Kroll Bond Rating Agency Assigns Preliminary Ratings To BB-UBS Trust 2012-TFT

Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings for the BB-UBS Trust 2012-TFT transaction (see ratings list below). BB-UBS Trust 2012-TFT is a CMBS large loan transaction that is collateralized by three first mortgage loans with a combined principal balance of $552.9 million jointly originated by Barclays Bank PLC and UBS Real Estate Securities Inc.

The loans, which are not cross-collateralized or cross-defaulted, are each secured by a super-regional mall that are owned and operated by General Growth Properties, Inc. The largest of the three loans has a balance of $205.5 million and is secured by a first mortgage lien on the borrower’s fee and leasehold interests in 667,561 square feet (sf) of the Tucson Mall, a 1.3 million sf property located in Tucson, Arizona. The second largest loan has a balance of $202.0 million and is secured by a first mortgage lien on the borrower’s fee and leasehold interest in 421,206 sf of Fashion Place, which is a 1.0 million sf property located in Murray, Utah. The final loan that serves as trust collateral has a balance of $145.4 million and is secured by first mortgage lien on the borrower’s fee and leasehold interests in 416,516 million sf of the Town East Mall, which is a 1.2 million sf property located in Mesquite, Texas.

KBRA’s analysis of the transaction included a detailed evaluation of each malls’ cash flows using our CMBS Property Evaluation Guidelines, and the application of our CMBS Single Borrower & Large Loan Rating Methodology. The results of the analysis produced an individual KNCF for each property. We applied KBRA capitalization rates to each property’s KNCF to arrive at KBRA value, the results of which are highlighted below.
  • Tucson Mall: an 8.50% cap rate to KNCF of $23.6 million, resulting in a KBRA value of $277.7 million, which is 30.6% off of the appraisal value.
  • Fashion Place: a 7.50% cap rate to KNCF of $20.8 million, resulting in a KBRA value of $277.8 million, which is 27.3% off of the appraisal value.
  • Town East Mall: an 8.25% cap rate to KNCF of $16.3 million, resulting in a KBRA value of $197.9 million, which is 22.1% off of the appraisal value.

In our analysis of the transaction, we also reviewed and considered third party engineering and environmental reports, as well as our own on-site inspections of the properties and the competition.