falling approximately 16% on average for office buildings, according to data provided by the City of New York, and as high as 25%, based on recent loan collateral data we have evaluated. While there is some disagreement about the speed of the recovery in real estate taxes among the larger appraisal firms, the consensus is that tax bills will return to pre-COVID-19 levels within the next four to five years, driven by increases in assessed value and real estate tax rates. We generally agree, largely due to the city's reliance on commercial real estate tax revenue to fund its annual budget of approximately $100 billion. In fiscal year 2021, the office sector provided an estimated $6.9 billion in direct revenue from property, real estate transaction, mortgage, and commercial rent taxes, according to the New York State Comptroller.

We also believe the temporary savings will accrue primarily to the equity holders' benefit, and these savings will almost certainly be gone when recent loans are due to refinance. As a result, we have generally excluded the present value of these temporary tax savings in our valuations. Further, if significant swathes of office (or retail) assets become obsolete, as some market participants expect, the tax burden may also increasingly fall to the remaining viable commercial properties, leading to accelerating increases.

ESG Moving To The Forefront

Our rating analyses for office loans consider a transaction's potential exposure to ESG credit factors. For CMBS, we view the exposure to environmental credit factors as above average, to social credit factors as average, and to governance credit factors as average (see "ESG Industry Report Card: Commercial Mortgage-Backed Securities," published March 31, 2021).

Our reviews concluded that environmental credit factors are not yet key rating drivers for the CMBS transactions we rate, and these factors were adequately addressed through means such as property insurance, environmental guarantees, or specific upfront reserves for certain transactions. While the progressive decarbonization of the real estate sector by 2050 is expected to influence market values over time, we believe our current approach to evaluating stressed long-term recovery values indirectly accounts for the potential materialization of that pricing differentiation over the expected life of a transaction.

In addition, our analyses have not given credit to any future actions that landlords and tenants may take to reduce their carbon footprint to support a healthier environment and preserve property value. As a result, we have not separately identified this as a material ESG credit factor in our analyses. In our view, the CMBS transactions we rate have exposures to social and governance credit factors that are in line with our sector benchmark.

However, New York City's LL97 is helping to bring ESG concerns to the forefront of CMBS. The law, which became effective in November 2019, has the goal of achieving a 40% reduction in aggregate greenhouse gas emissions in "covered buildings" by 2030, and an 80% reduction in citywide emissions by 2050. Covered buildings include those that exceed 25,000 gross sq. ft., two or more buildings on the same tax lot that together exceed 50,000 gross sq. ft., and two or more buildings held in the condominium form of ownership that are governed by the same board of managers that together exceed 50,000 gross sq. ft.

Beginning in May 2025, owners of these buildings must file an annual report showing that, for the previous calendar year, the building was either in compliance with the applicable building greenhouse gas emissions limit or, if not, by what extent. Industry participants have criticized the methodology of the law, arguing that it does not take sufficient account of density as calculations are a function of generalized use and gross building area. And, as a result, two buildings with similarly efficient systems (e.g., a moderately used office building and a trading floor) could perform quite differently under the city's metrics. Real estate owners had until June 2021 to apply for adjustments to the 2024 to 2029 limits.

The implementation of the law remains uncertain because the emissions targets partly depends on the state getting an appropriate balance of uses in the underlying grid--in addition to any capital improvements building owners make to their properties. Further, New York State could enact additional policies, such as carbon auctioning or trading, which could allow property owners to exchange emission credits and avoid fines under the law. At this stage, these developments remain uncertain, but we will continue to monitor them because they could have a lasting impact on long-term sustainable valuations.

Steady Performance

Of the 35 SASB transactions we rate that are collateralized by Manhattan office loans, all but two are secured by institutional quality, class A office buildings. The class A assets are located primarily in the Grand Central, Plaza District, and Columbus Circle submarkets, as defined by CoStar (see Appendix I for more details). The two exceptions are 75 Broad Street (loan collateral for NCMS 2017-75B), a class a B+ office building located in the Financial District submarket, and One Park Avenue (loan collateral for ONE 2021-PARK), a class B office building located in Murray Hill submarket.

Watchlist loans

Six loans of the 35 loans we rate are on servicer watchlists, but generally for issues we identified or considered at securitization (see table 2 and Appendix II).

The most immediately pressing is 1740 Broadway (loan collateral for BWAY 2015-1740), where 70% of the net rentable area (NRA) is due to expire in March 2022 and another tenant that represented approximately 15% of NRA vacated its space when its lease expired. The anchor tenant's decision to leave was expected, and the sponsor, Blackstone, has been working to increase the building's attractiveness to prospective tenants by reworking the building's lobby and second floor to create a new entryway with a lounge, cafe, restaurant, and a private club for the building's tenants. The building offers two large blocks of contiguous space: approximately 157,000 sq. ft. on floors 16-26 and approximately 379,000 sq. ft. on floors two to 13. Blackstone acquired the property in late 2014 for a reported $605 million, and the 10-year CMBS loan matures in 2025. In 2020, real estate taxes for the property were approximately $12.5 million and annual debt service is an additional $12.0 million, bringing basic annual carrying costs to an estimated $24.5 million. We continue to monitor the master servicer's dialog with the sponsor regarding leasing updates, and our last review did not result in a rating action.

Table 2

Select Manhattan SASB Transactions On Servicer Watchlist
Transaction(i) Property Current balance ($) Fully extended maturity date S&P Global Ratings' lowest bond rating Watchlist date Sponsor

BWAY 2015-1740

1740 Broadway 308,000,000 January 2025 B+ (sf) April 2021 Blackstone Property Partners L.P.

COMM 2016-667M

667 Madison Avenue 214,000,000 October 2026 BB (sf) October 2019 Hartz Financial Corp.

GSMS 2017-485L

485 Lexington Avenue 350,000,000 February 2027 BB- (sf) September 2021 SL Green Operating Partnership L.P.

VNDO 2016-350P

350 Park Avenue 233,332,000 January 2027 BB- (sf) December 2019 Vornado Realty Trust

MSDB 2017-712F

712 Fifth Avenue 300,000,000 July 2027 A- (sf) June 2019 Paramount Group Inc. (50%) and the von Finck family (50%)

DBWF 2016-85T

85 Tenth Avenue 271,000,000 December 2026 BB- (sf) October 2020 The Related Cos. L.P., The Related Group, and Vornado
(i)Data as of December 2021. Sq. ft.--Square feet. DSCR--Debt service coverage ratio. NCF--Net cash flow Source: S&P Global Ratings and Trepp.
SASB loans

Manhattan SASB office loans that matured in recent months have found ready access to refinance capital, although take-out lenders are increasingly turning to innovative structures to get the deals done. These structures include full property cash flow sweeps (large upfront reserve deposits to fund known or expected tenant leasing concessions or significant borrower guarantees for the same), which remain elevated in the market. Table 3 lists SASB transactions we rate that have near-term maturities, based on the fully extended maturity dates.

Table 3

Office SASB Transactions By Fully Extended Maturity
Maturity year/transaction(i)
2022 2023 2024 2025 2026 2027 and beyond

JPMCC 2012-HSBC

None

COMM 2019-521F(ii)

BWAY 2015-1740(iii)

ONYP 2020-1NYP(ii)

VNDO 2016-350P(iii)

NCMS 2018-285M

MAD 2017-330M

BWAY 2013-1515

COMM 2016-787S

GSMS 2017-485LWL)

MSC 2014-150E

BAMLL 2015-200P

LBTY 2016-225L

NCMS 2017-75B

MSC 2015-420

NCMS 2020-2PAC

ONE 2021-PARK(ii)

MSDB 2017-712F(iii)

GSMS 2005-ROCK

COMM 2016-667M(iii)

BAMLL 2015-ASTR

DBGS 2018-5BP(ii)

DBWF 2016-85T(iii)

MSSG 2017-237P

FB 2005-1

GSMS 2017-375H

MAD 2015-11MD

WPT 2017-WWP

BBCMS 2020-BID(ii)

NCMS 2018-OSS

GSMS 2015-590M

LCCM 2013-GCP

WFCM 2018-1745

CGCMT 2015-101A

AACMT 2005-C6A

(i)Data as of December 2021. (ii)Floating-rate loans. (iii)Watchlist loans. Source: S&P Global Ratings.

We currently rate seven SASB office transactions for which more than 30% of the leases are scheduled to rollover by 2024 (see table 4). Of these loans, the loans collateralizing JPMCC 2012-HSBC and Natixis Commercial Mortgage Securities Trust 2018-285M are maturing in 2022 (see below for more details).

JPMCC 2012-HSBC, which matures in July 2022, is collateralized by 452 Fifth Avenue, a class A office building in the Penn Plaza/Garment District submarket of Manhattan. The property, which is also known as the "HSBC tower," has been predominately occupied by HSBC Bank PLC since 1999 and serves as the company's North America corporate headquarters. According to media reports, the sponsor (Property and Building Corp. Ltd.) found a potential buyer (Innovo Property Group), which agreed in December 2021 to purchase the trophy asset for $855.0 million. The transaction's current balance was $277.6 million as of January 2022. HSBC leased 547,963 sq. ft. (63.3% of total NRA) at the property, and it recently renewed its lease through April 2025 at $77.00 per sq. ft. net rent. Only one other tenant occupies more than 10.0% of the property, Baker & McKenzie LLP, which occupies about 105,800 sq. ft. (12.2% of NRA) with leases expiring in January 2028. The property was 99% occupied as of June 2021 and reported a debt-service coverage ratio (net cash flow) of 1.75x.

Natixis Commercial Mortgage Securities Trust 2018-285M, which matures in November 2022, is collateralized by 285 Madison Avenue, a class A office building owned by RFR Holdings LLC. The property, which is located in the Grand Central submarket, was 96.7% occupied as of the September 2021 rent roll, compared to the market vacancy rate of 12.1%, according to CoStar. PVH Corp. occupies 43.0% of the NRA with a lease that matures in October 2033. The property has little rollover until 2025. At securitization, the appraised loan-to-value (LTV) ratio was 44.3% and the S&P Global Ratings LTV was 89.3%. We currently expect this loan to be able to refinance, based on the moderate leverage level.

Table 4

Loans With More Than 30% Lease Rollover During The Next Three Years(i)
Trepp lease expiration (% of NRA)
Transaction(ii) Property Maturity date Within one year Within two years Within three years Within four years Sponsor

COMM 2019-521F

521 Fifth Avenue June 2024 24.1 29.3 43.2 47.3 Savanna Real Estate Fund

MSC 2015-420

420 Lexington Avenue October 2024 14.0 23.0 29.0 33.0 SL Green Realty Corp.

BWAY 2015-1740

1740 Broadway January 2025 87.0 87.0 92.0 94.0 Blackstone Property Partners L.P.

COMM 2016-667M

667 Madison Avenue October 2026 4.3 13.7 54.6 69.8 Hartz Financial Corp.

VNDO 2016-350P

350 Park Avenue January 2027 18.1 39.2 63.6 63.6 Vornado Realty Trust

MSDB 2017-712F

712 Fifth Avenue July 2027 15.0 21.0 42.0 54.0 Paramount Group Inc. (50%) and the von Finck family (50%)

WPT 2017-WWP

825 Eighth Avenue November 2027 0.0 0.0 35.0 37.0 New York REIT (50.1%), SL Green (24.4%), RXR (24.4%), and WWP (1.2%)
(i)By net rentable area. (ii)Data as of December 2021. NRA--Net rentable area. Source: Trepp and S&P Global Ratings.

New York City Office Exposure In Conduit Transactions

U.S. conduit CMBS also has significant exposure to New York City office loans and properties. Of the 150 U.S. public conduit transactions we rate (excluding Freddie Mac transactions), 25.8% have more than 10% exposure to New York City office properties (all boroughs, including Manhattan) (see table 5). While conduit and SASB transactions face similar market risks, we believe conduits' exposure to a single submarket or property type are lower because of the diversity they offer.

Table 5

Rated Conduit Transactions With More Than 10% Pool Exposure To New York City Office Loans
Transaction(i) Pool exposure (%) Pool exposure balance (mil. $) S&P Global Ratings' lowest bond rating Credit enhancement level of the lowest rated class (%)

BMARK 2020-B21

25.0 284.2 AA- (sf) 20.4

GSMS 2020-GC47

23.2 179.0 AA- (sf) 21.8

COMM 2014-CCRE16

21.7 176.6 AAA (sf) 38.9

CGCMT 2020-GC46

21.4 270.0 AA+ (sf) 18.2

BANK 2019-BNK24

20.7 252.0 AA+ (sf) 19.3

BMARK 2021-B24

20.0 243.0 AA+ (sf) 22.1

BMARK 2020-B20

18.5 174.8 AA- (sf) 22.3

BANK 2018-BNK13

18.2 163.4 AA- (sf) 15.6

BMARK 2019-B11

17.8 195.0 AA (sf) 18.1

BANK 2020-BNK25

17.0 276.5 A (sf) 9.8

UBSCM 2017-C4

16.7 129.5 D (sf) 1.7

BMARK 2020-B17

16.6 156.0 AA (sf) 18.5

GSMS 2020-GSA2

16.5 141.8 AAA (sf) 30.1

CF 2019-CF1

16.5 108.7 A (sf) 16.1

BMARK 2019-B12

16.4 193.2 AA (sf) 17.6

DBJPM 2017-C6

16.4 173.8 AA- (sf) 17.3

JPMCC 2019-COR5

16.3 112.3 AA (sf) 22.1

COMM 2012-CCRE4

16.0 125.0 D (sf) 0.0

BMARK 2021-B23

16.0 252.5 A- (sf) 11.5

CD 2017-CD4

15.5 142.5 BBB+ (sf) 13.3

GSMS 2019-GC40

15.4 145.0 AA- (sf) 18.9

BMARK 2019-B10

15.3 175.0 AA- (sf) 20.2

BANK 2019-BNK21

14.5 170.5 AA- (sf) 17.0

UBSCM 2017-C2

14.4 116.0 CCC (sf) 3.5

BMARK 2018-B7

14.3 166.0 AAA (sf) 30.3

BMARK 2021-B27

13.7 150.0 A- (sf) 14.6

BANK 2019-BNK19

13.5 174.7 A- (sf) 9.9

JPMDB 2020-COR7

13.5 97.5 AA- (sf) 22.3

BMARK 2021-B29

13.4 157.7 AA+ (sf) 23.0

BMARK 2020-B18

12.9 120.2 AAA (sf) 30.0

JPMDB 2017-C5

12.6 120.2 AAA (sf) 32.8

MSBAM 2013-C8

12.4 100.0 D (sf) 2.5

WFRBS 2013-C11

12.4 106.5 B (sf) 3.5

GSMS 2019-GC38

12.3 92.8 AA (sf) 22.1

COMM 2013-LC13

11.9 64.9 CCC- (sf) 2.2

CGCMT 2017-P8

11.1 130.2 B+ (sf) 3.6

BMARK 2019-B9

10.9 95.5 AAA (sf) 30.2

BANK 2019-BNK22

10.5 125.0 AA+ (sf) 19.9
(i)Data as of December 2021. All five boroughs, including Manhattan. In addition to the pool exposures noted above, the following transactions also include nonpool rake bond exposures rated by S&P Global Ratings: 3 Columbus Circle (BMARK 2019-B10), 65 Broadway (CF 2019-CF1), and 330 West 34th Street (MSC 2007-TOP27). MSC 2007-TOP27 has nonpooled certificates that are secured by a ground lease on the 330 West 34th Street loan. As of December 2021, the largest New York City office exposure was 360 Park Ave South, which is securitized in MSC 2007-TOP27. The loan had an outstanding balance of $200.3 million (98.8% exposure to NYC office properties by the pooled balance) and is secured by a 451,800 sq. ft. office property in Manhattan that is 100% leased to Reed Elsevier Inc. The lease expired on Dec. 31, 2021, and the loan was scheduled to mature on March 1, 2022; however, it was paid off in January 2022. Note that MSC 2007-TOP27 is excluded from the table above. Source: Trepp and S&P Global Ratings.

Appendices

Appendix I: Manhattan Office SASB Transactions By CoStar Submarkets
Submarket/transaction(s)(i) Property address(ii) S&P Global Ratings' lowest bond rating Sponsor
Grand Central (vacancy rate: 12.1%; availability rate: 18.8%; rent per sq. ft.: $76.27)(iii)

BAMLL 2015-200P

200 Park Avenue BB- (sf) Tishman Speyer Properties L.P.

COMM 2019-521F

521 Fifth Avenue B- (sf) Savanna Real Estate Fund

GSMS 2017-485L

485 Lexington Avenue BB- (sf) SL Green Operating Partnership L.P.

LCCM 2013-GCP

622 Third Avenue BBB+ (sf) Cohen Brothers Realty Corp. (CBRC)

MAD 2017-330M

330 Madison Avenue BB (sf) Vornado Realty L.P.

MSC 2014-150E

150 East 42nd Street B (sf) Mark Karasick and Michael Silberberg

MSC 2015-420

420 Lexington Avenue BB+ (sf) SL Green Realty Corp.

MSSG 2017-237P

237 Park Avenue BB- (sf) RXR Realty LLC and Walton Street Capital LLC

NCMS 2018-285M

285 Madison Avenue B- (sf) RFR Realty LLC
Plaza District (vacancy rate: 14.5%; availability rate: 17.3%; rent per sq. ft.: $87.91)

COMM 2016-667M

667 Madison Avenue BB (sf) Hartz Financial Corp.

GSMS 2005-ROCK

Rockefeller Center complex BB+ (sf) Tishman Speyer Crown Equities

GSMS 2015-590M

590 Madison Avenue BB (sf) The Board of State Teachers Retirement System of Ohio

MSDB 2017-712F

712 Fifth Avenue A- (sf) Paramount Group Inc. (50%) and the von Finck family (50%)

NCMS 2020-2PAC

330 East 62nd Street B- (sf) Amnon Shalhov, Eliezer S. Weiss, Jorge Madruga, Francesca Madruga, and Chava Lobel

VNDO 2012-6AVE

1290 Avenue of the Americas AA+ (sf) Vornado Realty L.P.

VNDO 2016-350P

350 Park Avenue BB- (sf) Vornado Realty Trust
Columbus Circle (vacancy rate: 9.7%; availability rate: 15.6%; rent per sq. ft.: $74.82)

FB 2005-1

1345 Avenue of the Americas BB+ (sf) Fisher Brothers Realty

BWAY 2015-1740

1740 Broadway B+ (sf) Blackstone Property Partners L.P.

COMM 2016-787S

787 Seventh Avenue A- (sf) Fifth Street Properties LLC

WFCM 2018-1745

1745 Broadway BBB+ (sf) QSuper Board
Financial District (vacancy rate: 17.1%; availability rate: 25.5%; rent per sq. ft.: $56.65)
NCMS 2017-75B 75 Broad Street B+ (sf) JEMB Realty Corp.

NCMS 2018-OSS

One State Street Plaza BBB- (sf) Abraham Wolfson and The Wolfson Family Trusts

ONYP 2020-1NYP

1 New York Plaza AAA (sf) BOP NYC OP LLC
Times Square (vacancy rate: 8.9%; availability rate: 21.3%; rent per sq. ft.: $77.93)

AACMT 2005-C6A

1166 Avenue of the Americas A- (sf) Marsh & McLennan Cos. Inc.

BWAY 2013-1515

1515 Broadway BB- (sf) SL Green Realty Corp.

WPT 2017-WWP

825 Eighth Avenue BBB- (sf) New York REIT (50.1%), SL Green (24.4%), RXR (24.4%), and WWP (1.2%)
Hudson Square (vacancy rate: 8.4%; availability rate: 11.2%; rent per sq. ft.: $73.41)

CGCMT 2015-101A

101 Avenue of the Americas B+ (sf) Edward J. Minskoff Equities Inc. (EJME)

GSMS 2017-375H

375 Hudson Street BB- (sf) Trinity (51%), Norges (48%), and Hines (1%)
Penn Plaza/Garment (vacancy rate: 10.9%; availability rate: 17.0%; rent per sq. ft.: $66.15)

DBGS 2018-5BP

1065 Avenue of the Americas B- (sf) Savanna Real Estate Fund

JPMCC 2012-HSBC

442 and 452 Fifth Avenue and 1 West 39th Street AA (sf) Property and Building Corp. Ltd.
Chelsea (vacancy rate: 13.2%; availability rate: 18.5%; rent per sq. ft.: $64.33)

DBWF 2016-85T

85 Tenth Avenue BB- (sf) The Related Cos. L.P., The Related Group, and Vornado
Gramercy Park (vacancy rate: 10.4%; availability rate: 16.1%; rent per sq. ft.: $69.99)

MAD 2015-11MD

11 Madison Avenue AA (sf) SL Green Realty Corp.
Greenwich Village (vacancy rate: 10.8%; availability rate: 12.9%; rent per sq. ft.: $74.93)

BAMLL 2015-ASTR

51 Astor Place BB- (sf) Edward J. Minskoff Equities Inc. (EJME)
Murray Hill (vacancy rate: 18.6%; availability rate: 24.0%; rent per sq. ft.: $55.18)

ONE 2021-PARK

One Park Avenue BBB- (sf) Vornado Realty Trust and Canadian Pension Plan Investment Board (CPPIB)
Upper East Side (vacancy rate: 5.4%; availability rate: 5.7%; rent per sq. ft.: $67.24)

BBCMS 2020-BID

1334 York Avenue B+ (sf) Sotheby's
World Trade Center (vacancy rate: 11.5%; availability rate: 16.9%; rent per sq. ft.: $64.82)

LBTY 2016-225L

225 Liberty Street B- (sf) Brookfield Financial Partners L.P.
(i)Data as of December 2021. (ii)The properties below are designated class A properties by S&P Global Ratings, except for 75 Broad Street (class B+) and One Park Avenue (class B). (iii)CoStar submarket data as of third-quarter 2021. SASB--Single-asset single-borrower. Sq. ft.--Square feet. Source: S&P Global Ratings and CoStar.

Appendix II

Comments On Select Servicer Watchlist Manhattan Office SASB Transactions
Transaction(i) Comments

BWAY 2015-1740

1740 Broadway is a class A office property located on the easterly blockfront of Broadway, between West 55th and West 56th Streets, in the West Side office submarket of Midtown Manhattan. The largest tenant, L Brands, occupies approximately 70.93% by sq. ft. and has a current lease expiration of March 31, 2022. L Brands does not plan to renew, and the servicer is in communication with the borrower regarding a plan to re-let the space. There is no springing trigger associated with this tenant. S&P Global Ratings is closely monitoring the transaction and the property's leasing status, and it may take rating actions as it deems appropriate.

COMM 2016-667M

667 Madison Avenue is a class A office building located in Midtown Manhattan. The loan was placed on watchlist due to a large water main break that occurred just outside the property on July 26, 2019, which flooded the subbasement and caused damage to the building's electrical and elevator systems. Repair and restoration work has been carried out since then, and the latest annual inspection completed on Aug. 20, 2021, showed no deferred maintenance. The only remaining restoration work is moving the electrical systems to a higher floor to avoid this issue in the future. This work is expected to be delayed until 2022-2023 because the electrical systems will be moved to an area currently occupied by a tenant on the ground floor. The property had an occupancy rate of 84% as of June 2021 and reported a DSCR (NCF) of 2.06x.

GSMS 2017-485L

485 Lexington Avenue is a class A office property located in Midtown Manhattan. The loan was placed on watchlist because the lockbox was activated when the debt yield fell below 7.25% (the actual debt yield was 6.31% as of June 30, 2020). As of September 2021, the property was 85% occupied and reported a DSCR (NCF) of 1.92x.

VNDO 2016-350P

350 Park Avenue is a class A office building located in Manhattan's Park Avenue submarket. The lockbox was activated when the debt yield test for the period ended March 31, 2021, failed to achieve the minimum required threshold of 7.25%. One tenant, Ziff Brothers (287,030 sq. ft.; 49% of NRA at securitization; lease expired April 30, 2021) vacated 65% of its space as of June 2019 and sublet the vacated space. Ziff continued to pay 100% of rent through the life of the lease, but it did not renew at lease expiration. The borrower was able to sign new leases with tenants, including Citadel and Square Mile. The property is 73% occupied as of June 2021 and reported a DSCR (NCF) of 2.60x. S&P Global Ratings will continue to monitor the sponsor's leasing efforts. We will revisit our assumptions and consider the impact, if any, on the transaction if actual performance differs significantly from our expectations.

MSDB 2017-712F

712 Fifth Avenue is a class A office building located in in Midtown Manhattan's Madison/Fifth Avenue office submarket. The sole retail tenant, Henri Bendel (85,917 sq. ft.; 16% of NRA at securitization; lease expires Feb. 28, 2031) vacated its space in January 2019 by exercising an early termination option. Extensive lobby renovations were completed in November 2019 to attract new tenants. As of Dec. 6, 2021, the lender has approved a lease for the vacated space. The new tenant will be Harry Winston Inc., a luxury jewelry brand. The lease will expire in July 2036. The property had an occupancy rate of 67% as of September 2021 and reported a DSCR (NCF) of 1.12x.

DBWF 2016-85T

85 Tenth Avenue is a class A office building in Manhattan's Chelsea submarket and is part of what is considered the "Google Campus," which are four properties that are occupied by Google as a tenant or an owner-user. General Services Administration, the second-largest tenant as of securitization, occupied 178,065 sq. ft. (28% of NRA) of the space and vacated when its lease expired in December 2020. The loan is currently in a cash sweep period due to the year-end 2020 DSCR (1.54x) falling below the 2.10x threshold. S&P Global Ratings is closely monitoring the transaction and the property's leasing status, and it may take rating actions as it deems appropriate.
(i)Data as of December 2021. SASB--Single-asset single-borrower. Sq. ft.--Square feet. DSCR--Debt service coverage ratio. NCF--Net cash flow. NRA--Net rentable area. Source: S&P Global Ratings and Trepp.

This report does not constitute a rating action.

Editor: Georgia Jones

Primary Credit Analysts:John V Connorton III, New York + 1 (212) 438 3892;
john.connorton@spglobal.com
Dennis Q Sim, New York + 1 (212) 438 3574;
dennis.sim@spglobal.com
Secondary Contact:Praveenkumarreddy Pallapothula, New York 212 438 1971;
p.pallapothula@spglobal.com
Global Structured Finance Research:James M Manzi, CFA, Washington D.C. + 1 (202) 383 2028;
james.manzi@spglobal.com

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