FWP 1 n728_ts-x5.htm FREE WRITING PROSPECTUS

 

    FREE WRITING PROSPECTUS
    FILED PURSUANT TO RULE 433
    REGISTRATION FILE NO.: 333-206361-05
     

 

 

September 14, 2016 JPMCC 2016-JP3

Free Writing Prospectus

 

Structural and Collateral Term Sheet

 

 

JPMCC 2016-JP3

 

 

 

$1,217,494,697

(Approximate Mortgage Pool Balance) 

 

$1,077,483,000

(Approximate Offered Certificates)

 

J.P. Morgan Chase Commercial Mortgage Securities Corp.

Depositor

 

 

 

Commercial Mortgage Pass-Through Certificates

Series 2016-JP3

 

 

 

JPMorgan Chase Bank, National Association 

Benefit Street Partners CRE Finance LLC

Starwood Mortgage Funding VI LLC

Mortgage Loan Sellers

 

J.P. Morgan
Lead Manager and Sole Bookrunner  
 

Drexel Hamilton
Co-Manager

 

 

Academy Securities
Co-Manager

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

 

 

September 14, 2016 JPMCC 2016-JP3

 

This material is for your information, and none of J.P. Morgan Securities LLC (“JPMS”), Drexel Hamilton, LLC (“Drexel”), or Academy Securities, Inc. (“Academy Securities”) (each individually, an “Underwriter”, and together, the ‘‘Underwriters’’) are soliciting any action based upon it. This material is not to be construed as an offer to sell or the solicitation of any offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal.

 

The Depositor has filed a registration statement (including a prospectus) with the SEC (SEC File no. 333-206361) for the offering to which this free writing prospectus relates. Before you invest, you should read the prospectus in the registration statement and other documents the Depositor has filed with the SEC for more complete information about the Depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC Website at www.sec.gov. Alternatively, the Depositor or any Underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling (866) 669-7629 or by emailing the ABS Syndicate Desk at abs_synd@jpmorgan.com.

 

Neither this document nor anything contained in this document shall form the basis for any contract or commitment whatsoever. The information contained in this document is preliminary as of the date of this document, supersedes any previous such information delivered to you and will be superseded by any such information subsequently delivered prior to the time of sale. These materials are subject to change, completion or amendment from time to time.

 

This document has been prepared by the Underwriters for information purposes only and does not constitute, in whole or in part, a prospectus for the purposes of Directive 2003/71/EC (as amended) and/or Part VI of the Financial Services and Markets Act 2000 (as amended) or other offering document.

 

The attached information contains certain tables and other statistical analyses (the “Computational Materials”) that have been prepared in reliance upon information furnished by the Mortgage Loan Sellers. Numerous assumptions were used in preparing the Computational Materials, which may or may not be reflected in this document. The Computational Materials should not be construed as either projections or predictions or as legal, tax, financial or accounting advice. You should consult your own counsel, accountant and other advisors as to the legal, tax, business, financial and related aspects of a purchase of these certificates. Any weighted average lives, yields and principal payment periods shown in the Computational Materials are based on prepayment and/or loss assumptions, and changes in such prepayment and/or loss assumptions may dramatically affect such weighted average lives, yields and principal payment periods. In addition, it is possible that prepayments or losses on the underlying assets will occur at rates higher or lower than the rates shown in the Computational Materials. The specific characteristics of the certificates may differ from those shown in the Computational Materials due to differences between the final underlying assets and the preliminary underlying assets used in preparing the Computational Materials. The principal amount and designation of any certificate described in the Computational Materials are subject to change prior to issuance. None of the Underwriters nor any of their respective affiliates make any representation or warranty as to the actual rate or timing of payments or losses on any of the underlying assets or the payments or yield on the certificates.

 

This information is based upon management forecasts and reflects prevailing conditions and management’s views as of this date, all of which are subject to change.

 

This document contains forward-looking statements. Those statements are subject to certain risks and uncertainties that could cause the success of collections and the actual cash flow generated to differ materially from the information set forth in this document. While such information reflects projections prepared in good faith based upon methods and data that are believed to be reasonable and accurate as of their dates, the Depositor undertakes no obligation to revise these forward-looking statements to reflect subsequent events or circumstances. Investors should not place undue reliance on forward-looking statements and are advised to make their own independent analysis and determination with respect to the forecasted periods, which reflect the Depositor’s view only as of the date of this document.

 

J.P. Morgan is the marketing name for the investment banking businesses of JPMorgan Chase & Co. and its subsidiaries worldwide. Securities, syndicated loan arranging, financial advisory and other investment banking activities are performed by JPMS and its securities affiliates, and lending, derivatives and other commercial banking activities are performed by JPMorgan Chase Bank, National Association and its banking affiliates. JPMS is a member of SIPC and the NYSE.

 

Capitalized terms used in this material but not defined herein shall have the meanings ascribed to them in the Preliminary Prospectus (as defined below).

 

THE CERTIFICATES REFERRED TO IN THESE MATERIALS ARE SUBJECT TO MODIFICATION OR REVISION (INCLUDING THE POSSIBILITY THAT ONE OR MORE CLASSES OF CERTIFICATES MAY BE SPLIT, COMBINED OR ELIMINATED AT ANY TIME PRIOR TO ISSUANCE OR AVAILABILITY OF A FINAL PROSPECTUS) AND ARE OFFERED ON A “WHEN, AS AND IF ISSUED” BASIS.

 

THE UNDERWRITERS MAY FROM TIME TO TIME PERFORM INVESTMENT BANKING SERVICES FOR, OR SOLICIT INVESTMENT BANKING BUSINESS FROM, ANY COMPANY NAMED IN THESE MATERIALS. THE UNDERWRITERS AND/OR THEIR AFFILIATES OR RESPECTIVE EMPLOYEES MAY FROM TIME TO TIME HAVE A LONG OR SHORT POSITION IN ANY CERTIFICATE OR CONTRACT DISCUSSED IN THESE MATERIALS.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet   JPMCC 2016-JP3
 
Indicative Capital Structure

Publicly Offered Certificates

Class Expected Ratings
(Moody’s / Fitch / KBRA)
Approximate Initial
Certificate Balance
or Notional
Amount(1)
Approximate
Initial Credit
Support(2)
Expected
Weighted
Avg. Life
(years)(3)
Expected
Principal
Window(3)
Certificate
Principal to
Value
Ratio(4)
Underwritten
NOI Debt Yield(5)
 A-1 Aaa(sf) / AAAsf / AAA(sf) $45,932,000 30.000% 2.85 10/16 – 9/21 39.3% 15.3%
 A-2 Aaa(sf) / AAAsf / AAA(sf) $97,274,000 30.000% 4.96 9/21 – 9/21 39.3% 15.3%
 A-3 Aaa(sf) / AAAsf / AAA(sf) $16,726,000 30.000% 6.29 1/23 – 1/23 39.3% 15.3%
 A-4 Aaa(sf) / AAAsf / AAA(sf) $300,000,000 30.000% 9.74 12/25 – 7/26 39.3% 15.3%
 A-5 Aaa(sf) / AAAsf / AAA(sf) $342,359,000 30.000% 9.86 7/26 – 8/26 39.3% 15.3%
 A-SB Aaa(sf) / AAAsf / AAA(sf) $49,955,000 30.000% 7.18 9/21 – 12/25 39.3% 15.3%
 X-A(6) Aa1(sf) / AAAsf / AAA(sf) $970,952,000 N/A N/A N/A N/A N/A
 X-B(6) A2(sf) / AA-sf / AAA(sf) $56,309,000 N/A N/A N/A N/A N/A
 A-S Aa2(sf) / AAAsf / AAA(sf) $118,706,000 20.250% 9.93 8/26 – 9/26 44.8% 13.4%
 B A2(sf) / AA-sf / AA-(sf) $56,309,000 15.625% 9.96 9/26 – 9/26 47.4% 12.7%
 C NR / A-sf / A-(sf) $50,222,000 11.500% 9.96 9/26 – 9/26 49.7% 12.1%

 

Privately Offered Certificates(7) 

Class Expected Ratings
(Moody’s / Fitch / KBRA)
Approximate Initial
Certificate Balance
or Notional
Amount(1)
Approximate
Initial Credit
Support
Expected
Weighted
Avg. Life
(years)(3)
Expected
Principal
Window(3)
Certificate
Principal to
Value Ratio(4)
Underwritten
NOI Debt Yield(5)
 X-C(6) NR / BBB-sf / BBB-(sf) $105,009,000 N/A N/A N/A N/A N/A
 D NR / BBB-sf / BBB-(sf) $54,787,000 7.000% 9.96 9/26 – 9/26 52.3% 11.5%
 E NR / BBsf / BB(sf) $22,828,000 5.125% 9.96 9/26 – 9/26 53.3% 11.3%
 F NR / B-sf / B(sf) $15,219,000 3.875% 9.96 9/26 – 9/26 54.0% 11.1%
 NR NR / NR / NR $47,177,696 0.000% 9.96 9/26 – 9/26 56.2% 10.7%
(1)In the case of each such Class, subject to a permitted variance of plus or minus 5%.
(2)The credit support percentages set forth for Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 and Class A-SB Certificates represent the approximate initial credit support for the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 and Class A-SB Certificates in the aggregate.
(3)Assumes 0% CPR / 0% CDR and a September 30, 2016 closing date. Based on modeling assumptions as described in the Preliminary Prospectus dated September 14, 2016 (the “Preliminary Prospectus”).
(4)The “Certificate Principal to Value Ratio” for any Class (other than the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 and Class A-SB Certificates) is calculated as the product of (a) the weighted average Cut-off Date LTV Ratio for the mortgage loans, multiplied by (b) a fraction, the numerator of which is the total initial Certificate Balance of such Class of Certificates and all Classes of Principal Balance Certificates senior to such Class of Certificates and the denominator of which is the total initial Certificate Balance of all of the Principal Balance Certificates. The Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 and Class A-SB Certificate Principal to Value Ratios are calculated in the aggregate for those Classes as if they were a single Class. Investors should note, however, that excess mortgaged property value associated with a mortgage loan will not be available to offset losses on any other mortgage loan.
(5)The “Underwritten NOI Debt Yield” for any Class (other than the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 and Class A-SB Certificates) is calculated as the product of (a) the weighted average UW NOI Debt Yield for the mortgage loans and (b) the total initial Certificate Balance of all of the Classes of Principal Balance Certificates divided by the total initial Certificate Balance for such Class and all Classes of Principal Balance Certificates senior to such Class of Certificates. The Underwritten NOI Debt Yield for each of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 and Class A-SB Certificates is calculated in the aggregate for those Classes as if they were a single Class. Investors should note, however, that net operating income from any mortgaged property supports only the related mortgage loan and will not be available to support any other mortgage loan.

(6)The Class X-A, Class X-B and Class X-C Notional Amounts are defined in the Preliminary Prospectus.

(7)The Class X-C, Class D, Class E, Class F and Class NR Certificates are not being offered by the Preliminary Prospectus and this Term Sheet. The Class R Certificates are not shown above.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2016-JP3
 
Summary of Transaction Terms

 

Securities Offered: $1,077,483,000 monthly pay, multi-class, commercial mortgage REMIC Pass-Through Certificates.
Lead Manager and Sole Bookrunner: J.P. Morgan Securities LLC.
Co-Managers: Drexel Hamilton, LLC and Academy Securities, Inc.
Mortgage Loan Sellers: JPMorgan Chase Bank, National Association (“JPMCB”) (65.7%), Benefit Street Partners CRE Finance LLC (“BSP”) (18.2%) and Starwood Mortgage Funding VI LLC (“SMF VI”) (16.1%).
Master Servicer: Midland Loan Services, a Division of PNC Bank, National Association.
Special Servicer: Torchlight Loan Services, LLC (“Torchlight”).
Directing Certificateholder: Torchlight Investors, LLC (or its affiliate).
Trustee: Wells Fargo Bank, National Association.
Certificate Administrator: Wells Fargo Bank, National Association.
Operating Advisor: Pentalpha Surveillance LLC.
Asset Representations Reviewer: Pentalpha Surveillance LLC.
Rating Agencies: Moody’s Investors Service, Inc. (“Moody’s”), Fitch Ratings, Inc. (“Fitch”) and Kroll Bond Rating Agency, Inc. (“KBRA”).
Pricing Date: On or about September 20, 2016.
Closing Date: On or about September 30, 2016.
Cut-off Date: With respect to each mortgage loan, the related due date in September 2016, or with respect to any mortgage loan that has its first due date in October 2016, the date that would otherwise have been the related due date in September 2016.
Distribution Date: The 4th business day after the Determination Date in each month, commencing in October 2016.
Determination Date: 11th day of each month, or if the 11th day is not a business day, the next succeeding business day, commencing in October 2016.
Assumed Final Distribution Date: The Distribution Date in September 2026 which is the latest anticipated repayment date of the Certificates.
Rated Final Distribution Date: The Distribution Date in August 2049.
Tax Treatment: The Publicly Offered Certificates are expected to be treated as REMIC “regular interests” for U.S. federal income tax purposes.
Form of Offering: The Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-SB, Class X-A, Class X-B, Class A-S, Class B and Class C Certificates (the “Publicly Offered Certificates”) will be offered publicly. The Class X-C, Class D, Class E, Class F, Class NR and Class R Certificates (the “Privately Offered Certificates”) will be offered domestically to Qualified Institutional Buyers and to Institutional Accredited Investors and to institutions that are not U.S. Persons pursuant to Regulation S.
SMMEA Status: The Certificates will not constitute “mortgage related securities” for purposes of SMMEA.
ERISA: The Publicly Offered Certificates are expected to be ERISA eligible.
Optional Termination: On any Distribution Date on which the aggregate principal balance of the pool of mortgage loans is less than 1%, certain entities specified in the Preliminary Prospectus will have the option to purchase all of the remaining mortgage loans (and all property acquired through exercise of remedies in respect of any mortgage loan) at the price specified in the Preliminary Prospectus. Refer to “Pooling and Servicing Agreement—Termination; Retirement of Certificates” in the Preliminary Prospectus.
Minimum Denominations: The Publicly Offered Certificates (other than the Class X-A and Class X-B Certificates) will be issued in minimum denominations of $10,000 and integral multiples of $1 in excess of $10,000. The Class X-A and Class X-B Certificates will be issued in minimum denominations of $1,000,000 and in integral multiples of $1 in excess of $1,000,000.
Settlement Terms: DTC, Euroclear and Clearstream Banking.
Analytics: The transaction is expected to be modeled by Intex Solutions, Inc. and Trepp, LLC and is expected to be available on Bloomberg L.P., Blackrock Financial Management Inc., Interactive Data Corporation, CMBS.com, Markit Group Limited and Thomson Reuters Corporation.
Risk Factors: THE CERTIFICATES INVOLVE CERTAIN RISKS AND MAY NOT BE SUITABLE FOR ALL INVESTORS. REFER TO THE “RISK FACTORS” SECTION OF THE PRELIMINARY PROSPECTUS.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet   JPMCC 2016-JP3
 
Collateral Characteristics

 

Loan Pool  
  Initial Pool Balance (“IPB”): $1,217,494,697
  Number of Mortgage Loans: 52
  Number of Mortgaged Properties: 62
  Average Cut-off Date Balance per Mortgage Loan: $23,413,360
  Weighted Average Current Mortgage Rate: 4.24772%
  10 Largest Mortgage Loans as % of IPB: 49.8%
  Weighted Average Remaining Term to Maturity: 113 months
  Weighted Average Seasoning: 1 month
     
Credit Statistics  
  Weighted Average UW NCF DSCR(1)(2): 2.12x
  Weighted Average UW NOI Debt Yield(1)(3): 10.7%
  Weighted Average Cut-off Date Loan-to-Value Ratio (“LTV”)(1)(3)(4): 56.2%
  Weighted Average Maturity Date LTV(1)(3)(4): 50.7%
     
Other Statistics  
  % of Mortgage Loans with Additional Debt: 22.4%
  % of Mortgaged Properties with Single Tenants: 12.3%
     
Amortization  
  Weighted Average Original Amortization Term(5): 343 months
  Weighted Average Remaining Amortization Term(5): 342 months
  % of Mortgage Loans with Interest-Only: 44.7%
  % of Mortgage Loans with Amortizing Balloon: 29.8%
  % of Mortgage Loans with Partial Interest-Only followed by Amortizing Balloon: 25.5%
     
Cash Management(6)  
  % of Mortgage Loans with In-Place, CMA Lockboxes: 64.9%
  % of Mortgage Loans with In-Place, Hard Lockboxes: 18.2%
  % of Mortgage Loans with Springing Lockboxes: 16.9%
     
Reserves  
  % of Mortgage Loans Requiring Monthly Tax Reserves: 73.8%
  % of Mortgage Loans Requiring Monthly Insurance Reserves: 34.7%
  % of Mortgage Loans Requiring Monthly CapEx Reserves(7): 70.5%
  % of Mortgage Loans Requiring Monthly TI/LC Reserves(8): 32.8%

 

(1)In the case of Loan Nos. 1, 2, 3, 4, 5, 6, 8, 12, 16, 22, 28 and 35, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations include the related Pari Passu Companion Loan(s). In the case of Loan Nos. 1, 4 and 36, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations exclude the related Subordinate Companion Loan(s).
(2)In the case of Loan No. 36, the UW NCF DSCR is calculated using the average of principal and interest payments over the first 12 payments following the Cut-off Date based on the principal payment schedule provided in Annex F of the Preliminary Prospectus.
(3)In the case of Loan No. 28, the UW NOI Debt Yield, Cut-off Date LTV Ratio and Maturity Date LTV calculations include a deduction for a holdback reserve in the amount of $3.4 million, with $1.7 million to be released to the borrower (at the borrower’s request) upon the net cash flow (as calculated in the loan documents) at the mortgaged property achieving a minimum of $4.5 million based on the trailing 12-month period and the full or remaining balance to be released to the borrower upon the net cash flow at the mortgaged property achieving a minimum of $4.7 million based on the trailing 12-month period. Notwithstanding the foregoing, no disbursement is permitted prior to the payment date in November 2016. The net cash flow for the trailing 12-month period ending May 2016, as calculated per the loan documents including a deduction of 4.0% of gross revenues for FF&E reserves, was approximately $4.2 million. Based on the total Cut-off Date Balance of the mortgage loan, excluding a deduction for the full $3.4 million holdback reserve amount, UW NOI Debt Yield, Cut-off Date LTV Ratio and the Maturity Date LTV are 10.3%, 67.7% and 56.7%, respectively.
(4)In the case of Loan Nos. 6, 10, 11, 16, 20, 29, 36 and 50, the Cut-off Date LTV and the Maturity Date LTV are calculated by using an appraised value based on certain hypothetical assumptions. Refer to “Description of the Mortgage Pool—Assessments of Property Value and Condition” and “—Appraised Value” in the Preliminary Prospectus for additional details.
(5)Excludes 13 mortgage loans that are interest-only for the entire term.
(6)For a more detailed description of Cash Management, refer to “Description of the Mortgage Pool—Certain Terms of the Mortgage Loans—Mortgaged Property Accounts” in the Preliminary Prospectus.
(7)CapEx Reserves include FF&E reserves for hotel properties.
(8)Calculated only with respect to the Cut-off Date Balance of mortgage loans secured or partially secured by mixed use, retail, industrial and office properties.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2016-JP3

 

Collateral Characteristics

                           
Mortgage Loan Seller   Number of
Mortgage Loans
  Number of
Mortgaged
Properties
  Aggregate
Cut-off Date
Balance
% of
IPB
 
JPMCB(1)(2)   23     24       $800,011,378   65.7 %  
BSP   16     19       222,049,043   18.2    
SMF VI(3)(4)   13     19       195,434,275   16.1    
Total:   52     62       $1,217,494,697   100.0 %  

  (1) In the case of Loan No. 3, the whole loan was co-originated by JPMCB and Citigroup Global Markets Realty Corp.  
  (2) In the case of Loan No. 4, the whole loan was co-originated by JPMCB and Deutsche Bank AG, New York Branch.  
  (3) In the case of Loan No. 8, the whole loan was co-originated by Citigroup Global Markets Realty Corp. and Starwood Mortgage Capital LLC.  
  (4) In the case of Loan Nos. 22, 35, 40 and 52, the mortgage loans were originated by The Bank of New York Mellon and subsequently purchased and reunderwritten by SMF VI in accordance with the underwriting guidelines described under “Transaction Parties—The Sponsors and Mortgage Loan Sellers—SMF VI’s Underwriting Guidelines and Processes” in the Preliminary Prospectus.  

 

Ten Largest Mortgage Loans

 

No. Loan Name Mortgage
Loan
Seller
No.
of
Prop.
Cut-off Date
Balance
% of
IPB
Square
Feet
Property
Type
UW
NCF
DSCR(1)
UW NOI
Debt
Yield(1)
Cut-off
Date
LTV(1)(2)
Maturity
Date
LTV(1)(2)
1 9 West 57th Street JPMCB 1 $100,000,000 8.2% 1,680,218 Office 3.64x 10.6% 29.8% 29.8%
2 693 Fifth Avenue JPMCB 1 $80,000,000 6.6% 96,514 Mixed Use 1.00x 6.4% 47.6% 37.4%
3 Opry Mills JPMCB 1 $80,000,000 6.6% 1,169,633 Retail 2.33x 10.1% 50.8% 50.8%
4 Westfield San Francisco Centre JPMCB 1 $60,000,000 4.9% 794,521 Mixed Use 3.68x 13.1% 35.5% 35.5%
5 1 Kaiser Plaza JPMCB 1 $60,000,000 4.9% 528,158 Office 2.15x 10.7% 45.8% 45.8%
6 Salesforce Tower JPMCB 1 $60,000,000 4.9% 1,105,117 Office 2.47x 12.7% 59.6% 59.6%
7 Amazon Buckeye Logistics Center BSP 1 $48,587,500 4.0% 1,009,351 Industrial 1.83x 9.2% 64.4% 64.4%
8 Crocker Park Phase One & Two SMF VI 1 $40,000,000 3.3% 615,062 Mixed Use 1.34x 9.3% 65.3% 60.1%
9 1333 Broadway JPMCB 1 $39,500,000 3.2% 240,051 Office 2.03x 10.2% 44.8% 44.8%
10 Laguna Design Center JPMCB 1 $38,150,000 3.1% 236,727 Mixed Use 1.42x 9.3% 70.2% 64.0%

 

  Top 3 Total/Weighted Average   3 $260,000,000 21.4%     2.42x 9.2% 41.7% 38.6%
  Top 5 Total/Weighted Average   5 $380,000,000 31.2%     2.58x 10.0% 41.4% 39.2%
  Top 10 Total/Weighted Average   10 $606,237,500 49.8%     2.32x 10.1% 48.7% 46.6%

(1) In the case of Loan Nos. 1, 2, 3, 4, 5, 6 and 8, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations include any related Pari Passu Companion Loan(s). In the case of Loan Nos. 1 and 4, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations exclude the related Subordinate Companion Loans. In the case of Loan No. 2, UW NCF DSCR of 1.00x is calculated based on a 25-year amortization schedule. The current UW NCF DSCR based on the interest-only period for the first two years of the loan term is 1.56x. Valentino has a contractual rent increase in August 2018, which increases its annual rent payment from $16.5 million to approximately $19.0 million. Including the Valentino contractual rent increase in August 2018, the implied UW NCF would result in an UW NCF DSCR of approximately 1.15x based on a 25-year amortization schedule.
(2) In the case of Loan Nos. 6 and 10, the Cut-off Date LTV and the Maturity Date LTV are calculated by using an appraised value based on certain hypothetical assumptions. Refer to “Description of the Mortgage Pool—Assessments of Property Value and Condition” and “—Appraised Value” in the Preliminary Prospectus for additional details.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2016-JP3

 

Collateral Characteristics

 

Pari Passu Companion Loan Summary

 

No. Loan Name Trust Cut-
off Date
Balance
Pari Passu
Loan(s) Cut-
off Date
Balance
Total
Mortgage
Loan Cut-off
Date Balance(1)
Controlling
Pooling &
Servicing
Agreement
Master
Servicer
Special
Servicer
Voting Rights
1 9 West 57th Street $100,000,000 $913,724,000 $1,013,724,000 JPMCC 2016-NINE Wells Fargo Wells Fargo JPMCC 2016-NINE
2 693 Fifth Avenue $80,000,000 $170,000,000 $250,000,000 DBJPM 2016-C3 Midland Midland DBJPM 2016-C3
3 Opry Mills $80,000,000 $295,000,000 $375,000,000 JPMCC 2016-JP2 Wells Fargo LNR JPMCC 2016-JP2
4 Westfield San Francisco Centre $60,000,000 $373,077,000 $433,077,000 DBJPM 2016-SFC Wells Fargo Pacific Life DBJPM 2016-SFC
5 1 Kaiser Plaza $60,000,000 $37,100,000 $97,100,000 JPMCC 2016-JP3 Midland Torchlight JPMCC 2016-JP3
6 Salesforce Tower $60,000,000 $48,000,000 $108,000,000 JPMCC 2016-JP3 Midland Torchlight JPMCC 2016-JP3
8 Crocker Park Phase One & Two $40,000,000 $100,000,000 $140,000,000 CGCMT 2016-C2 Midland C-III CGCMT 2016-C2
12 National Business Park $33,000,000 $22,000,000 $55,000,000 JPMCC 2016-JP3 Midland Torchlight JPMCC 2016-JP3
16 100 East Wisconsin Avenue $25,000,000 $28,800,000 $53,800,000 JPMCC 2016-JP3(2) Midland(2) Torchlight(2) (2)
22 Hillside Industrial $20,000,000 $19,000,000 $39,000,000 JPMCC 2016-JP3 Midland Torchlight JPMCC 2016-JP3
28 Embassy Suites Lake Buena Vista $16,932,574 $24,900,844 $41,833,418 JPMCC 2016-JP3 Midland Torchlight JPMCC 2016-JP3
35 West LA Office - 1950 Sawtelle Boulevard $10,000,000 $26,500,000 $36,500,000 MSBAM 2016-C30 Wells Fargo LNR MSBAM 2016-C30

(1) In the case of Loan Nos.1 and 4, the Total Mortgage Loan Cut-off Date Balance excludes the related Subordinate Companion Loan(s).
(2) In the case of Loan No. 16, the whole loan will be serviced under the JPMCC 2016-JP3 Pooling and Servicing Agreement until such time that the controlling pari passu companion loan is securitized, at which point the whole loan will be serviced under the related pooling and servicing agreement. The initial controlling noteholder is JPMCB, or an affiliate, as holder of the related controlling pari passu companion loan.

 

Additional Debt Summary(1)

 

No. Loan Name Trust
Cut-off Date
Balance
Subordinate
Debt Cut-off
Date
Balance(2)
Total Debt
Cut-off Date
Balance
Mortgage
Loan
UW NCF
DSCR(2)(3)
Total
Debt
UW
NCF
DSCR(3)
Mortgage
Loan
Cut-off
Date
LTV(2)
Total
Debt
Cut-off
Date
LTV
Mortgage
Loan UW
NOI Debt
Yield(2)
Total
Debt
UW NOI
Debt
Yield
1 9 West 57th Street $100,000,000 $186,276,000 $1,200,000,000 3.64x 3.08x 29.8% 35.3% 10.6%   9.0%
4 Westfield San Francisco Centre $60,000,000 $124,923,000 $558,000,000 3.68x 2.85x 35.5% 45.7% 13.1% 10.1%
6 Salesforce Tower $60,000,000 $24,500,000 $132,500,000 2.47x 1.41x 59.6% 73.2% 12.7% 10.3%
16 100 East Wisconsin Avenue $25,000,000 $10,000,000 $63,800,000 1.77x 1.30x 65.4% 77.5% 11.5%   9.7%
27 415 West 13th Street $18,000,000 $7,000,000 $25,000,000 2.67x 1.39x 36.1% 50.1% 10.8%   7.8%
36 Arkansas Hotel Portfolio $9,986,603 $1,098,526 $11,085,130 1.93x 1.54x 65.7% 72.9% 12.9% 11.6%

(1) In the case of Loan Nos. 1 and 4, subordinate debt represents one or more Subordinate Companion Loans. In the case of Loan Nos. 6 and 16, subordinate debt represents a mezzanine loan. In the case of Loan No. 27, subordinate debt represents unsecured subordinate debt. In the case of Loan No. 36, subordinate debt represents a B-Note.
(2) In the case of Loan Nos. 1, 4 and 36, Mortgage Loan UW NCF DSCR, Mortgage Loan Cut-off Date LTV and Mortgage Loan UW NOI Debt Yield calculations include any related Pari Passu Companion Loans, but exclude the related Subordinate Companion Loan(s).
(3) In the case of Loan No. 36, the Mortgage Loan UW NCF DSCR and Total Debt UW NCF DSCR are calculated using the average of principal and interest payments over the first 12 payments following the Cut-off Date based on the principal payment schedule provided in Annex F of the Preliminary Prospectus.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2016-JP3

 

Collateral Characteristics

 

Mortgaged Properties by Type(1)

 

            Weighted Average
Property Type Property Subtype Number of
Properties
Cut-off Date
Principal
Balance
% of
IPB
Occupancy UW
NCF
DSCR(2)(3)
UW
NOI Debt
Yield(2)(4)
Cut-off
Date
LTV(2)(4)(5)
Maturity
Date
LTV(2)(4)(5)
Office CBD 5 $284,500,000 23.4 % 80.9% 2.69x 11.1% 44.7% 43.5%
  Suburban 10 71,259,884 5.9   89.7% 1.41x 9.7% 65.5% 54.0%
  Data Center 3 60,000,000 4.9   100.0% 3.99x 15.0% 36.9% 36.9%
  Subtotal: 18 $415,759,884 34.1 % 85.2% 2.66x 11.4% 47.1% 44.3%
                   
Hotel Full Service 6 $139,734,009 11.5 % 79.5% 1.86x 11.9% 68.2% 58.2%
  Limited Service 8 58,922,844 4.8   75.2% 1.75x 12.0% 66.2% 54.7%
  Extended Stay 2 33,272,391 2.7   80.5% 1.94x 13.2% 62.6% 54.4%
  Subtotal: 16 $231,929,244 19.0 % 78.5% 1.84x 12.1% 66.9% 56.8%
                   
Mixed Use Retail/Office 3 $123,693,385 10.2 % 69.5% 1.17x   7.5% 55.6% 46.5%
  Super Regional Mall/Office 1 60,000,000 4.9   95.6% 3.68x 13.1% 35.5% 35.5%
  Office/Retail 1 40,000,000 3.3   98.5% 1.34x   9.3% 65.3% 60.1%
  Student/Retail 1 8,013,158 0.7   96.8% 1.50x   9.7% 69.1% 60.5%
  Subtotal: 6 $231,706,543 19.0 % 82.2% 1.86x 9.4% 52.5% 46.5%
                   
Retail Super Regional Mall 1 $80,000,000 6.6 % 98.6% 2.33x 10.1% 50.8% 50.8%
  Anchored 3 34,873,405 2.9   94.5% 1.47x   9.8% 72.2% 56.0%
  Single Tenant 1 18,000,000 1.5   100.0% 2.67x 10.8% 36.1% 36.1%
  Unanchored 2 7,515,000 0.6   100.0% 1.74x 10.2% 66.6% 59.1%
  Shadow Anchored 1 5,786,759 0.5   100.0% 1.44x   9.7% 70.6% 57.6%
  Freestanding 1 1,210,000 0.1   100.0% 2.13x   9.7% 55.6% 55.6%
  Subtotal: 9 $147,385,164 12.1 % 97.9% 2.10x 10.1% 55.7% 51.0%
                   
Industrial Warehouse/Distribution 3 $92,061,638 7.6 % 99.4% 1.59x   9.2% 64.9% 59.9%
  Flex 1 13,584,151 1.1   89.9% 1.45x   9.4% 73.8% 60.0%
  Subtotal: 4 $105,645,789 8.7 % 98.2% 1.57x   9.3% 66.0% 59.9%
                   
Multifamily Garden 6 $78,121,164 6.4 % 94.1% 1.70x 10.4% 69.9% 64.7%
  Student 1 2,486,842 0.2   90.9% 1.50x   9.7% 69.1% 60.5%
  Subtotal: 7 $80,608,006 6.6 % 94.0% 1.69x 10.4% 69.8% 64.6%
                   
Self Storage Self Storage 2 $4,460,067 0.4 % 92.7% 1.41x   9.5% 73.7% 62.9%
                   
  Total / Weighted 62 $1,217,494,697 100.0 % 86.6% 2.12x  10.7% 56.2% 50.7%

(1)Because this table presents information relating to the mortgaged properties and not mortgage loans, the information for mortgage loans secured by more than one mortgaged property is based on allocated loan amounts.

(2)In the case of Loan Nos. 1, 2, 3, 4, 5, 6, 8, 12, 16, 22, 28 and 35, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations include the related Pari Passu Companion Loan(s). In the case of Loan Nos. 1, 4 and 36, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations exclude the related Subordinate Companion Loan(s).

(3)In the case of Loan No. 36, the UW NCF DSCR is calculated using the average of principal and interest payments over the first 12 payments following the Cut-off Date based on the principal payment schedule provided in Annex F of the Preliminary Prospectus.

(4)In the case of Loan No. 28, the UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations include a deduction for a holdback reserve in the amount of $3.4 million, with $1.7 million to be released to the borrower (at the borrower’s request) upon the net cash flow (as calculated in the loan documents) at the mortgaged property achieving a minimum of $4.5 million based on the trailing 12-month period and the full or remaining balance to be released to the borrower upon the net cash flow at the mortgaged property achieving a minimum of $4.7 million based on the trailing 12-month period. Notwithstanding the foregoing, no disbursement is permitted prior to the payment date in November 2016. The net cash flow for the trailing 12-month period ending May 2016, as calculated per the loan documents including a deduction of 4.0% of gross revenues for FF&E reserves, was approximately $4.2 million. Based on the total Cut-off Date Balance of the mortgage loan, excluding a deduction for the full $3.4 million holdback reserve amount, UW NOI Debt Yield, Cut-off Date LTV and the Maturity Date LTV are 10.3%, 67.7% and 56.7%, respectively.

(5)In the case of Loan Nos. 6, 10, 11, 16, 20, 29, 36 and 50, the Cut-off Date LTV and the Maturity Date LTV are calculated by using an appraised value based on certain hypothetical assumptions. Refer to “Description of the Mortgage Pool—Assessments of Property Value and Condition” and “—Appraised Value” in the Preliminary Prospectus for additional details.

 

 

 

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2016-JP3

 

Collateral Characteristics

 

 (MAP)

 

Mortgaged Properties by Location(1)

 

 

 

 

State

 

 

Number of Properties

 

Cut-off Date Principal Balance

 

 

% of IPB

Weighted Average

 

 

Occupancy

 

UW

NCF DSCR(2)(3)

UW

NOI Debt Yield(2)(4)

 

Cut-off
Date LTV(2)(4)(5)

 

Maturity
Date LTV(2)(4)(5)

New York 6 $228,963,472 18.8% 68.6% 2.35x 9.0% 42.0% 36.3%
California 6 227,640,000 18.7 93.8% 2.32x 10.9% 49.8% 47.8%
Tennessee 2 104,190,000 8.6 95.4% 2.26x 11.0% 52.9% 51.3%
New Jersey 8 94,594,138 7.8 90.5% 1.38x 9.7% 66.0% 55.5%
Arizona 3 73,801,279 6.1 100.0% 1.73x 9.3% 66.2% 62.1%
Indiana 4 66,286,104 5.4 85.5% 2.42x 12.8% 58.1% 57.4%
Virginia 3 60,000,000 4.9 100.0% 3.99x 15.0% 36.9% 36.9%
Florida 5 58,657,574 4.8 83.1% 1.89x 12.0% 68.4% 59.1%
Georgia 4 45,687,923 3.8 94.4% 1.82x 10.5% 66.3% 60.2%
Utah 2 44,082,391 3.6 79.5% 1.75x 11.6% 69.7% 58.0%
Ohio 1 40,000,000 3.3 98.5% 1.34x 9.3% 65.3% 60.1%
Texas 3 39,080,000 3.2 93.8% 1.51x 10.1% 74.2% 69.2%
West Virginia 1 29,580,000 2.4 71.1% 2.03x 11.9% 68.8% 59.8%
Wisconsin 1 25,000,000 2.1 82.0% 1.77x 11.5% 65.4% 51.7%
North Carolina 3 22,390,228 1.8 80.6% 1.75x 11.9% 66.8% 54.9%
Nevada 1 13,584,151 1.1 89.9% 1.45x 9.4% 73.8% 60.0%
South Carolina 2 10,336,687 0.8 75.1% 1.58x 11.0% 68.3% 53.6%
Arkansas 2 9,986,603 0.8 71.0% 1.93x 12.9% 65.7% 50.5%
Louisiana 2 9,410,000 0.8 89.4% 1.43x 9.8% 72.5% 59.1%
Illinois 1 5,543,385 0.5 84.6% 1.81x 12.1% 71.1% 57.5%
Washington 1 4,686,540 0.4 78.2% 1.88x 13.8% 61.3% 46.7%
Mississippi 1 3,994,221 0.3 57.3% 1.80x 13.1% 57.9% 43.9%
Total / Weighted Average: 62 $1,217,494,697 100.0% 86.6% 2.12x 10.7% 56.2% 50.7%

(1)Because this table presents information relating to the mortgaged properties and not mortgage loans, the information for mortgage loans secured by more than one mortgaged property is based on allocated loan amounts.

(2)In the case of Loan Nos. 1, 2, 3, 4, 5, 6, 8, 12, 16, 22, 28 and 35, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations include the related Pari Passu Companion Loan(s). In the case of Loan Nos. 1, 4 and 36, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations exclude the related Subordinate Companion Loan(s).

(3)In the case of Loan No. 36, the UW NCF DSCR is calculated using the average of principal and interest payments over the first 12 payments following the Cut-off Date based on the principal payment schedule provided in Annex F of the Preliminary Prospectus.

(4)In the case of Loan No. 28, the UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations include a deduction for a holdback reserve in the amount of $3.4 million, with $1.7 million to be released to the borrower (at the borrower’s request) upon the net cash flow (as calculated in the loan documents) at the mortgaged property achieving a minimum of $4.5 million based on the trailing 12-month period and the full or remaining balance to be released to the borrower upon the net cash flow at the mortgaged property achieving a minimum of $4.7 million based on the trailing 12-month period. Notwithstanding the foregoing, no disbursement is permitted prior to the payment date in November 2016. The net cash flow for the trailing 12-month period ending May 2016, as calculated per the loan documents including a deduction of 4.0% of gross revenues for FF&E reserves, was approximately $4.2 million. Based on the total Cut-off Date Balance of the mortgage loan, excluding a deduction for the full $3.4 million holdback reserve amount, UW NOI Debt Yield, Cut-off Date LTV and the Maturity Date LTV are 10.3%, 67.7% and 56.7%, respectively.

(5)In the case of Loan Nos. Nos. 6, 10, 11, 16, 20, 29, 36 and 50, the Cut-off Date LTV and the Maturity Date LTV are calculated by using an appraised value based on certain hypothetical assumptions. Refer to “Description of the Mortgage Pool—Assessments of Property Value and Condition” and “—Appraised Value” in the Preliminary Prospectus for additional details.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2016-JP3

 

Collateral Characteristics

 

Cut-off Date Principal Balance

                       
            Weighted Average
        Cut-off Date       UW UW Cut-off Maturity
Range of Cut-off Date Number of Principal % of Mortgage Remaining NCF NOI Date Date
Principal Balances Loans Balance IPB Rate Loan Term DSCR(1)(2) DY(1)(3) LTV(1)(3)(4) LTV(1)(3)(4)
$2,375,000 - $9,999,999 17 $104,051,483 8.5% 4.87725% 113 1.71x 11.5% 66.8% 55.2%
$10,000,000 - $19,999,999 13 196,934,325 16.2 4.48512% 98 2.10x 11.2% 59.7% 53.9%
$20,000,000 - $24,999,999 6 132,151,389 10.9 4.69575% 98 1.53x 10.4% 68.0% 57.2%
$25,000,000 - $49,999,999 10 344,357,500 28.3 4.40131% 119 1.92x 10.8% 62.2% 56.1%
$50,000,000 - $100,000,000 6 440,000,000 36.1 3.73783% 119 2.56x 10.4% 43.9% 42.0%
Total / Weighted Average: 52 $1,217,494,697 100.0% 4.24772% 113 2.12x 10.7% 56.2% 50.7%

 

Mortgage Interest Rates

                       
            Weighted Average
        Cut-off Date       UW UW Cut-off Maturity
Range of Number Principal % of Mortgage Remaining NCF NOI Date Date
Mortgage Interest Rates of Loans Balance IPB Rate Loan Term DSCR(1)(2) DY(1)(3) LTV(1)(3)(4) LTV(1)(3)(4)
2.85950% - 3.99999% 8 $343,000,000 28.2% 3.42633% 119 2.91x 10.9% 39.1% 35.7%
4.00000% - 4.49999% 11 380,768,472 31.3 4.19294% 119 2.10x 10.8% 57.6% 54.4%
4.50000% - 4.99999% 22 370,860,271 30.5 4.72330% 100 1.58x 10.3% 67.5% 59.4%
5.00000% - 5.48000% 11 122,865,953 10.1 5.27504% 117 1.62x 11.3% 65.6% 54.7%
Total / Weighted Average: 52 $1,217,494,697 100.0% 4.24772% 113 2.12x 10.7% 56.2% 50.7%

 

Original Term to Maturity in Months

                   
        Weighted Average
    Cut-off Date       UW UW Cut-off Maturity
Original Term to Number Principal % of Mortgage Remaining NCF NOI Date Date
Maturity in Months of Loans Balance IPB Rate Loan Term DSCR(1)(2) DY(1)(3) LTV(1)(3)(4) LTV(1)(3)(4)
60 6 $107,350,000 8.8% 4.78525% 60 1.68x 11.4% 68.7% 62.4%
84 1 18,816,164 1.5 4.75000% 76 1.77x 11.8% 66.1% 58.8%
120 45 1,091,328,533 89.6 4.18619% 119 2.17x 10.7% 54.8% 49.4%
Total / Weighted Average: 52 $1,217,494,697 100.0% 4.24772% 113 2.12x 10.7% 56.2% 50.7%

 

Remaining Term to Maturity in Months

                       
            Weighted Average
        Cut-off Date       UW UW Cut-off Maturity
Range of Remaining Term to Number Principal % of Mortgage Remaining NCF NOI Date Date
Maturity in Months of Loans Balance IPB Rate Loan Term DSCR(1)(2) DY(1)(3) LTV(1)(3)(4) LTV(1)(3)(4)
60 - 60 6 $107,350,000 8.8% 4.78525% 60 1.68x 11.4% 68.7% 62.4%
76 - 76 1 18,816,164 1.5 4.75000% 76 1.77x 11.8% 66.1% 58.8%
111 - 120 45 1,091,328,533 89.6 4.18619% 119 2.17x 10.7% 54.8% 49.4%
Total / Weighted Average: 52 $1,217,494,697 100.0% 4.24772% 113 2.12x 10.7% 56.2% 50.7%

(1)In the case of Loan Nos. 1, 2, 3, 4, 5, 6, 8, 12, 16, 22, 28 and 35, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations include the related Pari Passu Companion Loan(s). In the case of Loan Nos. 1, 4 and 36, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations exclude the related Subordinate Companion Loan(s).

(2)In the case of Loan No. 36, the UW NCF DSCR is calculated using the average of principal and interest payments over the first 12 payments following the Cut-off Date based on the principal payment schedule provided in Annex F of the Preliminary Prospectus.

(3)In the case of Loan No. 28, the UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations include a deduction for a holdback reserve in the amount of $3.4 million, with $1.7 million to be released to the borrower (at the borrower’s request) upon the net cash flow (as calculated in the loan documents) at the mortgaged property achieving a minimum of $4.5 million based on the trailing 12-month period and the full or remaining balance to be released to the borrower upon the net cash flow at the mortgaged property achieving a minimum of $4.7 million based on the trailing 12-month period. Notwithstanding the foregoing, no disbursement is permitted prior to the payment date in November 2016. The net cash flow for the trailing 12-month period ending May 2016, as calculated per the loan documents including a deduction of 4.0% of gross revenues for FF&E reserves, was approximately $4.2 million. Based on the total Cut-off Date Balance of the mortgage loan, excluding a deduction for the full $3.4 million holdback reserve amount, UW NOI Debt Yield, Cut-off Date LTV and the Maturity Date LTV are 10.3%, 67.7% and 56.7%, respectively.

(4)In the case of Loan Nos. 6, 10, 11, 16, 20, 29, 36 and 50, the Cut-off Date LTV and the Maturity Date LTV are calculated by using an appraised value based on certain hypothetical assumptions. Refer to “Description of the Mortgage Pool—Assessments of Property Value and Condition” and “—Appraised Value” in the Preliminary Prospectus for additional details.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2016-JP3

 

Collateral Characteristics

 

Original Amortization Term in Months

                   
        Weighted Average
Original   Cut-off Date       UW UW Cut-off Maturity
Amortization Number Principal % of Mortgage Remaining NCF NOI Date Date
Term in Months of Loans Balance IPB Rate Loan Term DSCR(1)(2) DY(1)(3) LTV(1)(3)(4) LTV(1)(3)(4)
Interest Only 13 $544,537,500 44.7% 3.77600% 119 2.84x 11.3% 44.7% 44.7%
300 10 194,866,316 16.0 4.42155% 100 1.43x 9.7% 58.3% 47.1%
360 29 478,090,881 39.3 4.71415% 112 1.58x 10.5% 68.4% 58.9%
Total / Weighted Average: 52 $1,217,494,697 100.0% 4.24772% 113 2.12x 10.7% 56.2% 50.7%

 

Remaining Amortization Term in Months

                       
            Weighted Average
        Cut-off Date       UW UW Cut-off Maturity
Range of Remaining Number Principal % of Mortgage Remaining NCF NOI Date Date
Amortization Term in Months of Loans Balance IPB Rate Loan Term DSCR(1)(2) DY(1)(3) LTV(1)(3)(4) LTV(1)(3)(4)
Interest Only 13 $544,537,500 44.7% 3.77600% 119 2.84x 11.3% 44.7% 44.7%
297 - 300 10 194,866,316 16.0 4.42155% 100 1.43x 9.7% 58.3% 47.1%
352 - 360 29 478,090,881 39.3 4.71415% 112 1.58x 10.5% 68.4% 58.9%
Total / Weighted Average: 52 $1,217,494,697 100.0% 4.24772% 113 2.12x 10.7% 56.2% 50.7%

 

Amortization Types

                   
        Weighted Average
    Cut-off Date       UW UW Cut-off Maturity
  Number Principal % of Mortgage Remaining NCF NOI Date Date
Amortization Types of Loans Balance IPB Rate Loan Term DSCR(1)(2) DY(1)(3) LTV(1)(3)(4) LTV(1)(3)(4)
Interest Only 13 $544,537,500 44.7% 3.77600% 119 2.84x 11.3% 44.7% 44.7%
Balloon 25 362,422,197 29.8 4.79131% 105 1.63x 11.1% 67.0% 55.2%
IO-Balloon 14 310,535,000 25.5 4.44050% 112 1.44x 9.3% 63.7% 55.8%
Total / Weighted Average: 52 $1,217,494,697 100.0% 4.24772% 113 2.12x 10.7% 56.2% 50.7%

 

Underwritten Net Cash Flow Debt Service Coverage Ratios(1)(2)

                       
            Weighted Average
Range of Underwritten Net   Cut-off Date       UW UW Cut-off Maturity
Cash Flow Debt Service Number Principal % of Mortgage Remaining NCF NOI Date Date
Coverage Ratios of Loans Balance IPB Rate Loan Term DSCR(1)(2) DY(1)(3) LTV(1)(3)(4) LTV(1)(3)(4)
1.00x - 1.24x 2 $90,000,000 7.4% 4.08867% 117 1.02x 6.6% 49.8% 40.0%
1.25x - 1.74x 22 364,738,951 30.0 4.74173% 107 1.45x 9.9% 69.0% 59.2%
1.75x - 2.24x 20 384,755,746 31.6 4.47983% 112 1.96x 11.3% 60.2% 54.3%
2.25x - 2.74x 3 158,000,000 13.0 4.15743% 119 2.42x 11.2% 52.5% 52.5%
2.75x - 4.02x 5 220,000,000 18.1 3.15268% 119 3.75x 12.5% 33.3% 33.3%
Total / Weighted Average: 52 $1,217,494,697 100.0% 4.24772% 113 2.12x 10.7% 56.2% 50.7%

(1)In the case of Loan Nos. 1, 2, 3, 4, 5, 6, 8, 12, 16, 22, 28 and 35, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations include the related Pari Passu Companion Loan(s). In the case of Loan Nos. 1, 4 and 36, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations exclude the related Subordinate Companion Loan(s).

(2)In the case of Loan No. 36, the UW NCF DSCR is calculated using the average of principal and interest payments over the first 12 payments following the Cut-off Date based on the principal payment schedule provided in Annex F of the Preliminary Prospectus.

(3)In the case of Loan No. 28, the UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations include a deduction for a holdback reserve in the amount of $3.4 million, with $1.7 million to be released to the borrower (at the borrower’s request) upon the net cash flow (as calculated in the loan documents) at the mortgaged property achieving a minimum of $4.5 million based on the trailing 12-month period and the full or remaining balance to be released to the borrower upon the net cash flow at the mortgaged property achieving a minimum of $4.7 million based on the trailing 12-month period. Notwithstanding the foregoing, no disbursement is permitted prior to the payment date in November 2016. The net cash flow for the trailing 12-month period ending May 2016, as calculated per the loan documents including a deduction of 4.0% of gross revenues for FF&E reserves, was approximately $4.2 million. Based on the total Cut-off Date Balance of the mortgage loan, excluding a deduction for the full $3.4 million holdback reserve amount, UW NOI Debt Yield, Cut-off Date LTV and the Maturity Date LTV are 10.3%, 67.7% and 56.7%, respectively.

(4)In the case of Loan Nos. 6, 10, 11, 16, 20, 29, 36 and 50, the Cut-off Date LTV and the Maturity Date LTV are calculated by using an appraised value based on certain hypothetical assumptions. Refer to “Description of the Mortgage Pool—Assessments of Property Value and Condition” and “—Appraised Value” in the Preliminary Prospectus for additional details.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Collateral Characteristics

 

LTV Ratios as of the Cut-off Date(1)(3)

                       
            Weighted Average
        Cut-off Date       UW UW Cut-off Maturity
Range of Number Principal % of Mortgage Remaining NCF NOI Date Date
Cut-off Date LTVs of Loans Balance IPB Rate Loan Term DSCR(1)(2) DY(1)(3) LTV(1)(3)(4) LTV(1)(3)(4)
29.8% - 49.9% 10 $423,786,104 34.8% 3.58857% 119 2.77x 10.8% 39.1% 37.1%
50.0% - 59.9% 5 172,634,221 14.2 4.30721% 111 2.32x 11.6% 55.4% 54.1%
60.0% - 64.9% 9 156,101,841 12.8 4.79369% 118 1.67x 10.2% 63.2% 56.6%
65.0% - 69.9% 14 266,210,982 21.9 4.76531% 106 1.63x 10.8% 67.7% 58.1%
70.0% - 75.0% 14 198,761,547 16.3 4.47942% 108 1.57x 10.2% 72.4% 62.1%
Total / Weighted Average: 52 $1,217,494,697 100.0% 4.24772% 113 2.12x 10.7% 56.2% 50.7%

 

LTV Ratios as of the Maturity Date(1)(3)

                       
            Weighted Average
        Cut-off Date       UW UW Cut-off Maturity
Range of Number Principal % of Mortgage Remaining NCF NOI Date Date
Maturity Date LTVs of Loans Balance IPB Rate Loan Term DSCR(1)(2) DY(1)(3) LTV(1)(3)(4) LTV(1)(3)(4)
29.8% - 44.9% 10 $367,780,326 30.2% 3.51774% 119 2.86x 10.9% 38.2% 35.7%
45.0% - 49.9% 4 78,122,019 6.4 4.36447% 118 2.06x 11.2% 49.9% 46.3%
50.0% - 54.9% 10 242,994,084 20.0 4.49686% 112 1.86x 10.9% 59.8% 51.8%
55.0% - 59.9% 12 243,106,616 20.0 4.66269% 111 1.87x 11.3% 66.7% 58.7%
60.0% - 64.9% 12 239,681,651 19.7 4.56157% 112 1.65x 9.9% 67.9% 62.3%
65.0% - 70.3% 4 45,810,000 3.8 4.74338% 72 1.49x 9.8% 74.9% 69.3%
Total / Weighted Average: 52 $1,217,494,697 100.0% 4.24772% 113 2.12x 10.7% 56.2% 50.7%

 

Prepayment Protection

                   
        Weighted Average
    Cut-off Date       UW UW Cut-off Maturity
  Number Principal % of Mortgage Remaining NCF NOI Date Date
Prepayment Protection of Loans Balance IPB Rate Loan Term DSCR(1)(2) DY(1)(3) LTV(1)(3)(4) LTV(1)(3)(4)
Defeasance(5) 32 $720,163,891 59.2% 4.20395% 119 2.32x 11.1% 53.5% 49.1%
Yield Maintenance 18 397,330,806 32.6 4.38829% 101 1.61x 10.0% 63.2% 55.0%
Defeasance or Yield Maintenance 2 100,000,000 8.2 4.00440% 119 2.74x 11.6% 47.4% 45.3%
Total / Weighted Average: 52 $1,217,494,697 100.0% 4.24772% 113 2.12x 10.7% 56.2% 50.7%

 

Loan Purpose

                   
        Weighted Average
    Cut-off Date       UW UW Cut-off Maturity
  Number Principal % of Mortgage Remaining NCF NOI Date Date
Loan Purpose of Loans Balance IPB Rate Loan Term DSCR(1)(2) DY(1)(3) LTV(1)(3)(4) LTV(1)(3)(4)
Refinance 29 $662,598,472 54.4% 4.24127% 109 2.22x 10.9% 56.0% 50.1%
Acquisition 19 429,495,061 35.3 4.25894% 119 2.00x 10.5% 58.3% 52.2%
Recapitalization 4 125,401,164 10.3 4.24339% 112 2.02x 10.7% 50.2% 48.5%
Total / Weighted Average: 52 $1,217,494,697 100.0% 4.24772% 113 2.12x 10.7% 56.2% 50.7%

(1)In the case of Loan Nos. 1, 2, 3, 4, 5, 6, 8, 12, 16, 22, 28 and 35, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations include the related Pari Passu Companion Loan(s). In the case of Loan Nos. 1, 4 and 36, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations exclude the related Subordinate Companion Loan(s).

(2)In the case of Loan No. 36, the UW NCF DSCR is calculated using the average of principal and interest payments over the first 12 payments following the Cut-off Date based on the principal payment schedule provided in Annex F of the Preliminary Prospectus.

(3)In the case of Loan No. 28, the UW NOI Debt Yield, Cut-off Date LTV and Maturity Date LTV calculations include a deduction for a holdback reserve in the amount of $3.4 million, with $1.7 million to be released to the borrower (at the borrower’s request) upon the net cash flow (as calculated in the loan documents) at the mortgaged property achieving a minimum of $4.5 million based on the trailing 12-month period and the full or remaining balance to be released to the borrower upon the net cash flow at the mortgaged property achieving a minimum of $4.7 million based on the trailing 12-month period. Notwithstanding the foregoing, no disbursement is permitted prior to the payment date in November 2016. The net cash flow for the trailing 12-month period ending May 2016, as calculated per the loan documents including a deduction of 4.0% of gross revenues for FF&E reserves, was approximately $4.2 million. Based on the total Cut-off Date Balance of the mortgage loan, excluding a deduction for the full $3.4 million holdback reserve amount, UW NOI Debt Yield, Cut-off Date LTV and the Maturity Date LTV are 10.3%, 67.7% and 56.7%, respectively.

(4)In the case of Loan Nos. 6, 10, 11, 16, 20, 29, 36 and 50, the Cut-off Date LTV and the Maturity Date LTV are calculated by using an appraised value based on certain hypothetical assumptions. Refer to “Description of the Mortgage Pool—Assessments of Property Value and Condition” and “—Appraised Value” in the Preliminary Prospectus for additional details.

(5)In the case of Loan Nos. 3, 4, 5, 6, 8 and 16, in each case, the loan documents permit the borrower to prepay the related loan with yield maintenance premium in the event the defeasance lockout period has not expired after certain dates. See the individual write-ups in this term sheet and “Description of the Mortgage Pool – Certain Terms of the Mortgage Loans - Defeasance; Collateral Substitution” in the Preliminary Prospectus.

   

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Collateral Characteristics

 

Previous Securitization History(1)

 

No. Loan Name Location Property Type Previous Securitization
1 9 West 57th Street New York, NY Office COMM 2012-9W57
4 Westfield San Francisco Centre San Francisco, CA Mixed Use LBUBS 2007-C1
8 Crocker Park Phase One & Two Westlake, OH Mixed Use BSCMS 2005-PW10
13 Embassy Suites Charleston Charleston, WV Hotel MLCFC 2006-3
15 Embassy Suites Busch Gardens Hotel Tampa, FL Hotel MLCFC 2006-3
17 Homewood Suites Nashville Downtown Nashville, TN Hotel JPMCC 2011-C5
18 2500 83rd Street North Bergen, NJ Industrial RAITF 2014-FL2
21 Cicero Marketplace Cicero, NY Retail WBCMT 2006-C27
22 Hillside Industrial Hillside, NJ Industrial JPMCC 2006-CB16
23 Embassy Suites Palmdale Palmdale, CA Hotel JPMCC 2011-C5
26 Hilton Garden Inn Ridgefield Park Ridgefield Park, NJ Hotel JPMCC 2011-C5
29 Shadow Creek Apartments Houston, TX Multifamily CLNY 2015-FL3
31 Decatur Crossing II Las Vegas, NV Industrial GSMS 2006-GG8
33 Doubletree Fayetteville Fayetteville, NC Hotel DBUBS 2011-LC2
37.01 Sunshine Heights Shopping Center West Monroe, LA Retail BACM 2006-5
39 Hampton Inn Suites Orlando South Lake Buena Vista Kissimmee, FL Hotel JPMCC 2011-C5
43 Fern Forest Apartments Gastonia, NC Multifamily JPMCC 2007-CB18
46 Comfort Suites Raleigh-Durham Airport Durham, NC Hotel MSC 2006-IQ12
47 Best Western Ellensburg Ellensburg, WA Hotel GECMC 2007-C1
49 Summerfield Shoppes Riverview, FL Retail CSMC 2006-C5

(1)The table above represents the properties for which the previously existing debt was most recently securitized, based on information provided by the related borrower or obtained through searches of a third-party database.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2016-JP3

 

Class A-2(1)

 

No. 

Loan Name 

Location 

Cut-off Date Balance 

% of IPB 

Maturity Date Balance 

% of Certificate Class(2) 

Original Loan Term 

Remaining Loan Term 

UW NCF DSCR 

UW NOI Debt Yield 

Cut-off Date LTV(3) 

Maturity Date LTV(3) 

17 Homewood Suites Nashville Downtown Nashville, TN $24,190,000 2.0% $21,410,379 22.0% 60 60 2.04x 13.9% 59.9% 53.0%
19 Fountains at the Bayou Houston, TX 22,050,000 1.8% 20,668,077 21.2% 60 60 1.51x 10.0% 75.0% 70.3%
23 Embassy Suites Palmdale Palmdale, CA 19,990,000 1.6% 17,692,992 18.2% 60 60 1.66x 11.3% 66.9% 59.2%
26 Hilton Garden Inn Ridgefield Park Ridgefield Park, NJ 18,120,000 1.5% 16,093,209 16.5% 60 60 1.57x 10.9% 69.7% 61.9%
29 Shadow Creek Apartments Houston, TX 14,300,000 1.2% 13,398,874 13.8% 60 60 1.45x 9.7% 74.9% 70.2%
39 Hampton Inn Suites Orlando South Lake Buena Vista Kissimmee, FL 8,700,000 0.7% 8,010,985 8.2% 60 60 1.81x 11.5% 69.0% 63.6%
Total / Weighted Average:   $107,350,000 8.8% $97,274,515 100.0% 60 60 1.68x 11.4% 68.7% 62.4%
(1)The table above presents the mortgage loans whose balloon payments would be applied to pay down the certificate balance of the Class A-2 Certificates, assuming a 0% CPR and applying the “Modeling Assumptions” described in the Preliminary Prospectus, including the assumptions that (i) none of the mortgage loans in the pool experience prepayments, defaults or losses; (ii) there are no extensions of maturity dates of any mortgage loans in the pool; and (iii) each mortgage loan in the pool is paid in full on its stated maturity date. Each Class of Certificates, including the Class A-2 Certificates, evidences undivided ownership interests in the entire pool of mortgage loans. Debt service coverage ratio, debt yield and loan-to-value ratio information does not take into account subordinate debt (whether or not secured by the mortgaged property), if any, that is allowed under the terms of any mortgage loan. See Annex A-1 to the Preliminary Prospectus.

(2)Reflects the percentage equal to the Maturity Date Balance divided by the initial Class A-2 Certificate Balance.

(3)In the case of Loan No. 29, the Cut-off Date LTV and the Maturity Date LTV are calculated by using an appraised value based on certain hypothetical assumptions. Refer to “Description of the Mortgage Pool—Assessments of Property Value and Condition” and “—Appraised Value” in the Preliminary Prospectus for additional details.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2016-JP3

 

Class A-3(1)

 

No. 

Loan Name 

Location 

Cut-off Date Balance 

% of IPB 

Maturity Date Balance 

% of Certificate Class(2) 

Original Loan Term 

Remaining Loan Term 

UW NCF DSCR 

UW NOI Debt Yield 

Cut-off Date LTV 

Maturity Date LTV 

25 The Villas of East Cobb Marietta, GA $18,816,164 1.5% $16,726,924 100.0% 84 76 1.77x 11.8% 66.1% 58.8%
Total / Weighted Average:   $18,816,164 1.5% $16,726,924 100.0% 84 76 1.77x 11.8% 66.1% 58.8%
(1)The table above presents the mortgage loans whose balloon payments would be applied to pay down the certificate balance of the Class A-3 Certificates, assuming a 0% CPR and applying the “Modeling Assumptions” described in the Preliminary Prospectus, including the assumptions that (i) none of the mortgage loans in the pool experience prepayments, defaults or losses; (ii) there are no extensions of maturity dates of any mortgage loans in the pool; and (iii) each mortgage loan in the pool is paid in full on its stated maturity date. Each Class of Certificates, including the Class A-3 Certificates, evidences undivided ownership interests in the entire pool of mortgage loans. Debt service coverage ratio, debt yield and loan-to-value ratio information does not take into account subordinate debt (whether or not secured by the mortgaged property), if any, that is allowed under the terms of any mortgage loan. See Annex A-1 to the Preliminary Prospectus.

(2)Reflects the percentage equal to the Maturity Date Balance divided by the initial Class A-3 Certificate Balance.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural Overview

 

   Accrual:   Each Class of Certificates (other than the Class R Certificates) will accrue interest on a 30/360 basis. The Class R Certificates will not accrue interest.
     
   Distribution of Interest:  

On each Distribution Date, accrued interest for each Class of Certificates (other than the Class R Certificates) at the applicable pass-through rate will be distributed in the following order of priority to the extent of available funds: first, to the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-SB, Class X-A, Class X-B and Class X-C Certificates (the “Senior Certificates”), on a pro rata basis, based on the interest entitlement for each such Class on such date, and then to the Class A-S, Class B, Class C, Class D, Class E, Class F and Class NR Certificates, in that order, in each case until the interest entitlement for such date payable to each such Class is paid in full.

 

The pass-through rate applicable to the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-SB, Class A-S, Class B, Class C, Class D, Class E, Class F and Class NR Certificates on each Distribution Date, will be a per annum rate equal to one of (i) a fixed rate, (ii) the weighted average of the net mortgage rates on the mortgage loans (in each case adjusted, if necessary, to accrue on the basis of a 360-day year consisting of twelve 30-day months), (iii) the lesser of a specified fixed pass-through rate and the rate described in clause (ii) above or (iv) the rate described in clause (ii) above less a specified percentage.

 

The pass-through rate for the Class X-A Certificates for any Distribution Date will be a per annum rate equal to the excess, if any, of (a) the weighted average of the net mortgage rates on the mortgage loans (in each case adjusted, if necessary, to accrue on the basis of a 360-day year consisting of twelve 30-day months), over (b) the weighted average of the pass-through rates on the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-SB and Class A-S Certificates for the related Distribution Date, weighted on the basis of their respective Certificate Balances outstanding immediately prior to that Distribution Date.

 

The pass-through rate for the Class X-B Certificates for any Distribution Date will be a per annum rate equal to the excess, if any, of (a) the weighted average of the net mortgage rates on the mortgage loans (in each case adjusted, if necessary, to accrue on the basis of a 360-day year consisting of twelve 30-day months), over (b) the pass-through rate on the Class B Certificates for the related Distribution Date.

 

The pass-through rate for the Class X-C Certificates for any Distribution Date will be a per annum rate equal to the excess, if any, of (a) the weighted average of the net mortgage rates on the mortgage loans (in each case adjusted, if necessary, to accrue on the basis of a 360-day year consisting of twelve 30-day months), over (b) the weighted average of the pass-through rates on the Class C and Class D Certificates for the related Distribution Date, weighted on the basis of their respective Certificate Balances outstanding immediately prior to that Distribution Date.

 

See “Description of the Certificates—Distributions” in the Preliminary Prospectus.

 

  Distribution of Principal:  

On any Distribution Date prior to the Cross-Over Date, payments in respect of principal of the Certificates will be distributed:

 

first, to the Class A-SB Certificates until the Certificate Balance of the Class A-SB Certificates is reduced to the Class A-SB planned principal balance for the related Distribution Date set forth in Annex E to the Preliminary Prospectus, second, to the Class A-1 Certificates, until the Certificate Balance of such Class is reduced to zero, third, to the Class A-2 Certificates, until the Certificate Balance of such Class is reduced to zero, fourth, to the Class A-3 Certificates, until the Certificate Balance of such Class is reduced to zero, fifth, to the Class A-4 Certificates, until the Certificate Balance of such Class is reduced to zero, sixth, to the Class A-5 Certificates, until the Certificate Balance of such Class is reduced to zero and seventh, to the Class A-SB Certificates, until the Certificate Balance of such Class is reduced to zero and then to the Class A-S, Class B, Class C, Class D, Class E, Class F and Class NR Certificates, in that order, until the Certificate Balance of each such Class is reduced to zero.

 

On any Distribution Date on or after the Cross-Over Date, payments in respect of principal of the Certificates will be distributed to the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 and Class A-SB Certificates, pro rata based on the Certificate Balance of each such Class until the Certificate Balance of each such Class is reduced to zero.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural Overview

 

   

The “Cross-Over Date” means the Distribution Date on which the aggregate Certificate Balances of the Class A-S, Class B, Class C, Class D, Class E, Class F and Class NR Certificates have been reduced to zero as a result of the allocation of realized losses to such Classes.

 

The Class X-A, Class X-B and Class X-C Certificates (the “Class X Certificates”) will not be entitled to receive distributions of principal; however, the notional amount of the Class X-A Certificates will be reduced by the aggregate amount of principal distributions, realized losses and trust fund expenses, if any, allocated to the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-SB and Class A-S Certificates, the notional amount of the Class X-B Certificates will be reduced by the amount of principal distributions, realized losses and trust fund expenses, if any, allocated to the Class B Certificates and the notional amount of the Class X-C Certificates will be reduced by the aggregate amount of principal distributions, realized losses and trust fund expenses, if any, allocated to the Class C and Class D Certificates.

     
   Yield Maintenance / Fixed Penalty Allocation:   For purposes of the distribution of Yield Maintenance Charges on any Distribution Date, Yield Maintenance Charges collected in respect of the mortgage loans will first be allocated pro rata among four groups (based on the aggregate amount of principal distributed to the Principal Balance Certificates in each group), consisting of (a) the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-SB, Class A-S and Class X-A Certificates (“YM Group A”), (b) the Class B and Class X-B Certificates (“YM Group B”), (c) the Class C, Class D and Class X-C Certificates (“YM Group C”), and (d) the Class E, Class F and Class NR certificates (the “YM Group D”). As among the Classes of Certificates in each YM Group, other than the YM Group D, each Class of Certificates entitled to distributions of principal will receive an amount calculated generally in accordance with the following formula and as more specifically described in the Preliminary Prospectus, with any remaining Yield Maintenance Charges on such Distribution Date being distributed to the class of Class X Certificates in such YM Group.

 

    Principal Paid to Class   (Pass-Through Rate on Class – Discount Rate)
YM X   X  
Charge   Total Principal Paid   (Mortgage Rate on Loan – Discount Rate)

 

    As among the Classes of Certificates in the YM Group D, each Class of Certificates entitled to distributions of principal will receive an amount calculated generally in accordance with the following formula and as more specifically described in the Preliminary Prospectus.

 

    Principal Paid to Class    
YM X      
Charge   Total Principal Paid    

 

    No Yield Maintenance Charges will be distributed to the Class R Certificates.
     
   Realized Losses:  

Losses on the mortgage loans will be allocated first to the Class NR, Class F, Class E, Class D, Class C, Class B and Class A-S Certificates, in that order, in each case until the Certificate Balance of all such Classes have been reduced to zero, and then, to the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 and Class A-SB Certificates, pro rata, based on the Certificate Balance of each such Class, until the Certificate Balance of each such Class has been reduced to zero. The notional amounts of the Class X-A, Class X-B and Class X-C Certificates will be reduced by the aggregate amount of realized losses allocated to Certificates that are components of the notional amounts of the Class X-A, Class X-B and Class X-C Certificates, respectively.

 

Losses on each pari passu Whole Loan will be allocated, pro rata, between the related mortgage loan and the related pari passu companion loan(s), based upon their respective principal balances. With respect to the 9 West 57th Street Whole Loan, the Westfield San Francisco Centre Whole Loan and the Arkansas Hotel Portfolio Whole Loan, losses will be allocated first to each related subordinate companion loan until reduced to zero and then to the related mortgage loan and any related pari passu companion loans, pro rata, based on their respective principal balances.

 

   Interest Shortfalls:   A shortfall with respect to the amount of available funds distributable in respect of interest can result from, among other sources: (a) delinquencies and defaults by borrowers; (b) shortfalls resulting from the application of appraisal reductions to reduce P&I Advances; (c) shortfalls resulting from interest on Advances made by the Master Servicer, the Special Servicer or the Trustee; (d) shortfalls resulting from the payment of Special Servicing Fees and other additional compensation that the Special Servicer is entitled to receive; (e) shortfalls resulting from

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet   JPMCC 2016-JP3
 
Structural Overview

 

    extraordinary expenses of the trust, including indemnification payments payable to the Depositor, the Master Servicer, the Special Servicer, the Certificate Administrator, the Trustee, the Operating Advisor and the Asset Representations Reviewer; (f) shortfalls resulting from a modification of a mortgage loan’s interest rate or principal balance; and (g) shortfalls resulting from other unanticipated or default-related expenses of the trust. Any such shortfalls that decrease the amount of available funds distributable in respect of interest to the Certificateholders will reduce distributions to the classes of Certificates (other than the Class R Certificates) beginning with those with the lowest payment priorities, in reverse sequential order. See “Description of the Certificates—Distributions—Priority of Distributions” in the Preliminary Prospectus.
     
   Appraisal Reduction Amounts:  

With respect to mortgage loans serviced under the Pooling and Servicing Agreement, upon the occurrence of certain trigger events with respect to a mortgage loan, which are generally tied to certain events of default under the related mortgage loan documents, the Special Servicer will be obligated to obtain an appraisal of the related mortgaged property and the Master Servicer will calculate the Appraisal Reduction Amount. The “Appraisal Reduction Amount” is generally the amount by which the current principal balance of the related mortgage loan or serviced whole loan, plus outstanding advances, real estate taxes, unpaid servicing fees and certain similar amounts exceeds 90% of the appraised value of the related mortgaged property, plus the amount of any escrows and letters of credit.

 

With respect to the Non-Serviced Whole Loans, any Appraisal Reduction Amount will be similarly determined pursuant to the related trust and servicing agreement or pooling and servicing agreement, as applicable, under which it is serviced.

 

In general, the Appraisal Reduction Amounts that are allocated to the mortgage loans are notionally allocated to reduce, in reverse sequential order, the Certificate Balance of each Class of Certificates (other than the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 and Class A-SB Certificates) beginning with the Class NR Certificates for certain purposes, including certain voting rights and the determination of the controlling class. As a result of calculating one or more Appraisal Reduction Amounts (and, in the case of any Whole Loan, to the extent allocated in the related Mortgage Loan), the amount of any required P&I Advance will be reduced, which will have the effect of reducing the amount of interest available to the most subordinate class of certificates then-outstanding (i.e., first, to Class NR certificates; second, to the Class F certificates; third, to the Class E certificates; fourth, to the Class D certificates; fifth, to the Class C certificates, sixth, to the Class B certificates, seventh, to the Class A-S certificates, and finally, pro rata based on their respective interest entitlements, to the Senior Certificates).

 

With respect to each serviced pari passu Whole Loan, the Appraisal Reduction Amount is notionally allocated, pro rata, between the related mortgage loan and the related serviced pari passu companion loan(s), based upon their respective principal balances. With respect to 9 West 57th Street Whole Loan, the Westfield San Francisco Centre Whole Loan and the Arkansas Hotel Portfolio Whole Loan, all appraisal reductions will first be allocated to the subordinate companion loans until reduced to zero and then to the related mortgage loan and any related pari passu companion loans, pro rata, based on their respective principal balances.

 

   Appraisal Reduced Interest:   Accrued and unpaid interest at the related Mortgage Rate for a mortgage loan that is not advanced by the Master Servicer or the Trustee as backup master servicer due to the application of Appraisal Reduction Amounts to such mortgage loan.
     
   Master Servicer Advances:   The Master Servicer will be required to advance certain delinquent scheduled mortgage loan payments of principal and interest and certain property protection advances, in each case, to the extent the Master Servicer deems such advances to be recoverable. At any time that an Appraisal Reduction Amount exists, the amount that would otherwise be required to be advanced by the Master Servicer in respect of delinquent payments of interest on any mortgage loan will be reduced to equal the product of (x) the interest portion of the amount that would be advanced without regard to any Appraisal Reduction Amount and (y) a fraction, the numerator of which is the then-outstanding principal balance of the mortgage loan minus the Appraisal Reduction Amount and the denominator of which is the then-outstanding principal balance of the mortgage loan. The Master Servicer will not make any principal or interest advances with respect to any companion loan.
     
   Whole Loans:   13 mortgage loans are each evidenced by one mortgage loan and one or more companion loans (each a “Companion Loan” and collectively with the related mortgage loan, a “Whole Loan”), secured by the same mortgage(s) on the related mortgaged property(ies). Each such

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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mortgage loan and its related Companion Loan(s) are subject to an intercreditor agreement. None of these Companion Loans will be part of the trust.

 

In the case of the Whole Loans, referred to as the “9 West 57th Street Whole Loan”, the ”693 Fifth Avenue Whole Loan”, the “Opry Mills Whole Loan”, the “Westfield San Francisco Centre Whole Loan”, the “1 Kaiser Plaza Whole Loan”, the “Salesforce Tower Whole Loan”, the “Crocker Park Phase One & Two Whole Loan”, the “National Business Park Whole Loan”, the “100 East Wisconsin Avenue Whole Loan”, the “Hillside Industrial Whole Loan”, the “Embassy Suites Lake Buena Vista Whole Loan” and the “West LA Office - 1950 Sawtelle Boulevard Whole Loan”, one or more related Companion Loans are pari passu with the related mortgage loan (these Companion Loans are also referred to as the “Pari Passu Companion Loans”). In the case of each of the 9 West 57th Street Whole Loan and the Westfield San Francisco Centre Whole Loan, in addition to the related Pari Passu Companion Loans, one or more related Companion Loans are subordinate in right of payment to the related mortgage loan and the related Pari Passu Companion Loans (these Companion Loans, together with the Arkansas Hotel Portfolio Subordinate Companion Loan are also referred to as the “Subordinate Companion Loans”).

 

The 1 Kaiser Plaza Pari Passu Companion Loan, the Salesforce Tower Pari Passu Companion Loan, the National Business Park Pari Passu Companion Loan, the 100 East Wisconsin Avenue Pari Passu Companion Loan (prior to the securitization of the related controlling pari passu companion loan), the Hillside Industrial Pari Passu Companion Loan, the Embassy Suites Lake Buena Vista Pari Passu Companion Loan and the Arkansas Hotel Portfolio Subordinate Companion Loan are referred to as “Serviced Companion Loans”.

 

The 1 Kaiser Plaza Whole Loan, the Salesforce Tower Whole Loan, the National Business Park Whole Loan, the 100 East Wisconsin Avenue Whole Loan (prior to the securitization of the related controlling pari passu companion loan), the Hillside Industrial Whole Loan, the Embassy Suites Lake Buena Vista Whole Loan and the Arkansas Hotel Portfolio Whole Loan (each, a “Serviced Whole Loan”) will be serviced under the pooling and servicing agreement for the JPMCC 2016-JP3 transaction (the “Pooling and Servicing Agreement”).

 

The 100 East Wisconsin Avenue Whole Loan (a “Servicing Shift Whole Loan”, and the related mortgage loan, a “Servicing Shift Mortgage Loan”) will be initially serviced pursuant to the Pooling and Servicing Agreement. After the securitization of the related controlling pari passu companion loan, the Servicing Shift Whole Loan is expected to be serviced pursuant to the pooling and servicing agreement relating to the securitization of such controlling pari passu companion loan as described under “Description of the Mortgage Pool—The Whole Loans— The Non-Serviced Whole Loans—100 East Wisconsin Avenue Whole Loan” in the Preliminary Prospectus.

 

The Whole Loan referred to as the “Arkansas Hotel Portfolio Whole Loan” is comprised of the related mortgage loan and one subordinate Companion Loan (the “Arkansas Hotel Portfolio Subordinate Companion Loan”).

 

The 9 West 57th Street Whole Loan is expected to be serviced pursuant to a trust and servicing agreement relating to a private securitization as described under “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced Whole Loans—9 West 57th Street Whole Loan” in the Preliminary Prospectus.

 

The 693 Fifth Avenue Whole Loan is being serviced pursuant to the DBJPM 2016-C3 pooling and servicing agreement as described under “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced Whole Loans—693 Fifth Avenue Whole Loan” in the Preliminary Prospectus.

 

The Opry Mills Whole Loan is being serviced pursuant to the JPMCC 2016-JP2 pooling and servicing agreement as described under “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced Whole Loans—Opry Mills Whole Loan” in the Preliminary Prospectus.

 

The Westfield San Francisco Centre Whole Loan is being serviced pursuant to a trust and servicing agreement relating to a private securitization as described under “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced Whole Loans—Westfield San Francisco Centre Whole Loan” in the Preliminary Prospectus.

 

The Crocker Park Phase One & Two Whole Loan is being serviced pursuant to the CGCMT 2016-C2 pooling and servicing agreement as described under “Description of the Mortgage 

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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    Pool—The Whole Loans—The Non-Serviced Whole Loans—Crocker Park Phase One & Two Whole Loan” in the Preliminary Prospectus.

 

The West LA Office - 1950 Sawtelle Boulevard Whole Loan is expected to be serviced pursuant to the MSBAM 2016-C30 pooling and servicing agreement as described under “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced Whole Loans—The West LA Office - 1950 Sawtelle Boulevard Whole Loan” in the Preliminary Prospectus.

 

The 9 West 57th Street Whole Loan, the 693 Fifth Avenue Whole Loan, the Opry Mills Whole Loan, the Westfield San Francisco Centre Whole Loan, the Crocker Park Phase One & Two Whole Loan, the 100 East Wisconsin Avenue Whole Loan (on and after the securitization of the controlling pari passu companion loan) and the West LA Office - 1950 Sawtelle Boulevard Whole Loan are each a “Non-Serviced Whole Loan” and collectively the “Non-Serviced Whole Loans”.

     
   Highlighted Servicing Provisions:  

The servicing provisions for this transaction include certain modifications to the provisions used in prior transactions. These modifications include, but are not limited to, the following:

 

   A Mortgage Loan may become a specially serviced loan as a result of an imminent or reasonably foreseeable default only if the Master Servicer determines such default is not likely to be cured by the related borrower within 60 days.  However, if the Special Servicer believes an imminent default exists and the Master Servicer does not transfer the mortgage loan to special servicing, it is entitled to request the Master Servicer deliver an explanation in the form of an officer’s certificate to the Depositor and the Special Servicer setting forth its determination and the related reasoning.

 

    A Mortgage Loan will not become a specially serviced loan for up to 120 days in circumstances where the related borrower does not make its balloon payment at maturity upon satisfaction of certain conditions, including that the borrower has, prior to such maturity date, provided documentation from an acceptable lender, including, without limitation, an executed term sheet or refinancing commitment or an executed purchase and sale agreement, in each case, that is consistent with CMBS market practices and is reasonably satisfactory in form and substance to the Master Servicer evidencing an expected refinancing of the Mortgage Loan or sale of the related Mortgaged Property.

 

    Certain revisions to the rights of the Directing Certificateholder to approve “major decisions” have been incorporated in the Prospectus, including limiting the involvement of the Directing Certificateholder in (1) the replacement of the related property management company, (2) the approval of releases of certain performance escrows and earnouts, and (3) the consent to modifications of any mezzanine intercreditor agreement in circumstances when the Directing Certificateholder is affiliated with the mezzanine lender. 

 

    The Certificate Administrator will be required to identify the then-current Directing Certificateholder as part of its monthly distribution date statement.

 

See “Description of the Certificates” and “Pooling and Servicing Agreement” in the Preliminary Prospectus.

 

   Liquidated Loan Waterfall:   On liquidation of any mortgage loan, all net liquidation proceeds related to the mortgage loan (but not any related Companion Loan) will be applied so that amounts allocated as a recovery of accrued and unpaid interest will not, in the first instance, include any delinquent interest that was not advanced as a result of Appraisal Reduction Amounts or interest that accrued on any junior note(s) if such Mortgage loan is an AB Modified Loan. After the adjusted interest amount is so allocated, any remaining liquidation proceeds will be allocated to offset certain advances and to pay principal on the mortgage loan until the unpaid principal amount of the mortgage loan has been reduced to zero. Any remaining liquidation proceeds will then be allocated to pay delinquent interest that was not advanced as a result of Appraisal Reduction Amounts and any interest that accrued on any junior note(s) if such Mortgage loan is an AB Modified Loan. Any liquidation proceeds in respect of each such mortgage loan in excess of the related outstanding balance will first be applied to offset any interest shortfalls allocated to the Certificates (other than the Class R Certificates), in sequential order, and then to offset any realized losses allocated to the Certificates, in sequential order. Any liquidation proceeds remaining after such applications will be distributed to the Class R Certificates.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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   Sale of Defaulted Loans and REO Properties:  

The Special Servicer is required to solicit offers for any defaulted loan or REO property (other than a non-serviced mortgage loan), if the Special Servicer determines that no satisfactory arrangements can be made for collection of delinquent payments and the sale would be in the best economic interests of the certificateholders (or, in the case of any Serviced Whole Loan, the certificateholders and any holders of the related Serviced Companion Loans, as a collective whole, taking into account the pari passu nature of any Companion Loans), on a net present value basis.

 

In the case of each non-serviced mortgage loan, under certain circumstances permitted under the related intercreditor agreement, to the extent that such non-serviced mortgage loan is not sold together with the related non-serviced companion loan by the special servicer for the related Non-Serviced Whole Loans, the Special Servicer will be entitled to sell (with respect to any mortgage loan other than an Excluded Loan, with the consent of the Directing Certificateholder if no Control Termination Event has occurred and is continuing) such non-serviced mortgage loan if it determines in accordance with the servicing standard that such action would be in the best interests of the certificateholders.

 

The Special Servicer is required to accept the highest cash offer received from any person for any defaulted loan or REO property in an amount at least equal to par plus accrued interest plus all other outstanding amounts due under such mortgage loan and any outstanding expenses of the trust relating to such mortgage loan (the “Purchase Price”) except as described in the Preliminary Prospectus.

 

With respect to the Serviced Whole Loans, any such sale of the related defaulted loan is required to also include the related Pari Passu Companion Loans, if any, and the prices will be adjusted accordingly.

 

In connection with such sale and fair value determination, within 30 days of a defaulted loan becoming a specially serviced loan, the Special Servicer is required to order an appraisal and, within 30 days of receipt of such appraisal, is required to determine the fair value of such defaulted loan in accordance with the applicable servicing standard. If, however, the Special Servicer is already in the process of obtaining an appraisal with respect to the related mortgaged property, the Special Servicer is required to make its fair value determination as soon as reasonably practicable (but in any event within 30 days) after its receipt of such appraisal. Additionally, with respect to the mortgage loans that have mezzanine debt or permit mezzanine debt in the future, the mezzanine lenders may have the option to purchase the related mortgage loan after certain events of default under such mortgage loan. In addition, with respect to the Arkansas Hotel Portfolio Whole Loan, the holder of the Subordinate Companion Loan may have an option to purchase the related mortgage loan after certain events of default under such mortgage loan.

 

The Directing Certificateholder will not have a right of first refusal to purchase a defaulted loan.

 

If the Special Servicer does not receive a cash offer at least equal to the Purchase Price, the Special Servicer may purchase the defaulted loan or REO property at the Purchase Price. If the Special Servicer does not purchase the defaulted loan or REO property at the Purchase Price, the Special Servicer is required to accept the highest offer received from any person that is determined to be a fair price (supported by an appraisal required to be obtained by the Special Servicer within 30 days of a mortgage loan becoming a specially serviced mortgage loan) for such defaulted loan or REO property, if the highest offeror is a person other than a party to the Pooling and Servicing Agreement, the Directing Certificateholder, any sponsor, any borrower, any manager of a mortgaged property, any independent contractor engaged by the special servicer, with respect to a defaulted whole loan, the depositor, master servicer, special Servicer (or independent contractor engaged by such special servicer) or the trustee for the securitization of a companion loan, a holder of any related Companion Loan (but only with respect to the related Serviced Whole Loans) or mezzanine loan (but only with respect to the related mortgage loan), or any known affiliate of any such person (each, an “Interested Person”). If the highest offer is made by an Interested Person, the Trustee will determine (based upon the most recent appraisal or updated appraisal conducted in accordance with the terms of the Pooling and Servicing Agreement) whether the offer constitutes a fair price for the defaulted loan or REO property provided that no offer from an Interested Person will constitute a fair price unless (A) it is the highest offer received and (B) if the offer is less than the applicable Purchase Price, at least two other offers are received from independent third parties and the Trustee may conclusively rely on the opinion of an independent appraiser or other

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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independent expert retained by the Trustee in connection with making such determination. Neither the Trustee nor any of its affiliates may make an offer for or purchase any specially serviced mortgage loan or REO property.

 

If the Special Servicer does not receive any offers that are at least equal to the Purchase Price, the Special Servicer is not required to accept the highest offer and may accept a lower offer for a defaulted loan or REO property if the Special Servicer determines, in accordance with the servicing standard (and subject to the requirements of any related intercreditor agreement), that a rejection of such offer would be in the best interests of the Certificateholders and, with respect to any Serviced Whole Loan, the holder of the related Companion Loans, as a collective whole, as if such Certificateholders and, if applicable, the related Companion Loan Holder(s) constituted a single lender), so long as such lower offer was not made by the Special Servicer or any of its affiliates. With respect to the Arkansas Hotel Portfolio Whole Loan, the special servicer will be permitted to sell the related Subordinate Companion Loan along with the related Mortgage Loan if it determines that a sale of the Arkansas Hotel Portfolio Whole Loan would maximize recoveries on the Whole Loan in accordance with the Servicing Standard. If title to any mortgaged property is acquired by the trust fund, the Special Servicer will be required to sell such mortgaged property prior to the close of the third calendar year beginning after the year of acquisition, unless (a) the IRS grants or has not denied an extension of time to sell such mortgaged property or (b) the Special Servicer, Trustee and the Certificate Administrator receive an opinion of independent counsel to the effect that the holding of the property by the trust longer than the above-referenced three-year period will not result in the imposition of a tax on any REMIC of the trust fund or cause any REMIC of the trust fund to fail to qualify as a REMIC.

 

The foregoing applies to mortgage loans serviced under the Pooling and Servicing Agreement. With respect to each Non-Serviced Whole Loan, if the special servicer under the applicable trust and servicing agreement or pooling and servicing agreement, as applicable, determines to sell the related Companion Loan(s) as described above, then the applicable special servicer will be required to sell the related non-serviced mortgage loan, included in the JPMCC 2016-JP3 Trust, and the related Companion Loan(s), as a single loan. In connection with any such sale, the then-applicable special servicer will be required to follow procedures substantially similar to those set forth above.

 

   Control Eligible Certificates:   Classes E, F and NR.
     
   Control Rights:   The Control Eligible Certificates will have certain control rights attached to them. The “Directing Certificateholder” will be (i) with respect to the Servicing Shift Mortgage Loan, the “controlling holder” or any analogous concept under the related intercreditor agreement, which prior to the securitization of the related controlling pari passu companion loan will be the holder of such companion loan, and (ii) with respect to each Mortgage Loan (other than non-serviced mortgage loans and the Servicing Shift Mortgage Loan), the Controlling Class Certificateholder (or its representative) selected by more than 50% of the Controlling Class Certificateholders; provided, however, that (1) absent that selection, (2) until a Directing Certificateholder is so selected or (3) upon receipt of a notice from a majority of the Controlling Class Certificateholders that a Directing Certificateholder is no longer designated, the Controlling Class Certificateholder that owns the largest aggregate Certificate Balance of the Controlling Class (or its representative) will be the Directing Certificateholder; provided, however, that in the case of this clause (3), in the event no one holder owns the largest aggregate Certificate Balance of the Controlling Class, then there will be no Directing Certificateholder until appointed in accordance with the terms of the Pooling and Servicing Agreement. With respect to any mortgage loan (other than any non-serviced mortgage loan, Servicing Shift Mortgage Loan, the Arkansas Hotel Portfolio Mortgage Loan prior to the occurrence and continuance of a control appraisal period or any Excluded Loan), unless a Control Termination Event has occurred and is continuing, the Directing Certificateholder will be entitled to direct the Special Servicer to take, or refrain from taking, certain actions with respect to such mortgage loan. Furthermore, the Directing Certificateholder will also have the right to receive notice and provide consent with respect to certain material actions that the Master Servicer and the Special Servicer plan on taking with respect to a mortgage loan (other than any non-serviced mortgage loan, Servicing Shift Mortgage Loan, the Arkansas Hotel Portfolio Mortgage Loan prior to the occurrence and continuance of a control appraisal period or any Excluded Loan). With respect to any mortgage loan that has or may in the future have mezzanine debt, pursuant to the related intercreditor agreement, the related mezzanine lender may have certain consent rights with respect to certain modifications related to such mortgage loan.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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With respect to the Arkansas Hotel Portfolio mortgage loan, prior to the occurrence and continuance of a control appraisal period, direction and consent rights with respect to the related Whole Loan will be exercised by the holder of the related Subordinate Companion Loan pursuant to the related intercreditor agreement as described in the Preliminary Prospectus. In addition, the holder of the related Subordinate Companion Loan will have certain rights to cure defaults under the related mortgage loan, and in certain circumstances, a holder of the related Subordinate Companion Loan will have the right to purchase the related defaulted mortgage loan. A “Borrower Party” means a borrower, a mortgagor, a manager of a mortgaged property, an Accelerated Mezzanine Loan Lender, or with respect to a borrower, a mortgagor, a manager of a mortgaged property, or an Accelerated Mezzanine Loan Lender, any other Person controlling or controlled by or under common control with such borrower, mortgagor, manager or Accelerated Mezzanine Loan Lender, as applicable, or any other Person owning, directly or indirectly, 25% or more of the beneficial interests in such borrower, mortgagor, manager or Accelerated Mezzanine Loan Lender, as applicable. For purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

An “Accelerated Mezzanine Loan Lender” means a mezzanine lender under a mezzanine loan that has been accelerated or as to which foreclosure or enforcement proceedings have been commenced against the equity collateral pledged to secure such mezzanine loan.

 

An “Excluded Loan” is a mortgage loan or Whole Loan with respect to which the Directing Certificateholder or the holder of the majority of the controlling class is a Borrower Party. As of the Closing Date, it is expected that there will be no Excluded Loans in this securitization.

 

With respect to the Serviced Whole Loans, direction, consent and consultation rights with respect to the related Whole Loan are subject to certain consultation rights of the holder of the related Pari Passu Companion Loans pursuant to the related intercreditor agreement.

 

With respect to any Non-Serviced Whole Loan (other than the 9 West 57th Street Whole Loan), direction, consent and consultation rights with respect to the related Whole Loan will be exercised by the directing certificateholder or controlling class representative under the applicable trust and servicing agreement or pooling and servicing agreement, as applicable.

 

With respect to any Servicing Shift Whole Loan, direction, consent and consultation rights with respect to the related Whole Loan will be exercised by the applicable directing holder pursuant to the applicable pooling and servicing agreement and related intercreditor agreement.

 

   Directing Certificateholder:   Torchlight Investors, LLC (or its affiliate) is expected to be appointed as the initial directing certificateholder with respect to all Serviced Mortgage Loans (other than the Servicing Shift Mortgage Loan and the Excluded Loans).
     
   Controlling Class:  

The “Controlling Class” will at any time of determination be the most subordinate Class of Control Eligible Certificates then outstanding that has an aggregate Certificate Balance, as notionally reduced by any Cumulative Appraisal Reduction Amounts allocable to such Class, equal to no less than 25% of the initial Certificate Balance for such Class. Each holder of a certificate of the Controlling Class is referred to herein as a “Controlling Class Certificateholder”.

 

The Controlling Class as of the Closing Date will be the Class NR Certificates; provided that if at any time the principal balances of the certificates other than the Control Eligible Certificates have been reduced to zero as a result of the allocation of principal payments on the mortgage loans, then the Controlling Class will be the most subordinate Class among the Control Eligible Certificates that has an aggregate principal balance greater than zero without regard to any Appraisal Reduction Amounts.

 

   Control Termination Event:   A “Control Termination Event” will occur when (i) the Certificate Balance of the Class E Certificates (taking into account the application of Cumulative Appraisal Reduction Amounts to notionally reduce the Certificate Balance of the Class E Certificates) has been reduced to less than 25% of the initial Certificate Balance of such Class as of the Closing Date or (ii) a holder of the Class E Certificates becomes the majority Controlling Class Certificateholder and irrevocably waives its right to exercise any rights of the Controlling Class Certificateholder and such rights have not been reinstated to a successor Controlling Class Certificateholder; provided that prior to the applicable securitization of the controlling pari passu Companion Loan with respect to the Servicing Shift Whole Loan, no Control Termination Event may occur with

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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respect to the directing holder related to the Servicing Shift Whole Loan, and the term “Control Termination Event” will not be applicable to such directing holder related to such Servicing Shift Whole Loan; provided, further, that a Control Termination Event will not be deemed to be continuing in the event the Certificate Balances of all Classes of Principal Balance Certificates other than the Control Eligible Certificates have been reduced to zero.

 

The “Cumulative Appraisal Reduction Amount” as of any date of determination for any mortgage loan, is equal to the sum of (i) all Appraisal Reduction Amounts then in effect, and (ii) with respect to any AB Modified Loan, any Collateral Deficiency Amount then in effect.

 

An “AB Modified Loan” means any corrected loan (1) that became a corrected loan (which includes for purposes of this definition any non-serviced mortgage loan that became a “corrected loan” (or any term substantially similar thereto) pursuant to the trust and servicing agreement or pooling and servicing agreement, as applicable, governing such non-serviced mortgage loan) due to a modification thereto that resulted in the creation of an A/B note structure (or similar structure) and as to which the new junior note(s) did not previously exist or the principal amount of the new junior note(s) was previously part of either an A note held by the issuing entity or the original unmodified mortgage loan and (2) as to which an Appraisal Reduction Amount is not in effect.

 

The “Collateral Deficiency Amount” means, with respect to any AB Modified Loan as of any date of determination, the excess of (i) the principal balance of such AB Modified Loan (taking into account the related junior note(s) and any pari passu notes included therein), over (ii) the sum of (in the case of a Whole Loan, solely to the extent allocable to the subject mortgage loan) (x) the most recent Appraised Value for the related mortgaged property or mortgaged properties, plus (y) solely to the extent not reflected or taken into account in such Appraised Value and to the extent on deposit with, or otherwise under the control of, the lender as of the date of such determination, any capital or additional collateral contributed by the related borrower at the time the mortgage loan became (and as part of the modification related to) such AB Modified Loan for the benefit of the related mortgaged property or mortgaged properties (provided, that in the case of an non-serviced mortgage loan, the amounts set forth in this clause (y) will be taken into account solely to the extent relevant information is received by the master servicer), plus (z) any other escrows or reserves (in addition to any amounts set forth in the immediately preceding clause (y)) held by the lender in respect of such AB Modified Loan as of the date of such determination.

 

Upon the occurrence and during the continuance of a Control Termination Event, the Controlling Class will no longer have any control rights. After the occurrence and during the continuance of a Control Termination Event, the Directing Certificateholder will relinquish its right to direct certain actions of the Special Servicer and will no longer have consent rights with respect to certain actions that the Master Servicer or the Special Servicer plan on taking with respect to a mortgage loan. Following the occurrence and during the continuance of a Control Termination Event, the Directing Certificateholder will retain consultation rights with the Special Servicer with respect to certain material actions that the Special Servicer plans on taking with respect to any mortgage loan other than an Excluded Loan. Such consultation rights will continue until the occurrence of a Consultation Termination Event.

 

With respect to the Arkansas Hotel Portfolio Whole Loan, pursuant to the related intercreditor agreement, the holder of the related Subordinate Companion Loan will lose its right to direct certain actions upon the occurrence and continuance of a control appraisal event with respect to the related Subordinate Companion Loan, which will occur when the principal balance of such Subordinate Companion Loan (taking into account the application of realized losses, payments of principal and Appraisal Reductions to notionally reduce such balance) has been reduced to less than 25% of the initial principal balance of the Arkansas Hotel Portfolio Subordinate Companion Loan less payments of principal.

 

   Consultation Termination Event:   A “Consultation Termination Event” will occur when (i) without regard to the application of any Cumulative Appraisal Reduction Amount (i.e., giving effect to principal reductions through principal payments and realized losses only), there is no Class of Control Eligible Certificates that satisfies the requirement of a Controlling Class or (ii) a holder of the Class E Certificates is the majority Controlling Class Certificateholder and has irrevocably waived its right, in writing, to exercise any of the rights of the Controlling Class Certificateholder and such rights have not been reinstated to a successor Controlling Class Certificateholder pursuant to the terms of the Pooling and Servicing Agreement; provided that prior to the applicable securitization of the related controlling pari passu companion loan with respect to a Servicing Shift Whole Loan, no

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Consultation Termination Event may occur with respect to the directing certificateholder related to the related Servicing Shift Whole Loan, and the term “Control Termination Event” will not be applicable to the directing holder related to such Servicing Shift Whole Loan; provided, further, that a Consultation Termination Event will not be deemed to be continuing in the event the Certificate Balances of all Classes of Principal Balance Certificates other than the Control Eligible Certificates have been reduced to zero.

 

Upon the occurrence of a Consultation Termination Event, there will be no Class of Certificates that will act as the Controlling Class and the Directing Certificateholder will have no rights under the Pooling and Servicing Agreement, other than those rights generally available to all Certificateholders.

 

   Appraised-Out Class:   A Class of Control Eligible Certificates that has been determined, as a result of Appraisal Reduction Amounts or Collateral Deficiency Amounts allocable to such Class, to no longer be the Controlling Class.
     
   Remedies Available to Holders of an Appraised-Out Class:  

Holders of the majority of any Class of Control Eligible Certificates that are determined at any date of determination to no longer be the Controlling Class as a result of Appraisal Reduction Amounts or Collateral Deficiency Amounts allocable to such class will have the right, at their sole expense, to require the Special Servicer to order a supplemental appraisal report from an MAI appraiser (selected by the Special Servicer) for any mortgage loan (or Serviced Whole Loan) that results in the Class becoming an Appraised-Out Class.

 

Upon receipt of that supplemental appraisal, the Special Servicer will be required to determine, in accordance with the Servicing Standard, whether, based on its assessment of the supplemental appraisal, any recalculation of the Appraisal Reduction Amount or Collateral Deficiency Amount is warranted, and if so warranted, the Master Servicer will be required to recalculate the Appraisal Reduction Amount or Collateral Deficiency Amount, as applicable based on the supplemental appraisal and if required by such recalculation, the Appraised-Out Class will be reinstated as the Controlling Class. The holders of an Appraised-Out Class requesting a supplemental appraisal are not permitted to exercise any control or consent rights of the Controlling Class until such time, if any, as the Class is reinstated as the Controlling Class.

 

   Operating Advisor:  

The Operating Advisor will initially be Pentalpha Surveillance LLC. The Operating Advisor will have certain review and consultation rights relating to the performance of the Special Servicer and with respect to its actions taken in connection with the resolution and/or liquidation of specially serviced loans. The Operating Advisor will generally be responsible for reviewing the Special Servicer’s operational practices with respect to the resolution and liquidation of specially serviced loans. In addition, after the occurrence and during the continuance of a Control Termination Event, the Operating Advisor will have certain consultation rights with respect to the specially serviced loans. The Operating Advisor will generally have no obligations or consultation rights under the Pooling and Servicing Agreement with respect to (i) the Non-Serviced Whole Loans or any related REO Property, (ii) the Servicing Shift Whole Loan or any related REO Property and (iii) the Arkansas Hotel Portfolio Mortgage Loan, prior to the occurrence and continuance of a control appraisal period.

 

However, Pentalpha Surveillance LLC is currently the operating advisor under the JPMCC 2016-JP2 pooling and servicing agreement and the CGCMT 2016-C2 pooling and servicing agreement and, in each such capacity, has certain obligations and consultation rights with respect to the Opry Mills Whole Loan and the Crocker Park Phase One & Two Whole Loan, respectively, that are substantially similar to those of the Operating Advisor under the Pooling and Servicing Agreement.

 

With respect to each mortgage loan or Serviced Whole Loan (in each case, other than a non-serviced mortgage loan, the Arkansas Hotel Portfolio Mortgage Loan (prior to the occurrence and continuance of a control appraisal period with respect to the related Subordinate Companion Loan) and the Servicing Shift Mortgage Loan), the Operating Advisor will be responsible for:

 

    after the occurrence and during the continuance of a Control Termination Event, consulting with the Special Servicer with respect to each asset status report prepared by the Special Servicer and recommending proposed alternative courses of action.

 

    after the occurrence and during the continuance of a Control Termination Event, preparing an annual report addressing the Operating Advisor’s overall findings and determinations

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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and setting forth its assessment of the Special Servicer’s performance of its duties under the Pooling and Servicing Agreement on a platform-level basis with respect to the resolution and/or liquidation of specially serviced loans that the Special Servicer is responsible for servicing under the Pooling and Servicing Agreement. As used above, “platform-level basis” refers to the Special Servicer’s performance of its duties as they relate to the resolution and liquidation of specially serviced loans, taking into account the Special Servicer’s specific duties under the Pooling and Servicing Agreement as well as the extent to which those duties were performed in accordance with the servicing standard, with reasonable consideration to (and as limited by) the Operating Advisor’s review of any assessment of compliance report, attestation report, asset status report and other information delivered to the Operating Advisor by the Special Servicer with respect to the specially serviced loans (other than any communications between the Directing Certificateholder and the Special Servicer that would be privileged information). The annual report will be based on the Operating Advisor’s knowledge of the Special Servicer’s actions taken during the applicable calendar year with respect to the resolution or liquidation of specially serviced loans that the Special Servicer is responsible for servicing under the Pooling and Servicing Agreement, including knowledge obtained in connection with the Operating Advisor’s review of each asset status report prepared by the Special Servicer.

 

      prior to the occurrence and continuance of a Control Termination Event, the Special Servicer will forward any Appraisal Reduction Amount and net present value calculations used in the Special Servicer’s determination of what course of action to take in connection with the workout or liquidation of a specially serviced loan to the Operating Advisor after such calculations have been finalized. The Operating Advisor will be required to review such calculations (with respect to Appraisal Reduction Amounts, if the Special Servicer has calculated such amounts) but will not opine on or take any affirmative action with respect to such Appraisal Reduction Amount calculations and/or net present value calculations.

 

     after the occurrence and during the continuance of a Control Termination Event, recalculating and verifying, on a limited basis, the accuracy of mathematical calculations and the corresponding application of the non-discretionary portion of the applicable formulas utilized in connection with any Appraisal Reduction Amount (with respect to Appraisal Reduction Amounts, if the Special Servicer has calculated such amounts) or net present value calculations performed by the Special Servicer. In the event the Operating Advisor does not agree with the mathematical calculations or the application of the non-discretionary portion of the applicable formulas required to be utilized for such calculation, the Operating Advisor and the Special Servicer will consult with each other in order to resolve any disagreement. If there is any disagreement with respect to such calculations that the Operating Advisor and the Special Servicer are unable to resolve, the Certificate Administrator will determine which calculation is to apply.

 

In addition, the Operating Advisor is required to promptly review all information available to Privileged Persons on the Certificate Administrator’s website related to specially serviced loans and certain information available to Privileged Persons on the Certificate Administrator’s website related to mortgage loans included on the monthly CREFC® servicer watch list report, each final asset status report delivered to the Operating Advisor by the Special Servicer and each assessment of compliance report and attestation report prepared by the Special Servicer in order to maintain its familiarity with the mortgage loans and the performance of the Special Servicer under the Pooling and Servicing Agreement.

 

After the occurrence and during the continuance of a Control Termination Event, the Operating Advisor will also consult with the Special Servicer in connection with certain major decisions and propose possible alternative courses of action.

 

In addition, after the occurrence of a Consultation Termination Event, if the Operating Advisor determines that the Special Servicer is not performing its duties as required under the Pooling and Servicing Agreement or is otherwise not acting in accordance with the Servicing Standard, the Operating Advisor will have the right to recommend the replacement of the Special Servicer and will submit its formal recommendation to the Trustee and the Certificate Administrator (along with its rationale, its proposed replacement special servicer and other relevant information justifying its recommendation).

 

The Operating Advisor’s recommendation to replace the Special Servicer must be confirmed by 

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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    an affirmative vote of holders of Certificates evidencing at least a majority of the aggregate notional balance of all Classes of Certificates entitled to principal distributions (taking into account the application of any Appraisal Reduction Amounts to notionally reduce the Certificate Balances of the Classes to which such Appraisal Reduction Amounts are allocable). In the event the holders of such Certificates elect to remove and replace the Special Servicer, the Certificate Administrator will be required to obtain a rating agency confirmation from each of the rating agencies at that time.
     
   Replacement of Operating Advisor:  

The Operating Advisor may be terminated or removed under certain circumstances and a replacement operating advisor appointed as described in the Preliminary Prospectus.

 

Any replacement operating advisor (or the personnel responsible for supervising the obligations of the replacement operating advisor) must be an institution (A) that is a special servicer or operating advisor on a commercial mortgage-backed securities transaction rated by Moody’s, Fitch and KBRA (including, in the case of the Operating Advisor, this transaction) but has not been special servicer or operating advisor on a transaction for which any of Moody’s, Fitch and KBRA has qualified, downgraded or withdrawn its rating or ratings of, one or more classes of certificates for such transaction publicly citing servicing concerns with the special servicer or operating advisor as the sole or a material factor in such rating action; (B) that can and will make the representations and warranties of the operating advisor set forth in the Pooling and Servicing Agreement; (C) that is not (and is not affiliated with) the Depositor, the Trustee, the Certificate Administrator, the Master Servicer, the Special Servicer, a Mortgage Loan Seller, the Directing Certificateholder, a depositor, a trustee, a certificate administrator, a master servicer or special servicer with respect to the securitization of a Companion Loan, or any of their respective affiliates; (D) that has not been paid by any Special Servicer or successor Special Servicer any fees, compensation or other remuneration (x) in respect of its obligations hereunder or (y) for the appointment or recommendation for replacement of a successor special servicer to become the Special Servicer; and (E) that (x) has been regularly engaged in the business of analyzing and advising clients in commercial mortgage-backed securities matters and has at least 5 years of experience in collateral analysis and loss projections and (y) has at least 5 years of experience in commercial real estate asset management and experience in the workout and management of distressed commercial real estate assets. Any Operating Advisor is prohibited from making an investment in any Class of Certificates in the Trust as described in the Preliminary Prospectus.

 

   Asset Representations Reviewer:  

The Asset Representations Reviewer will be required to review certain delinquent mortgage loans after a specified delinquency threshold has been exceeded and notification from the Certificate Administrator that the required percentage of Certificateholders have voted to direct a review of such delinquent mortgage loans. An “Asset Review Trigger” will occur when either (1) Mortgage Loans with an aggregate outstanding principal balance of 25.0% or more of the aggregate outstanding principal balance of all of the Mortgage Loans (including any REO Loans (or a portion of any REO Loan in the case of a Whole Loan) held by the issuing entity as of the end of the applicable Collection Period are Delinquent Loans, (2)(A) prior to and including the second anniversary of the Closing Date, at least 10 Mortgage Loans are Delinquent Loans and the outstanding principal balance of such Delinquent Loans in the aggregate constitutes at least 15.0% of the aggregate outstanding principal balance of all of the Mortgage Loans (including any REO Loans (or a portion of any REO Loan in the case of a Whole Loan)) held by the issuing entity as of the end of the applicable Collection Period or (B) after the second anniversary of the Closing Date, at least 15 Mortgage Loans are Delinquent Loans and the outstanding principal balance of such Delinquent Loans in the aggregate constitutes at least 20.0% of the aggregate outstanding principal balance of all of the Mortgage Loans (including any REO Loans (or a portion of any REO Loan in the case of a Whole Loan)) held by the issuing entity as of the end of the applicable Collection Period.

 

Following the determination that an Asset Review Trigger has occurred, the Certificate Administrator will include in the Form 10-D relating to the distribution period in which the Asset Review Trigger occurred a description of the events that caused the Asset Review Trigger to occur. Once an Asset Review Trigger has occurred, Certificateholders evidencing not less than 5% of the Voting Rights may deliver to the Certificate Administrator a written direction requesting a vote on whether to commence an Asset Review within 90 days after the filing of the Form 10-D reporting the occurrence of the Asset Review Trigger (an “Asset Review Vote Election”). If directed by such Certificateholders, a vote of all Certificateholders will commence and an Asset Review will occur if more than a majority of Certificateholders voting (assuming Certificateholders representing a minimum of 5% of the Voting Rights respond) vote affirmatively within 150 days of the Asset Review Vote Election. If the vote does not pass, then 

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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    no further votes will occur until an additional Mortgage Loan becomes a Delinquent Loan, an additional Asset Review Trigger occurs, and Certificateholders representing 5% of the Voting Rights again elect to cause a vote of all the Certificateholders.
     
   Replacement of the Asset Representations Reviewer:   The Asset Representations Reviewer may be terminated and replaced without cause. Upon (i) the written direction of Certificateholders evidencing not less than 25% of the Voting Rights (without regard to the application of any Appraisal Reduction Amounts) requesting a vote to terminate and replace the Asset Representations Reviewer with a proposed successor asset representations reviewer that is an Eligible Asset Representations Reviewer, and (ii) payment by such holders to the Certificate Administrator of the reasonable fees and expenses to be incurred by the Certificate Administrator in connection with administering such vote, the Certificate Administrator will promptly provide notice to all Certificateholders and the Asset Representations Reviewer of such request by posting such notice on its internet website, and by mailing to all Certificateholders and the Asset Representations Reviewer. Upon the written direction of Certificateholders evidencing at least 75% of a Certificateholder Quorum (without regard to the application of any Appraisal Reduction Amounts), the Trustee will terminate all of the rights and obligations of the Asset Representations Reviewer under the Pooling and Servicing Agreement by written notice to the Asset Representations Reviewer, and the proposed successor asset representations reviewer will be appointed.
     
   Appointment and Replacement of Special Servicer:  

The  Directing  Certificateholder  will  appoint  the initial  Special Servicer as of the Closing Date.  Prior to the  occurrence and  continuance of a  Control  Termination Event, the  Special Servicer may generally be replaced for cause at any time, by the Directing Certificateholder; providedhowever, that with respect to the Arkansas Hotel Portfolio Whole Loan, the holder of the related Subordinate Companion Loan (prior to the occurrence and continuance of a control appraisal period with respect to such Subordinate Companion Loan) will have the right to replace the Special Servicer with respect to that Whole Loan.

 

If the Special Servicer obtains knowledge that it is a Borrower Party with respect to any mortgage loan or Serviced Whole Loan (any such mortgage loan or Serviced Whole Loan, an “Excluded Special Servicer Loan”), the Special Servicer will be required to resign as Special Servicer of that Excluded Special Servicer Loan. Prior to the occurrence and continuance of a Control Termination Event, if the applicable Excluded Special Servicer Loan is not also an Excluded Loan, the Directing Certificateholder or the controlling class representative on its behalf will be required to select a successor special servicer that is not a Borrower Party in accordance with the terms of the Pooling and Servicing Agreement (an “Excluded Special Servicer”) for the related Excluded Special Servicer Loan. After the occurrence and during the continuance of a Control Termination Event or if at any time the applicable Excluded Special Servicer Loan is also an Excluded Loan, the resigning Special Servicer will be required to use reasonable efforts to select the related Excluded Special Servicer.

 

Upon the occurrence and during the continuance of a Control Termination Event, the Directing Certificateholder will no longer have the right to replace the Special Servicer and such replacement will occur based on a vote of holders of all voting eligible Classes of Certificates as described below.

 

After the occurrence of a Consultation Termination Event, the Operating Advisor may also recommend the replacement of the Special Servicer as described above.

 

   Replacement of Special Servicer by Vote of Certificateholders:   After the occurrence and  during the  continuance of a Control  Termination Event and upon  (a) the written direction of   holders of Certificates  evidencing not  less  than 25% of  the Voting Rights of all Classes of Certificates entitled to principal (taking into account the application of Appraisal Reduction Amounts to notionally reduce the Certificate Balances of Classes to which such Appraisal Reduction Amounts are allocable) requesting a vote to replace the Special Servicer with a replacement special servicer, (b) payment by such requesting holders to the Certificate Administrator of all reasonable fees and expenses to be incurred by the Certificate Administrator in connection with administering such vote and (c) delivery by such holders to the Certificate Administrator and the Trustee of written confirmations from each Rating Agency that the appointment of such replacement special servicer will not result in a downgrade, withdrawal or qualification of the Certificates (which confirmations will be obtained at the expense of such holders), the Certificate Administrator will be required to post such notice on its Internet website, and by mail conduct the solicitation of votes of all Certificates in such regard, which such vote must occur within 180 days of the posting of such notice. Upon the written direction of holders of at least 66-2/3% of a Certificateholder Quorum, the Trustee will immediately replace the Special Servicer with a qualified replacement special servicer

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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designated by such holders of Certificates.

 

A “Certificateholder Quorum” means, in connection with any solicitation of votes in connection with the replacement of the Special Servicer or the Asset Representations Reviewer described above, the holders of Certificates evidencing at least 50% of the aggregate Voting Rights (taking into account the application of realized losses and, other than with respect to the termination of the Asset Representations Reviewer, the application of any Appraisal Reduction Amounts to notionally reduce the Certificate Balance of the Certificates) of all Classes of Certificates entitled to principal on an aggregate basis.

 

With respect to each of the Serviced Whole Loan, the holders of the related Pari Passu Companion Loans, under certain circumstances following a servicer termination event with respect to the Special Servicer, will be entitled to direct the Trustee (and the Trustee will be required) to terminate the Special Servicer solely with respect to such Serviced Whole Loan. A replacement special servicer will be selected by the Trustee or, prior to a Control Termination Event, by the Directing Certificateholder; provided, however, that any successor special servicer appointed to replace the Special Servicer with respect to such Whole Loan can generally not be the person (or its affiliate) that was terminated at the direction of the holder of the related Pari Passu Companion Loan.

 

With respect to any Non-Serviced Whole Loan, the JPMCC 2016-JP3 trust as holder of the related mortgage loan has similar termination rights in the event of a servicer termination event with respect to the special servicer under the applicable trust and servicing agreement or pooling and servicing agreement, as applicable, as described above, which may be exercised by the Directing Certificateholder prior to the Control Termination Event. However, the successor special servicer will be selected pursuant to the applicable trust and servicing agreement or pooling and servicing agreement, applicable, by the related directing holder prior to a control event under such trust and servicing agreement or pooling and servicing agreement, as applicable. The Master Servicer and Special Servicer are entitled to certain fees in connection with the servicing and administration of the mortgage loans as more fully described in “Transaction Parties—Servicing and Other Compensation and Payment of Expenses” in the Preliminary Prospectus.

 

   Dispute Resolution Provisions:  

Each Mortgage Loan Seller will be subject to the dispute resolution provisions set forth in the Pooling and Servicing Agreement to the extent those provisions are triggered with respect to any mortgage loan sold to the Depositor by a Mortgage Loan Seller and such Mortgage Loan Seller will be obligated under the related mortgage loan purchase agreement to comply with all applicable provisions and to take part in any mediation or arbitration proceedings that may result.

 

Generally, in the event that a request to repurchase a Mortgage Loan (a “Repurchase Request”) is not “Resolved” (as defined below) within 180 days after the related Mortgage Loan Seller receives such Repurchase Request (a “Resolution Failure”), then the Enforcing Servicer (as defined below) will be required to send a notice to the “Initial Requesting Certificateholder” (if any) indicating the Enforcing Servicer’s intended course of action with respect to the Repurchase Request. If (a) the Enforcing Servicer’s intended course of action with respect to the Repurchase Request does not involve pursuing further action to exercise rights against the related Mortgage Loan Seller with respect to the Repurchase Request and the Initial Requesting Certificateholder, if any, or any other Certificateholder or Certificate Owner wishes to exercise its right to refer the matter to mediation (including nonbinding arbitration) or arbitration, or (b) the Enforcing Servicer’s intended course of action is to pursue further action to exercise rights against the related Mortgage Loan Seller with respect to the Repurchase Request but the Initial Requesting Certificateholder, if any, or any other Certificateholder or Certificate Owner does not agree with the dispute resolution method selected by the Enforcing Servicer, then the Initial Requesting Certificateholder, if any, or such other Certificateholder or Certificate Owner may deliver a written notice to the Enforcing Servicer indicating its intent to exercise its right to refer the matter to either mediation or arbitration.

 

The Enforcing Servicer will be required to consult with any Certificateholder or Certificate Owner that delivers a notice of its intent to exercise its dispute resolution rights (a “Requesting Certificateholder”) so that a Requesting Certificateholder may consider the views of the Enforcing Servicer as to the claims underlying the Repurchase Request and possible dispute resolution methods. If a Requesting Certificateholder elects to exercise its right to refer the matter to either mediation or arbitration, then it will become the party responsible for enforcing

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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the Repurchase Request and must promptly submit the matter to mediation (including nonbinding arbitration) or arbitration. Failure to make an election to exercise that right or failure to begin the elected form of proceedings within the certain timeframe set forth in the Pooling and Servicing Agreement will generally waive the Certificateholders’ or Certificate Owners’ rights with respect to the related Repurchase Request.

 

The “Enforcing Servicer” will be (a) with respect to a specially serviced loan, the Special Servicer, and (b) with respect to a non-specially serviced loan, (i) in the case of a Repurchase Request made by the Special Servicer, the Directing Certificateholder or a Controlling Class Certificateholder, the Master Servicer, and (ii) in the case of a Repurchase Request made by any person other than the Special Servicer, the Directing Certificateholder or a Controlling Class Certificateholder, (A) prior to a Resolution Failure relating to such non-specially serviced loan, the Master Servicer, and (B) from and after a Resolution Failure relating to such non-specially serviced Loan, the Special Servicer.

 

Resolved” means, with respect to a Repurchase Request, (i) that the related Material Defect has been cured, (ii) the related Mortgage Loan has been repurchased in accordance with the related mortgage loan purchase agreement, (iii) a mortgage loan has been substituted for the related mortgage loan in accordance with the related mortgage loan purchase agreement, (iv) the applicable Mortgage Loan Seller has made a Loss of Value Payment, (v) a contractually binding agreement is entered into between the Master Servicer or the Special Servicer, as applicable, on behalf of the issuing entity, and the related Mortgage Loan Seller that settles the related Mortgage Loan Seller’s obligations under the related mortgage loan purchase agreement, or (vi) the related mortgage loan is no longer property of the issuing entity as a result of a sale or other disposition in accordance with the Pooling and Servicing Agreement.

 

   Investor Communications  

The Certificate Administrator is required include on any Form 10–D any request received from a Certificateholder to communicate with other Certificateholders related to Certificateholders exercising their rights under the terms of the Pooling and Servicing Agreement. Any Certificateholder wishing to communicate with other Certificateholders regarding the exercise of its rights under the terms of the Pooling and Servicing Agreement should deliver a written request signed by an authorized representative of the requesting investor to the Certificate Administrator at the address below:

 

9062 Old Annapolis Road

 

Columbia, Maryland 21045

 

Attention: Corporate Trust Administration Group – JPMCC 2016-JP3

 

With a copy to: trustadministrationgroup@wellsfargo.com

 

   Master Servicer and Special Servicer Compensation:  

The Master Servicer is entitled to a fee (the “Servicing Fee”) payable monthly from interest received in respect of each mortgage loan, any related REO loan and any related Serviced Companion Loan that will accrue at the related servicing fee rate described in the Preliminary Prospectus. The Special Servicer is also entitled to a fee (the “Special Servicing Fee”) with respect to each specially serviced loan and REO loan (other than a non-serviced mortgage loan) at the special servicing fee rate described in the Preliminary Prospectus.

 

In addition to the Servicing Fee, Special Servicing Fee and certain other fees described below, the Master Servicer and Special Servicer are entitled to retain and share certain additional servicing compensation, including assumption application fees, assumption fees, defeasance fees and certain Excess Modification Fees and consent fees with respect to the mortgage loans. The Special Servicer may also be entitled to either a Workout Fee or Liquidation Fee, but not both, from recoveries in respect of any particular mortgage loan.

 

An “Excess Modification Fee” with respect to any mortgage loan (other than the non-serviced mortgage loans) or Serviced Whole Loan is the sum of (A) the excess, if any, of (i) any and all Modification Fees with respect to a mortgage loan or Serviced Whole Loan over (ii) all unpaid or unreimbursed additional expenses described in the Preliminary Prospectus (excluding Special Servicing Fees, Workout Fees and Liquidation Fees) outstanding with respect to the related mortgage loan or Serviced Whole Loan, as applicable, and reimbursed from such Modification Fees and (B) expenses previously paid or reimbursed from Modification Fees as described in clause (A), which expenses have subsequently been recovered from the related borrower or otherwise. 

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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With respect to the Master Servicer and Special Servicer, the Excess Modification Fees collected and earned by such servicer from the related borrower (taken in the aggregate with any other Excess Modification Fees collected and earned by such servicer from the related borrower within the prior 18 months of the collection of the current Excess Modification Fees) will be subject to a cap of 1.00% of the outstanding principal balance of the related mortgage loan or Serviced Whole Loan, as applicable, on the closing date of the related modification, extension, waiver or amendment. A “Modification Fee” with respect to any mortgage loan (other than the non-serviced mortgage loans) or Serviced Companion Loan is generally any fee with respect to a modification, extension, waiver or amendment of any mortgage loan and/or related Serviced Companion Loan.

 

A “Workout Fee” will generally be payable with respect to each corrected loan (as more specifically described in the Preliminary Prospectus) and will be calculated at a rate of 1.00% of payments of principal and interest on the respective mortgage loan for so long as it remains a corrected loan, subject to a maximum of $1,000,000 in the aggregate with respect to any particular corrected mortgage loan. After receipt by the Special Servicer of Workout Fees with respect to a corrected loan in an amount equal to $25,000, any Workout Fees in excess of such amount will be reduced by the Excess Modification Fee Amount; provided that in the event the Workout Fee, collected over the course of such workout calculated at the Workout Fee Rate is less than $25,000, then the Special Servicer will be entitled to an amount from the final payment on the related corrected loan (including any related Serviced Companion Loan) that would result in the total Workout Fees payable to the Special Servicer in respect of that corrected loan (including any related Serviced Companion Loan) to be $25,000.

 

The “Excess Modification Fee Amount” for any corrected loan is an amount equal to any Excess Modification Fees paid by or on behalf of the related borrower with respect to the related mortgage loan (including the related Serviced Companion Loan) and received and retained by the Master Servicer or the Special Servicer, as applicable, as additional servicing compensation within the prior 18 months of the related modification, waiver, extension or amendment resulting in the mortgage loan or REO loan being a corrected loan, but only to the extent those fees have not previously been deducted from a Workout Fee or Liquidation Fee.

 

A “Liquidation Fee” will generally be payable with respect to each specially serviced loan or REO property (except with respect to any non-serviced mortgage loan) as to which the Special Servicer obtains a full or partial recovery of the related asset. The Liquidation Fee for each specially serviced mortgage loan will be payable at a rate of 1.00% of the liquidation proceeds (exclusive of default interest) subject to a maximum of $1,000,000; provided, however, that no Liquidation Fee will be less than $25,000.

 

The Liquidation Fees will be reduced by the amount of any Excess Modification Fees received by the Special Servicer with respect to the related mortgage loan (including a Serviced Companion Loan) or REO property as additional compensation within the prior 18 months, but only to the extent those fees have not previously been deducted from a Workout Fee or Liquidation Fee.

 

Similar fees to those described above will be payable to the applicable special servicer for the Non-Serviced Whole Loans under the related trust and servicing agreement or pooling and servicing agreement, as applicable.

 

Subject to certain limited exceptions, in connection with its duties under the Pooling and Servicing Agreement, the Special Servicer and its affiliates are prohibited from receiving or retaining any compensation (other than compensation specifically provided for under the Pooling and Servicing Agreement) from anyone in connection with the disposition, workout or foreclosure of any mortgage loan, the management or disposition of any REO property, or the performance of any other special servicing duties under the Pooling and Servicing Agreement. In the event the Special Servicer does receive any such compensation, it will be required to disclose those fees to the Certificate Administrator who will include it as part of the statement to Certificateholders.

 

In addition, no liquidation fee will be payable to the Special Servicer if a mortgage loan or Serviced Whole Loan becomes a specially serviced loan only because of a maturity default and the related liquidation proceeds are received within 90 days following the related maturity date as a result of the related mortgage loan or Serviced Whole Loan being refinanced or otherwise repaid in full.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural Overview

 

   Deal Website:  

The Certificate Administrator will maintain a deal website to which certain persons will have access to certain information including, but not limited to the following, which will be posted:

 

   special notices

 

   summaries of any final asset status reports

 

   appraisals in connection with Appraisal Reductions plus any second appraisals ordered

 

   an “Investor Q&A Forum”

 

   a voluntary investor registry

 

   SEC EDGAR filings

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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[THIS PAGE INTENTIONALLY LEFT BLANK]

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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9 West 57th Street

 

 (GRAPHIC)

  

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2016-JP3

 

9 West 57th Street

 

 (MAP)

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2016-JP3

 

9 West 57th Street

 

 (MAP)

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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9 West 57th Street

 

         
Mortgage Loan Information   Property Information
Mortgage Loan Seller: JPMCB   Single Asset / Portfolio: Single Asset
Credit Assessment     Title: Fee / Leasehold
(Moody’s / Fitch / KBRA) (1): Aaa / AAA / AAA   Property Type - Subtype: Office – CBD
Original Principal Balance(2): $100,000,000   Net Rentable Area (SF): 1,680,218
Cut-off Date Principal Balance(2): $100,000,000   Location: New York, NY
% of Pool by IPB: 8.2%   Year Built / Renovated: 1972 / N/A
Loan Purpose: Refinance   Occupancy: 63.5%
Borrowers: Solow Building Company II, L.L.C.   Occupancy Date: 6/1/2016
  and Solovieff Realty Co. II, L.L.C.   Number of Tenants: 26
Sponsor: Sheldon H. Solow   2013 NOI(4): $60,972,979
Interest Rate: 2.85950%   2014 NOI(4): $67,687,210
Note Date: 8/30/2016   2015 NOI(4): $85,164,572
Maturity Date: 9/1/2026   TTM NOI (as of 6/2016)(4): $97,014,333
Interest-only Period: 120 months   UW Economic Occupancy: 66.9%
Original Term: 120 months   UW Revenues: $166,714,099
Original Amortization: None   UW Expenses: $58,877,243
Amortization Type: Interest Only   UW NOI(4): $107,836,855
Call Protection(3): L(24),Def(89),O(7)   UW NCF: $107,098,067
Lockbox: CMA   Appraised Value / Per SF: $3,400,000,000 / $2,024
Additional Debt: Yes   Appraisal Date: 7/28/2016
Additional Debt Balance: $913,724,000 / $186,276,000      
Additional Debt Type: Pari Passu / Subordinate Debt      
         

 

               
Escrows and Reserves(5)   Financial Information(2)
  Initial Monthly Initial Cap     Pari Passu Debt Whole Loan
Taxes: $9,417,640 $3,139,213 N/A   Cut-off Date Loan / SF: $603   $714  
Insurance: $264,333 $88,111 N/A   Maturity Date Loan / SF: $603   $714  
Replacement Reserves: $0 $61,615 $2,500,000   Cut-off Date LTV: 29.8% 35.3%
TI/LC: $25,000,000 Springing $25,000,000   Maturity Date LTV: 29.8% 35.3%
Other: $29,811,518 $0 N/A   UW NCF DSCR: 3.64x 3.08x
          UW NOI Debt Yield: 10.6%  9.0%
               

 

             
Sources and Uses
Sources Proceeds % of Total     Uses Proceeds % of Total
Mortgage Loan(2) $1,200,000,000 100.0%      Payoff Existing Debt $630,769,032 52.6%
        Return of Equity 484,972,507 40.4   
        Upfront Reserves 64,493,490 5.4   
        Closing Costs 19,764,970 11.6   
Total Sources $1,200,000,000 100.0%      Total Uses $1,200,000,000 100.0%

(1)Moody’s, Fitch and KBRA have confirmed that the 9 West 57th Street loan has, in the context of its inclusion in the mortgage pool, credit characteristics consistent with an investment grade obligation.

(2)The 9 West 57th Street loan is part of a whole loan evidenced by five pari passu notes and one subordinate note with an aggregate original principal balance as of the Cut-off Date of $1.2 billion. The Financial Information presented in the chart above reflects the Cut-off Date balance of the $1.2 billion 9 West 57th Street Whole Loan, as defined in “The Loan” below.

(3)The lockout period will be at least 24 payments beginning with and including the first payment date of October 1, 2016. Defeasance of the full $1.2 billion 9 West 57th Street Whole Loan is permitted at any time after the earlier to occur of (A) two years after the closing date of the final REMIC that holds any note evidencing the 9 West 57th Street Whole Loan or (B) the third anniversary of the origination date.

(4)The increase in NOI from 2013 to 2014 is primarily due to an increase in occupancy from 50.9% to 63.5%. The increase in NOI from 2014 to 2015 is primarily due to an increase in occupancy from 63.5% to 67.3% and an increase in in-place weighted average base rent per square foot from approximately $97.86 to approximately $113.98 per square foot. The increase in NOI from 2015 to TTM is primarily due to an increase in in-place weighted average base rent from approximately $113.98 to approximately $127.10 per square foot. The increase in NOI from TTM to UW is primarily due to the inclusion of tenants who have signed leases but have not begun paying rent including Zimmer Partners LP (20,100 square feet) and Seven Bridges Advisors LLC (7,560 square feet).

(5)For a full description of Escrows and Reserves, please refer to “Escrows and Reserves” below.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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9 West 57th Street

 

The Loan. The 9 West 57th Street loan is secured by a first mortgage lien on the borrowers’ fee and leasehold interests in a 50-story, 1,680,218 square foot office building located on West 57th Street in Manhattan between 5th and 6th Avenues. The building is near the 5th Avenue retail corridor and across the street from the Plaza Hotel within the Plaza District submarket. The whole loan has an outstanding principal balance as of the Cut-off Date of $1.2 billion (the “9 West 57th Street Whole Loan”), and is comprised of (i) one senior note with an outstanding principal balance as of the Cut-off Date of $100.0 million, (ii) four pari passu senior companion notes (also pari passu with respect to the 9 West 57th Street loan) with an aggregate outstanding principal balance as of the Cut-off Date of approximately $913.7 million (the “9 West 57th Street Pari Passu Companion Loans”) and (iii) one subordinate note with an outstanding principal balance as of the Cut-off Date of approximately $186.3 million (the “9 West 57th Street Subordinate Companion Loan”), each as described below. The 9 West 57th Street loan and each of the 9 West 57th Street Pari Passu Companion Loans are pari passu in right of payment with each other and are generally senior in right of payment to the 9 West 57th Street Subordinate Companion Loan as and to the extent described in “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced Whole Loans—The 9 West 57th Street Whole Loan” in the Preliminary Prospectus. The senior note A-1 and the 9 West 57th Street Subordinate Companion Loan are expected to be contributed to the JPMCC 2016-NINE securitization trust, a private CMBS securitization pursuant to which the 9 West 57th Street loan is expected to be serviced and administered. The 9 West 57th Street Whole Loan has a 10-year term and is interest-only for the entire term. The previously existing debt was securitized in the COMM 2012-9W57 securitization.

 

         
Whole Loan Summary
Note Original Balance Cut-off Date Balance Note Holder Controlling Piece
A-1 $670,724,000 $670,724,000 JPMCC 2016-NINE No
A-2 100,000,000 100,000,000 JPMCC 2016-JP3 No
A-3 100,000,000 100,000,000 JPMCB No
A-4 80,000,000 80,000,000 JPMCB No
A-5 63,000,000 63,000,000 JPMCB No
B-1 186,276,000 186,276,000 JPMCC 2016-NINE No
Total $1,200,000,000 $1,200,000,000    

 

The Borrowers. The borrowing entities for the 9 West 57th Street Whole Loan are Solow Building Company II, L.L.C. and Solovieff Realty Co. II, L.L.C., each a Delaware limited liability company and special purpose entity.

 

The Loan Sponsor. The loan sponsor of the borrowers is Sheldon H. Solow who has been an owner and developer of commercial and residential properties in New York since 1950 and has owned the property since developing it in 1972. Sheldon H. Solow has a real estate portfolio consisting of approximately 18 commercial and residential properties in New York City, including 265 East 66th Street, One East River Place and 419 East 60th Street. Solow has shown his commitment to the property by periodically upgrading and improving it for more than 40 years in order to attract top tier tenants.

  

The Property. 9 West 57th Street consists of 50 stories with 47 office levels and three subterranean levels that contain a mix of retail, storage and service areas as well as a 285-space parking garage. The full-service restaurant, Brasserie 8 ½, is located on the first subterranean level. According to the appraisal, the property is an iconic trophy office property and is widely perceived as being one of the top three office buildings in New York City due to its excellent Plaza District location, quality tenancy and unobstructed Central Park views from the 27th floor and above. As of June 1, 2016, the property was leased to 26 tenants, including a number of institutional quality tenants. 9 West 57th Street serves as headquarters’ locations for Kohlberg, Kravis, Roberts & Co. L.P. (“KKR”), Chanel Inc. (“Chanel”), Apollo Management Holdings, L.P. (“Apollo”), Och Ziff Management LP, Tiger Global Management LLC and Ruane, Cunniff & Goldfarb Inc. The property commands some of the highest per square foot office rents in Manhattan with certain higher floor in-place rents exceeding $200 per square foot. The property was 63.5% occupied as of June 1, 2016, considerably below the Plaza District market occupancy of 89.9%, which presents the opportunity for improvement in debt yield and DSCR if the property’s occupancy increases during the loan term. The sponsor is marketing the approximately 600,000 square feet of vacant space at the property.

 

The property’s largest tenant is KKR, a global investment firm headquartered at the property, which leases 11.7% of the net rentable area through December 2020 across seven floors. KKR has over $131.0 billion of assets under management with over 800 employees. The second largest tenant, Chanel, leases 11.0% of the net rentable area through May 2031. Chanel is a French designer of women’s luxury fashion items and is headquartered at the property. The Chanel brand had over $5.2 billion in revenues in 2016 and over 12,760 employees. The third largest tenant, Apollo, leases 6.6% of the net rentable area through April 2020. Apollo is a global alternative asset manager with a value-oriented investment strategy in private equity, credit and real estate. As of 2016, Apollo had $173 billion of assets under management and is also headquartered at the property.

 

The property is located in the Plaza District in Midtown Manhattan and in close proximity to the Plaza Hotel, 5th Avenue, the Museum of Modern Art, Rockefeller Center, Carnegie Hall, Radio City Music Hall, Columbus Circle and Grand Central Terminal. Midtown Manhattan is home to numerous national and multinational corporations, such as The Blackstone Group, Bloomberg L.P., Estée Lauder, JPMorgan Chase and NBC. The surrounding area has a number of luxury hotels, including The Four Seasons, The Peninsula,

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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9 West 57th Street

 

The Plaza and The St. Regis. The property is located along “Billionaire’s Row” which includes several luxury supertall residential condominium developments such as One57, 432 Park, 220 Central Park South and 111 West 57th Street. Certain residential condominium units along “Billionaire’s Row” have sold for more than $9,000 per square foot.

 

As of the second quarter of 2016, the Plaza District submarket reported an overall vacancy rate of 10.1% and overall average asking rents of $128.36 per square foot. The appraisal identified four comparable Class A trophy office buildings including the Seagram Building (375 Park Avenue), 667 Madison Avenue, the GM Building (767 5th Avenue) and Lever House (390 Park Avenue) with current asking rents ranging from $125 per square foot to $220 per square foot which is in-line with the property.

 

       
Historical and Current Occupancy(1)
2013(2) 2014(2) 2015(2) Current(3)
50.9% 63.5% 67.3% 63.5%

(1)Historical Occupancies are as of December 31 of each respective year.

(2)The increase in 2014 occupancy from 2013 is primarily driven by leases signed with SHL Investment Group (USA), Inc. and Benefit Street Partners. The increase in 2015 occupancy from 2014 is primarily driven by leases signed with Tiger Global Management LLC, Qatar Investment Authority Advisory USA Inc. and Veritas Capital Fund Management, LLC.

(3)Current Occupancy is as of June 1, 2016.

 

               
Tenant Summary(1)
Tenant Retail /
Office
Component
Ratings(2)
Moody’s/S&P/Fitch
Net
Rentable
Area (SF)
% of
Total
NRA
Base
Rent PSF
% of Total
Base Rent
Lease
Expiration Date
Kohlberg, Kravis, Roberts & Co.(3) Office NA / A / A 196,124 11.7% $121.48 16.1% 12/31/2020
Chanel Inc. (4) Office NA / NA / NA 185,120 11.0% $119.07 14.9% 5/31/2031
Apollo Management Holdings, L.P. (5) Office NA / A / A- 111,194 6.6% $167.17 12.6% 4/30/2020
Och Ziff Management LP Office NA / NA / NA 95,200 5.7% $180.18 11.6% 12/31/2029
Providence Equity LLC (6) Office NA / NA / NA 51,145 3.0% $204.62 7.1% Various
Tiger Global Management LLC Office NA / NA / NA 43,490 2.6% $171.20 5.0% 7/31/2024
Silver Lake Management Co., LLC Office NA / NA / NA 31,800 1.9% $195.00 4.2% 2/9/2019
Coatue Management LLC Office NA / NA / NA 31,000 1.8% $125.00 2.6% 5/31/2023
40 North Industries LLC Office NA / NA / NA 28,620 1.7% $167.32 3.2% 1/31/2022
Ruane, Cunniff & Goldfarb Inc. Office NA / NA / NA 26,920 1.6% $191.00 3.5% 5/31/2025

(1)Based on the underwritten rent roll dated June 1, 2016.
(2)Ratings provided are for the parent company of the entity listed in the “Tenant” field whether or not the parent company guarantees the lease.

(3)Kohlberg, Kravis, Roberts & Co., has acquired an approximately 343,000 square foot condominium at Hudson Yards, an office development in West Midtown, Manhattan. There can be no assurance that KKR will not vacate the property upon lease expiration in December 2020. Excluding KKR from the in-place underwritten base rent, the UW NCF DSCR based on UW NCF is equal to 2.30x.

(4)Chanel Inc.’s storage lease for 7,800 square feet expires March 31, 2031.

(5)13,600 square feet of Apollo Management Holdings, L.P.’s office lease expires April 15, 2020. Apollo Management Holdings L.P.’s 2,294 square foot storage lease also expires April 15, 2020.

(6)The 51,145 square foot space also includes space leased to Benefit Street Partners, an affiliate of Providence Equity LLC. Providence Equity LLC’s lease for 32,800 square feet expires March 15, 2019. Benefit Street Partners’ lease for 18,345 square feet expires September 30, 2025. Benefit Street Partners has the right to terminate its lease as of September 1, 2022, with at least 12 months' notice and the payment of a termination fee approximately equal to the sum of (i) an amount equal to four months of base rent and (ii) any unamortized brokerage commissions paid by the landlord on account of the lease.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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9 West 57th Street

 

Lease Rollover Schedule(1)
Year   Number of Leases Expiring   Net Rentable Area Expiring   % of NRA Expiring     Base Rent Expiring  

% of

Base  

Rent

Expiring 

 

Cumulative

Net  

Rentable  

Area  

Expiring 

Cumulative
% of NRA
Expiring
Cumulative
Base Rent Expiring
Cumulative
% of Base
Rent
Expiring
 
Vacant   NAP   613,310   36.5 %   NAP   NAP     613,310   36.5 %   NAP   NAP    
2016   0   0   0.0     $0   0.0 %   613,310   36.5 %   $0   0.0%  
2017   0   0   0.0     0   0.0     613,310   36.5 %   $0   0.0%  
2018   0   0   0.0     0   0.0     613,310   36.5 %   $0   0.0%  
2019   2   64,600   3.8     13,089,000   8.8     677,910   40.3 %   $13,089,000   8.8%  
2020   3   308,618   18.4     42,632,981   28.8     986,528   58.7 %   $55,721,981   37.7%  
2021   2   31,500   1.9     5,109,900   3.5     1,018,028   60.6 %   $60,831,881   41.1%  
2022   2   30,020   1.8     5,204,730   3.5     1,048,048   62.4 %   $66,036,611   44.6%  
2023   2   64,730   3.9     6,827,514   4.6     1,112,778   66.2 %   $72,864,125   49.2%  
2024   3   65,140   3.9     10,046,735   6.8     1,177,918   70.1 %   $82,910,860   56.0%  
2025   4   77,395   4.6     14,301,223   9.7     1,255,313   74.7 %   $97,212,083   65.7%  
2026 & Beyond   8   424,905   25.3     50,783,105   34.3     1,680,218   100.0 %   $147,995,188   100.0%  
Total   26   1,680,218   100.0 %   $147,995,188   100.0 %                      

(1)Based on the underwritten rent roll dated June 1, 2016 and includes rent steps through September 2017.

  

Operating History and Underwritten Net Cash Flow
  2013   2014   2015   TTM(1)   Underwritten  

Per 

Square

Foot 

  %(2)  
Rents in Place $96,419,788   $104,395,474   $128,865,929   $141,867,688   $147,995,188   $88.08   59.4 %  
Vacant Income 0   0   0   0   82,518,645   49.11   33.1    
Gross Potential Rent $96,419,788   $104,395,474   $128,865,929   $141,867,688   $230,513,833   $137.19   92.5 %  
Total Reimbursements 18,367,753   20,686,585   18,213,824   17,863,714   16,775,136   9.98   6.7    
Percentage Rent Income - Garage 1,960,765   2,011,104   1,649,779   1,754,505   1,943,774   1.16   0.8    
Net Rental Income $116,748,306   $127,093,163   $148,729,532   $161,485,907   $249,232,744   $148.33   100.0 %  
(Vacancy/Credit Loss) 0   0   0   0   (82,518,645 ) (49.11 ) (33.1 )  
Other Income 0   0   0   0   0   0   0.0    
Effective Gross Income $116,748,306   $127,093,163   $148,729,532   $161,485,907   $166,714,099   $99.22   66.9 %  
Total Expenses $55,775,327   $59,405,953   $63,564,960   $64,471,574   $58,877,243   $35.04   35.3 %  

Net Operating Income(3)(4)(5)(6)

$60,972,979   $67,687,210   $85,164,572   $97,014,333   $107,836,855   $64.18   64.7 %  
Total TI/LC, Capex/RR 0   0   0   0   738,788   0.44   0.4    
Net Cash Flow $60,972,979   $67,687,210   $85,164,572   $97,014,333   $107,098,067   $63.74   64.2 %  

(1)TTM Column represents the trailing 12-month period ending June 30, 2016.

(2)Percentage column represents percent of Net Rental Income for all revenue lines and represents percent of Effective Gross Income for the remainder of fields.

(3)The increase in Net Operating Income from 2013 to 2014 is primarily due to an increase in occupancy from 50.9% to 63.5%.

(4)The increase in Net Operating Income from 2014 to 2015 is primarily due to an increase in occupancy from 63.5% to 67.3% and an increase in in-place weighted average base rent per square foot from approximately $97.86 to approximately $113.98 per square foot.

(5)The increase in Net Operating Income from 2015 to TTM is primarily due to an increase in in-place weighted average base rent from approximately $113.98 to approximately $127.10 per square foot.

(6)The increase in Net Operating Income from TTM to Underwritten is primarily due to the inclusion of tenants who have signed leases but have not begun paying rent including Zimmer Partners LP (20,100 square feet) and Seven Bridges Advisors LLC (7,560 square feet).

   

Property Management. The property is managed by Solow Management Corp., an affiliate of the borrowers, under a management agreement that is renewed annually.

 

Escrows and Reserves. At origination, the borrowers deposited $25,000,000 for future tenant improvements and leasing commissions, $16,462,228 for outstanding free rent related to seven tenants at the property, $13,061,790 for outstanding tenant improvements and leasing commissions related to 10 tenants at the property, $9,417,640 for real estate taxes, $287,500 for required repairs and $264,333 for insurance reserves.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2016-JP3

 

9 West 57th Street

 

Tax Escrows - On a monthly basis, the borrowers are required to escrow 1/12 of annual estimated tax payments, which currently equates to $3,139,213.

 

Insurance Escrows - On a monthly basis, the borrowers are required to escrow 1/12 of the annual insurance premiums, which currently equates to $88,111.

 

Replacement Reserves - On a monthly basis, the borrowers are required to escrow $61,615 ($0.44 per square foot annually) for ongoing replacement reserves. The replacement reserve is subject to a cap of $2,500,000.

 

TI/LC Reserves - If the amount on deposit in the TI/LC reserve falls below the initial deposit of $25,000,000, on a monthly basis, the borrowers are required to escrow $420,054.50 for tenant improvements and leasing commissions, unless, (A) the DSCR is equal to or greater than 2.50x, (B) the balance of the reserve account is equal to or greater than $15,000,000, and (C) the property is occupied by tenants under leases demising no less than 65.0% of the rentable square footage. The TI/LC reserve is subject to a cap of $25,000,000.

 

Lockbox / Cash Management. The 9 West 57th Street Whole Loan is structured with a CMA lockbox. The borrowers were required at origination to deliver tenant direction letters instructing all tenants to deposit rents into a lockbox account controlled by the lender. All funds in the lockbox account will be swept daily into the borrowers’ operating account at the clearing bank, unless a Trigger Period (as defined below) is continuing, in which event such funds will be swept on a daily basis into the a cash management account controlled by the lender and disbursed on each payment date in accordance with the loan documents.

 

A “Trigger Period” commences upon the occurrence of (a) an event of default, (b) the bankruptcy or insolvency of the borrowers, (c) the bankruptcy or insolvency of the property manager or (d) the debt service coverage ratio based on net cash flow (as calculated in the loan documents) falling below 2.50x based on a trailing three-month basis.

 

The borrowers will have the right two times (in the aggregate) in any 12-month period to cure a Trigger Period as follows: (A) if a Trigger Period exists solely by reason of an event of default, the curing and acceptance of such cure by the lender of the applicable event of default (in its sole and absolute discretion), (B) if a Trigger Period exists solely by reason of a bankruptcy or insolvency of a property manager, the replacement of such manager with a qualified manager pursuant to a management agreement acceptable to the lender within 60 days, (C) if a Trigger Period exists solely by reason of a the debt service coverage ratio falling below 2.50x for a trailing three-month period, the achievement of the debt service coverage ratio for two consecutive quarters of at least 2.50x on a trailing three-month basis as determined by the lender. In no event will the borrowers have the right to cure a Trigger Period occurring by reason of a borrowers’ bankruptcy.

 

Permitted Mezzanine Debt. The sole members of the borrowers are permitted to obtain a mezzanine loan secured by the ownership interests in the related borrower upon satisfaction of certain terms and conditions which include, without limitation, (i) the mezzanine lender meets a qualified lender provision in the loan documents, (ii) the combined loan-to-value ratio on the origination date of the mezzanine loan does not exceed 35.3%, (iii) the combined debt service coverage ratio (as calculated in the loan documents and based on the 12 months immediately preceding the origination date of the mezzanine loan) is not less than 3.08x, and (iv) the lenders enter into an intercreditor agreement in form and substance reasonably acceptable to the mortgage lender and the rating agencies.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2016-JP3
   
693 Fifth Avenue

 

 (GRAPHIC)

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2016-JP3
   
693 Fifth Avenue

 

 (GRAPHIC)

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2016-JP3
   
693 Fifth Avenue

 

 (GRAPHIC)

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

(J.P MORGAN LOGO)43 of 151 
 

 

Structural and Collateral Term Sheet JPMCC 2016-JP3
   
693 Fifth Avenue

 

 (GRAPHIC)

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2016-JP3
   
693 Fifth Avenue

 

Mortgage Loan Information   Property Information
Mortgage Loan Seller: JPMCB     Single Asset / Portfolio: Single Asset
Original Principal Balance(1): $80,000,000     Title: Fee
Cut-off Date Principal Balance(1): $80,000,000     Property Type - Subtype: Mixed Use – Retail/Office
% of Pool by IPB: 6.6%     Net Rentable Area (SF)(2): 96,514
Loan Purpose: Acquisition     Location: New York, NY
Borrower: 693 Fifth Owner LLC     Year Built / Renovated: 1993 / 2015
Sponsor: Marc de Lacharrière     Occupancy: 57.1%
Interest Rate: 3.96600%     Occupancy Date: 4/1/2016
Note Date: 6/10/2016     Number of Tenants: 7
Maturity Date: 7/1/2026     2013 NOI: N/A
Interest-only Period: 24 months     2014 NOI(3): $4,902,318
Original Term: 120 months     2015 NOI(3): $14,208,201
Original Amortization: 300 months     TTM NOI (as of 3/2016): $14,590,731
Amortization Type: IO-Balloon     UW Economic Occupancy: 86.9%
Call Protection: L(25),Grtr1%orYM(91),O(4)     UW Revenues: $20,153,750
Lockbox: Hard     UW Expenses: $4,235,787
Additional Debt: Yes     UW NOI: $15,917,963
Additional Debt Balance: $170,000,000     UW NCF: $15,711,152
Additional Debt Type: Pari Passu     Appraised Value / Per SF: $525,000,000 / $5,440
        Appraisal Date: 5/24/2016
           
           
Escrows and Reserves(4)   Financial Information(1)
  Initial Monthly Initial Cap     Cut-off Date Loan / SF: $2,590
Taxes: $0 Springing N/A     Maturity Date Loan / SF: $2,032
Insurance: $0 Springing N/A     Cut-off Date LTV: 47.6%
Replacement Reserves: $0 $0 N/A     Maturity Date LTV: 37.4%
TI/LC: $0 $0 N/A     UW NCF DSCR(5): 1.00x
Other: $3,327,853 $0 N/A     UW NOI Debt Yield: 6.4%
             
             
Sources and Uses
Sources Proceeds % of Total   Uses Proceeds % of Total
Sponsor Equity $284,819,681 53.3%   Purchase Price $525,000,000 98.2%
Mortgage Loan(1) 250,000,000 46.7      Closing Costs 6,491,828 1.2   
        Upfront Reserves 3,327,853 0.6   
Total Sources $534,819,681 100.0%   Total Uses $534,819,681 100.0%
(1) The 693 Fifth Avenue loan is part of a whole loan evidenced by four pari passu notes with an aggregate original principal balance of $250.0 million. The Financial Information presented in the chart above reflects the Cut-off Date balance of the $250.0 million 693 Fifth Avenue Whole Loan, as defined in “The Loan” below.
(2) Net Rentable Area (SF) consists of 82,089 square feet (85.1% of net rentable area) of office space and 14,425 square feet (14.9% of net rentable area) of retail space.
(3) The increase in 2015 NOI from 2014 NOI is primarily due to the rent commencement under Valentino’s lease.
(4) For a full description of Escrows and Reserves, please refer to “Escrows and Reserves” below.
(5) UW NCF DSCR of 1.00x is calculated based on a 25-year amortization schedule. The current UW NCF DSCR based on the interest-only period for the first two years of the loan term is 1.56x. Valentino has a contractual rent increase in August 2018, which increases its annual rent payment from $16.5 million to approximately $19.0 million. Including the Valentino contractual rent increase in August 2018, the implied UW NCF would result in an UW NCF DSCR of approximately 1.15x based on a 25- year amortization schedule.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2016-JP3
   
693 Fifth Avenue

 

The Loan. The 693 Fifth Avenue loan is secured by a first mortgage lien on the borrower’s fee interest in a 20-story, 96,514 square foot, Class A office building with four levels of retail along Fifth Avenue between East 54th and East 55th Streets in Midtown Manhattan. The whole loan has an outstanding principal balance as of the Cut-off Date of $250.0 million (the “693 Fifth Avenue Whole Loan”), and is comprised of four pari passu notes, each as described below. Note A-2 was securitized in the DBJPM 2016-C3 trust and serves as the controlling note under the related intercreditor agreement, the rights of which will be exercised by the related trustee (or, prior to the occurrence and continuance of a control termination event under the related pooling and servicing agreement, by the related directing certificateholder). However, the JPMCC 2016-JP3 Trust will be entitled, under certain circumstances, to be consulted with respect to certain major decisions (which rights will be exercised by the Directing Certificateholder prior to a Control Termination Event). The 693 Fifth Avenue Whole Loan has a 10-year term and, subsequent to a two-year interest-only period, will amortize on a 25-year schedule.

 

Whole Loan Summary
Note Original Balance Cut-off Date Balance Note Holder Controlling Piece
A-1 $65,000,000 $65,000,000 JPMCC 2016-JP2 No
A-2 62,500,000 62,500,000 DBJPM 2016-C3 Yes
A-3 80,000,000 80,000,000 JPMCC 2016-JP3 No
A-4 42,500,000 42,500,000 JPMCB No
Total $250,000,000 $250,000,000    

 

The Borrower. The borrowing entity for the 693 Fifth Avenue loan is 693 Fifth Owner LLC, a Delaware limited liability company and special purpose entity.

 

The Loan Sponsor. The loan sponsor is Marc de Lacharrière. Mr. Lacharrière, a French investor with a reported net worth of approximately $2.8 billion, is Chairman and CEO of Fimalac, a Paris-based holding company with investments in financial services, hotels, entertainment and real estate. As of December 31, 2015, Fimalac’s financial services investments include an approximately 20.0% non-controlling equity interest in the Fitch Group, which is the parent company of Fitch Ratings. There is no separate nonrecourse carve-out guarantor for the 693 Fifth Avenue Whole Loan. The borrower is the sole party responsible for breaches or violations of the nonrecourse carve-out provisions in the loan documents and the environmental indemnity.

 

The Property. The 693 Fifth Avenue property is a 20-story, 96,514 square foot, Class A boutique office building with a four-level retail component located along Fifth Avenue between East 54th and East 55th Streets in Midtown Manhattan. The office and retail components of the property consist of 82,089 square feet (85.1% of net rentable area) and 14,425 square feet (14.9% of net rentable area), respectively. The 693 Fifth Avenue property was built in 1993 and was renovated in 2015 to include a new eight-story glass and steel façade and new lobby. The floors range from approximately 4,978 to 5,671 square feet on floors two through eight and are 4,975 square feet on floors nine to 18. The top two floors range between 2,090 and 2,566 square feet. The retail ceiling heights range from 14 to 17.5 feet. Typical office floor ceiling heights range from 13 to 15 feet and the penthouse extends just over 35 feet.

 

As of April 1, 2016, the property was 57.1% occupied by seven tenants. The retail component of the property is 100.0% occupied by Valentino U.S.A., Inc. (“Valentino”) and the office component of the property is approximately 49.6% occupied by six tenants. The prior owner was primarily focused on leasing the retail component of the property, which accounts for approximately 82.7% of the in-place base rent. The current loan sponsor plans to focus on leasing the office space up to market level.

 

The property’s largest tenant is Valentino, a luxury fashion company based in Milan, Italy, which leases 14.9% of the net rentable area through July 2029 across four floors and has occupied the space since August 2013. The property serves as Valentino’s flagship U.S. location. According to the loan sponsor, prior to taking occupancy, Valentino invested $40.0 million ($2,773 per square foot) into its space in addition to approximately $10.0 million ($693 per square foot) invested by the previous owner, Thor Equities. Valentino’s annual base rent is currently $16.5 million ($1,144 per square foot), increasing contractually by 15.0% to approximately $19.0 million ($1,315 per square foot) in August 2018 and by an additional 15.0% to approximately $21.8 million ($1,513 per square foot) in August 2023. Valentino currently accounts for approximately 83.7% of the total underwritten base rent at the property. Valentino has no renewal or termination options. The second largest tenant, JDS Development Group (“JDS”), leases 12.1% of the net rentable area through April 2020 and has occupied the space since February 2015. JDS is a Manhattan-based real estate development company, which purchases and develops luxury real estate in New York and Miami, including developments at 626 First Avenue and 111 West 57th Street in New York. JDS accounts for approximately 4.3% of the total underwritten base rent at the property. The third largest tenant, Pierson Capital (“Pierson”), leases 10.0% of the net rentable area through August 2020 and has occupied the space since September 2015. Pierson is an international construction firm focused on the development of social housing programs, highways, railways, pipelines, power stations and other government projects. Pierson accounts for approximately 3.9% of the total underwritten base rent at the property.

 

THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

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Structural and Collateral Term Sheet JPMCC 2016-JP3
   
693 Fifth Avenue

 

The property is surrounded by a number of New York’s landmarks, restaurants, hotels, retail shops and tourist attractions and is made accessible by several major transportation hubs. The property is located in the Upper Fifth Avenue retail submarket. According to the appraisal, this portion of Fifth Avenue is the single most expensive area in Manhattan and the second most expensive retail corridor in the world. As of the first quarter of 2016, the Upper Fifth Avenue retail submarket reported an overall vacancy rate of 13.0% and overall average asking rents of $2,906 per square foot (ranging between $2,700 and $4,450 per square foot). The appraisal identified 11 comparable ground floor retail leases on Fifth Avenue ranging from $3,175 to $5,337 per square foot, including Bulgari ($5,337 per square foot; August 2015), Harry Winston ($4,146; April 2015) and Ermeneglido Zegna ($3,800; February 2016).

 

The property is located within the Madison/Fifth Avenue office submarket, which consists of approximately 21.1 million square feet of Class A office space. According to the appraisal, as of the first quarter of 2016, the Madison/Fifth Avenue office submarket reported an overall vacancy rate of 13.3% and overall average asking rents of $99.98 per square foot. The appraisal identified six directly comparable office properties built between 1926 and 1987 and ranging in size from approximately 52,500 to 142,023 square feet. The comparable office properties reported average asking rents ranging from $70.00 to $85.00 per square foot with a weighted average of $79.80 per square foot. The appraisal identified six comparable office projects currently under construction in Midtown Manhattan as well as seven proposed developments. 

     
Historical and Current Occupancy(1)
2013(2) 2014(2) 2015 Current(3)
36.7% 62.0% 62.0% 57.1%
(1)   Historical Occupancies are as of December 31 of each respective year.
(2)   The increase in 2014 occupancy from 2013 occupancy is primarily driven by the lease up associated with Valentino.
(3)   Current Occupancy is as of April 1, 2016.