FWP 1 n882_prets-x1.htm FREE WRITING PROSPECTUS

    FREE WRITING PROSPECTUS
    FILED PURSUANT TO RULE 433
    REGISTRATION FILE NO.: 333-206361-08
     

 

 

February [24], 2017 JPMCC 2017-JP5

 

Free Writing Prospectus 

Structural and Collateral Term Sheet 

 

JPMCC 2017-JP5

 

 

 
 
 
 
 
 
 

This material is for your information, and none of J.P. Morgan Securities LLC (“JPMS”), Drexel Hamilton, LLC and Academy Securities, Inc. (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 Web site at www.sec.gov. Alternatively, the depositor, 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is preliminary as of the date of this document, supersedes any previous such information delivered to you and will be superseded by any such information subsequently delivered prior to the time of sale.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 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.

 

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.

 

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.

 

 

February [24], 2017 JPMCC 2017-JP5

 

THE REPUBLIC OF KOREA

 

THIS PROSPECTUS IS NOT, AND UNDER NO CIRCUMSTANCES IS THIS PROSPECTUS TO BE CONSTRUED AS, A PUBLIC OFFERING OF SECURITIES IN KOREA. NEITHER THE ISSUER NOR ANY OF ITS AGENTS MAKE ANY REPRESENTATION WITH RESPECT TO THE ELIGIBILITY OF ANY RECIPIENTS OF THIS PROSPECTUS TO ACQUIRE THE OFFERED CERTIFICATES UNDER THE LAWS OF KOREA, INCLUDING, BUT WITHOUT LIMITATION, THE FOREIGN EXCHANGE TRANSACTION LAW AND REGULATIONS THEREUNDER (THE “FETL”). THE OFFERED CERTIFICATES HAVE NOT BEEN REGISTERED WITH THE FINANCIAL SERVICES COMMISSION OF KOREA FOR PUBLIC OFFERING IN KOREA, AND NONE OF THE OFFERED CERTIFICATES MAY BE OFFERED, SOLD OR DELIVERED, DIRECTLY OR INDIRECTLY, OR OFFERED OR SOLD TO ANY PERSON FOR RE-OFFERING OR RESALE, DIRECTLY OR INDIRECTLY IN KOREA OR TO ANY RESIDENT OF KOREA EXCEPT PURSUANT TO THE FINANCIAL INVESTMENT SERVICES AND CAPITAL MARKETS ACT AND THE DECREES AND REGULATIONS THEREUNDER (THE “FSCMA”), THE FETL AND ANY OTHER APPLICABLE LAWS, REGULATIONS AND MINISTERIAL GUIDELINES IN KOREA. WITHOUT PREJUDICE TO THE FOREGOING, THE NUMBER OF OFFERED CERTIFICATES OFFERED IN KOREA OR TO A RESIDENT OF KOREA SHALL BE LESS THAN FIFTY AND FOR A PERIOD OF ONE YEAR FROM THE ISSUE DATE OF THE OFFERED CERTIFICATES, NONE OF THE OFFERED CERTIFICATES MAY BE DIVIDED RESULTING IN AN INCREASED NUMBER OF OFFERED CERTIFICATES. FURTHERMORE, THE OFFERED CERTIFICATES MAY NOT BE RESOLD TO KOREAN RESIDENTS UNLESS THE PURCHASER OF THE OFFERED CERTIFICATES COMPLIES WITH ALL APPLICABLE REGULATORY REQUIREMENTS (INCLUDING, BUT NOT LIMITED TO, GOVERNMENT REPORTING APPROVAL REQUIREMENTS UNDER THE FETL AND ITS SUBORDINATE DECREES AND REGULATIONS) IN CONNECTION WITH THE PURCHASE OF THE OFFERED CERTIFICATES.

 

JAPAN

 

THE OFFERED CERTIFICATES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE FINANCIAL INSTRUMENTS AND EXCHANGE LAW OF JAPAN, AS AMENDED (THE “FIEL”), AND DISCLOSURE UNDER THE FIEL HAS NOT BEEN AND WILL NOT BE MADE WITH RESPECT TO THE OFFERED CERTIFICATES. ACCORDINGLY, EACH UNDERWRITER HAS REPRESENTED AND AGREED THAT IT HAS NOT, DIRECTLY OR INDIRECTLY, OFFERED OR SOLD AND WILL NOT, DIRECTLY OR INDIRECTLY, OFFER OR SELL ANY OFFERED CERTIFICATES IN JAPAN OR TO, OR FOR THE BENEFIT OF, ANY RESIDENT OF JAPAN (WHICH TERM AS USED IN THIS PROSPECTUS MEANS ANY PERSON RESIDENT IN JAPAN, INCLUDING ANY CORPORATION OR OTHER ENTITY ORGANIZED UNDER THE LAWS OF JAPAN) OR TO OTHERS FOR REOFFERING OR RE-SALE, DIRECTLY OR INDIRECTLY, IN JAPAN OR TO, OR FOR THE BENEFIT OF, ANY RESIDENT OF JAPAN EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF, AND OTHERWISE IN COMPLIANCE WITH, THE FIEL AND OTHER RELEVANT LAWS, REGULATIONS AND MINISTERIAL GUIDELINES OF JAPAN. AS PART OF THIS OFFERING OF THE OFFERED CERTIFICATES, THE UNDERWRITERS MAY OFFER THE OFFERED CERTIFICATES IN JAPAN TO UP TO 49 OFFEREES IN ACCORDANCE WITH THE ABOVE PROVISIONS. 

 

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 2017-JP5
 
Collateral Characteristics

 

Loan Pool  
  Initial Pool Balance (“IPB”): $1,092,982,047
  Number of Mortgage Loans: 43
  Number of Mortgaged Properties: 59
  Average Cut-off Date Balance per Mortgage Loan: $25,418,187
  Weighted Average Current Mortgage Rate: 4.67097%
  10 Largest Mortgage Loans as % of IPB: 56.6%
  Weighted Average Remaining Term to Maturity: 112 months
  Weighted Average Seasoning: 2 months
     
Credit Statistics  
  Weighted Average UW NCF DSCR(1)(2): 1.97x
  Weighted Average UW NOI Debt Yield(1): 11.7%
  Weighted Average Cut-off Date Loan-to-Value Ratio (“LTV”)(1)(3): 59.1%
  Weighted Average Maturity Date LTV(1)(2)(3): 52.5%
     
Other Statistics  
  % of Mortgage Loans with Additional Debt: 18.3%
  % of Mortgaged Properties with Single Tenants: 13.5%
     
Amortization  
  Weighted Average Original Amortization Term(4): 355 months
  Weighted Average Remaining Amortization Term(4): 354 months
  % of Mortgage Loans with Amortizing Balloon: 39.2%
  % of Mortgage Loans with Partial Interest-Only followed by Amortizing Balloon: 32.0%
  % of Mortgage Loans with Interest-Only: 28.2%
  % of Mortgage Loans with Amortizing, Interest-Only followed by Balloon: 0.6%
     
Cash Management(5)  
  % of Mortgage Loans with In-Place, CMA Lockboxes: 54.7%
  % of Mortgage Loans with In-Place, Hard Lockboxes: 20.7%
  % of Mortgage Loans with Springing Lockboxes: 23.2%
  % of Mortgage Loans with No Lockboxes: 1.4%
     
Reserves  
  % of Mortgage Loans Requiring Monthly Tax Reserves: 77.3%
  % of Mortgage Loans Requiring Monthly Insurance Reserves: 21.7%
  % of Mortgage Loans Requiring Monthly CapEx Reserves(6): 59.0%
  % of Mortgage Loans Requiring Monthly TI/LC Reserves(7): 45.1%
     
(1)In the case of Loan Nos. 1, 2, 3, 4, 5 and 8, 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, 2 and 10, 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. 2, the UW NCF DSCR and Maturity Date LTV are calculated using the average of principal and interest payments over the first 12 months following the expiration of the interest-only period based on the assumed principal payment schedule provided on Annex G to the Preliminary Prospectus. Additionally, in the case of Loan No. 10, the UW NCF DSCR and Maturity Date LTV are calculated in accordance with the amortization schedule set forth in Annex [  ] to the Preliminary Prospectus.

(3)In the case of Loan Nos. 2, 12 and 21, 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.

(4)Excludes seven mortgage loans that are interest-only for the entire term or until the anticipated repayment date.

(5)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.

(6)CapEx Reserves include FF&E reserves for hotel properties.

(7)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 2017-JP5
 
Collateral Characteristics

 

Mortgage Loan Seller 

Number of
Mortgage Loans 

Number of
Mortgaged
Properties 

Aggregate
Cut-off Date
Balance 

% of 

IPB 

JPMCB(1) 22 22 $924,280,100 84.6%
SMF VI 21 37 168,701,947 15.4
Total: 43 59 $1,092,982,047 100.0%
(1)In the case of Loan No. 1, the whole loan was co-originated by JPMCB, Deutsche Bank AG, New York Branch, Goldman Sachs Mortgage Company, Barclays Bank PLC and Morgan Stanley Bank, N.A. In the case of Loan No. 4, the whole loan was co-originated by JPMCB and Société Générale.

                       
Ten Largest Mortgage Loans
 
No. Loan Name Mortgage
Loan Seller
No.
of
Prop.
Cut-off Date
Balance
% of
IPB
SF/Units/
Rooms/Beds
Property
Type
UW
NCF
DSCR(1)
UW NOI
Debt
Yield(1)
Cut-off
Date
LTV(1)(2)
Maturity
Date
LTV(1)(2)
1 Hilton Hawaiian Village JPMCB 1 $80,000,000 7.3% 2,860 Hotel 4.47x 19.0% 31.2% 31.2%
2 Moffett Gateway JPMCB 1 $80,000,000 7.3% 612,691 Office 1.95x 11.9% 46.3% 39.3%
3 Dallas Design District JPMCB 1 $75,000,000 6.9% 728,452 Industrial 1.28x 9.4% 62.1% 55.3%
4 Fresno Fashion Fair Mall JPMCB 1 $69,000,000 6.3% 536,106 Retail 2.19x 8.3% 57.5% 57.5%
5 Riverway JPMCB 1 $64,763,123 5.9% 869,120 Office 1.42x 10.3% 72.4% 59.6%
6 55 Hawthorne JPMCB 1 $61,500,000 5.6% 136,432 Office 2.61x 11.8% 50.0% 50.0%
7 Bardmoor Palms JPMCB 1 $55,352,648 5.1% 553,485 Mixed Use 1.39x 9.4% 73.8% 60.3%
8 Landmark Square JPMCB 1 $51,000,000 4.7% 757,917 Mixed Use 2.19x 12.0% 56.9% 56.9%
9 Centre Market Building JPMCB 1 $41,842,074 3.8% 388,122 Office 2.48x 18.2% 47.0% 34.6%
10 Courtyard Marriott - King Kamehameha JPMCB 1 $39,945,058 3.7% 452 Hotel 3.06x 18.6% 30.0% 25.3%
                       
  Top 3 Total/Weighted Average 3 $235,000,000 21.5%     2.59x 13.5% 46.2% 41.6%
  Top 5 Total/Weighted Average 5 $368,763,123 33.7%     2.31x 12.0% 52.9% 47.8%
  Top 10 Total/Weighted Average 10 $618,402,903 56.6%     2.31x 12.6% 52.9% 47.5%

(1)In the case of Loan Nos. 1, 2, 3, 4, 5 and 8, 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, 2 and 10, 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. 2, 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 2017-JP5
 
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)
Cut-off
Date
LTV(2)(4)
Maturity
Date
LTV(2)(3)(4)
Office CBD 9 $313,488,123   28.7% 90.4% 1.65x 10.8% 63.1% 55.6%
  Suburban 2 103,342,074   9.5  95.2% 2.56x 14.4% 48.8% 43.8%
  Subtotal: 11 $416,830,197   38.1% 91.6% 1.87x 11.7% 59.5% 52.7%
                   
Retail Anchored 6 $121,813,314   11.1% 94.3% 1.35x 9.3% 68.4% 58.0%
  Super Regional Mall 1 69,000,000   6.3   89.3% 2.19x 8.3% 57.5% 57.5%
  Unanchored 2 7,731,809   0.7   100.0% 1.32x 9.9% 71.1% 59.5%
  Shadow Anchored 1 6,581,000   0.6   93.9% 1.51x 10.5% 74.9% 66.1%
  Freestanding 2 6,086,930   0.6   100.0% 1.54x 9.9% 56.2% 49.3%
  Subtotal: 12 $211,213,053   19.3% 93.0% 1.63x 9.1% 64.8% 57.9%
                   
Hotel Full Service 5 $183,287,842   16.8% 82.9% 3.20x 16.1% 42.1% 38.3%
  Limited Service 2 12,505,845   1.1    71.9% 1.87x 13.2% 65.3% 52.1%
  Extended Stay 1 11,882,296   1.1    76.7% 1.70x 10.9% 66.7% 54.8%
  Subtotal: 8 $207,675,983   19.0% 81.9% 3.03x 15.7% 44.9% 40.1%
                   
Mixed Use Office/Retail 3 $61,442,484   5.6% 87.1% 2.05x 11.6% 58.9% 57.0%
  Office/Industrial 1 55,352,648   5.1    100.0% 1.39x 9.4% 73.8% 60.3%
  Subtotal: 4 $116,795,132   10.7% 93.2% 1.74x 10.6% 66.0% 58.6%
                   
Industrial Flex 3 $85,950,000   7.9% 98.1% 1.36x 9.8% 62.5% 56.1%
  Warehouse 1 14,215,053   1.3    90.7% 1.39x 11.5% 72.3% 60.1%
  Subtotal: 4 $100,165,053   9.2% 97.1% 1.36x 10.0% 63.9% 56.7%
                   
Multifamily Garden 18 $31,064,623   2.8% 95.6% 1.52x 11.0% 68.4% 61.4%
  Mid-Rise 1 6,438,005   0.6    95.5% 1.70x 14.0% 55.1% 42.0%
  Subtotal: 19 $37,502,628   3.4% 95.6% 1.55x 11.5% 66.1% 58.1%
                   
Manufactured Housing Manufactured Housing 1 $2,800,000   0.3% 77.4% 1.48x 10.1% 71.4% 60.7%
                   
  Total / Weighted 59 $1,092,982,047   100.0% 90.8% 1.97x 11.7% 59.1% 52.5%
(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 and 8, 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, 2 and 10, 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. 2, the UW NCF DSCR and Maturity Date LTV are calculated using the average of principal and interest payments over the first 12 months following the expiration of the interest-only period based on the assumed principal payment schedule provided on Annex G to the Preliminary Prospectus. Additionally, in the case of Loan No. 10, the UW NCF DSCR and Maturity Date LTV are calculated in accordance with the amortization schedule set forth in Annex [ ] to the Preliminary Prospectus.

(4)In the case of Loan Nos. 2, 12 and 21, 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 2017-JP5
 
Collateral Characteristics

 

(MAP)

 

Mortgaged Properties by Location(1)

 

       

Weighted Average 

State 

Number of
Properties 

Cut-off Date
Principal
Balance 

% of
IPB 

Occupancy 

UW
NCF DSCR(2)(3) 

UW
NOI Debt
Yield(2) 

Cut-off Date
LTV(2)(4) 

Maturity Date
LTV(2)(3)(4) 

California 4 $222,350,000 20.3%    96.4% 2.18x 10.6% 51.8% 48.6%
Texas 9 180,293,502 16.5    89.3% 1.40x 9.9% 66.0% 58.4%
Hawaii 2 119,945,058 11.0    91.4% 4.00x 18.9% 30.8% 29.2%
Florida 4 94,306,221 8.6    95.5% 1.50x 9.9% 67.7% 56.2%
Georgia 4 76,332,165 7.0    82.2% 1.45x 10.6% 67.6% 61.2%
Illinois 17 73,763,123 6.7    95.1% 1.47x 10.6% 70.5% 58.8%
Connecticut 1 51,000,000 4.7    84.9% 2.19x 12.0% 56.9% 56.9%
New Jersey 1 41,842,074 3.8    88.1% 2.48x 18.2% 47.0% 34.6%
Virginia 1 38,000,000 3.5    85.6% 2.18x 10.4% 62.1% 62.1%
Massachusetts 1 33,424,589 3.1    98.1% 1.21x 8.6% 71.0% 59.9%
Maryland 1 33,250,000 3.0    79.0% 1.45x 10.1% 73.7% 64.9%
Ohio 3 28,102,500 2.6    93.9% 1.47x 11.6% 67.6% 55.4%
Michigan 1 21,100,000 1.9    71.7% 1.50x 12.0% 63.9% 55.6%
Nevada 1 19,750,000 1.8    100.0% 1.33x 9.3% 64.8% 56.1%
North Carolina 1 16,475,654 1.5    69.2% 1.89x 12.2% 65.1% 53.6%
Alabama 1 8,850,000 0.8    94.5% 1.34x 9.8% 74.5% 65.1%
Oklahoma 1 6,581,000 0.6    93.9% 1.51x 10.5% 74.9% 66.1%
Pennsylvania 2 6,385,157 0.6    97.8% 1.33x 10.0% 66.4% 55.7%
Wisconsin 1 6,335,152 0.6    100.0% 1.28x 9.3% 73.1% 64.2%
South Carolina 1 6,170,852 0.6    79.2% 1.91x 14.1% 68.6% 52.4%
Total / Weighted Average: 59 $1,092,982,047 100.0% 90.8% 1.97x 11.7% 59.1% 52.5%

(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 and 8, 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, 2 and 10, 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. 2, the UW NCF DSCR and Maturity Date LTV are calculated using the average of principal and interest payments over the first 12 months following the expiration of the interest-only period based on the assumed principal payment schedule provided on Annex G to the Preliminary Prospectus. Additionally, in the case of Loan No. 10, the UW NCF DSCR and Maturity Date LTV are calculated in accordance with the amortization schedule set forth in Annex [ ] to the Preliminary Prospectus.

(4)In the case of Loan Nos. 2, 12 and 21, 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 2017-JP5
 
Collateral Characteristics

 

Cut-off Date Principal Balance

 

       

Weighted Average

Range of Cut-off Date
Principal Balances
Number of Loans Cut-off Date
Principal
Balance
% of
IPB
Mortgage Rate Remaining Loan Term UW
NCF
DSCR(1)(2)
UW
NOI
DY(1)
Cut-off
Date
LTV(2)(3)
Maturity
Date
LTV(1)(2)(3)
$2,786,930  - $9,999,999 17 $99,526,292 9.1% 5.32565% 118 1.58x 11.3% 66.7% 57.1%
$10,000,000  - $19,999,999 8 124,002,796 11.3 5.04839% 110 1.53x 10.7% 67.3% 57.5%
$20,000,000  - $24,999,999 2 44,600,000 4.1 4.98130% 119 1.39x 10.4% 69.6% 60.2%
$25,000,000  - $49,999,999 8 288,237,188 26.4 4.83256% 98 1.90x 12.3% 58.7% 51.8%
$50,000,000  - $80,000,000 8 536,615,771 49.1 4.34975% 118 2.24x 11.7% 55.1% 50.2%
Total / Weighted Average: 43 $1,092,982,047 100.0% 4.67097% 112 1.97x 11.7% 59.1% 52.5%

 

Mortgage Interest Rates

 

       

Weighted Average

Range of
Mortgage Interest Rates
Number
of Loans
Cut-off Date
Principal
Balance
% of
IPB
Mortgage Rate Remaining
Loan Term
UW
NCF
DSCR(1)(2)
UW
NOI
DY(1)
Cut-off
Date LTV(2)(3)
Maturity Date LTV(1)(2)(3)
3.31940%  - 3.99999% 2 $149,000,000 13.6% 3.44332% 119 2.06x 10.2% 51.5% 47.7%
4.00000%  - 4.49999% 4 221,342,074 20.3 4.23041% 111 3.18x 15.4% 44.7% 42.4%
4.50000%  - 4.99999% 14 406,872,933 37.2 4.84369% 112 1.70x 11.2% 64.6% 56.1%
5.00000%  - 5.75200% 23 315,767,040 28.9 5.33653% 109 1.44x 10.3% 65.7% 57.2%
Total / Weighted Average: 43 $1,092,982,047 100.0% 4.67097% 112 1.97x 11.7% 59.1% 52.5%

 

Original Term to Maturity in Months

 

       

Weighted Average

Original Term to
Maturity in Months
Number of Loans Cut-off Date Principal Balance % of IPB Mortgage Rate Remaining Loan Term UW
NCF DSCR(1)(2)
UW
NOI
DY(1)
Cut-off
Date LTV(2)(3)
Maturity Date LTV(1)(2)(3)
60 3 $88,006,451 8.1% 5.17654% 58 1.41x 10.0% 68.0% 64.0%
84 1 38,000,000 3.5 4.20000% 81 2.18x 10.4% 62.1% 62.1%
120 38 886,975,596 81.2 4.76289% 118 2.02x 11.9% 59.2% 52.1%
126 1 80,000,000 7.3 3.31940% 121 1.95x 11.9% 46.3% 39.3%
Total / Weighted Average: 43 $1,092,982,047 100.0% 4.67097% 112 1.97x 11.7% 59.1% 52.5%
                   
Remaining Term to Maturity in Months

 

  Weighted Average
Range of Remaining Term to
Maturity in Months
Number
of Loans
Cut-off Date Principal
Balance
% of
IPB
Mortgage Rate Remaining Loan Term UW
NCF
DSCR(1)(2)
UW
NOI
DY(1)
Cut-off
Date
LTV(2)(3)
Maturity
Date
LTV(1)(2)(3)
58  - 114 4 $126,006,451 11.5% 4.88204% 65 1.64x 10.1% 66.2% 63.4%
115  - 121 39 966,975,596 88.5 4.64347% 118 2.02x 11.9% 58.2% 51.1%
Total / Weighted Average: 43 $1,092,982,047 100.0% 4.67097% 112 1.97x 11.7% 59.1% 52.5%
                               
(1)In the case of Loan Nos. 1, 2, 3, 4, 5 and 8, 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, 2 and 10, 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. 2, the UW NCF DSCR and Maturity Date LTV are calculated using the average of principal and interest payments over the first 12 months following the expiration of the interest-only period based on the assumed principal payment schedule provided on Annex G to the Preliminary Prospectus. Additionally, in the case of Loan No. 10, the UW NCF DSCR and Maturity Date LTV are calculated in accordance with the amortization schedule set forth in Annex [ ] to the Preliminary Prospectus.
(3)In the case of Loan Nos. 2, 12 and 21, 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 2017-JP5
 
Collateral Characteristics

 

Original Amortization Term in Months

 

        Weighted Average
Original
Amortization
Term in Months
Number of Loans Cut-off Date Principal
Balance
% of
IPB
Mortgage Rate Remaining Loan Term UW
NCF
DSCR(1)(2)
UW
NOI
DY(1)
Cut-off
Date
LTV(2)(3)
Maturity
Date
LTV(1)(2)(3)
Interest Only 7 $308,500,000 28.2% 4.20527% 112 2.86x 12.7% 49.6% 49.6%
300 5 63,117,927 5.8 4.80092% 118 2.21x 16.5% 52.7% 39.3%
360 31 721,364,119 66.0 4.85877% 111 1.58x 10.8% 63.7% 54.9%
Total / Weighted Average: 43 $1,092,982,047 100.0% 4.67097% 112 1.97x 11.7% 59.1% 52.5%

 

Remaining Amortization Term in Months

 

        Weighted Average
Range of Remaining
Amortization Term in Months
Number
of Loans
Cut-off Date Principal
Balance
% of
IPB
Mortgage Rate Remaining Loan Term UW
NCF
DSCR(1)(2)
UW
NOI
DY(1)
Cut-off
Date
LTV(2)(3)
Maturity
Date
LTV(1)(2)(3)
Interest Only 7 $308,500,000 28.2% 4.20527% 112 2.86x 12.7% 49.6% 49.6%
297 - 356 5 63,117,927 5.8 4.80092% 118 2.21x 16.5% 52.7% 39.3%
357 - 360 31 721,364,119 66.0 4.85877% 111 1.58x 10.8% 63.7% 54.9%
Total / Weighted Average: 43 $1,092,982,047 100.0% 4.67097% 112 1.97x 11.7% 59.1% 52.5%

 

Amortization Types

 

       

Weighted Average

Amortization Types Number
of Loans
Cut-off Date Principal
Balance
% of
IPB
Mortgage Rate Remaining Loan Term UW
NCF
DSCR(1)(2)
UW
NOI
DY(1)
Cut-off
Date
LTV(2)(3)
Maturity
Date
LTV(1)(2)(3)
Balloon 21 $428,540,895 39.2% 5.01381% 111 1.72x 11.9% 62.9% 52.1%
IO-Balloon 14 349,606,000 32.0 4.64629% 112 1.51x 10.5% 62.6% 55.4%
Interest Only 7 308,500,000 28.2 4.20527% 112 2.86x 12.7% 49.6% 49.6%
Amortizing-IO-Balloon 1 6,335,152 0.6 5.52000% 118 1.28x 9.3% 73.1% 64.2%
Total / Weighted Average: 43 $1,092,982,047 100.0% 4.67097% 112 1.97x 11.7% 59.1% 52.5%

 

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

 

        Weighted Average
Range of Underwritten Net
Cash Flow Debt Service
Coverage Ratios
Number
of Loans
Cut-off Date Principal
Balance
% of
IPB
Mortgage Rate Remaining Loan Term UW
NCF
DSCR(1)(2)
UW
NOI
DY(1)
Cut-off
Date
LTV(2)(3)
Maturity
Date
LTV(1)(2)(3)
1.21x  - 1.24x 1 $33,424,589 3.1% 5.75200% 118 1.21x 8.6% 71.0% 59.9%
1.25x  - 1.74x 28 539,643,591 49.4 5.03256% 108 1.41x 10.1% 68.3% 59.0%
1.75x  - 2.24x 10 296,626,735 27.1 4.14102% 114 2.06x 11.0% 56.0% 52.3%
2.25x  - 2.74x 2 103,342,074 9.5 4.26552% 118 2.56x 14.4% 48.8% 43.8%
2.75x  - 4.47x 2 119,945,058 11.0 4.40281% 117 4.00x 18.9% 30.8% 29.2%
Total / Weighted Average: 43 $1,092,982,047 100.0% 4.67097% 112 1.97x 11.7% 59.1% 52.5%
(1)In the case of Loan Nos. 1, 2, 3, 4, 5 and 8, 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, 2 and 10, 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. 2, the UW NCF DSCR and Maturity Date LTV are calculated using the average of principal and interest payments over the first 12 months following the expiration of the interest-only period based on the assumed principal payment schedule provided on Annex G to the Preliminary Prospectus. Additionally, in the case of Loan No. 10, the UW NCF DSCR and Maturity Date LTV are calculated in accordance with the amortization schedule set forth in Annex [ ] to the Preliminary Prospectus.
(3)In the case of Loan Nos. 2, 12 and 21, 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 2017-JP5
 
Collateral Characteristics

 

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

 

        Weighted Average
Range of
Cut-off Date LTVs
Number of Loans Cut-off Date
Principal
Balance
% of
IPB
Mortgage
Rate
Remaining
Loan Term
UW
NCF
DSCR(1)(2)
UW
NOI
DY(1)
Cut-off
Date
LTV(2)(3)
Maturity
Date
LTV(1)(2)(3)
30.0%  - 49.9% 5 $245,087,132 22.4% 4.07363% 118 3.04x 16.4% 38.9% 33.7%
50.0%  - 59.9% 6 226,891,578 20.8 4.29886% 118 2.19x 10.7% 55.6% 53.5%
60.0%  - 64.9% 10 227,389,053 20.8 5.02665% 104 1.57x 10.2% 62.8% 56.5%
65.0%  - 69.9% 8 112,843,468 10.3 5.02968% 97 1.52x 10.9% 68.0% 59.5%
70.0%  - 74.9% 14 280,770,817 25.7 5.06088% 114 1.38x 9.8% 73.1% 62.0%
Total / Weighted Average: 43 $1,092,982,047 100.0% 4.67097% 112 1.97x 11.7% 59.1% 52.5%

 

LTV Ratios as of the Maturity Date(1)(2)(3)

 

       

Weighted Average

Range of
Maturity Date/ARD LTVs
Number of Loans Cut-off Date
Principal
Balance
% of
IPB
Mortgage
Rate
Remaining
Loan Term
UW
NCF
DSCR(1)(2)
UW
NOI
DY(1)
Cut-off
Date
LTV(2)(3)
Maturity
Date
LTV(1)(2)(3)
25.3%  - 44.9% 5 $248,225,137 22.7% 4.09476% 119 3.02x 16.4% 39.2% 33.7%
45.0%  - 49.9% 3 36,040,502 3.3 4.74159% 119 1.56x 10.2% 59.3% 48.8%
50.0%  - 54.9% 9 144,039,098 13.2 4.67208% 118 2.12x 11.8% 58.2% 51.7%
55.0%  - 59.9% 11 398,494,206 36.5 4.89623% 113 1.61x 9.9% 63.8% 57.5%
60.0%  - 69.6% 15 266,183,105 24.4 4.86093% 100 1.51x 10.0% 71.1% 63.5%
Total / Weighted Average: 43 $1,092,982,047 100.0% 4.67097% 112 1.97x 11.7% 59.1% 52.5%

 

Prepayment Protection

 

       

Weighted Average

Prepayment Protection Number of Loans Cut-off Date Principal Balance % of IPB Mortgage Rate Remaining Loan Term UW
NCF
DSCR(1)(2)
UW
NOI
DY(1)
Cut-off
Date LTV(2)(3)
Maturity Date LTV(1)(2)(3)
Defeasance(5) 29 $584,071,768 53.4% 4.69163% 113 1.77x 11.0% 61.6% 54.6%
Yield Maintenance 10 323,684,625 29.6 4.93902% 108 1.72x 11.9% 61.2% 52.6%
Defeasance or Yield Maintenance 4 185,225,654 16.9 4.13740% 117 3.06x 13.4% 47.6% 45.6%
Total / Weighted Average: 43 $1,092,982,047 100.0% 4.67097% 112 1.97x 11.7% 59.1% 52.5%

 

Loan Purpose

 

       

Weighted Average

Loan Purpose Number of Loans Cut-off Date Principal Balance % of IPB Mortgage Rate Remaining Loan Term UW
NCF
DSCR(1)(2)
UW
NOI
DY(1)
Cut-off
Date LTV(2)(3)
Maturity Date LTV(1)(2)(3)
Refinance 25 $688,580,039 63.0% 4.75054% 114 2.05x 12.4% 56.3% 49.0%
Acquisition 16 326,402,008 29.9 4.71603% 106 1.77x 10.8% 65.3% 58.8%
Recapitalization 2 78,000,000 7.1 3.78004% 116 2.15x 8.8% 57.5% 57.0%
Total / Weighted Average: 43 $1,092,982,047 100.0% 4.67097% 112 1.97x 11.7% 59.1% 52.5%
(1)In the case of Loan Nos. 1, 2, 3, 4, 5 and 8, 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, 2 and 10, 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. 2, the UW NCF DSCR and Maturity Date LTV are calculated using the average of principal and interest payments over the first 12 months following the expiration of the interest-only period based on the assumed principal payment schedule provided on Annex G to the Preliminary Prospectus. Additionally, in the case of Loan No. 10, the UW NCF DSCR and Maturity Date LTV are calculated in accordance with the amortization schedule set forth in Annex [ ] to the Preliminary Prospectus.
(3)In the case of Loan Nos. 2, 12 and 21, 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 2017-JP5
 
Collateral Characteristics

 

Previous Securitization History(1)

 

No. Loan Name Location Property Type Previous Securitization
1 Hilton Hawaiian Village Honolulu, HI Hotel HILT 2013-HLT
3 Dallas Design District Dallas, TX Industrial JPMCC 2015-FL7
6 55 Hawthorne San Francisco, CA Office LBUBS 2006-C6
9 Centre Market Building Newark, NJ Office JPMBB 2012-CBX
10 Courtyard Marriott - King Kamehameha Kailua-Kona, HI Hotel MSBAM 2014-C17
13 Orchard Hill Park Leominster, MA Retail COMM 2006-C8
15 Marriott Galleria Houston, TX Hotel BCMS 2007-BBA8
16 Royal Oaks Plaza Houston Retail JPMCC 2007-CB19
17 Las Palmas San Antonio, TX Retail JPMCC 2007-CB19
18 Liberty Center Troy, MI Office MSC 2007-IQ14
19 Ocotillo Plaza Las Vegas, NV Retail GECMC 2007-C1
23 Partridge Inn Augusta Augusta, GA Hotel GCCFC 2007-GG9
25 TownePlace Suites Dallas Las Colinas Irving, TX Hotel CDGJ 2014-BXCH
29 Montgomery Triangle Gateway Cincinnati, OH Mixed Use MSC 2007-IQ16
30 Neilson Square Enid, OK Retail CWCI 2007-C2
32.02 St. Albans Circle Newton Square, PA Mixed Use JPMCC 2006-CB16
33 Lake Geneva Commons Lake Geneva, WI Retail JPMCC 2007-CB20
35 Holiday Inn Express Orangeburg Orangeburg, SC Hotel MSC 2007-HQ11
(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 2017-JP5
 
Hilton Hawaiian Village

 

(GRAPHIC) 

 

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.

 

(JP MORGAN LOGO) 11 of 125  

 

 

 

Structural and Collateral Term Sheet   JPMCC 2017-JP5
 
Hilton Hawaiian Village

 

(GRAPHIC) 

 

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.

 

(JP MORGAN LOGO) 12 of 125  

 

 

 

Structural and Collateral Term Sheet   JPMCC 2017-JP5
 
Hilton Hawaiian Village

 

(GRAPHIC) 

 

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 2017-JP5
 
Hilton Hawaiian Village

 

Mortgage Loan Information   Property Information
Mortgage Loan Seller: JPMCB   Single Asset / Portfolio: Single Asset
Credit Assessment     Title: Fee / Leasehold
(Moody’s/Fitch/KBRA)(2): Aa3 / BBB- / BBB+   Property Type - Subtype: Hotel – Full Service
Original Principal Balance(3): $80,000,000   Net Rentable Area (Rooms)(6): 2,860
Cut-off Date Principal Balance(3): $80,000,000   Location: Honolulu, HI
% of Pool by IPB: 7.3%   Year Built / Renovated: 1961 / 2016
Loan Purpose(4): Refinance   Occupancy / ADR / RevPAR: 94.6% / $250.09 / $236.65
Borrower: Hilton Hawaiian Village LLC   Occupancy / ADR / RevPAR Date: 9/30/2016
Sponsor: Park Intermediate Holdings LLC   Number of Tenants: N/A
Interest Rate: 4.19950%   2013 NOI: $110,964,835
Note Date: 10/24/2016   2014 NOI: $119,860,819
Maturity Date: 11/1/2026   2015 NOI: $128,737,723
Interest-only Period: 120 months   Most Recent NOI (as of 9/2016) $131,893,120
Original Term: 120 months   UW Occupancy / ADR / RevPAR: 94.6% / $250.09 / $236.65
Original Amortization: None   UW Revenues: $374,437,742
Amortization Type: Interest Only   UW Expenses: $241,850,768
Call Protection(5): L(28),DeforGrtr1%orYM(85),O(7)   UW NOI: $132,586,975
Lockbox: CMA   UW NCF: $132,586,975
Additional Debt: Yes   Appraised Value / Per Room: $2,230,000,000 / $779,720
Additional Debt Balance: $616,600,000 / $578,400,000   Appraisal Date: 8/30/2016
Additional Debt Type: Pari Passu / Subordinate Debt      
         

 

Escrows and Reserves(7)   Financial Information(3)
  Initial Monthly Initial Cap     Pari Passu Debt Whole Loan
Taxes: $0 Springing N/A   Cut-off Date Loan / Room: $243,566 $445,804
Insurance: $0 Springing N/A   Maturity Date Loan / Room: $243,566 $445,804
FF&E: $0 Springing N/A   Cut-off Date LTV: 31.2% 57.2%
TI/LC: $0 $0 N/A   Maturity Date LTV: 31.2% 57.2%
Other: $0 $0 N/A   UW NCF DSCR: 4.47x 2.44x
          UW NOI Debt Yield: 19.0% 10.4%
             

 

Sources and Uses
Sources Proceeds % of Total   Uses Proceeds % of Total
Mortgage Loan(3) $1,275,000,000 100.0%   Payoff Existing Debt $1,255,912,700 98.5%
        Excess Loan Proceeds(4) 10,621,760 0.8  
        Closing Costs 8,465,540 0.7  
Total Sources $1,275,000,000 100.0%   Total Uses $1,275,000,000 100.0%
(1)The Hilton Hawaiian Village Whole Loan was co-originated by JPMCB, Deutsche Bank AG, New York Branch, Goldman Sachs Mortgage Company, Barclays Bank PLC and Morgan Stanley Bank, N.A.
(2)Moody’s, Fitch and KBRA have confirmed that the Hilton Hawaiian Village Mortgage Loan has, in the context of its inclusion in the mortgage pool, credit characteristics consistent with an investment grade obligation.
(3)The Hilton Hawaiian Village Mortgage Loan is part of a whole loan comprised of (i) the mortgage loan (comprised of one senior note with an outstanding principal balance as of the Cut-off Date of $80.0 million), (ii) two companion loans, each of which is pari passu with respect to the Hilton Hawaiian Village Mortgage Loan (such companion loans being comprised of 15 pari passu notes) with an aggregate outstanding principal balance as of the Cut-off Date of $616.6 million and (iii) a subordinate companion loan (comprised of five pari passu notes) with an aggregate outstanding principal balance as of the Cut-off Date of $578.4 million. The Pari Passu Debt Financial Information presented in the chart above reflects the $696.6 million aggregate Cut-off Date balance of the Hilton Hawaiian Village Mortgage Loan and the Hilton Hawaiian Village Pari Passu Companion Loan, excluding the Hilton Hawaiian Village Subordinate Companion Loan. The Whole Loan Financial Information presented in the chart above reflects the Cut-off Date balance of the $1.275 billion Hilton Hawaiian Village Whole Loan, as defined in “The Loan” below.
(4)Excess Loan Proceeds were distributed by the borrower to its member and thereafter utilized by affiliates of Park Hotels & Resorts to prepay other outstanding CMBS loans.
(5)The lockout period will be at least 28 payment dates beginning with and including the first payment date of December 1, 2016. Defeasance of the full $1.275 billion Hilton Hawaiian Village Whole Loan is permitted after the date that is the earlier of (i) May 1, 2019 and (ii) two years from the closing date of the securitization that includes the last note to be securitized (the “REMIC Prohibition Period”). If the borrower has not previously elected to defease the Hilton Hawaiian Village Whole Loan, the borrower is also permitted to prepay the Hilton Hawaiian Village Whole Loan in whole, but not in part, after the expiration of the REMIC Prohibition Period with the payment of a yield maintenance premium.
(6)The Hilton Hawaiian Village property also includes approximately 130,489 square feet of commercial/retail space leased to more than 100 tenants. Additionally, the property includes the 25-story Kalia Tower which is subject to a condominium regime. Kalia Tower contains six floors totaling 72 timeshare units that are not part of the collateral for the loan.

 

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 2017-JP5
 
Hilton Hawaiian Village

 

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

 

The Loan. The Hilton Hawaiian Village loan is secured by a first mortgage lien on the borrower’s fee and leasehold interests in a 2,860-room luxury full-service destination resort located in Honolulu, Hawaii. The whole loan was co-originated by JPMCB, Deutsche Bank AG, New York Branch, Goldman Sachs Mortgage Company, Barclays Bank PLC and Morgan Stanley Bank, N.A. and has an outstanding principal balance as of the Cut-off Date of $1.275 billion (the “Hilton Hawaiian Village Whole Loan”). The Hilton Hawaiian Village Whole Loan is comprised of (i) a senior loan, comprised of 16 pari passu notes, with an aggregate outstanding principal balance of $696.6 million (one of which, Note A-2-A-2, will be contributed to the JPMCC 2017-JP5 Trust, the “Hilton Hawaiian Village Mortgage Loan” and the remaining notes, collectively, the “Hilton Hawaiian Village Pari Passu Companion Loan”) and (ii) a subordinate companion loan, comprised of five pari passu notes, with an aggregate outstanding principal balance of $578.4 million (collectively, the “Hilton Hawaiian Village Subordinate Companion Loan”), each as described below. The Hilton Hawaiian Village Mortgage Loan and the Hilton Hawaiian Village Pari Passu Companion Loan are pari passu in right of payment with each other and are generally senior in right of payment to the Hilton Hawaiian Village Subordinate Companion Loan as and to the extent described in “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced Whole Loans—The Hilton Hawaiian Village Whole Loan” in the Preliminary Prospectus. The senior Note A-1-A was contributed to the Hilton USA Trust 2016-HHV securitization that governs the servicing and administration of the Hilton Hawaiian Village Whole Loan and is 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 trust and servicing agreement (the “Hilton USA Trust 2016-HHV and Servicing Agreement”), the directing certificateholder under the Hilton USA Trust 2016-HHV and Servicing Agreement). However, the JPMCC 2017-JP5 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 Hilton Hawaiian Village Whole Loan has a 10-year term and will be interest-only for the term of the loan. The Hilton Hawaiian Village property was previously securitized in the Hilton USA Trust 2013-HLT trust.

 

Whole Loan Summary

 

 

 

The Borrower. The borrowing entity for the Hilton Hawaiian Village Whole Loan is Hilton Hawaiian Village LLC, a Hawaii limited liability company and special purpose entity.

 

The Loan Sponsor. The loan sponsor and nonrecourse carve-out guarantor is Park Intermediate Holdings LLC. Park Intermediate Holdings LLC is a wholly owned subsidiary of Park Hotels & Resorts Inc. (“Park Hotels & Resorts”), one of two spin-offs announced by Hilton Worldwide Holdings Inc. (“Hilton”). On February 26, 2016, Hilton announced plans to separate into three independent, publicly traded companies: Park Hotels & Resorts (NYSE: PK), Hilton Grand Vacations Inc. (NYSE: HGV) and Hilton (NYSE: HLT). The spin-offs were completed in January 2017. Park Hotels & Resorts now owns most of Hilton’s owned and leased real estate properties and, with over 35,000 rooms and 67 hotels, is the second-largest publicly traded real estate investment trust in the lodging industry. Hilton Grand Vacations Inc. owns and operates Hilton’s timeshare business, while Hilton retains its core management and franchise business and continues to trade on the NYSE as a leading global hospitality company. In connection with the proposed restructuring, at origination, the borrower signed an operating lease with an affiliate, which is also a signatory to the loan documents (other than the promissory notes) as a co-obligor. The operating lease automatically became effective upon consummation of the restructuring. The borrower also delivered a substitute management agreement. The aggregate liability of the guarantor with respect to all full recourse carve-outs in the Hilton Hawaiian Village Whole Loan documents may not exceed an amount equal to 10.0% of the principal balance of the Hilton Hawaiian Village Whole Loan outstanding at the time of the occurrence of such event, plus any and all reasonable third-party collection costs actually incurred by the lender. In addition, the guarantor is not a party to the environmental indemnity. In lieu of the guarantor signing the indemnity, the Hilton Hawaiian Village Whole Loan documents require the borrower to obtain environmental insurance. At origination, the borrower obtained an environmental insurance policy with (i) a term of 10 years, (ii) limits of $10,000,000 per occurrence and $25,000,000 in the aggregate and (iii) a $25,000 deductible.

 

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 2017-JP5
 
Hilton Hawaiian Village

 

The Property. The Hilton Hawaiian Village property is a 2,860-room, full-service luxury resort located on the island of Oahu in Honolulu, Hawaii. The Hilton Hawaiian Village is one of Hawaii’s premier urban resort destinations, situated on an entire city block overlooking Waikiki Beach. The property is situated on an approximately 22-acre site, the majority of which is fee-owned. The property is comprised of 2,860 guest rooms spread across five towers: the Ali’i Tower (348 rooms), Diamond Head Tower (380 rooms), Rainbow Tower (796 rooms), Kalia Tower (315 rooms) and Tapa Tower (1,021 rooms). The towers each offer unique guest room accommodations and are situated on ocean-front property, offering views of Waikiki Beach, Diamond Head and downtown Honolulu. The property is the only self-contained destination resort in Waikiki and offers the largest guest room inventory in the state of Hawaii, as well as the most meeting space within its competitive set. The property offers a host of resort-style amenities and services, including 20 food and beverage outlets, over 150,000 square feet of flexible indoor and outdoor function space, three conference centers, five swimming pools, a saltwater lagoon, spa grottos, the Mandara Spa and Fitness Center, a chapel and a retail component comprised of over 100 retail tenants.

 

The property was initially constructed by Hilton in 1961 and has undergone several extensive renovations throughout its existence. According to the sponsor, since 2008, the loan sponsor has invested approximately $232.2 million (approximately $81,188 per room) in capital expenditures spread across all segments of the property. Most recently, the loan sponsor completed a full-scale renovation of its premier luxury guest room tower, the Ali’i Tower, in 2012, updating the guest rooms and suites, main lobby and library at an estimated cost of approximately $20.6 million. Additionally, the loan sponsor completed a comprehensive renovation of the Diamond Head Tower in 2014 at an estimated cost of approximately $17.9 million.

 

Historical Capital Expenditures(1)
  2008 2009 2010 2011 2012 2013 2014 2015 YTD 2016(2) Total
Capital Expenditures(3) $22,216 $16,509 $8,834 $56,117 $42,568 $28,138 $32,965 $15,559 $9,293 $232,198
Per Room $7,768 $5,772 $3,089 $19,621 $14,884 $9,838 $11,526 $5,440 $3,249 $81,188
(1)Based on actual capital expenditures as provided by the loan sponsor.
(2)YTD 2016 Capital Expenditures are as of September 30, 2016.
(3)Capital Expenditures are presented in (000)’s.

 

The property offers approximately 150,000 square feet of indoor and outdoor meeting and function space, which is split between three primary locations: the second floor of the Tapa Tower, the base of the Kalia Tower and the Mid-Pacific Conference Center. The property features over 65,000 square feet of indoor meeting space spread throughout four buildings, as well as two outdoor lawns: the Lagoon Green and the Village Green. The Mid-Pacific Conference Center, a stand-alone building, underwent a full-scale refurbishment in 2013 and features 35,000 square feet of meeting/event space, including the 24,840 square foot Coral Ballroom, which is divisible into five separate breakout rooms. It is among the largest conference centers in the Hawaiian Islands and offers the largest capacity ballroom, accommodating up to 2,600 guests.

 

The property features approximately 130,489 square feet of leased retail and restaurant space, which was 78.5% occupied by over 100 tenants as of September 2016. The retail component of the property generated TTM September 2016 sales of approximately $136.1 million for reporting tenants. For the trailing 12-month period ending September 30, 2016, the retail component of the property generated approximately $20.8 million in retail revenue (retail revenue is inclusive of reimbursements for common area maintenance, taxes and marketing expenses, as provided by the loan sponsor) which, net of undistributed expenses attributable to the retail component (as estimated by the loan sponsor), accounts for approximately 13.1% of net cash flow, providing diversity to traditional hotel revenue streams. While the majority of the property’s leased space is made up of traditional retail and restaurant tenants, the hotel also leases some office space to Hilton Grand Vacations and third-party travel wholesalers, such as Kintetsu and JTB. The hotel’s Ocean Crystal Chapel and Lagoon Chapel are also leased to a third-party operator.

 

Historical Retail Component Sales(1)
  2013 2014 2015 TTM(2)
Total Sales $130,613,993 $141,808,186 $137,316,925 $136,055,744
Sales PSF $1,552 $1,651 $1,590 $1,496
(1)Historical Sales for reporting tenants were provided by the loan sponsor.
(2)TTM is as of September 30, 2016.

 

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 2017-JP5
 
Hilton Hawaiian Village

 


Collateral Tenant Summary(1)
Tenant Ratings(2)
Moody’s/S&P/Fitch
Net Rentable Area (SF) % of
Total NRA
Lease Expiration Date Base Rent PSF % of Total Base Rent Most Recent Sales(3) Most Recent Sales PSF(3)
Mandara Spa NA / NA / NA 12,583 9.6% 8/31/2017 $53.61 3.9% $2,903,709 $231
Hatsuhana Hawaii NA / NA / NA 6,026 4.6% 11/30/2018 $52.38 1.8% $2,969,958 $493
Fresco NA / NA / NA 5,983 4.6% 12/31/2018 $58.38 2.0% $3,331,316 $557
Benihana of Tokyo NA / NA / NA 5,300 4.1% 5/31/2021 $127.6 3.9% $6,561,789 $1,238
Best Bridal - Lagoon Chapel NA / NA / NA 4,755 3.6% 10/31/2022 $57.45 1.6% $520,020 $109
Watabe Wedding(4) NA / NA / NA 4,158 3.2% 1/14/2019 $63.93 1.5% $167,697 $40
ABC Stores - Tapa Tower NA / NA / NA 3,500 2.7% 8/31/2022 $384.2 7.7% $12,225,380 $3,493
Louis Vuitton NA / A+ / NA 3,500 2.7% 8/18/2023 $146.7 2.9% $7,978,397 $2,280
Lamonts & Whalers General Store NA / NA / NA 2,800 2.1% MTM $163.1 2.6% $1,856,972 $663
ABC Discount Store NA / NA / NA 2,145 1.6% 12/31/2018 $812.2 10.0% $14,519,183 $6,769
(1)Based on the underwritten rent roll.
(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)Most Recent Sales and Most Recent Sales PSF for reporting tenants were provided by the loan sponsor as of September 30, 2016.
(4)Most Recent Sales and Most Recent Sales PSF for Watabe Wedding represent only partial year performance as the venue opened in 2016.

 

The Hilton Hawaiian Village property is located in Honolulu, Hawaii, in the greater Oahu lodging market and the Waikiki submarket. The island of Oahu serves as an economic center of the Hawaiian Islands. Oahu maintains its status as one of the world’s foremost tourist destinations, with cultural venues, golf courses, restaurants, retail and recreational attractions. In 2015, approximately 5.3 million tourists, or 62.4% of Hawaii’s total air tourists, visited the island of Oahu, making it the most popular destination in the Hawaiian Islands. The total number of air visitors has increased by 435,867 from 2012 to 2015, which represents a 2.9% year-over-year increase. International travel to Oahu represented 46.3% of Oahu’s 5.3 million air visitors in 2015 and was marginally unchanged from 2014. Additionally, visitor expenditures in Oahu totaled $7.4 billion in 2015, which represents 49.3% of total expenditures by air visitors in 2015. Honolulu is the strongest lodging market in Oahu and all of the eight Hawaiian Islands, a status attributable to a temperate year-round climate, popularity as one of the leading group and leisure destinations of Hawaii, superior visitor infrastructure and high barriers to new supply. Honolulu encompasses more than 24,000 guest rooms in 74 properties and consistently achieved occupancy rates in the mid 70% to 80% range, never dropping below 74%, between 2009 and 2015. During this same period, RevPAR in Honolulu increased at an average annual rate of 9.5%, ending 2015 at $190, while the average daily rate achieved a premium of $69 over 2009. The market’s RevPAR in 2009, which represented the trough during the downturn, reflects a 14.6% decline relative to 2007, less than other leading markets.

 

The appraisal identified two hotels either recently opened or currently under construction in the Waikiki submarket that are expected to have some degree of competitive interaction with the Hilton Hawaiian Village property. The 623-room Hilton Garden Inn (Ohana Waikiki West Redevelopment) opened in June 2016, while the 230-room boutique Hyatt Centric (Waikiki Trade Center Redevelopment) is expected to open in March 2017. Though offered at a competitive price-point with national brand affiliations, the appraisal notes that both options are non-beachfront locations with select-service product offerings. Additionally, the appraisal notes significant barriers to entry, including nearly no developable ocean-front land and prohibitively high costs.

 


Historical Occupancy, ADR, RevPAR(1)
  Competitive Set(2) Hilton Hawaiian Village(3) Penetration Factor(4)
Year Occupancy ADR RevPAR Occupancy ADR RevPAR Occupancy ADR RevPAR
2013 89.0% $248.36 $221.07 89.9% $237.77 $213.84 101.0% 95.7% 96.7%
2014 87.8% $250.07 $219.50 90.7% $238.34 $216.26 103.4% 95.3% 98.5%
2015 89.0% $256.75 $228.38 94.4% $240.62 $227.20 106.2% 93.7% 99.5%
TTM(5) 89.9% $259.08 $232.92  94.6% $250.09 $236.65 105.3% 96.5% 101.6%

(1)Variances between the underwriting, the appraisal and the above table with respect to Occupancy, ADR and RevPAR at the Hilton Hawaiian Village property are attributable to variances in reporting methodologies and/or timing differences.
(2)Data provided by STR. The competitive set contains the following properties: Sheraton Waikiki, Marriott Waikiki Beach Resort & Spa, Hyatt Regency Waikiki Beach Resort & Spa, Westin Moana Surfrider, Sheraton Hotel Princess Kaiulani, Outrigger Reef Waikiki Beach Resort and Outrigger Waikiki Beach Resort.
(3)Based on operating statements provided by the borrower, with the exception of 2013 and 2014 which have been adjusted by STR for both ADR and RevPAR in order to normalize for a change in accounting methodology in 2015. Prior to 2015, borrower operating statements presented ADR and RevPAR inclusive of resort fees. For all years presented above, ADR and RevPAR are calculated exclusive of resort fees.
(4)Penetration Factor is calculated based on data provided by STR for the competitive set and borrower-provided operating statements for the property.
(5)TTM represents the trailing 12-month period ending on September 30, 2016.

 

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 2017-JP5
 
Hilton Hawaiian Village

 

Competitive Hotels Profile(1)
        2015 Estimated Market Mix 2015 Estimated Operating Statistics
Property Rooms Year Opened Meeting Space (SF) Wholesale Transient Meeting & Group Occupancy ADR RevPAR
Hilton Hawaiian Village(2) 2,860 1961 150,000 37% 44% 19% 94.4% $240.62 $227.20
Primary Competitors                  
Sheraton Waikiki 1,636 1971 48,210 65% 15% 20% 90-95% $300-325 $280-290
Marriott Waikiki Beach Resort & Spa 1,310 1971 55,000 20% 60% 20% 85-90% $210-220 $180-190
Hyatt Regency Waikiki Beach Resort & Spa 1,230 1976 23,130 60% 25% 15% 85-90% $250-260 $220-230
Westin Moana Surfrider 791 1901-1969 23,612 60% 30% 10% 85-90% $350-375 $300-325
Secondary Competitors                  
Sheraton Hotel Princess Kaiulani 1,000 1955 14,000 65% 25% 10% 85-90% $150-160 $130-140
Outrigger Reef Waikiki Beach Resort 635 1956 9,600 55% 40% 5% 85-90% $250-260 $220-230
Outrigger Waikiki Beach Resort 524 1967 5,000 50% 40% 10% 80-85% $260-270 $220-230
 Total(3) 7,126                
(1)Based on the appraisal.
(2)Occupancy, ADR and RevPAR are based on operating statements provided by the borrower.
(3)Excludes the Hilton Hawaiian Village property.

 


Operating History and Underwritten Net Cash Flow
  2013 2014 2015 TTM(1) Underwritten Per Room(2) % of Total Revenue(3)
Occupancy 89.9% 90.7% 94.4% 94.6% 94.6%    
ADR(4) $247.48 $259.85 $240.62 $250.09 $250.09    
RevPAR(4) $222.57 $235.77 $227.20 $236.65 $236.65    
               
Room Revenue $232,345,007 $246,124,088 $237,172,233 $247,711,744 $247,034,700 $86,376 66.0%
Resort Fee(4) 0 0 22,462,635 22,641,808 22,752,381 7,955 6.1%
Food and Beverage Revenue 56,844,007 62,740,100 70,771,369 69,023,623 68,996,667 24,125 18.4%
Retail Revenue(5) 19,071,361 20,048,658 20,582,018 20,786,062 19,162,812 6,700 5.1%
Other Departmental Revenue 16,714,514 17,176,781 15,802,967 16,824,201 16,491,183 5,766 4.4%
               
Total Revenue $324,974,888 $346,089,627 $366,791,222 $376,987,438 $374,437,742 $130,922 100.0%
               
Room Expense $55,976,889 $59,766,137 $62,515,991 $64,556,543 $64,380,098 $22,511 26.1%
Food and Beverage Expense 45,055,100 48,831,676 56,658,889 56,716,914 56,028,348 19,590 81.2%
Other Departmental Expense 7,418,538 7,148,334 7,483,496 6,425,274 6,371,608 2,228 38.6%
Departmental Expenses $108,450,526 $115,746,148 $126,658,376 $127,698,731 $126,780,054 $44,329 33.9%
               
Departmental Profit $216,524,362 $230,343,479 $240,132,846 $249,288,707 $247,657,688 $86,594 66.1%
               
Operating Expenses $61,997,168 $64,229,329 $62,250,540 $64,897,454 $62,099,714 $21,713 16.6%
Gross Operating Profit $154,527,194 $166,114,150 $177,882,306 $184,391,253 $185,557,974 $64,880 49.6%
               
Management Fee $9,159,509 $9,759,316 $10,366,617 $11,551,940 $10,658,248 $3,727 2.8%
Incentive Management Fee 7,542,587 8,134,544 8,776,701 9,141,675 9,344,215 3,267 2.5%
Retail Management Fee 1,081,185 1,142,850 1,168,053 1,174,867 1,053,955 369 0.3%
Property Taxes 8,335,725 9,129,497 10,512,964 11,773,676 12,249,130 4,283 3.3%
Property Insurance 3,138,410 3,058,106 2,452,071 2,579,098 3,343,630 1,169 0.9%
Ground Rent & Other Expense 1,305,948 1,185,432 1,196,527 1,197,379 1,344,312 470 0.4%
FF&E 12,998,996 13,843,585 14,671,649 15,079,498 14,977,510 5,237 4.0%
Total Other Expenses $43,562,359 $46,253,331 $49,144,583 $52,498,133 $52,971,000 $18,521 14.1%
               
Net Operating Income $110,964,835 $119,860,819 $128,737,723 $131,893,120 $132,586,975 $46,359 35.4%
Net Cash Flow $110,964,835 $119,860,819 $128,737,723 $131,893,120 $132,586,975 $46,359 35.4%
(1)TTM represents the trailing 12-month period ending on September 30, 2016.
(2)Per Room values based on 2,860 guest rooms.
(3)% of Total Revenue for Room Expense, Food and Beverage Expense and Other Departmental Expenses is based on their corresponding revenue line items.
(4)Prior to a change in industry accounting methodology in 2015, resort fees were accounted for as a component of Room Revenue and included in ADR and RevPAR calculations. Since 2014, resort fees have been netted out of Room Revenue and shown separately in the Resort Fee category. ADR and RevPAR are shown net of resort fees for 2015 and all future years.
(5)Retail tenant spaces are occupied pursuant to partial net leases. Retail Revenue is inclusive of reimbursements associated with shared common area maintenance, tax and marketing expenses. Related expenses attributable to the retail component are included in undistributed Operating Expenses for the overall property.

 

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 2017-JP5
 
Hilton Hawaiian Village

 

Property Management. The property is currently managed by Hilton Management LLC, a Delaware limited liability company and subsidiary of Hilton. The current management agreement expires on December 31, 2047, with two 20-year extension options, and provides for (i) a base management fee equal to 3.0% of gross revenue (less revenue from the retail component of the property), (ii) an incentive management fee equal to 6.0% of adjusted gross profit (exclusive of the retail component of the property), (iii) a management fee equal to 5.5% of net retail income with respect to the retail component of the property and (iv) monthly FF&E deposits equal to 4.0% of gross revenue.

 

Escrows and Reserves. No upfront reserves were taken at origination.

 

Tax Escrows - The requirement for the borrower to make monthly deposits to the tax escrow is waived so long as the borrower has reserved such amounts with the property manager or the manager pays such taxes, in each case pursuant to the management agreement. In the event that the borrower is no longer required to reserve such amounts with the property manager, on each payment date, the borrower will be required to deposit 1/12 of annual estimated taxes upon the occurrence of a Trigger Period (as defined below).

 

Insurance Escrows - The requirement for the borrower to make monthly deposits to the insurance escrow is waived so long as the borrower has reserved such amounts with the property manager or the manager pays such premiums, in each case pursuant to the management agreement. In the event that the borrower is no longer required to reserve such amounts with the property manager, on each payment date, the borrower will be required to deposit 1/12 of annual estimated insurance premiums upon the occurrence of a Trigger Period. In addition, provided that no event of default has occurred and is continuing, the requirement to deposit such amounts is waived so long as the property is insured under a blanket policy reasonably acceptable to the lender insuring substantially all of the real property owned, directly or indirectly, by the guarantor.

 

Replacement Reserves - The requirement for the borrower to make monthly deposits for replacements reserves is waived so long as the borrower has reserved such amounts with the property manager pursuant to the management agreement. In the event that the borrower is no longer required to reserve such amounts with the property manager, on each payment date, the borrower will be required to deposit 4.0% of gross income for the calendar month that is two months prior to the applicable payment date (as calculated in the loan documents).

 

Lockbox / Cash Management. The loan is structured with a CMA lockbox. All revenues will be deposited into segregated property accounts maintained by the property manager on behalf of the borrower and the operating lessee, as applicable, and controlled by the lender (the “Property Accounts”). All revenues in the Property Accounts (less any account charges payable to the bank at which the Property Accounts are maintained and less any required minimum peg balance) will be transferred on each business day to accounts maintained by the property manager on behalf of the borrower and the operating lessee, as applicable (each, an “Operating Account”). Funds on deposit in the Operating Accounts will be disbursed in an amount equal to the monthly replacement reserve deposit into the manager replacement reserve account (the “Manager FF&E Reserve Account”) (each of the Manager FF&E Reserve Account, the Operating Account and the Property Account are referred to as “Manager Accounts”). The property manager will be required to apply such funds to the payment of real property taxes and insurance, ground rent, debt service (but only prior to the restructuring), management fees, capital expenditures and reserves for the same, operating expenses, emergency repairs, tenant improvement costs and leasing commissions, working capital reserves, sales and use taxes owed to governmental authorities, custodial funds and required monthly reserves, in each case in accordance with the management agreement (the “Required Payments”). The lender will not require any reserves with respect to any Required Payments which are to be paid directly by or reserved by the property manager pursuant to the management agreement. On a monthly basis, the property manager will deposit all funds remaining in the Operating Accounts after the payment of the Required Payments (“Excess Cash”) into a lender-controlled account as additional collateral for the mortgage loan (the “Cash Management Account”). So long as no Trigger Period is continuing, all funds in the Cash Management Account after payment of debt service, required reserves and operating expenses will be released to the operating lessee and/or the borrower, as applicable, not later than the business day immediately following the date such funds are deposited by the property manager. During a Trigger Period, all funds in the Cash Management Account will be deposited into the excess cash accounts and held as additional collateral for the Hilton Hawaiian Village Whole Loan. The operating lessee and/or the borrower, as applicable, is required to grant a security interest in all Manager Accounts (and the property manager will consent to the same); provided, that such amounts on deposit in the Manager Accounts will be available for use by the property manager in accordance with the management agreement following an event of default and the lender will not apply such amounts on deposit in the Manager Accounts to Hilton Hawaiian Village Whole Loan.

 

A “Trigger Period” will commence upon the occurrence of: (i) an event of default or (ii) the date that the debt yield (as calculated in the loan documents) is less than 7.0%.

 

A Trigger Period will end when, if caused by (a) clause (i) above, the respective event of default has been cured or waived or (b) clause (ii) above, the debt yield (as calculated in the loan documents) exceeds 7.0% for two consecutive quarters.

 

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 2017-JP5
 
Hilton Hawaiian Village

 

Partial Releases. The borrower is permitted to release (i) the ground leased parcel, (ii) the retail component and/or (iii) certain other parcels of property that do not materially and adversely affect the ongoing operations of the remaining property, other than the lost income associated with the released parcels, in each case through a partial prepayment of the Hilton Hawaiian Village Whole Loan at any time after the expiration of the lockout period upon certain terms and conditions contained in the loan documents (including, without limitation, payment of the yield maintenance premium, if applicable). Please see “Description of the Mortgage Pool—Certain Terms of the Mortgage Loans—Partial Releases” in the Preliminary Prospectus for additional details.

 

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 2017-JP5
 
Moffett Gateway

 

(GRAPHIC) 

 

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 2017-JP5
 
Moffett Gateway

 

(MAP) 

 

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 2017-JP5
 
Moffett Gateway

 

 (MAP)

 

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 2017-JP5
 
Moffett Gateway

 

Mortgage Loan Information   Property Information
Mortgage Loan Seller: JPMCB   Single Asset / Portfolio: Single Asset
Credit Assessment (Fitch)(1) BBB-   Title: Fee
Original Principal Balance(2): $80,000,000   Property Type - Subtype: Office – Suburban
Cut-off Date Principal Balance(2): $80,000,000   Net Rentable Area (SF): 612,691
% of Pool by IPB: 7.3%   Location: Sunnyvale, CA
Loan Purpose: Refinance   Year Built / Renovated: 2016 / N/A
Borrower: 441 Real Estate LLC   Occupancy(6): 100.0%
Sponsor(3): Joseph K. Paul   Occupancy Date: 2/1/2017
Interest Rate: 3.319403%   Number of Tenants: 1
Note Date: 9/22/2016   2013 NOI(7): N/A
Maturity Date: 4/1/2027   2014 NOI(7): N/A
Interest-only Period: 60 months   2015 NOI(7): N/A
Original Term: 126 months   TTM NOI(7): N/A
Original Amortization(4): 360 months   UW Economic Occupancy: 95.0%
Amortization Type: IO-Balloon   UW Revenues: $35,097,235
Call Protection(5): L(29),Def(90),O(7)   UW Expenses: $6,170,971
Lockbox: Hard   UW NOI: $28,926,265
Additional Debt: Yes   UW NCF: $27,631,280
Additional Debt Balance(2): $163,000,000 / $102,000,000 /   Appraised Value / Per SF(8): $525,000,000 / $857
  $50,000,000   Appraisal Date: 7/20/2016
Additional Debt Type: Pari Passu / B-Note /      
  Mezzanine Loan      
         

 

Escrows and Reserves(9)   Financial Information(2)
  Initial Monthly Initial Cap     A-Notes   Whole Loan
Taxes: $180,864 $180,864 N/A   Cut-off Date Loan / SF: $397   $563
Insurance: $0 Springing N/A   Maturity Date Loan / SF: $337   $503
Replacement Reserves: $0 $0 N/A   Cut-off Date LTV(8): 46.3%   65.7%
TI/LC: $0 $0 N/A   Maturity Date LTV(8): 39.3%   58.7%
Other: $86,961,915 $0 N/A   UW NCF DSCR(10): 1.95x   1.43x
          UW NOI Debt Yield: 11.9%   8.4%
               

 

Sources and Uses
Sources Proceeds % of Total   Uses Proceeds      % of Total
A-Notes(2) $243,000,000 61.5 %   Payoff Existing Debt $216,321,083 54.8 %
B-Note(2) 102,000,000 25.8     Upfront Reserves 87,142,779 22.1  
Mezzanine Loan 50,000,000 12.7     Return of Equity 84,003,847 21.3  
          Closing Costs 7,532,290 1.9  
Total Sources $395,000,000 100.0 %   Total Uses $395,000,000 100.0 %

(1)Fitch has confirmed that the Moffett Gateway Mortgage Loan has, in the context of its inclusion in the mortgage pool, credit characteristics consistent with an investment grade obligation.
(2)The Moffett Gateway loan is part of a whole loan evidenced by five pari passu notes with an aggregate principal balance as of the Cut-off Date of $243.0 million (the “A-Notes”) and a subordinate companion loan (the “B-Note”). The A-Notes Financial Information presented in the chart above reflects the Cut-off Date balance of the A-Notes evidencing the Moffett Gateway Whole Loan, as defined in “The Loan” below, but excludes the related B-Note and mezzanine loan. The Whole Loan Financial Information presented in the chart above reflects the Cut-off Date balance of the A-Notes and B-Note evidencing the Moffett Gateway Whole Loan, but excludes the related mezzanine loan.
(3)For a full description of Sponsor, please refer to “The Loan Sponsor” below.
(4)The Moffett Gateway A-Notes will amortize in accordance with the amortization schedule set forth in [Annex F] to the Preliminary Prospectus subsequent to a five-year interest-only period. The principal payments that would otherwise have been paid to the B-Note will be used to pay down the aggregate principal balance of the A-Notes.
(5)The lockout period will be at least 29 payment dates beginning with and including the first payment date of November 1, 2016. Defeasance of the full $345.0 million Moffett Gateway Whole Loan is permitted after the date that is two years from the closing date of the securitization that includes the note to be last securitized (the “REMIC Prohibition Period”). If the REMIC Prohibition Period has not expired by November 1, 2020, the borrower is permitted to prepay the Moffett Gateway Whole Loan in whole, but not in part, with the payment of a yield maintenance premium.
(6)The property is 100.0% leased to Google Inc. (“Google”) through March 2027. Google has executed two leases for the property but is not yet in occupancy of either space. Google leases the property under two separate leases, one for 1225 Crossman Avenue (“Building One”) and the second for 1265 Crossman Avenue (“Building Two”). Google is expected to take occupancy for both spaces by September 2017 and, subsequent to any applicable free rent periods, is required to begin paying full rent as applicable under each lease as follows: Building One in July 2018 and Building Two in July 2017.
(7)Historical cash flows are not available as the property was constructed in 2016.

 

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 2017-JP5
 
Moffett Gateway

 

(8)The Appraised Value / Per SF, Cut-off Date LTV and Maturity Date LTV are calculated based on the “hypothetical market value as stabilized”, which assumes that all tenant improvement construction is complete and that all contractual free rent has “burned off” at the “stabilized” value date. At origination, the borrower reserved approximately $87.0 million for unfunded obligations (approximately $49.4 million for outstanding tenant improvements and leasing commissions and approximately $37.6 million for free rent). The “as-is” value as of July 20, 2016 is $430.0 million, which results in a Cut-off Date LTV and Maturity Date LTV of 56.5% and 48.0%, respectively, and a Whole Loan Cut-off Date LTV and Maturity Date LTV of 80.2% and 71.7%, respectively.
(9)For a full description of Escrows and Reserves, please refer to “Escrows and Reserves” below.
(10)The UW NCF DSCR is calculated using the sum of principal and interest payments over the first 12 months following the expiration of the interest-only period based on the assumed principal payment schedule provided on [Annex F] to the Preliminary Prospectus.

 

The Loan. The Moffett Gateway loan is secured by a first mortgage lien on the borrower’s fee interest in a newly constructed corporate office campus consisting of two seven-story towers, an amenities building and a parking garage, located in Sunnyvale, California. The whole loan has an outstanding principal balance as of the Cut-off Date of $345.0 million (the “Moffett Gateway Whole Loan”) and is comprised of five pari passu senior notes, each as described below, with an aggregate outstanding principal balance as of the Cut-off Date of $243.0 million (collectively, the “Moffett Gateway A-Notes”) and a subordinate B-Note with an outstanding principal balance as of the Cut-off Date of $102.0 million (the “Moffett Gateway Subordinate Companion Loan”), each as described below. Note A-1, with an outstanding principal balance as of the Cut-off Date of $80.0 million, is being contributed to the JPMCC 2017-JP5 Trust (the “Moffett Gateway Mortgage Loan”). Note A-3 and Note A-4, with outstanding principal balances as of the Cut-off Date of $40.0 million and $20.0 million, respectively, are expected to be contributed to one or more future securitization trusts. Note A-2, with an outstanding principal balance as of the Cut-off Date of $60.0 million, was contributed to the JPMCC 2016-JP4 trust and Note A-5, with an outstanding principal balance as of the Cut-off Date of $43.0, million was contributed to the JPMDB 2016-C4 trust (together, with Note A-3 and Note A-4, the “Moffett Gateway Pari Passu Companion Loans”). The Moffett Gateway Subordinate Companion Loan has been sold to a third party investor. Under the related intercreditor agreement, prior to a control appraisal period with respect to the Moffett Gateway Subordinate Companion Loan, under certain circumstances, the holder of the Moffett Gateway Subordinate Companion Loan will have the right to approve certain major decisions with respect to the Moffett Gateway Whole Loan, to exercise certain cure rights and to replace the related special servicer with or without cause. The holder of the Moffett Gateway Subordinate Companion Loan will also have the right to purchase the Moffett Gateway A-Notes under certain circumstances. After the occurrence and during the continuance of a control appraisal period occurs with respect to the Moffett Gateway Subordinate Companion Loan, the holder of Note A-2 will be entitled to exercise the rights of the controlling noteholder for the Moffett Gateway Whole Loan, which rights 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 holders of the Moffett Gateway Pari Passu Companion Loans will be entitled, under certain circumstances, to be consulted with respect to certain major decisions. The Moffett Gateway Whole Loan has a 10-year, six-month term and, subsequent to a five-year interest-only period, the Moffett Gateway A-Notes will amortize in accordance with the amortization schedule set forth on [Annex F] to the Preliminary Prospectus. The principal payments that would otherwise have been paid to the Moffett Gateway Subordinate Companion Loan are included as part of the scheduled amortization of the Moffett Gateway A-Notes.

 

Whole Loan Summary
Note Original Balance Cut-off Date Balance   Note Holder   Controlling Piece
A-1 $80,000,000 $80,000,000   JPMCC 2017-JP5   No
A-2 60,000,000 60,000,000   JPMCC 2016-JP4   No
A-3 40,000,000 40,000,000   JPMCB   No
A-4 20,000,000 20,000,000   JPMCB   No
A-5 43,000,000 43,000,000   JPMDB 2016-C4   No
B-1 102,000,000 102,000,000   Third Party Investor   Yes
Total $345,000,000 $345,000,000        

 

The Borrower. The borrowing entity for the Moffett Gateway Whole Loan is 441 Real Estate LLC, a Delaware limited liability company and special purpose entity.

 

The Loan Sponsor. The loan sponsor is Joseph K. Paul (“Jay Paul”) and the nonrecourse carve-out guarantors are Jay Paul, Jay Paul Revocable Living Trust Dated November 9, 1999, as Amended and Restated on March 19, 2010, and Paul Guarantor LLC, a Delaware limited liability company. Jay Paul is the founder of the Jay Paul Company. The Jay Paul Company is an owner and developer of commercial office properties throughout California. Founded in 1975, the Jay Paul Company has developed or acquired over 8.5 million square feet of office space, including 21 buildings in Moffett Park totaling 5.0 million square feet. Jay Paul Company has built projects for many notable companies including Apple, Google, Amazon, Motorola, Microsoft, Boeing, Philips Electronics, HP and DreamWorks, among others. The loan sponsor focuses on sustainable design and has closed in excess of $12.0 billion in equity and debt financings since inception. The borrower is permitted to obtain the release of Jay Paul and the trust from the guaranty and environmental indemnity upon satisfaction of certain conditions in the loan documents, which include, without limitation, Paul Guarantor LLC maintaining a net worth of not less than $300.0 million and liquidity of not less than $20.0 million.

 

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 2017-JP5
 
Moffett Gateway

 

The loan sponsor purchased the land and previous buildings in 2012 for approximately $50.4 million and has spent approximately $182.5 million ($298 per square foot) on the development of the Moffett Gateway office complex. Additionally, the loan sponsor has spent approximately $55.1 million ($90 per square foot) in tenant improvement and leasing commission costs. The loan sponsor’s total cost basis is approximately $336.1 million ($549 per square foot).

 

The Property. The Moffett Gateway property is comprised of two newly-constructed seven-story Class A LEED Platinum-Certified towers totaling 597,848 square feet and is located in Sunnyvale, California. The property is situated on approximately 15.5 acres and features a 14,843 square foot amenities building, which contains a fitness center with locker rooms, showers, steam rooms and a yoga studio, a rooftop dining area, bocce court area and common and recreation areas. Additionally, the property contains 2,022 parking spaces resulting in a parking ratio of approximately 3.3 spaces per 1,000 square feet of space. The property benefits from its location at the intersection of Highways 237 and 101, two regional highway systems that provide direct access to the surrounding areas as well as the San Francisco central business district, located approximately 38.4 miles north of the property. The property is part of the larger Moffett Park development, a 519-acre area comprised of recently developed office spaces and research and development buildings. Additionally, a Santa Clara Light Rail System is located adjacent to the property, which provides service to the surrounding residential communities. The Santa Clara County Transit System provides bus service county-wide and has four stops nearby the property.

 

As of December 1, 2016, the property is 100.0% leased to Google pursuant to two separate 298,924 square foot triple net leases through March 31, 2027 for Building One and Building Two, each with two seven-year extension options and no early termination options. Google does not directly lease the amenities building from the landlord. Instead, Google’s right to use the amenities building is contained within each individual lease. Google’s right to use the amenities building is exclusive during any period when Google leases both office buildings and is non-exclusive for any period of time that an additional tenant leases space at the property in the future. Additionally, the amenities building, which includes the parking structure, is part of the common areas which are owned in fee simple by an owners association, which is wholly owned by the borrower. The borrower has pledged the ownership interests in the owner’s association as collateral for the Moffett Gateway Whole Loan.

 

Google’s main headquarters in Mountain View, California is located approximately 6.4 miles west of the property. On October 2, 2015, Google implemented a holding company reorganization in which Alphabet became the successor issuer to Google. At that time, Alphabet recognized the assets and liabilities of Google at carryover basis. Alphabet, through its subsidiaries, provides online advertising services in the United States, the United Kingdom and rest of the world. Alphabet is the second largest publicly traded company (NASDAQ: GOOG) in the world as measured by market capitalization and is rated Aa2 and AA by Moody’s and S&P, respectively. Google represents approximately 99.4% of Alphabet’s total revenues, based on Alphabet’s 2015 annual report.

 

The property is located in the Sunnyvale office submarket. The submarket features one of the highest concentrations of technology, software and creative tenants within Silicon Valley. Moffett Gateway is located along Moffett Park Avenue, a part of the larger Moffett Park development, which is a 519-acre area comprised of recently developed office spaces and research and development buildings. Moffett Park is home to several notable technology firms including Amazon.com, Google, Hewlett-Packard, Juniper Networks, Lockheed Martin, Microsoft, and Yahoo!. Google owns or leases approximately 3.5 million square feet of office space in Sunnyvale, making it the largest corporate occupier in the submarket. Additionally, Google collectively owns or leases approximately 15.1 million square feet in Silicon Valley and the greater San Francisco area. As of the second quarter of 2016, the Sunnyvale market had a Class A office inventory of approximately 8.9 million square feet with an overall vacancy rate of 8.8% and annual asking rents between $43.80 and $45.60 per square foot on a triple-net basis.

 

Historical and Current Occupancy(1)
2013 2014 2015 Current(2)
N/A N/A N/A 100.0%

(1)Historical Occupancy is not available as the property was constructed in 2016.
(2)Current Occupancy is as of December 1, 2016. The property is 100.0% leased to Google through March 2027. Google has executed two leases for the property but is not yet in occupancy of either space. Google leases the property under two separate leases, one for Building One and the second for Building Two. Google is expected to take occupancy by September 2017 and, subsequent to any applicable free rent periods, is required to begin paying full rent at Building One in July 2018 and full rent at Building Two in July 2017. At origination, the borrower reserved approximately $87.0 million for unfunded obligations (approximately $49.4 million for outstanding tenant improvements and leasing commissions and approximately $37.6 million for free rent).

 

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 2017-JP5
 
Moffett Gateway

 

Tenant Summary(1)
Tenant Ratings(2)
Moody’s/S&P/Fitch
Net Rentable
Area (SF)
% of Total
NRA
Base Rent
PSF(3)
% of Total
Base Rent
Lease
Expiration Date
Google(4) Aa2 / AA / NA 612,691 100.0% $50.87 100.0% 3/31/2027
               

(1)Based on the underwritten rent roll.
(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)Base Rent PSF includes the 14,843 square foot amenities building, for which approximately $785,298 of base rent has been underwritten. Google’s right to use the amenities building is exclusive during any period when Google leases both office buildings and is non-exclusive for any additional tenant that may sign a lease at the property in the future.
(4)Google has two seven-year renewal options remaining for each lease. Google must provide notice of its intention to renew no earlier than January 2026 or later than June 2026.

 

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 0 0.0% NAP NAP 0 0.0% NAP NAP
2017 & MTM 0 0 0.0% $0 0.0% 0 0.0% $0 0.0%
2018 0 0 0.0% 0 0.0% 0 0.0% $0 0.0%
2019 0 0 0.0% 0 0.0% 0 0.0% $0 0.0%
2020 0 0 0.0% 0 0.0% 0 0.0% $0 0.0%
2021 0 0 0.0% 0 0.0% 0 0.0% $0 0.0%
2022 0 0 0.0% 0 0.0% 0 0.0% $0 0.0%
2023 0 0 0.0% 0 0.0% 0 0.0% $0 0.0%
2024 0 0 0.0% 0 0.0% 0 0.0% $0 0.0%
2025 0 0 0.0% 0 0.0% 0 0.0% $0 0.0%
2026 0 0 0.0% 0 0.0% 0 0.0% $0 0.0%
2027 2 612,691 100.0% 31,169,318 100.0% 612,691 100.0% $31,169,318 100.0%
2028 & Beyond   0 0 0.0% 0 0.0% 612,691 100.0% $31,169,318 100.0%
Total 2 612,691 100.0% $31,169,318 100.0%        

(1)Based on the underwritten rent roll.

 

Google Rent Schedule
Period Building One Base Rent per Year Building One Base Rent per Year PSF Building Two Base Rent per Year Building Two Base Rent per Year PSF Cumulative Base Rent per Year Cumulative Base Rent per Year PSF
Months 1 – 10(1) $0 $0.00 $0 $0.00 $0 $0.00
Months 11 – 22(1) 0 0.00 12,232,568 20.46 12,232,568 20.46
Months 23 – 34 12,599,545 21.07 13,738,744 22.98 26,338,289 44.06
Months 35 – 46 14,150,907 23.67 14,150,907 23.67 28,301,813 47.34
Months 47 – 58 14,575,434 24.38 14,575,434 24.38 29,150,868 48.76
Months 59 – 70 15,012,697 25.11 15,012,697 25.11 30,025,394 50.22
Months 71 – 82 15,463,078 25.86 15,463,078 25.86 30,926,156 51.73
Months 83 – 94 15,926,970 26.64 15,926,970 26.64 31,853,940 53.28
Months 95 – 106 16,404,779 27.44 16,404,779 27.44 32,809,559 54.88
Months 107 – 118 16,896,923 28.26 16,896,923 28.26 33,793,845 56.53
Months 119 – 128 14,431,037 24.14 14,431,037 24.14 28,862,073 48.28
Total/Wtd. Avg.(2) $135,461,369 $25.34 $148,833,136 $25.09 $284,294,505 $49.53
(1)The property is 100.0% leased to Google through March 2027. Google has executed two leases for the property but is not yet in occupancy of either space. Google leases the property under two separate leases, one for Building One and the second for Building Two. Google is expected to take occupancy by September 2017 and, after any applicable free rent periods, is required to begin paying full rent as applicable under each lease as follows: Building One in July 2018 and Building Two in July 2017. At origination, the borrower reserved approximately $87.0 million for unfunded obligations (approximately $49.4 million for outstanding tenant improvements and leasing commissions and approximately $37.6 million for free rent).
(2)The Total/Wtd. Avg. Base Rent and PSF numbers exclude the 14,843 square foot amenities building, for which approximately $785,298 of base rent has been underwritten. Google’s right to use the amenities building is exclusive during any period when Google leases both office buildings and is non-exclusive for any period of time an additional tenant leases space at the property in the future.

 

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 2017-JP5
 
Moffett Gateway

 

Proforma and Underwritten Net Cash Flow

Proforma
2017

Proforma
2018

Proforma
2019

Underwritten

 

Per Square
Foot

 

%(1)

Rents in Place(2)   $3,318,057   $17,393,064   $28,439,878   $31,169,318   $50.87   84.4 %
Vacant Income   0   0   0   0   0.00   0.0  
Gross Potential Rent   $3,318,057   $17,393,064   $28,439,878   $31,169,318   $50.87   84.4 %
Total Reimbursements   4,112,410   6,072,471   6,503,937   5,775,140   9.43   15.6  
Net Rental Income   $7,430,467   $23,465,535   $34,943,815   $36,944,458   $60.30   100.0 % 
(Vacancy/Credit Loss)   0   0   0   (1,847,223)    (3.01 )   (5.0 )
Other Income   0   0   0   0   0.00   0.0  
Effective Gross Income   $7,430,467   $23,465,535   $34,943,815   $35,097,235   $57.28   95.0 %
                           
Total Expenses   $5,583,716   $6,204,727   $6,692,827   $6,170,971   $10.07   17.6 %
                           
Net Operating Income   $1,846,751   $17,260,808   $28,250,988   $28,926,265   $47.21   82.4 %
                           
Total TI/LC, Capex/RR   0   0   0   1,294,985   2.11   3.7  
Net Cash Flow   $1,846,751   $17,260,808   $28,250,988   $27,631,280   $45.10   78.7 %

(1)% column represents percent of Net Rental Income for all revenue lines and represents percent of Effective Gross Income for the remainder of fields.
(2)The property is 100.0% leased to Google through March 2027. Google has executed two leases for the property but is not yet in occupancy of either space. Google leases the property under two separate leases, one for Building One and the second for Building Two. Google is expected to take occupancy by September 2017 and, after any applicable free rent periods, is required to begin paying full rent as applicable under each lease as follows: Building One in July 2018 and Building Two in July 2017. At origination, the borrower reserved approximately $87.0 million for unfunded obligations (approximately $49.4 million for outstanding tenant improvements and leasing commissions and approximately $37.6 million for free rent).

 

Property Management. The property is subject to a management agreement with Paul Holdings, Inc., an affiliate of the loan sponsor.

 

Escrows and Reserves. At origination, the borrower deposited into escrow approximately $87.0 million for unfunded obligations (which included approximately $49.4 million for outstanding tenant improvements and leasing commissions and approximately $37.6 million for free rent reserves) and $180,864 for tax reserves.

 

Tax Escrows - On a monthly basis, the borrower is required to escrow 1/12 of the annual estimated tax payments, which currently equates to $180,864.

 

Insurance Escrows - The requirement for the borrower to make monthly deposits to the insurance escrow is waived so long as (i) no event of default exists and (ii) the borrower provides satisfactory evidence that the property is insured under an acceptable blanket policy in accordance with the loan documents.

 

Lockbox / Cash Management. The loan is structured with a hard lockbox and in-place cash management. The borrower was required to send tenant direction letters to all tenants upon the origination of the loan instructing them to deposit all rents and payments directly into the lockbox account controlled by the lender. All funds in the lockbox account are swept each business day to a segregated cash management account under the control of the lender and disbursed on each payment date during the term of the loan in accordance with the loan documents. During a Cash Sweep Period (as defined below), all excess cash flow after payment of the mortgage debt service, required reserves, operating expenses and mezzanine debt service will be held as additional collateral for the loan. The lender has a first priority security interest in the cash management account.

 

A “Cash Sweep Period” means the period after the occurrence of (i) an event of default, (ii) any bankruptcy action of the borrower or manager (if, with respect to the manager only, such bankruptcy action is not discharged, stayed or dismissed within 30 days), (iii) the date on which the debt service coverage ratio (as calculated in the loan documents), based on trailing three-months is less than 1.10x (including aggregate debt service for the Moffett Gateway A-Notes, Moffett Gateway Subordinate Companion Loan and mezzanine loan) or (iv) any of the following: (a) the earlier of (1) the payment date in August 2024, (2) a notification by Google of its intention to not renew its leases or (3) any failure to renew the Google leases in accordance with their terms (a “Maturity Trigger”), (b) the date on which the long term unsecured debt rating of Google or its parent company is not rated by two rating agencies, is withdrawn by two rating agencies or is downgraded to or below BBB- (or its equivalent) by two rating agencies (a “Downgrade Trigger”), (c) any default by Google under its leases (a “Default Trigger”), (d) any bankruptcy or insolvency action by Google or any party providing a guaranty or credit support for the leases (a “Tenant Bankruptcy Trigger”), or (e) Google gives notice that it intends to terminate its leases or any termination or cancellation of the leases (a “Termination Trigger”) (any of the foregoing in subpart (iv), a “Specified Tenant Trigger”).

 

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 2017-JP5
 
Moffett Gateway

 

The borrower has the right to cure a Cash Sweep Period by, if caused by (a) clause (i) above, the acceptance of a cure by the lender of the applicable event of default (in its sole and absolute discretion), (b) clause (ii) above solely with respect to the manager, the replacement of such manager with a qualified manager under a management agreement acceptable to the lender within 60 days (or, if such bankruptcy action was involuntary and the manager or borrower did not consent to or solicit or collude with the party filing such action, upon the same being discharged, stayed or dismissed within 60 days), (c) clause (ii) above solely with respect to the borrower if the bankruptcy action was involuntary and the borrower, guarantor or any affiliate did not consent to or solicit or collude with the party filing such action, upon the same not being discharged, stayed or dismissed within 60 days, (d) if caused by clause (iii) above, the achievement of a debt service coverage ratio for two consecutive quarters of at least 1.10x on a trailing three-month basis, (e) a Maturity Trigger, Google renewing both of its leases in accordance with the loan documents and paying full unabated rent without any right of offset or free rent credit or outstanding tenant improvement obligations in accordance with the loan documents, (f) a Downgrade Trigger, the initiation or reinstatement by Fitch, Moody’s and S&P, of the applicable rating required under the loan documents, (g) a Default Trigger, Google has cured all defaults and is paying full unabated rent without any right of offset or free rent credit or outstanding tenant improvement obligations (unless the tenant is rated at least BBB- (or its equivalent) by Fitch, Moody’s and S&P and the borrower reserves for such amounts in accordance with the loan documents), (h) a Tenant Bankruptcy Trigger, the bankruptcy action is dismissed pursuant to a final, non-appealable order and Google is paying full unabated rent without any right of offset or free rent credit or outstanding tenant improvement obligations (unless the tenant is rated at least BBB- (or its equivalent) by Fitch, Moody’s and S&P and the borrower reserves for such amounts in accordance with the loan documents), or (i) a Termination Trigger, Google has revoked or rescinded all termination or cancellation notices with respect to the lease(s) and has re-affirmed each lease as being in full force and effect and is paying full unabated rent without any right of offset or free rent credit or outstanding tenant improvement obligations (unless the tenant is rated at least BBB- (or its equivalent) by Fitch, Moody’s and S&P and the borrower reserves for such amounts in accordance with the loan documents). The borrower may also cure a Default Trigger, a Tenant Bankruptcy Trigger or a Termination Trigger by re-leasing the space leased by Google to a replacement tenant in accordance with the loan documents. In no event will the borrower have the right to cure a Cash Sweep Period caused by the borrower’s voluntary bankruptcy or insolvency, and the borrower is limited to curing a Cash Sweep Period caused by an event of default, a Default Trigger, a Downgrade Trigger, a Tenant Bankruptcy Trigger or a Termination Trigger to no more than three times during the term of the loan.

 

Additional Debt. There is a $102.0 million Moffett Gateway Subordinate Companion Loan and a $50.0 million mezzanine loan, both coterminous with the Moffett Gateway A-Notes. The Moffett Gateway Subordinate Companion Loan and the mezzanine loan have each been sold to separate third party investors. The Moffett Gateway Subordinate Companion Loan has a 5.00000% coupon and is interest only for the entire term. All principal payments on the Moffett Gateway Whole Loan once amortization begins after the expiration of the interest-only period will be applied to the Moffett Gateway A-Notes, which will cause hyper-amortization of the Moffett Gateway A-Notes. The mezzanine loan has a 6.35000% coupon and is interest only for the full term of the loan. Including the Moffett Gateway Subordinate Companion Loan and mezzanine loan, the cumulative Cut-off Date LTV, cumulative UW NCF DSCR and cumulative UW NOI Debt Yield are 75.2%, 1.22x and 7.3%, respectively. The mortgage and mezzanine lenders have entered into an intercreditor agreement.

 

Partial Release. The borrower is permitted to release Building One or Building Two from the lien of the security instrument through a partial defeasance of the Moffett Gateway Whole Loan at any time after the expiration of the lockout period if, among other conditions, (i) no event of default has occurred and is continuing, (ii) the borrower defeases a portion of the Moffett Gateway Whole Loan in an amount equal to (a) the allocated loan amount for the applicable building (which is $170.0 million for each building with respect to the Whole Loan and $27.5 million for each building with respect to the mezzanine loan) plus (b) if the Google Tenancy Condition (as defined below) is not satisfied, 25% of the allocated loan amount, (iii) after giving effect to the release, the debt service coverage ratio of the remaining portion of the property based on the trailing 12-month period equals or is greater than the greater of (a) 1.23x and (b) the debt service coverage ratio for the property (including the building being released) immediately preceding the release based on the trailing-three month period.

 

Google Tenancy Condition” means (a) there is no Cash Sweep Period caused by a Specified Tenant Trigger and (b) either the Google lease or a lease for the Google leased premises with a tenant that has a long term unsecured debt rating of BBB or its equivalent is in full force and effect for the remaining property.

 

Right of First Offer. Google has a right of first offer, so long as the borrower or an affiliate owns the property, to purchase all or any portion of the property that the borrower is willing to sell. The right of first offer expressly does not apply to any third party (including any owner by reason of foreclosure or any successor-in-interest) who subsequently owns all or any portion of the property.

 

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 2017-JP5
 
Moffett Gateway

 

 (GRAPHIC)

 

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 2017-JP5
 
Dallas Design District

 

(Graphic) 

 

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 2017-JP5
 
Dallas Design District

 

(Graphic) 

 

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 2017-JP5
 
Dallas Design District

 

Mortgage Loan Information   Property Information
Mortgage Loan Seller: JPMCB   Single Asset / Portfolio: Single Asset
Original Principal Balance(1): $75,000,000   Title: Fee / Leasehold
Cut-off Date Principal Balance(1): $75,000,000   Property Type - Subtype: Industrial - Flex
% of Pool by IPB: 6.9%   Net Rentable Area (SF): 728,452
Loan Purpose: Refinance   Location: Dallas, TX
Borrowers(2): Various   Year Built / Renovated(3) Various / Various
Sponsors: Donald Engle and   Occupancy: 98.7%
  William L. Hutchinson   Occupancy Date: 12/28/2016
Interest Rate: 5.25700%   Number of Tenants: 100
Note Date: 1/5/2017   2013 NOI(4): $7,626,320
Maturity Date: 2/1/2027   2014 NOI(4): $9,005,119
Interest-only Period: 36 months   2015 NOI(5): $8,498,455
Original Term: 120 months   TTM NOI (as of 9/2016)(5): $9,637,865
Original Amortization: 360 months   UW Economic Occupancy: 95.0%
Amortization Type: IO-Balloon   UW Revenues: $15,304,762
Call Protection: L(25),Grtr1%orYM(91),O(4)   UW Expenses: $4,048,471
Lockbox: Hard   UW NOI(5): $11,256,291
Additional Debt: Yes   UW NCF: $10,204,999
Additional Debt Balance: $45,000,000   Appraised Value / Per SF: $193,085,000 / $265
Additional Debt Type: Pari Passu   Appraisal Date: Various
         

 

Escrows and Reserves(6)   Financial Information(1)
  Initial Monthly Initial Cap   Cut-off Date Loan / SF:   $165  
Taxes: $316,270 $316,270 N/A   Maturity Date Loan / SF:   $147  
Insurance: $200,000 Springing N/A   Cut-off Date LTV:   62.1%  
Replacement Reserves: $374,106 Springing $372,816   Maturity Date LTV:   55.3%  
TI/LC: $3,278,052 Springing $3,278,052   UW NCF DSCR:   1.28x  
Other: $2,155,636 $6,025 N/A   UW NOI Debt Yield:   9.4%  
               

 

Sources and Uses
Sources Proceeds % of Total   Uses Proceeds % of Total
Mortgage Loan(1) $120,000,000 100.0%   Payoff Existing Debt $109,451,756 91.2%
    %   Upfront Reserves 6,324,064 5.3%
        Closing Costs 3,812,371 3.2%
        Return of Equity 411,809 0.3%
Total Sources $120,000,000 100.0%   Total Uses $120,000,000 100.0%
                   
(1)The Dallas Design District loan is part of a whole loan evidenced by two pari passu notes, with an aggregate outstanding principal balance as of the Cut-off Date of $120.0 million. The Financial Information presented in the chart above reflects the Cut-off Date balance of the $120.0 million Dallas Design District Whole Loan, as defined in “The Loan” below.
(2)For a full description of the Borrowers please refer to “The Borrowers” below.
(3)The Dallas Design District properties were built between 1953 and 1999 and renovated between 2010 and 2016.
(4)The increase in 2014 NOI from 2013 NOI is primarily due to rents in place increasing from approximately $9.0 million in 2013 to approximately $9.9 million in 2014 as a result of new/renewal leases signed at higher rents at 1025 Stemmons, 1250 Slocum, 1617 Hi Line, 1645 Stemmons and 1500 Dragon.
(5)The increase in NOI from 2015 to UW NOI is primarily due to recent leasing across the properties along with contractual rent steps taken through January 2018 totaling $425,877.
(6)For a full description of Escrows and Reserves, please refer to “Escrows and Reserves” below.

 

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 2017-JP5
 
Dallas Design District

 

The Loan. The Dallas Design District loan is secured by a first mortgage lien on the borrowers’ fee and leasehold interests in 12 industrial-flex properties located in Dallas, Texas. The whole loan has an outstanding principal balance as of the Cut-off Date of approximately $120.0 million (the “Dallas Design District Whole Loan”) and is comprised of two pari passu notes, each as described below. Note A-1, with an outstanding principal balance as of the Cut-off Date of $75.0 million, is the controlling note and is being contributed to the JPMCC 2017-JP5 Trust. Note A-2, with an outstanding principal balance as of the Cut-off Date of $45.0 million, is expected to be contributed to one or more future securitizations. The Dallas Design District Whole Loan has a 10-year term and, subsequent to a three-year interest-only period, will amortize on a 30-year schedule. The previous debt securing the property was securitized in JPMCC 2015-FL7.

 

Whole Loan Summary
Notes Original Balance Cut-off Date Balance Note Holder Controlling Piece
A-1 $75,000,000 $75,000,000 JPMCC 2017-JP5  Yes
A-2 45,000,000 45,000,000 JPMCB No
Total $120,000,000 $120,000,000    

 

The Borrowers. The borrowing entities for the Dallas Design District Whole Loan are DE Design Borrower 2017 LLC, DD Dunhill 2017 LLC and 1500 Dragon Dunhill LLC, each a Delaware limited liability company and special purpose entity. DD Dunhill 2017 LLC and DE Design Borrower 2017 LLC own the majority of the property as tenants-in-common and the remaining borrower owns the fee interest in its parcel.

 

The Loan Sponsors. The Dallas Design District Whole Loan’s sponsors and nonrecourse carve-out guarantors are William L. Hutchinson, President of Dunhill Partners (“Dunhill”), and Donald Engle. Dunhill specializes in the sale, acquisition, leasing and management of retail shopping centers. Over the last 10 years, Dunhill has bought and sold approximately $3.0 billion of shopping centers throughout the Southwestern United States. Dunhill currently manages more than 5.8 million square feet of retail commercial property in Texas. Donald Engle, who owns one of the borrowers, is not a party to the environmental indemnity and is obligated under his guaranty only for certain breaches or violations of the nonrecourse carve-out provisions attributed to that borrower. The other guarantor, William L. Hutchinson, is a party to the environmental indemnity and is obligated under his guaranty for any breach or violation of the nonrecourse carve-out provisions in the loan documents.

 

The Property. The Dallas Design District properties consist of 728,452 square feet of industrial-flex space across 12 Class A properties located in Dallas, Texas. The 12 properties were developed between 1953 and 1999, renovated between 2010 and 2016, and are situated on approximately 32.5 acres. Among the 12 properties are three larger design and showroom centers, which comprise the majority of the property collateral.

 

As of December 28, 2016, the complex was 98.7% occupied by 100 tenants. The rent roll at the properties is diverse with no tenant representing more than 6.1% of net rentable area. Tenants at the properties include seven restaurants, several retail shops, and showroom/gallery space for tenants such as furniture retailers, wholesale textile retailers, interior design and architecture firms, and other professional firms including a modeling agency and photography studio. Among the properties, the largest tenant is Regulus Group LLC (“Regulus Group”), which first took occupancy in November 2006 and leases 6.1% of the net rentable area through March 2017. Regulus Group was founded in 2002 and provides processing solutions to a wide range of firms and has operations in three states. The second largest tenant is Walter Lee Culp Associates, Inc. (“Culp Associates”), which first took occupancy in September 1993 and recently exercised a lease extension option through October 2028, and leases 4.2% of the net rentable area. Culp Associates has two, five-year extension options. Culp Associates has been involved in the interior design community for over 42 years. The Culp Associates showroom has a large collection of traditional, transitional and fashion-forward textiles. The third largest tenant is David Sutherland, Inc. (“David Sutherland”), which first took occupancy in October 1997, and leases 4.1% of the net rentable area through May 2023. The David Sutherland showroom has a multi-line collection of furniture, fabric and accessories from manufacturers from around the world. David Sutherland has one, five-year extension option.

 

The loan sponsors have recently executed several new and renewal leases with tenants at the properties, with 305,121 square feet of new, renewal and expansion leases executed since May 2015. Headington Realty signed a new lease for 10,161 square feet at $35.00 per square foot and William E. McGannon, Inc. renewed its 15,823 square foot lease starting January 2018 at 1617 Hi Line at $15.04 per square foot. Additionally, new leases were executed by Level Two at 1250 Slocum for 12,949 square feet at $3.73 per square foot and by Made Goods at 1025 Stemmons for 4,670 square feet at $28.00 per square foot.

 

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 2017-JP5
 
Dallas Design District

 

Property Summary(1)
Property Name Net Rentable
Area (SF)
Property Description Class Year Built Occupancy(2) Appraised Value(3) % of
Appraised Value
1025 Stemmons 212,329 Retail / Lifestyle Center A 1982 97.6% $51,300,000 26.6%
1250 Slocum 156,659 Retail / Lifestyle Center A 1999 98.3% 41,500,000 21.5%
1617 Hi Line 136,539 Designer / Showroom A 1955-1967 100.0% 40,500,000 21.0%
1500 Dragon 104,641 Office / Showroom A 1979,1981 100.0% 18,500,000 9.6%
1700 Oak Lawn 17,425 Designer / Showroom A 1957 100.0% 8,350,000 4.3%
1645 Stemmons 22,726 Designer / Showroom A 1963 100.0% 7,100,000 3.7%
1616 Hi Line 19,074 Designer / Showroom A 1954 100.0% 5,450,000 2.8%
1628-1630 Oak Lawn 11,655 Restaurant / Showroom A 1954 92.6% 4,950,000 2.6%
1519-1525 Hi Line 13,816 Designer / Showroom A 1955 99.2% 4,250,000 2.2%
1621 Oak Lawn 9,038 Restaurant / Retail A 1953 96.6% 4,000,000 2.1%
1626 Hi Line 14,150 Designer / Showroom A 1955 99.4% 3,725,000 1.9%
1616 Oak Lawn 10,400 Designer / Showroom A 1953 100.0% 3,460,000 1.8%
Total/Wtd. Avg. 728,452       98.7% $193,085,000 100.0%
(1)Based on the appraisals.
(2)Based on the underwritten rent roll dated December 28, 2016.
(3)CBRE appraised the Dallas Design District properties on a property-by-property basis in November 2016. The aggregate value of the individual properties totaled approximately $193.1 million.

 

The Dallas Design District property is located approximately 2.7 miles northwest of downtown Dallas in an area locally known as the “The Design District”. Originally developed as showrooms for home furnishings, fabrics and decorative accessories, The Design District is comprised of approximately 160.0 acres just west of downtown Dallas and on the north side of the Trinity River corridor. The area consists of residential, retail, restaurants, showrooms and trade buildings and, according to the borrowers, is known to have the fourth largest concentration of designer showroom space in the country. Approximately 186.0 acres within The Design District are part of a Tax Increment Financing (“TIF”) zone that began in June 2005 and will terminate on December 31, 2027. The mission of the TIF zone is to provide a source of funding for public infrastructure improvements that will assist in redeveloping an industrial and warehouse district to take full advantage of the expanding DART light rail system, to promote transit oriented development, and to improve access to the Trinity River and the quality of development adjacent to the Trinity River Corridor.

 

According to the appraisal, the Dallas Design District is also home to the Dallas Market Center (“DMC”), one of the world’s largest wholesale marts (more than five million square feet), which is located along Stemmons Freeway near Market Center Boulevard, approximately one mile north of the property. The DMC offers more than 2,000 permanent showrooms with thousands of lines from leading manufacturers of gift products, decorative accessories, home furnishing, lighting, garden accessories, gourmet products, holiday and floral items and apparel. The DMC holds approximately 50 trade and special events each year with the largest event attracting more than 50,000 attendees. According to the appraisal, approximately 400,000 people visit the DMC campus each year including more than 200,000 buyers and sellers from all 50 states and 84 countries.

 

The Dallas Design District property is located adjacent to Stemmons Freeway, a main north-south thoroughfare that bisects Dallas. The property is also located off Interstate 35 to the north and east, with access on the south to Riverfront Boulevard and the Trinity River. The area benefited from a 2011 Interstate 35 expansion that added additional freeway access points to the surrounding area. The Dallas Design District property is situated on the other side of Interstate 35 and is approximately one mile from the American Airlines Center, which hosts approximately 240 events and 2.8 million visitors annually. According to the 1025 Stemmons appraisal, the population within a three and five-mile radius contained 155,036 and 355,808 people, respectively, with a median household income of $54,153 and $51,771, respectively, as of 2016.

 

Appraisal Market Rent Summary
Category Rent(1)
Showroom <20k Square Feet $23
Showroom >20k Square Feet $18
Collection Space $19
Showroom/Retail $35
Mezz/Rear $9
Restaurant $34
(1)Weighted average of the appraisal rent per square feet for each of the categories.

 

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 2017-JP5
 
Dallas Design District

 

Historical and Current Occupancy(1)
2013 2014 2015 Current(2)
89.6% 86.7% 89.6% 98.7%
(1)Historical Occupancies are as of December 31 of each respective year.
(2)Current Occupancy is as of December 28, 2016.

 

Tenant Summary(1)
Tenant Ratings Moody’s/S&P/Fitch Net Rentable
Area (SF)
% of Total
NRA
Base
Rent PSF
% of Total
Base Rent
Lease
Expiration Date
Regulus Group LLC(2) NA / NA / NA 44,345 6.1% $11.50 4.1% 3/31/2017
Walter Lee Culp Associates, Inc. NA / NA / NA 30,650 4.2% $13.41 3.3% 10/31/2028
David Sutherland, Inc.(3) NA / NA / NA 29,937 4.1% $12.50 3.0% 5/31/2023
Interior Design Collections, Ltd. NA / NA / NA 24,651 3.4% $16.99 3.4% 6/30/2026
E.C. Dicken, Inc. NA / NA / NA 23,083 3.2% $13.75 2.6% 5/31/2020
George Cameron Nash, Inc.