Deutsche Bank Securities, Inc. has filed a prospectus related to the commercial mortgage-backed securities (CMBS) transaction COMM 2014-UBS3 Mortgage Trust, which is comprised of 49 loans secured by 60 commercial properties having an aggregate principal balance of approximately $996 million.
The largest loan exposure in COMM 2014-UBS3 Mortgage Trust is the $135.0 million Bronx Terminal Market Loan, which includes the non-controlling Note A-4, Note A-5-2 and Note A-6, which are part of a fixed rate Combination Loan in the aggregate principal amount of $380.0 million.
The Combination Loan is secured by the borrower’s leasehold interest in the 912,333 square foot, Class A, anchored retail power center located at 658 River Avenue in the Bronx, New York.
The Combination Loan was co-originated by GACC and Cantor Commercial Real Estate Lending, L.P. It is evidenced by seven pari passu notes. Only the non-controlling Note A-4, Note A-5-2 and Note A-6, with an aggregate original principal balance of $135.0 million, will be included in the COMM 2014-CCRE18 mortgage trust. The controlling Note A-1 and Note A-2, with an aggregate original principal balance of $140.0 million, were included in the COMM 2014-CCRE17 mortgage trust. The remaining notes were contributed to COMM 2014-UBS3.
The Bronx Terminal Market Loan Combination has a 10-year term and accrues interest at a fixed rate equal to 4.5280% for the loan term.
The proceeds of the Bronx Terminal Market Loan Combination were used to retire existing debt of approximately $332.9 million and pay closing costs of approximately $4.9 million, giving the borrower a return of equity of approximately $42.2 million.
Based on the appraised value of $600.0 million as of January 7, 2014, the cut-off date LTV of the Bronx Terminal Market Loan Combination is 63.3% and the remaining implied equity is $220.0 million. The most recent prior financing of the Bronx Terminal Market Property was not included in a securitization.
The borrower, BTM Development Partners, LLC, is a single purpose New York limited liability company structured to be bankruptcy-remote, with a single purpose Delaware limited liability company as its managing member and two independent managers in its organizational structure.
The sponsor of the borrower and the nonrecourse carve-out guarantor is The Related Companies, L.P. Founded in 1972 by Stephen Ross, Related is a privately-owned, vertically integrated real estate firm that develops, acquires, manages, finances and markets real estate developments both within the United States and internationally.
Related’s real estate portfolio is currently valued in excess of $15.0 billion and includes luxury residential, affordable and workforce apartments, commercial office, retail and mixed-use developments in Boston, Chicago, Los Angeles, San Francisco, South Florida, Abu Dhabi and Sao Paulo.
Notable Related properties include Time Warner Center at Columbus Circle and TriBeCa Green in Manhattan. Related is also developing the Hudson Yards project on Manhattan’s west side, a 28-acre, 17.4 million sq. ft. mixed-use development which is expected to be completed in 2018. Since its founding, Related has developed or acquired over $22.0 billion of real estate and currently employs over 2,500 employees across seven offices in the United States and two international offices located in Abu Dhabi, United Arab Emirates and Shanghai, China.
The Bronx Terminal Market Property is a 912,333 sq. ft. multi-level anchored retail power center located on a 16.8 acre site in the Bronx which is bounded generally by 149th Street to the south, River Avenue to the west and adjacent to the Major Deegan Expressway, the Metro-North rail road tracks to the north and Exterior Street to the east.
The Bronx Terminal Market Property consists of a four-level south tower and three-level north tower which are connected via a six-level parking garage consisting of 2,610 spaces, for a parking ratio of 2.86 per 1,000 sq. ft., along with two adjacent one-story buildings. The Bronx Terminal Market Property was developed by Related in 2009 for a reported cost of $360.1 million and opened for business in the fourth quarter of 2009.
The Bronx Terminal Market Property features 27 tenants, including national anchor tenants Target, Home Depot and BJ’s Wholesale Club, and national major tenants such as Marshalls, Best Buy, Toys ‘R’ Us / Babies ‘R’ Us, Michaels and Staples, among others. National in-line tenants include Gamestop, AT&T, T-Mobile, Sprint, JP Morgan Chase and Payless Shoe Source.
As of April 1, 2014, the Bronx Terminal Market Property was 99.3% occupied.
The Phase I environmental report dated January 8, 2014 recommended no further action at the Bronx Terminal Market Property other than (i) the development and implementation of an asbestos operation and maintenance plan for the southernmost building at the property which is the only remaining structure from the original development on the site, which is in place, and (ii) the maintenance of certain engineering controls and annual certifications relating to historical contamination.
The Bronx Terminal Market Property is located in the Bronxchester neighborhood of the Bronx, directly to the south of the new Yankee Stadium. The Bronxchester neighborhood has been the subject of multiple revitalization initiatives including the Yankee Stadium Area Redevelopment Project, which includes the construction of four new public baseball fields, a skating park, 18 new tennis courts and a new esplanade providing access from Yankee Stadium to the Bronx Terminal Market Property.
Other proposed developments include a 28,000-seat Major League Soccer stadium that is proposed to be completed by 2019.
Subway access to the Bronx Terminal Market Property is provided via the 2, 4 and 5 lines at the Grand Concourse station located three blocks to the east, as well as the 4, B and D lines at the 161st Street-Yankee Stadium station eight blocks to the north. The area is also served by numerous bus routes including the BXM1, BXM2, BXM3, BXM18, BX11 and BX13 lines and the Metro-North rail station immediately to the north of the Bronx Terminal Market Property.
The Bronx Terminal Market Property is directly accessible via car from exits 4 and 6 on the Major Deegan Expressway. Pedestrian traffic in the area exceeds 250,000 per day.
The appraiser determined a primary trade area that encompasses the three-mile radius around the Bronx Terminal Market Property. This primary trade area included approximately 1.2 million people and 456,401 households as of year-end 2013, with an average household income of $51,737, above the Bronx County average of $46,664.
The appraiser determined a primary competitive set that includes four other anchored retail shopping centers within Upper Manhattan and the Bronx. The appraiser also identified three proposed competitive properties: The Mall at Bay Plaza, Riverdale Crossings and Throggs Neck Shopping Center, all of which will be located approximately five or more miles to the north of the Bronx Terminal Market Property, outside of its primary trade area.