FWP 1 n1007_tsrions3-x6.htm FREE WRITING PROSPECTUS

 

    FREE WRITING PROSPECTUS
    FILED PURSUANT TO RULE 433
    REGISTRATION FILE NO.: 333-207340-03
     

 

 (COVER PAGE)

 

August 7, 2017 FREE WRITING PROSPECTUS COLLATERAL TERM SHEET $708,626,196 (Approximate Total Mortgage Pool Balance) UBS 2017-C3 UBS Commercial Mortgage Securitization Corp. Depositor UBS AG Société Générale KeyBank National Association Natixis Real Estate Capital LLC Rialto Mortgage Finance, LLC Sponsors and Mortgage Loan Sellers UBS Securities LLC Société Générale Co-Lead Managers and Joint Bookrunners KeyBanc Capital Markets NATIXIS Deutsche Bank Securities Academy Securities Co-Managers The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (‘‘SEC’’) (SEC File No. 333-207340) for the offering to which this communication 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 after filing if you request it by calling toll free 1-877-713-1030 (8 a.m. – 5 p.m. EST). The Offered Certificates referred to in these materials and the asset pool backing them are subject to modification or revision (including the possibility that one or more classes of certificates may be split, combined or eliminated at any time prior to issuance or availability of a final prospectus) and are offered on a “when, as and if issued” basis

 

 

 

 

STATEMENT REGARDING THIS FREE WRITING PROSPECTUS

 

Nothing in this document constitutes an offer of securities for sale in any jurisdiction where the offer or sale is not permitted. The information contained herein is preliminary as of the date hereof, supersedes any such information previously delivered to you and will be superseded by any such information subsequently delivered prior to the time of sale and ultimately by the final prospectus relating to the offered certificates. These materials are subject to change, completion, supplement or amendment from time to time.

 

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

 

STATEMENT REGARDING ASSUMPTIONS AS TO SECURITIES, PRICING ESTIMATES AND OTHER INFORMATION

 

This free writing prospectus contains certain forward-looking statements. If and when included in this free writing prospectus, the words “expects”, “intends”, “anticipates”, “estimates” and analogous expressions and all statements that are not historical facts, including statements about our beliefs or expectations, are intended to identify forward-looking statements. Any forward-looking statements are made subject to risks and uncertainties which could cause actual results to differ materially from those stated. Those risks and uncertainties include, among other things, declines in general economic and business conditions, increased competition, changes in demographics, changes in political and social conditions, regulatory initiatives and changes in customer preferences, many of which are beyond our control and the control of any other person or entity related to this offering. The forward-looking statements made in this free writing prospectus are made as of the date stated on the cover. We have no obligation to update or revise any forward-looking statement.

 

The attached information contains certain tables and other statistical analyses (the “Computational Materials”) that have been prepared in reliance upon information furnished by the Mortgage Loan Sellers. Numerous assumptions were used in preparing the Computational Materials, which may or may not be reflected herein. As such, no assurance can be given as to the Computational Materials’ accuracy, appropriateness or completeness in any particular context; or as to whether the Computational Materials and/or the assumptions upon which they are based reflect present market conditions or future market performance. The Computational Materials should not be construed as either projections or predictions or as legal, tax, financial or accounting advice. You should consult your own counsel, accountant and other advisors as to the legal, tax, business, financial and related aspects of a purchase of the offered certificates. Any weighted average lives, yields and principal payment periods shown in the Computational Materials are based on prepayment and/or loss assumptions, and changes in such prepayment and/or loss assumptions may dramatically affect such weighted average lives, yields and principal payment periods. In addition, it is possible that prepayments or losses on the underlying assets will occur at rates higher or lower than the rates shown in the attached Computational Materials. The specific characteristics of the offered certificates may differ from those shown in the Computational Materials due to differences between the final underlying assets and the preliminary underlying assets used in preparing the Computational Materials. The principal amount and designation of any security described in the Computational Materials are subject to change prior to issuance. None of UBS Securities LLC, SG Americas Securities, LLC, KeyBanc Capital Markets Inc., Natixis Securities Americas LLC, Deutsche Bank Securities Inc. or Academy Securities, Inc., or any of their respective affiliates, make any representation or warranty as to the actual rate or timing of payments or losses on any of the underlying assets or the payments or yield on the offered certificates. The information in this presentation is based upon management forecasts and reflects prevailing conditions and management’s views as of this date, all of which are subject to change. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us by or on behalf of the Mortgage Loan Sellers or which was otherwise reviewed by us.

 

IMPORTANT NOTICE REGARDING THE OFFERED CERTIFICATES

 

The offered certificates described herein are not suitable investments for all investors. In particular, you should not purchase any class of offered certificates unless you understand and are able to bear the prepayment, credit, liquidity and market risks associated with such class of certificates. For those reasons and for the reasons set forth under the heading “Risk Factors” in the Preliminary Prospectus, the yield to maturity and the aggregate amount and timing of distributions on the offered certificates are subject to material variability from period to period and give rise to the potential for significant loss over the life of such certificates. The interaction of these factors and their effects are impossible to predict and are likely to change from time to time. As a result, an investment in the offered certificates involves substantial risks and uncertainties and should be considered only by sophisticated institutional investors with substantial investment experience with similar types of securities and who have conducted appropriate due diligence on the mortgage loans and the certificates. Potential investors are advised and encouraged to review the Preliminary Prospectus in full and to consult with their legal, tax, accounting and other advisors prior to making any investment in the offered certificates described in this free writing prospectus.

 

This free writing prospectus 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 information contained in this free writing prospectus may not pertain to any securities that will actually be sold. The information contained in this free writing prospectus may be based on assumptions regarding market conditions and other matters as reflected in this free writing prospectus. We make no representations regarding the reasonableness of such assumptions or the likelihood that any of such assumptions will coincide with actual market conditions or events, and this free writing prospectus should not be relied upon for such purposes. The Underwriters and their respective affiliates, officers, directors, partners and employees, including persons involved in the preparation or issuance of this free writing prospectus may, from time to time, have long or short positions in, and buy or sell, the offered certificates mentioned in this free writing prospectus or derivatives thereof (including options). Information contained in this free writing prospectus is current as of the date appearing on this free writing prospectus only. None of UBS Securities LLC, SG Americas Securities, LLC, KeyBanc Capital Markets Inc., Natixis Securities Americas LLC, Deutsche Bank Securities Inc. or Academy Securities, Inc. provides accounting, tax or legal advice.

 

2 

 

 

 

The issuing entity will be relying upon an exclusion or exemption from the definition of “investment company” under the Investment Company Act of 1940, as amended (the “Investment Company Act”), contained in Section 3(c)(5) of the Investment Company Act or Rule 3a-7 under the Investment Company Act, although there may be additional exclusions or exemptions available to the issuing entity. The issuing entity is being structured so as not to constitute a “covered fund” for purposes of the Volcker Rule under the Dodd-Frank Act (both as defined in “Risk Factors—Other Risks Relating to the Certificates—Legal and Regulatory Provisions Affecting Investors Could Adversely Affect the Liquidity of the Offered Certificates” in the Preliminary Prospectus). See also “Legal Investment” in the Preliminary Prospectus.

 

The information contained herein supersedes any previous such information delivered to any prospective investor and will be superseded by information delivered to such prospective investor prior to the time of sale.

 

IMPORTANT NOTICE RELATING TO AUTOMATICALLY-GENERATED EMAIL DISCLAIMERS

 

Any legends, disclaimers or other notices that may appear at the bottom of any email communication to which this free writing prospectus is attached relating to (1) these materials not constituting an offer (or a solicitation of an offer), (2) any representation that these materials are accurate or complete and may not be updated or (3) these materials possibly being confidential, are not applicable to these materials and should be disregarded. Such legends, disclaimers or other notices have been automatically generated as a result of these materials having been sent via Bloomberg or another system.

 

3 

 

 

UBS 2017-C3

 

Capitalized terms used but not defined herein have the meanings assigned to them in the preliminary prospectus expected to be dated August 9, 2017 relating to the offered certificates (hereinafter referred to as the “Preliminary Prospectus”).

 

KEY FEATURES OF SECURITIZATION

 

Offering Terms:  
Co-Lead Managers and Joint Bookrunners:

UBS Securities LLC

 

SG Americas Securities, LLC

 

Co-Managers: KeyBanc Capital Markets Inc.
Natixis Securities Americas LLC
Deutsche Bank Securities Inc.
Academy Securities, Inc.
   
Mortgage Loan Sellers: UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (“UBS AG”) 18.9%, Société Générale (“SG”) 32.1%, KeyBank National Association (“KeyBank”) 33.6%, Natixis Real Estate Capital LLC (“Natixis”) 11.8%, Rialto Mortgage Finance, LLC (“RMF”) 3.6%
   
Master Servicer: Midland Loan Services, a Division of PNC Bank, National Association
   
Operating Advisor: Park Bridge Lender Services LLC
   
Asset Representations Reviewer: Park Bridge Lender Services LLC
   
Special Servicer: Midland Loan Services, a Division of PNC Bank, National Association
   
Trustee: Wells Fargo Bank, National Association
   
Certificate Administrator: Wells Fargo Bank, National Association
   
Rating Agencies: Fitch Ratings, Inc., Kroll Bond Rating Agency, Inc. and Moody’s Investors Service, Inc.
   
U.S. Credit Risk Retention:

UBS AG is expected to act as the “retaining sponsor” for this securitization and intends to satisfy the U.S. credit risk retention requirement through the purchase by KKR Real Estate Credit Opportunity Partners Aggregator I L.P., as a third party purchaser (as defined in Regulation RR), from the initial purchasers, on the Closing Date, of an “eligible horizontal residual interest”. The aggregate estimated fair value of the “eligible horizontal residual interest” will equal at least 5% of the estimated fair value of all of the Certificates issued by the issuing entity.

 

The pooling and servicing agreement will include the required provisions applicable to an operating advisor necessary for the securitization to comply with the credit risk retention rules utilizing the “third party purchaser” option. See “Operating Advisor” below.

 

For additional information, see “Credit Risk Retention” below.

 

EU Credit Risk Retention: The transaction is not structured to satisfy the EU risk retention and due diligence requirements.
   
Cut-off Date: The mortgage loans will be considered part of the trust fund as of their respective cut off dates. The cut-off date with respect to each mortgage loan is the respective due date for the monthly debt service payment that is due in August 2017 (or, in the case of any mortgage loan that has its first due date after August 2017, the date that would have been its due date in August 2017 under the terms of that mortgage loan if a monthly debt service payment were scheduled to be due in that month).
   
Closing Date: On or about August 31, 2017
   
Clean-up Call: 1.0%

 

Distribution of Collateral by Property Type

 

(PIE CHART) 

 

THE INFORMATION IN THIS 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.

 

  4 

 

 

UBS 2017-C3

TRANSACTION HIGHLIGHTS

 

Mortgage Loan Sellers Number of
Mortgage
Loans
Number of
Mortgaged
Properties(1)
Aggregate
Cut-off Date
Balance
% of Outstanding
Pool Balance(1)
UBS AG 6 6 $134,164,233 18.9%
Société Générale 12 25 $227,195,000 32.1%
KeyBank National Association 18 21 $238,316,095 33.6%
Natixis Real Estate Capital LLC 3 9 $83,500,000 11.8%
Rialto Mortgage Finance, LLC 3 3 $25,450,867 3.6%
Total 42 64 $708,626,196 100.0%

 

Pooled Collateral Facts:  
Initial Outstanding Pool Balance: $708,626,196
Number of Mortgage Loans: 42
Number of Mortgaged Properties(1): 64
Average Mortgage Loan Cut-off Date Balance: $16,872,052
Average Mortgaged Property Cut-off Date Balance: $11,072,284
Weighted Average Mortgage Rate(4): 4.341%
Weighted Average Mortgage Loan Original Term to Maturity Date or ARD (months): 112
Weighted Average Mortgage Loan Remaining Term to Maturity Date or ARD (months): 111
Weighted Average Mortgage Loan Seasoning (months): 1
% of Mortgaged Properties Leased to a Single Tenant: 15.1%
% of Mortgaged Properties Leased to a Single Tenant Excluding Portfolio(2): 13.5%
   
Credit Statistics:  
Weighted Average Mortgage Loan U/W NCF DSCR(3)(4): 2.23x
Weighted Average Mortgage Loan Cut-off Date LTV(3)(5): 55.9%
Weighted Average Mortgage Loan Maturity Date or ARD LTV(3)(5): 49.4%
Weighted Average U/W NOI Debt Yield(3): 12.4%
   
Amortization Overview:  
% Mortgage Loans with Amortization through Maturity Date or ARD: 34.5%
% Mortgage Loans which pay Interest Only through Maturity Date or ARD: 34.6%
% Mortgage Loans which pay Interest Only followed by Amortization through Maturity Date or ARD: 30.9%
Weighted Average Remaining Amortization Term (months)(6): 347
   
Loan Structural Features:  
% Mortgage Loans with Upfront or Ongoing Tax Reserves: 100.0%
% Mortgage Loans with Upfront or Ongoing Replacement Reserves(7): 96.2%
% Mortgage Loans with Upfront or Ongoing Insurance Reserves: 100.0%
% Mortgage Loans with Upfront or Ongoing TI/LC Reserves(8): 100.0%
% Mortgage Loans with Upfront Engineering Reserves: 35.6%
% Mortgage Loans with Upfront or Ongoing Other Reserves: 61.1%
% Mortgage Loans with In Place Hard Lockboxes: 61.5%
% Mortgage Loans with Cash Traps Triggered at DSCR Levels 1.05x: 92.2%
% Mortgage Loans with Defeasance Only After a Lockout Period and Prior to an Open Period: 96.6%
% Mortgage Loans with Prepayment with a Yield Maintenance Charge Only After a Lockout Period and Prior to an Open Period: 3.4%

 

(1)Unless otherwise indicated, all references to “% of Outstanding Pool Balance” in this Term Sheet reflect a percentage of the aggregate principal balance of the mortgage pool as of the Cut-off Date, after application of all payments of principal due during or prior to August 2017. The Initial Outstanding Pool Balance and Number of Mortgaged Properties do not reflect the property identified as “Villa Roma”, which, subject to the conditions set forth in the related loan documents with respect to the IC Leased Fee Hotel Portfolio Whole Loan, may be acquired upon the full funding of the unfunded pari passu companion loan up to $14,880,000 (the “IC Leased Fee Hotel Portfolio Unfunded Companion Loan”).

 

(2)Excludes mortgage loans secured by multiple properties leased to the same tenant.

 

(3)With respect to any mortgage loan that is part of a whole loan, unless otherwise indicated, LTV, DSCR and Debt Yield calculations in this Term Sheet include any related pari passu companion loans (other than the IC Leased Fee Hotel Portfolio Unfunded Companion Loan) and exclude any subordinate companion loans, as applicable. Additionally, LTV, DSCR and Debt Yield figures in this Term Sheet are calculated for mortgage loans without regard to any additional indebtedness that may be incurred at a future date. With respect to any leased fee loans, the SF/Unit and Balance per SF/Unit figures in this Term Sheet are based on the size of the non-collateral improvements. With respect to the IC Leased Fee Hotel Portfolio Mortgage Loan, the related Cut-off Date LTV Ratio, Maturity Date or ARD LTV Ratio, U/W NCF DSCR and U/W NOI Debt Yield, calculated assuming that the IC Leased Fee Hotel Portfolio Unfunded Companion Loan is fully funded and the property referred to as “Villa Roma” is acquired are 77.5%, 77.5, 1.58x and 8.0%, respectively.

 

(4)The Center 78 Mortgage Loan accrues interest at an interest rate that changes over time, as set forth on Annex F of the Preliminary Prospectus. The U/W NCF DSCR is calculated based on the aggregate debt service of the 12-month period commencing in September 2022.

 

(5)With respect to the Clay Plaza Mortgage Loan, the Cut-off Date LTV and Maturity Date LTV has been calculated based on the “As-Stabilized” value. For additional information, see “Description of the Mortgage Pool—Certain Calculations and Definitions” in the Preliminary Prospectus and the footnotes to Annex A-1 in the Preliminary Prospectus.

 

(6)Excludes mortgage loans that are interest-only for the full loan term.

 

(7)Includes FF&E Reserves.

 

(8)Represents the percent of the allocated aggregate principal balance of the mortgage pool as of the Cut-off Date of retail, office, industrial and mixed use properties only.

 

(9)The Center 78 Mortgage Loan accrues interest at an interest rate that increases over time as set forth on Annex F of the Preliminary Prospectus. The Mortgage Rate shown is the interest rate on September 7, 2017.

 

THE INFORMATION IN THIS 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.

 

  5 

 

UBS 2017-C3

 

OVERVIEW OF MORTGAGE POOL CHARACTERISTICS

 

Distribution of Cut-off Date Balances
            Weighted Averages
Range of Cut-off Date Balances Number of
Mortgage Loans
Aggregate
Cut-off Date Balance
% of Initial Outstanding
Pool Balance(1)
Mortgage
Rate
Stated Remaining Term (Mos.) U/W NCF
DSCR(1)(2)(3)
Cut-off Date LTV Ratio(1)(2)(4) Maturity Date
or ARD LTV
Ratio(1)(2)(4)
$1,816,452 - $5,000,000 9 $30,323,820 4.3% 4.936% 119 1.57x 61.0% 47.8%
$5,000,001 - $10,000,000 11 $72,120,660 10.2% 4.623% 119 1.71x 63.4% 51.7%
$10,000,001 - $15,000,000 6 $76,144,233 10.7% 4.819% 120 2.06x 55.5% 45.3%
$15,000,001 - $20,000,000 2 $31,908,867 4.5% 4.865% 119 1.64x 60.8% 50.4%
$20,000,001 - $25,000,000 2 $49,458,615 7.0% 4.534% 120 1.34x 64.6% 49.9%
$25,000,001 - $30,000,000 5 $141,250,000 19.9% 4.023% 95 3.10x 49.1% 46.6%
$35,000,001 - $40,000,000 3 $113,070,000 16.0% 4.221% 99 2.31x 54.3% 51.7%
$40,000,001 - $45,000,000 1 $43,000,000 6.1% 3.990% 119 1.79x 63.8% 57.9%
$45,000,001 - $51,350,000 3 $151,350,000 21.4% 4.160% 119 2.37x 53.0% 48.7%
Total/Weighted Average  42 $708,626,196 100.0% 4.341% 111 2.23x 55.9% 49.4%

 

Distribution of Mortgage Rates(3)
            Weighted Averages
Range of Mortgage Rates Number of
Mortgage Loans
Aggregate
Cut-off Date Balance
% of Initial Outstanding
Pool Balance(1)
Mortgage
Rate
Stated Remaining
Term (Mos.)
U/W NCF
DSCR(1)(2)(3)
Cut-off Date LTV Ratio(1)(2)(4) Maturity Date
or ARD LTV
Ratio(1)(2)(4)
2.620% - 3.500% 1 $30,000,000 4.2% 2.620% 60 4.46x 20.0% 20.0%
3.501% - 4.000% 4 $182,350,000 25.7% 3.801% 119 2.53x 49.0% 46.4%
4.001% - 4.500% 11 $200,166,615 28.2% 4.286% 100 2.45x 56.7% 50.3%
4.501% - 5.000% 18 $219,207,262 30.9% 4.798% 119 1.70x 62.6% 52.2%
5.001% - 5.300% 8 $76,902,319 10.9% 5.132% 120 1.61x 64.9% 57.3%
Total/Weighted Average 42 $708,626,196 100.0% 4.341% 111 2.23x 55.9% 49.4%

 

Property Type Distribution(1)
          Weighted Averages
Property Type Number of
 Mortgage Properties
Aggregate
Cut-Off
Date Balance
% of Initial
 Outstanding
Pool
Balance(1)
Number of  Units/Rooms/Pads/ 
NRA/Beds
Cut-off Date
Balance per Unit/Room/Pad/
NRA/Beds(2)
Mortgage
Rate
Stated Remaining
Term (Mos.)
Occupancy U/W NCF
DSCR

(1)(2)(3)
Cut-off
Date LTV

Ratio
(1)(2)(4)
Maturity
Date or

ARD LTV
Ratio

(1)(2)(4)
Office 6 $164,383,615 23.2% 3,615,936 258 4.109% 119 92.3% 1.92x 62.2% 55.5%
Suburban 4 $83,383,615 11.8% 900,605 164 4.372% 120 96.2% 1.62x 67.4% 57.2%
CBD 2 $81,000,000 11.4% 2,715,331 356 3.840% 119 88.3% 2.23x 56.8% 53.7%
Retail 10 $154,526,802 21.8% 3,185,032 200 4.209% 104 89.6% 2.26x 54.5% 49.9%
Anchored 5 $52,310,672 7.4% 919,591 142 4.551% 119 90.9% 1.37x 60.6% 50.4%
Super Regional Mall 1 $50,000,000 7.1% 1,769,525 260 3.658% 118 85.2% 3.34x 39.8% 39.8%
Outlet Center 1 $37,000,000 5.2% 393,793 220 4.180% 57 93.3% 2.41x 59.9% 59.9%
Shadow Anchored 2 $11,719,982 1.7% 77,451 157 4.940% 118 90.3% 1.34x 72.1% 59.3%
Unanchored 1 $3,496,148 0.5% 24,672 142 4.850% 119 90.2% 1.71x 57.6% 47.2%
Hospitality 9 $141,055,101 19.9% 1,890 101,519 4.694% 108 77.2% 2.74x 49.2% 40.3%
Full Service 5 $111,005,101 15.7% 1,520 106,159 4.687% 104 77.7% 2.94x 46.6% 39.4%
Limited Service 3 $17,050,000 2.4% 238 73,621 4.723% 120 69.5% 1.98x 60.7% 44.9%
Extended Stay 1 $13,000,000 1.8% 132 98,485 4.720% 120 82.6% 2.10x 56.0% 41.5%
Multifamily 18 $96,530,000 13.6% 3,824 72,074 4.271% 101 95.7% 2.42x 55.8% 49.4%
Garden 17 $66,530,000 9.4% 2,972 41,064 5.015% 119 95.5% 1.50x 71.9% 62.7%
High Rise 1 $30,000,000 4.2% 852 140,845 2.620% 60 96.0% 4.46x 20.0% 20.0%
Mixed Use 1 $51,350,000 7.2% 176,000 292 3.881% 120 100.0% 2.22x 45.8% 41.5%
Office/R&D 1 $51,350,000 7.2% 176,000 292 3.881% 120 100.0% 2.22x 45.8% 41.5%
Other 9 $38,330,000 5.4% 2,133,662 6,364 5.020% 120 100.0% 1.58x 67.8% 66.0%
Leased Fee 7 $27,000,000 3.8% 2,133,134 29 5.020% 120 100.0% 1.67x 73.2% 73.2%
Parking Garage 1 $9,130,000 1.3% 500 21,458 5.020% 120 100.0% 1.38x 55.0% 49.0%
Parking Lot 1 $2,200,000 0.3% 28 21,458 5.020% 120 100.0% 1.38x 55.0% 49.0%
Industrial 6 $31,550,678 4.5% 1,019,708 72 4.549% 119 97.1% 2.15x 55.6% 44.1%
Flex 4 $23,099,890 3.3% 957,585 44 4.550% 120 96.1% 2.25x 56.2% 44.2%
Warehouse/Distribution 2 $8,450,788 1.2% 62,123 149 4.546% 118 100.0% 1.87x 53.9% 43.8%
Manufactured Housing Community 3 $18,350,000 2.6% 717 30,272 4.637% 120 90.3% 1.41x 66.0% 54.7%
Self Storage 2 $12,550,000 1.8% 229,833 65 4.424% 120 93.0% 2.14x 58.8% 52.4%
Total/Weighted Average 64 $708,626,196 100.0%     4.341% 111 90.3% 2.23x 55.9% 49.4%

 

Please see footnotes on page 9

 

THE INFORMATION IN THIS 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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UBS 2017-C3

 

OVERVIEW OF MORTGAGE POOL CHARACTERISTICS

 

Geographic Distribution(1)
        Weighted Averages
State/Location Number of
Mortgage
Properties
Aggregate
Cut-off Date Balance
% of Initial Outstanding
Pool Balance(1)
Mortgage Rate Stated Remaining
Term (Mos.)
U/W NCF
DSCR(1)(2)(3)
Cut-off Date LTV Ratio(1)(2)(4) Maturity Date
or ARD LTV
Ratio(1)(2)(4)
California 7 $179,264,220 25.3% 4.164% 119 2.35x 48.3% 43.5%
California - Southern(5) 5 $159,464,220 22.5% 4.110% 119 2.36x 47.7% 43.6%
California - Northern(5) 2 $19,800,000 2.8% 4.596% 120 2.26x 52.9% 43.4%
New York 3 $71,630,833 10.1% 3.298% 94 3.40x 38.0% 38.0%
Florida 16 $58,166,452 8.2% 4.912% 119 1.52x 72.9% 63.9%
Utah 2 $49,458,615 7.0% 4.534% 120 1.34x 64.6% 49.9%
Georgia 1 $43,000,000 6.1% 3.990% 119 1.79x 63.8% 57.9%
Oklahoma 1 $37,000,000 5.2% 4.180% 57 2.41x 59.9% 59.9%
Illinois 2 $35,482,474 5.0% 4.138% 71 4.92x 26.9% 25.1%
Other 32 $234,623,602 33.1% 4.733% 120 1.80x 63.5% 54.1%
Total/Weighted Average 64 $708,626,196 100.0% 4.341% 111 2.23x 55.9% 49.4%

 

Distribution of Cut-off Date LTV Ratios(1)(2)(4)
            Weighted Averages
Range of Cut-off Date LTV Ratios Number of
Mortgage Loans
Aggregate
Cut-off Date Balance
% of Initial Outstanding
Pool Balance(1)
Mortgage
Rate
Stated Remaining Term (Mos.) U/W NCF
DSCR(1)(2)(3)
Cut-off Date LTV Ratio(1)(2)(4) Maturity Date
or ARD LTV
Ratio(1)(2)(4)
20.0% - 40.0% 3 $108,500,000 15.3% 3.472% 87 4.25x 29.5% 29.5%
40.1% - 50.0% 7 $133,202,928 18.8% 4.034% 119 2.47x 47.2% 42.9%
50.1% - 55.0% 2 $49,400,000 7.0% 4.858% 120 1.70x 54.3% 47.2%
55.1% - 60.0% 8 $89,013,467 12.6% 4.586% 93 2.14x 58.7% 50.5%
60.1% - 65.0% 8 $120,558,000 17.0% 4.433% 119 1.60x 63.0% 53.7%
65.1% - 70.0% 9 $113,363,615 16.0% 4.530% 120 1.55x 67.6% 57.1%
70.1% - 74.9% 5 $94,588,186 13.3% 4.926% 119 1.56x 73.6% 66.6%
Total/Weighted Average 42 $708,626,196 100.0% 4.341% 111 2.23x 55.9% 49.4%

 

Distribution of Maturity Date LTV Ratios(1)(2)(4)
            Weighted Averages
Range of LTV Ratios at Maturity or ARD Number of
Mortgage Loans
Aggregate
Cut-off Date Balance
% of Initial Outstanding
Pool Balance(1)
Mortgage
Rate
Stated Remaining Term (Mos.) U/W NCF
DSCR(1)(2)(3)
Cut-off Date LTV Ratio(1)(2)(4) Maturity Date
or ARD LTV
Ratio(1)(2)(4)
20.0% - 40.0% 5 $124,586,220 17.6% 3.594% 91 4.02x 31.4% 30.2%
40.1% - 50.0% 19 $287,388,789 40.6% 4.445% 119 2.00x 54.6% 45.8%
50.1% - 55.0% 3 $45,425,000 6.4% 4.652% 120 1.67x 65.4% 52.8%
55.1% - 60.0% 10 $134,388,000 19.0% 4.355% 102 1.79x 64.1% 58.1%
60.1% - 73.2% 5 $116,838,186 16.5% 4.746% 119 1.63x 72.2% 67.1%
Total/Weighted Average 42 $708,626,196 100.0% 4.341% 111 2.23x 55.9% 49.4%

 

Distribution of Underwritten NCF Debt Service Coverage Ratios(1)(2)(3)
            Weighted Averages
Range of Underwritten NCF Debt Service Coverage Ratios Number of
Mortgage Loans
Aggregate
Cut-off Date Balance
% of Initial Outstanding
Pool Balance(1)
Mortgage
Rate
Stated Remaining Term (Mos.) U/W NCF
DSCR(1)(2)(3)
Cut-off Date LTV Ratio(1)(2)(4) Maturity Date
or ARD LTV
Ratio(1)(2)(4)
1.29x - 1.40x 13 $125,142,473 17.7% 4.712% 119 1.34x 64.8% 52.7%
1.41x - 1.50x 2 $10,500,000 1.5% 4.798% 120 1.47x 63.0% 51.4%
1.51x - 1.60x 2 $52,700,000 7.4% 4.950% 119 1.55x 73.2% 64.6%
1.61x - 1.70x 3 $60,500,000 8.5% 4.723% 120 1.66x 70.3% 63.1%
1.71x - 1.80x 7 $114,966,148 16.2% 4.513% 120 1.78x 59.8% 51.4%
1.81x - 1.90x 1 $28,000,000 4.0% 4.090% 120 1.86x 67.4% 67.4%
1.91x - 2.00x 3 $27,683,341 3.9% 5.029% 118 1.98x 56.4% 43.3%
2.01x - 2.25x 3 $72,850,000 10.3% 4.097% 120 2.18x 49.3% 41.8%
2.26x - 2.50x 1 $37,000,000 5.2% 4.180% 57 2.41x 59.9% 59.9%
2.51x - 5.64x 7 $179,284,233 25.3% 3.703% 99 3.66x 36.8% 35.5%
Total/Weighted Average 42 $708,626,196 100.0% 4.341% 111 2.23x 55.9% 49.4%

 

Please see footnotes on page 9.

 

THE INFORMATION IN THIS 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.

 

  7 

 

 

UBS 2017-C3

 

OVERVIEW OF MORTGAGE POOL CHARACTERISTICS

 

Original Terms to Maturity or ARD
        Weighted Averages
Original Terms to
Maturity or ARD
Number of
Mortgage Loans
Aggregate
Cut-off Date Balance
% of Initial Outstanding
Pool Balance(1)
Mortgage Rate(3) Stated Remaining Term (Mos.) U/W NCF
DSCR(1)(2)(3)
Cut-off Date LTV Ratio(1)(2)(4) Maturity Date
or ARD

LTV Ratio(1)(2)(4)
  60   3 $95,500,000 13.5% 3.649% 59 4.02x 35.9% 35.9%
120 39 $613,126,196 86.5% 4.449% 119 1.95x 59.0% 51.5%
Total/Weighted Average 42 $708,626,196 100.0% 4.341% 111 2.23x 55.9% 49.4%

 

Distribution of Remaining Terms to Maturity or ARD
            Weighted Averages
Range of Remaining Terms to
Maturity or ARD
Number of
Mortgage Loans
Aggregate
Cut-off Date Balance
% of Initial Outstanding
Pool Balance(1)
Mortgage Rate Stated Remaining Term (Mos.) U/W NCF
DSCR(1)(2)(3)
Cut-off Date LTV Ratio(1)(2)(4) Maturity Date
or ARD
LTV Ratio(1)(2)(4)
57 - 60  3 $95,500,000 13.5% 3.649% 59 4.02x 35.9% 35.9%
61 - 120 39 $613,126,196 86.5% 4.449% 119 1.95x 59.0% 51.5%
Total/Weighted Average 42 $708,626,196 100.0% 4.341% 111 2.23x 55.9% 49.4%

 

Distribution of Underwritten NOI Debt Yields(1)(2)
            Weighted Averages
Range of Underwritten NOI Debt Yields Number of
Mortgage Loans
Aggregate
Cut-off Date Balance
% of Initial Outstanding
Pool Balance(1)
Mortgage Rate Stated Remaining Term (Mos.) U/W NCF
DSCR(1)(2)(3)
Cut-off Date LTV Ratio(1)(2)(4) Maturity Date
or ARD
LTV Ratio(1)(2)(4)
8.3% - 9.0%  5 $78,308,000 11.1% 4.707% 120 1.45x 67.1% 60.6%
9.1% - 10.0%  8 $100,756,801 14.2% 4.601% 120 1.50x 66.5% 57.0%
10.1% - 11.0%  6 $103,036,220 14.5% 4.451% 119 1.98x 63.0% 57.0%
11.1% - 12.0%  8 $154,991,452 21.9% 3.924% 93 2.45x 54.1% 49.2%
12.1% - 13.0%  5 $81,628,622 11.5% 4.104% 119 2.74x 47.3% 42.8%
13.1% - 14.0%  2 $89,420,000 12.6% 4.277% 120 2.04x 49.3% 43.7%
14.1% - 15.0%  2 $8,550,000 1.2% 4.994% 120 1.86x 61.6% 46.0%
15.1% - 16.0%  1 $8,500,000 1.2% 4.450% 120 2.10x 59.9% 43.8%
16.1% - 26.8%  5 $83,435,101 11.8% 4.545% 99 3.52x 41.7% 34.0%

Total/Weighted Average

 

42 $708,626,196 100.0% 4.341% 111 2.23x 55.9% 49.4%

 

Amortization Types
        Weighted Averages
Amortization Type Number of
Mortgage Loans
Aggregate
Cut-off Date Balance
% of Initial Outstanding
Pool Balance(1)
Mortgage Rate Stated Remaining Term (Mos.) U/W NCF
DSCR(1)(2)(3)
Cut-off Date LTV Ratio(1)(2)(4) Maturity Date
or ARD

LTV Ratio(1)(2)(4)
Full IO  8 $245,300,000 34.6% 3.875% 95 3.14x 46.7% 46.7%
Amortizing 26 $244,568,196 34.5% 4.720% 119 1.74x 61.6% 48.6%
Partial IO  8 $218,758,000 30.9% 4.440% 119 1.76x 59.9% 53.3%
Total/Weighted Average 42 $708,626,196 100.0% 4.341% 111 2.23x 55.9% 49.4%

 

Loan Purposes
        Weighted Averages
Loan Purpose Number of
Mortgage Loans
Aggregate
Cut-off Date Balance
% of Initial Outstanding
Pool Balance(1)
Mortgage Rate Stated Remaining Term (Mos.) U/W NCF
DSCR(1)(2)(3)
Cut-off Date LTV Ratio(1)(2)(4) Maturity Date
or ARD
LTV Ratio(1)(2)(4)
Refinance 37 $511,526,196 72.2% 4.471% 113 2.25x 55.9% 48.5%
Acquisition  5 $197,100,000 27.8% 4.004% 108 2.18x 56.0% 51.7%
Total/Weighted Average 42 $708,626,196 100.0% 4.341% 111 2.23x 55.9% 49.4%

 

Please see footnotes on page 9.

 

THE INFORMATION IN THIS 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.

 

  8 

 

  

UBS 2017-C3

 

OVERVIEW OF MORTGAGE POOL CHARACTERISTICS

 

(1)All numerical information concerning the mortgage loans is approximate and, in the case of mortgage loans secured by multiple properties, is based on allocated loan amounts with respect to such properties. All weighted average information regarding the mortgage loans reflects the weighting of the mortgage loans based on their outstanding principal balances as of the Cut-off Date or, in the case of mortgage loans secured by multiple properties, allocated loan amounts. The sum of numbers and percentages in columns may not match the “Total” due to rounding. With respect to any mortgage loan that is part of a whole loan, unless otherwise indicated, all LTV Ratio, U/W NCF DSCR and Debt Yield calculations include any related pari passu companion loans (other than the IC Leased Fee Hotel Portfolio Unfunded Companion Loan) and exclude any related subordinate companion loans, as applicable. The Number of Mortgaged Properties does not reflect the property identified as “Villa Roma”, which may be acquired upon the full funding of the IC Leased Fee Hotel Portfolio Unfunded Companion Loan.

 

(2)With respect to any mortgage loan that is part of a whole loan, unless otherwise indicated, LTV, DSCR and Debt Yield calculations in this Term Sheet include any related pari passu companion loans (other than the IC Leased Fee Hotel Portfolio Unfunded Companion Loan) and exclude any subordinate companion loans, as applicable. Additionally, LTV, DSCR and Debt Yield figures in this Term Sheet are calculated for mortgage loans without regard to any additional indebtedness that may be incurred at a future date. With respect to any leased fee loans, the SF/Unit and Balance per SF/Unit figures in this Term Sheet are based on the size of the non-collateral improvements. With respect to the IC Leased Fee Hotel Portfolio Mortgage Loan, the related Cut-off Date LTV Ratio, Maturity Date or ARD LTV Ratio, U/W NCF DSCR and U/W NOI Debt Yield, calculated assuming that the IC Leased Fee Hotel Portfolio Unfunded Companion Loan is fully funded and the property referred to as “Villa Roma” is acquired are 77.5%, 77.5, 1.58x and 8.0%, respectively.

 

(3)The Center 78 Mortgage Loan accrues interest at an interest rate that changes over time, as set forth on Annex F of the Preliminary Prospectus. The U/W NCF DSCR is calculated based on the aggregate debt service of the 12-month period commencing in September 2022.

 

(4)With respect to the Clay Plaza Mortgage Loan, Cut-off Date LTV Ratio, LTV Ratio at Maturity or ARD, and Appraised Value is based on the "As-Stabilized" value of $3.05 million as of September 6, 2017, which assumes the completion of tenant improvements to the Workout Anytime space. At closing, the borrower deposited $115,750 into a tenant improvement reserve to cover the cost of such Workout Anytime tenant improvements. The Cut-off Date LTV Ratio and LTV Ratio at Maturity or ARD based on the $2.85 million “As-Is” appraised value are 63.7% and 48.1%, respectively.

 

(5)“California – Northern” includes zip codes above 93600, and “California – Southern” includes zip codes at or below 93600.

 

THE INFORMATION IN THIS 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.

 

  9 

 

 

 

UBS 2017-C3

OVERVIEW OF MORTGAGE POOL CHARACTERISTICS

 

Ten Largest Mortgage Loans
Mortgage Loan

Mortgage

Loan

 Seller

City, State Property Type

Cut-off Date
Balance

% of Initial

Outstanding

Pool Balance

Cut-off Date

Balance per

Unit/Room/NRA(1)

Cut-off

Date 

LTV

Ratio(1)

U/W 

NCF 

DSCR(1) 

U/W NOI

 Debt

Yield(1)

Ionis Pharmaceuticals - Gazelle Ct UBS AG Carlsbad, CA Mixed Use $51,350,000 7.2% $292 45.8% 2.22x 13.5%
Del Amo Fashion Center SG Torrance, CA Retail $50,000,000 7.1% $260 39.8% 3.34x 12.9%
TZA Multifamily Portfolio I SG Various, FL Multifamily $50,000,000 7.1% $45,340 73.7% 1.55x 10.5%
American Cancer Society Center KeyBank Atlanta, GA Office $43,000,000 6.1% $117 63.8% 1.79x 12.0%
Embassy Suites - Santa Ana SG Santa Ana, CA Hospitality $38,070,000 5.4% $126,478 54.1% 1.80x 13.5%
245 Park Avenue SG New York, NY Office $38,000,000 5.4% $626 48.9% 2.73x 10.7%
OKC Outlets KeyBank Oklahoma City, OK Retail $37,000,000 5.2% $220 59.9% 2.41x 11.2%
Park West Village UBS AG New York, NY Multifamily $30,000,000 4.2% $140,845 20.0% 4.46x 12.0%
JW Marriott Chicago Natixis Chicago, IL Hospitality $28,500,000 4.0% $130,000 21.4% 5.64x 26.8%
Center 78(2) Natixis Warren, NJ Office $28,000,000 4.0% $171 67.4% 1.86x 9.9%
Total/Weighted Average     $393,920,000 55.6%   50.8% 2.65x 13.0%
(1)With respect to any mortgage loan that is part of a whole loan, unless otherwise indicated, all LTV Ratio, U/W NCF DSCR, Debt Yield and Balance per SF/Unit/Room/SF calculations in this Term Sheet include any related pari passu companion loans and exclude any subordinate companion loans, as applicable. Additionally, LTV Ratio, U/W NCF DSCR, Debt Yield and Balance per Unit/Room/SF figures in this Term Sheet are calculated for mortgage loans without regard to any additional indebtedness that may be incurred at a future date.

 

(2)The Center 78 Mortgage Loan accrues interest at an interest rate that changes over time, as set forth on Annex F of the Preliminary Prospectus. The U/W NCF DSCR is calculated based on the aggregate debt service of the 12-month period commencing in September 2022.

  

Existing Mezzanine Debt Summary
Mortgage Loan Mortgage Loan
Cut-off Date
Balance
Mezzanine Debt
Cut-off Date
Balance
Trust
U/W NCF
DSCR
Total Debt
U/W NCF
DSCR(1)
Trust
Cut-off Date
LTV Ratio
Total Debt
Cut-off Date
LTV Ratio(1)
Trust
U/W NOI
Debt Yield
Total Debt
U/W NOI
Debt Yield(1)
245 Park Avenue $38,000,000 $568,000,000 2.73x 1.42x 48.9% 80.0% 10.7% 6.5%
Park West Village $30,000,000 $186,250,000 4.46x 1.07x 20.0% 54.2% 12.0% 4.4%
JW Marriott Chicago $28,500,000 $66,500,000 5.64x 1.26x 21.4% 72.9% 26.8% 7.9%
Center 78(2) $28,000,000 $11,900,000 1.86x 1.08x 67.4% 85.1% 9.9% 7.9%
Great Valley Commerce Center $27,750,000 $5,000,000 1.66x 1.34x 67.0% 73.8% 11.5% 10.4%
(1)Total Debt U/W NCF DSCR, Total Debt Cut-off Date LTV Ratio and Total Debt U/W NOI Debt Yield calculations include any related pari passu companion loan(s), related subordinate companion loan(s) and/or related mezzanine loan(s).

 

(2)The Center 78 Mortgage Loan accrues interest at an interest rate that changes over time, as set forth on Annex F of the Preliminary Prospectus. The U/W NCF DSCR is calculated based on the aggregate debt service of the 12-month period commencing in September 2022.

 

Subordinate Debt Summary
Mortgage Loan Mortgage Loan
Cut-off Date
Balance
Pari Passu
Companion
Loan(s) Cut-off Date
Balance
Subordinate Debt
Cut-off Date
Balance
Trust
U/W NCF
DSCR
Total
Mortgage Debt
U/W NCF DSCR(1)
Trust
Cut-off Date
LTV Ratio
Total
Mortgage Debt
Cut-off Date
LTV Ratio(1)
Trust
U/W NOI
Debt Yield
Total Mortgage Debt
U/W NOI
Debt Yield(1)
Del Amo Fashion Center $50,000,000 $409,300,000 $125,700,000 3.34x 2.63x 39.8% 50.6% 12.9% 10.1%
245 Park Avenue $38,000,000 $1,042,000,000 $120,000,000 2.73x 2.45x 48.9% 54.3% 10.7% 9.6%
Park West Village $30,000,000 $90,000,000 $18,750,000 4.46x 3.44x 20.0% 23.1% 12.0% 10.4%
JW Marriott Chicago $28,500,000 $50,800,000 $124,200,000 5.64x 1.92x 21.4% 54.9% 26.8% 10.4%
Center 78(2) $28,000,000 $35,863,277 $4,936,723 1.86x 1.45x 67.4% 72.6% 9.9% 9.2%
(1)Total Mortgage Debt U/W NCF DSCR, Total Mortgage Debt Cut-off Date LTV, Total Mortgage Debt U/W NOI Debt Yield calculations include any related pari passu companion loan(s), related subordinate companion loan(s) and excludes related mezzanine loan(s), if any.

 

(2)The Center 78 Mortgage Loan accrues interest at an interest rate that changes over time, as set forth on Annex F of the Preliminary Prospectus. The U/W NCF DSCR is calculated based on the aggregate debt service of the 12-month period commencing in September 2022.

 

THE INFORMATION IN THIS 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.

 

  10 

 

 

UBS 2017-C3

OVERVIEW OF MORTGAGE POOL CHARACTERISTICS

 

Pari Passu Companion Loan Summary
Mortgage Loan Note(s) Original Balance Holder of Note Lead Servicer for Whole Loan (Y/N) Master Servicer Under Lead Securitization Special Servicer Under
 Lead Securitization
Del Amo Fashion Center A-1-1 (controlling)(1), A-2-1, A-3-1, A-4-1, B-1-1, B-2-1, B-3-1, B-4-1 $59,300,000 DAFC 2017-AMO Yes KeyBank National Association Cohen Financial, a Division of SunTrust Bank
  A-1-4, A-2-2-A, A-2-2-B, A-2-4, B-2-2-A, B-2-2-B, B-2-4 $90,457,000 BANA, WFB, Barclays No    
  A-1-2, A-4-2, B-1-2, B-4-2 $90,000,000 BANK 2017-BNK5 No    
  A-2-3, A-4-3, B-2-3, B-4-3 $60,000,000 WFCM 2017-C38 No    
  A-1-3, A-4-4, B-1-3, B-1-4, B-4-4 $59,543,000 BANK 2017-BNK6 No    
  A-3-2, B-3-2 $50,000,000 UBS 2017-C3 No    
  A-3-3,  B-3-3 $45,000,000 UBS 2017-C2 No    
  A-3-4, B-3-4 $5,000,000 SG No    
TZA Multifamily Portfolio I A-1 (controlling) $50,000,000 UBS 2017-C2 Yes Midland Loan Services, a Division of PNC Bank, National Association Midland Loan Services, a Division of PNC Bank, National Association
  A-2, A-3 $50,000,000 UBS 2017-C3 No    
  A-4 $8,000,000 SG No    
American Cancer Society Center A-1 (controlling), A-3 $73,200,000 KeyBank Yes Midland Loan Services, a Division of PNC Bank, National Association(2) Midland Loan Services, a Division of PNC Bank, National Association(2)
  A-2 $43,000,000 UBS 2017-C3 No(2)    
245 Park Avenue A-1-A (controlling)(1), A-1-B, A-1-C, A-1-D,
A-1-E
$380,000,000 245 Park Avenue Trust 2017-245P Yes Wells Fargo Bank, National Association Aegon USA Realty Advisors, LLC
  A-2-D-1 $32,000,000 UBS 2017-C2 No    
  A-2-E-1 $55,000,000 WFCM 2017-C38 No    
  A-2-A-1 $98,000,000 JPMCC 2017-JP6 No    
  A-2-A-2, A-2-C-1-A $90,000,000 DBJPM 2017-C6 No    
  A-2-B-1 $80,000,000 CSAIL 2017-C8 No    
  A-2-D-2, A-2-D-3 $38,000,000 UBS 2017-C3 No    
  A-2-A-3, A-2-A-4, A-2-B-2,
A-2-B-3-B, A-2-C-1-B, A-2-C-2,  A-2-E-2
$258,250,000 JPMCB, Natixis, DBNY, Barclays No    
  A-2-B-3-A $45,000,000 WFCM 2017-C39 No    
OKC Outlets A-1 (controlling) $49,500,000 KeyBank Yes Midland Loan Services, a Division of PNC Bank, National Association(3) Midland Loan Services, a Division of PNC Bank, National Association(3)
  A-2 $37,000,000 UBS 2017-C3 No(3)    
Park West Village A-1 (controlling)(1), A-5 $50,000,000 UBS 2017-C2 Yes Midland Loan Services, a Division of PNC Bank, National Association Midland Loan Services, a Division of PNC Bank, National Association
  A-2 $30,000,000 UBS 2017-C3 No    
  A-3, A-4, A-6 $40,000,000 UBS AG No    
JW Marriott Chicago A-1 (controlling)(1) $40,000,000 Natixis Yes Midland Loan Services, a Division of PNC Bank, National Association(4) Midland Loan Services, a Division of PNC Bank, National Association(4)
  A-2 $28,500,000 UBS 2017-C3 No(4)    
  A-3 $10,800,000 Natixis No    
Center 78 A-1 (controlling)(1) $35,863,277 Natixis Yes Midland Loan Services, a Division of PNC Bank, National Association(5) Midland Loan Services, a Division of PNC Bank, National Association(5)
  A-2 $28,000,000 UBS 2017-C3 No(5)    
Great Valley Commerce Center A-1 (controlling) $27,750,000 UBS 2017-C3 Yes Midland Loan Services, a Division of PNC Bank, National Association Midland Loan Services, a Division of PNC Bank, National Association
  A-2 $21,525,000 KeyBank No    
IC Leased Fee Hotel Portfolio A-1 $24,000,000 UBS 2017-C2 Yes Midland Loan Services, a Division of PNC Bank, National Association Midland Loan Services, a Division of PNC Bank, National Association
  A-2 $11,465,000 Natixis No    
  A-3 $14,880,000(6) Natixis No    
  A-4 (controlling) $27,000,000 UBS 2017-C3 No    
The District A-1 (controlling), A-3, A-4, A-5 $55,000,000 UBS AG Yes Midland Loan Services, a Division of PNC Bank, National Association(7) Midland Loan Services, a Division of PNC Bank, National Association(7)
  A-2 $25,000,000 UBS 2017-C3 No(7)    
(1)The related whole loan will be serviced pursuant to the indicated pooling and servicing agreement or trust and servicing agreement, as applicable. However, so long as no “control appraisal period” (or similar term) has occurred and is continuing, the holder of the related subordinate companion loan will be the controlling noteholder and will have the right to approve certain modifications and consent to certain actions taken with respect to the related whole loan. If a control appraisal period has occurred and is continuing, the holder of the note indicated as the “controlling” note will be the controlling noteholder.

(2)The American Cancer Society Center is expected to initially be serviced under the UBS 2017-C3 pooling and servicing agreement until the securitization of the related controlling pari passu Note A-1 (the “American Cancer Society Center Servicing Shift Securitization Date”), after which the American Cancer Society Center Whole Loan will be serviced under the pooling and servicing agreement related to the securitization of the related controlling pari passu Note A-1 (the “American Cancer Society Center Servicing Shift PSA”). The master servicer and special servicer under the American Cancer Society Center Servicing Shift PSA will be identified in a notice, report or statement to holders of the UBS 2017-C3 certificates after the securitization of the related controlling pari passu Note A-1.

(3)The OKC Outlets is expected to initially be serviced under the UBS 2017-C3 pooling and servicing agreement until the securitization of the related controlling pari passu Note A-1 (the “OKC Outlets Servicing Shift Securitization Date”), after which the OKC Outlets Whole Loan will be serviced under the pooling and servicing agreement related to the securitization of the related controlling pari passu Note A-1 (the “OKC Outlets Servicing Shift PSA”). The master servicer and special servicer under the OKC Outlets Servicing Shift PSA will be identified in a notice, report or statement to holders of the UBS 2017-C3 certificates after the securitization of the related controlling pari passu Note A-1.

(4)The JW Marriott Chicago is expected to initially be serviced under the UBS 2017-C3 pooling and servicing agreement until the securitization of the related controlling pari passu Note A-1 (the “JW Marriott Chicago Servicing Shift Securitization Date”), after which the JW Marriott Chicago Whole Loan will be serviced under the pooling and servicing agreement related to the securitization of the related controlling pari passu Note A-1 (the “JW Marriott Chicago Servicing Shift PSA”). The master servicer and special servicer under the JW Marriott Chicago Servicing Shift PSA will be identified in a notice, report or statement to holders of the UBS 2017-C3 certificates after the securitization of the related controlling pari passu Note A-1.

(5)The Center 78 is expected to initially be serviced under the UBS 2017-C3 pooling and servicing agreement until the securitization of the related controlling pari passu Note A-1 (the “Center 78 Servicing Shift Securitization Date”), after which the Center 78 Whole Loan will be serviced under the pooling and servicing agreement related to the securitization of the related controlling pari passu Note A-1 (the “Center 78 Servicing Shift PSA”). The master servicer and special servicer under the Center 78 Servicing Shift PSA will be identified in a notice, report or statement to holders of the UBS 2017-C3 certificates after the securitization of the related controlling pari passu Note A-1.

(6)Note A-3 has a principal balance as of the Cut-Off Date of $0 but may increase up to $14,880,000 subject to certain conditions in the loan documents.

(7)The District is expected to initially be serviced under the UBS 2017-C3 pooling and servicing agreement until the securitization of the related controlling pari passu Note A-1 ( “The District Servicing Shift Securitization Date”), after which The District Whole Loan will be serviced under the pooling and servicing agreement related to the securitization of the related controlling pari passu Note A-1 ( “The District Servicing Shift PSA”). The master servicer and special servicer under The District Servicing Shift PSA will be identified in a notice, report or statement to holders of the UBS 2017-C3 certificates after the securitization of the related controlling pari passu Note A-1.

 

THE INFORMATION IN THIS 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.

 

  11 

 

 

UBS 2017-C3

OVERVIEW OF MORTGAGE POOL CHARACTERISTICS

 

Previous Securitization History(1)
Mortgage Loan Mortgage
Loan Seller
City, State Property
Type
Cut-off Date
Balance
% of Initial
Outstanding
Pool Balance
Previous
Securitization(s)
Ionis Pharmaceuticals - Gazelle Ct UBS AG Carlsbad, CA Mixed Use $51,350,000 7.2% CGGS 2016-RNDA
TZA Multifamily Portfolio I SG Various, FL Multifamily $50,000,000 7.1% JPMBB 2014-C25(2)
American Cancer Society Center KeyBank Atlanta, GA Office $43,000,000 6.1% JPMCC 2007-C1
OKC Outlets KeyBank Oklahoma City, OK Retail $37,000,000 5.2% GSMS 2012-GCJ7
Azusa Center KeyBank Azusa, CA Retail $15,958,000 2.3% MLMT 2007-C1
Crowne Plaza Memphis Downtown RMF Memphis, TN Hospitality $15,950,867 2.3% CLNY 2015-FL3
Homewood Suites Oakland Waterfront SG Oakland, CA Hospitality $13,000,000 1.8% GCCFC 2007-GG11
Hampton Inn & Suites Williamsburg Historic District SG Williamsburg, VA Hospitality $8,500,000 1.2% MLCFC 2007-9
Bolingbrook Logistics Center KeyBank Bolingbrook, IL Industrial $6,982,474 1.0% MSC 2007-IQ16
Carneros Self Storage Park RMF Sonoma, CA Self Storage $6,800,000 1.0% BSCMS 2007-PW17
Two Rivers MHC KeyBank Bradenton, FL MHC $6,350,000 0.9% UBSBB 2012-C3
West Carmel Shoppes KeyBank Carmel, IN Retail $5,919,982 0.8% COMM 2007-C9
Walmart Plaza SG Natchitoches, LA Retail $5,800,000 0.8% JPMCC 2007-LD11
North Parkway Mini Storage KeyBank Huntsville, AL Self Storage $5,750,000 0.8% LBUBS 2007-C6
South Park Shopping Center SG Winston-Salem, NC Retail $5,450,000 0.8% GCCFC 2007-GG11
Redlands University Plaza KeyBank Redlands, CA Retail $4,086,220 0.6% CGCMT 2007-C6
(1)Includes mortgage loans for which all or a portion of the previously existing debt was most recently securitized in one or more conduit securitizations, based on information provided by the related borrower or obtained through searches of a third-party database. The information has not otherwise been confirmed by the mortgage loan sellers.

 

(2)All properties in the portfolio with the exception of the Timberfalls property were securitized in the JPMBB 2014-C25 transaction.

 

THE INFORMATION IN THIS 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.

 

  12 

 

 

(THIS PAGE INTENTIONALLY LEFT BLANK)

 

 

  13 

 

 

2855 Gazelle Court
Carlsbad, CA 92010

Collateral Asset Summary – Loan No. 1

Ionis Pharmaceuticals - Gazelle Ct

Cut-off Date Balance:

Cut-off Date LTV Ratio:

UW NCF DSCR:

UW NOI Debt Yield:

$51,350,000

45.8%

2.22x

13.5%

 

(GRAPHIC)

 

THE INFORMATION IN THIS 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.

 

  14 

 

 

2855 Gazelle Court
Carlsbad, CA 92010

Collateral Asset Summary – Loan No. 1

Ionis Pharmaceuticals - Gazelle Ct

Cut-off Date Balance:

Cut-off Date LTV Ratio:

UW NCF DSCR:

UW NOI Debt Yield:

$51,350,000

45.8%

2.22x

13.5%

 

Mortgage Loan Information   Property Information
Mortgage Loan Seller: UBS AG   Single Asset/Portfolio: Single Asset
Original Balance: $51,350,000   Location: Carlsbad, CA 92010
Cut-off Date Balance: $51,350,000   General Property Type: Mixed Use
% of Initial Pool Balance: 7.2%   Detailed Property Type: Office/R&D
Loan Purpose: Acquisition   Title Vesting: Fee
Borrower Sponsor: Ionis Pharmaceuticals, Inc.   Year Built/Renovated: 2011/N/A
Mortgage Rate: 3.8810%   Size: 176,000 SF
Note Date: 7/18/2017   Cut-off Date Balance per SF: $292
First Payment Date: 9/6/2017   Maturity Date Balance per SF: $264
Maturity Date: 8/6/2027   Property Manager:

Self-managed

 

Original Term to Maturity: 120 months    
Original Amortization Term: 360 months   Underwriting and Financial Information
IO Period: 60 months   UW NOI: $6,911,392
Seasoning: 0 months   UW NOI Debt Yield: 13.5%
Prepayment Provisions: LO (37); DEF (78); O (5)   UW NOI Debt Yield at Maturity: 14.9%
Lockbox/Cash Mgmt Status: Hard/Springing   UW NCF DSCR: 3.18x (IO)             2.22x (P&I)
Additional Debt Type: No   Most Recent NOI: $6,547,697 (12/31/2016)
Additional Debt Balance: No   2nd Most Recent NOI: $6,177,382 (12/31/2015)
Future Debt Permitted (Type): No (N/A)   3rd Most Recent NOI: $6,177,514 (12/31/2014)
Reserves(1)   Most Recent Occupancy: 100.0% (8/1/2017)
Type Initial Monthly Cap   2nd Most Recent Occupancy: 100.0% (12/31/2016)
RE Tax: $0 Springing N/A   3rd Most Recent Occupancy: 100.0% (12/31/2015)
Insurance: $0 Springing N/A   Appraised Value (as of): $112,000,000 (7/11/2017)
Replacements: $0 Springing N/A   Cut-off Date LTV Ratio: 45.8%
TI/LC: $0 Springing N/A   Maturity Date LTV Ratio: 41.5%
               

Sources and Uses
Sources Proceeds % of Total   Uses Proceeds % of Total
Loan Amount: $51,350,000 64.1%   Purchase Price: $79,411,552 99.1%
Borrower Equity: $28,785,975 35.9%   Closing Costs: $724,423 0.9%
Total Sources: $80,135,975 100.0%   Total Uses: $80,135,975 100.0%

 

 

(1)See “Escrows and Reserves” below for further discussion of reserve requirements.

 

The Mortgage Loan. The largest mortgage loan (the “Ionis Pharmaceuticals - Gazelle Ct Mortgage Loan”) is evidenced by three promissory notes in the aggregate original principal amount of $51,350,000 secured by a first priority fee mortgage encumbering a 176,000 SF mixed use office and R&D property in Carlsbad, California (the “Ionis Pharmaceuticals - Gazelle Ct Property”). The proceeds of the Ionis Pharmaceuticals - Gazelle Ct Mortgage Loan, together with $28,785,975 of borrower equity, were used to acquire the Ionis Pharmaceuticals - Gazelle Ct Property and pay closing costs.

 

The Borrower and the Borrower Sponsor. The borrower is Ionis Gazelle, LLC (the “Ionis Pharmaceuticals - Gazelle Ct Borrower”), a single-purpose Delaware limited liability company structured to be bankruptcy remote with one independent director. The Ionis Pharmaceuticals - Gazelle Ct Borrower is wholly owned by Ionis Pharmaceuticals, Inc. (“Ionis”) (NADSAQ: IONS), the borrower sponsor and nonrecourse carve-out guarantor of the Ionis Pharmaceuticals - Gazelle Ct Mortgage Loan.

 

Ionis is a company in the RNA-targeted drug discovery and development focused on developing drugs for patients with the highest unmet medical needs, such as those patients with severe and rare diseases. Using its proprietary antisense technology, Ionis has created a pipeline of drugs, with three drugs currently in the market and approximately 30 drugs in development. Ionis’ current market capitalization is $5.8 billion with total cash, cash equivalents, and short term investments of approximately $860 million. As of March 30, 2017, Ionis reported total assets of $1.1 billion and a net worth of $201.8 million.

 

The Property. The Ionis Pharmaceuticals - Gazelle Ct Property, located in Carlsbad, California, is comprised of a 176,000 SF two-story class A mixed use office and R&D space for life science and biotechnology research. The Ionis Pharmaceuticals - Gazelle Ct Property is situated on a 13.92-acre site and contains 477 parking spaces (2.71 spaces per 1,000 SF). The Ionis Pharmaceuticals - Gazelle Ct Property was originally build-to-suit for Ionis in 2011 and serves as its corporate headquarters and main research and development facility. Ionis exercised a lease to purchase option contained within its original lease dated March 30, 2010 to purchase the Ionis Pharmaceuticals - Gazelle Ct Property at a contractual price of approximately $79.4 million of which the borrower sponsor contributed approximately $28.8 million ($164 PSF) of equity towards the total purchase price. At origination of the Ionis Pharmaceuticals - Gazelle Ct Mortgage Loan, Ionis executed a new 15-year triple net lease through July 2032 at $41.40 PSF with 10.0% increases every five years and no early termination rights.

 

According to the appraisal, the Ionis Pharmaceuticals - Gazelle Ct Property contains approximately 65% (114,400 SF) of office space and 35% (61,600 SF) of R&D space. The Ionis Pharmaceuticals - Gazelle Ct Property is 100.0% leased to Ionis as of August 1, 2017. Office improvements (65% of NRA) at the Ionis Pharmaceuticals - Gazelle Ct Property include a mix of open plan and private offices, conference rooms and several employee lounge and break areas. Wet lab and related life science improvements (35% of NRA) are mainly research oriented and include di-ionized water, nitrogen and compressed air distribution throughout. Wet labs are designed mainly for biology R&D and have biosafety cabinets, fume hoods and chemistry lab areas.

 

THE INFORMATION IN THIS 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.

 

  15 

 

 

2855 Gazelle Court
Carlsbad, CA 92010

Collateral Asset Summary – Loan No. 1

Ionis Pharmaceuticals - Gazelle Ct

Cut-off Date Balance:

Cut-off Date LTV Ratio:

UW NCF DSCR:

UW NOI Debt Yield:

$51,350,000

45.8%

2.22x

13.5%

 

Life science improvements including two walk-in coolers and freezers (one of each per floor), glass wash rooms and two autoclaves. The Ionis Pharmaceuticals - Gazelle Ct Property also includes 25,000 SF of vivarium area split between two floors and served by an elevator.

 

Ionis is currently constructing a free-standing 5,600 SF building that will be used as an employee gym/fitness center facility, which currently occupies about 3,000 to 4,000 SF in the main building. The total cost of the new gym building is being funded by Ionis and is reported to be approximately $1.25 million. In addition, Ionis is currently working on plans with the city of Carlsbad for the installation of solar panels at the Ionis Pharmaceuticals - Gazelle Ct Property, which, once completed, would supply approximately 50% of electricity at the Ionis Pharmaceuticals - Gazelle Ct Property. Estimated project costs are approximately $3.0 million with all additional improvements at the Ionis Pharmaceuticals - Gazelle Ct Property becoming additional collateral for the Ionis Pharmaceuticals - Gazelle Ct Mortgage Loan. Since taking occupancy in 2011, Ionis has invested approximately $21.0 million in capital expenditures at the Ionis Pharmaceuticals - Gazelle Ct Property, including lab equipment, computer equipment and software, furniture and fixtures, solar panels, land and building improvements, data center and additional lab space.

 

The following table presents certain information relating to the sole occupied tenant at the Ionis Pharmaceuticals - Gazelle Ct Property:

 

Tenant Summary(1)
Tenant Name Credit Rating (Fitch/Moody’s/S&P) Tenant SF Approximate
% of SF
Annual UW Base Rent % of Total Annual
UW Base Rent
Annual
UW Base
Rent PSF
Lease Expiration
Ionis Pharmaceuticals, Inc. NR/NR/NR 176,000 100.0% $7,286,400 100.0% $41.40 7/16/2032
Total/Wtd. Avg.   176,000 100.0% $7,286,400 100.0% $41.40  

 

 

(1)Information is based on the underwritten rent roll.

 

The following table presents certain information relating to the lease rollover schedule at the Ionis Pharmaceuticals - Gazelle Ct Property:

 

Lease Rollover Schedule(1)
Year # of
Leases Rolling
SF Rolling Approx. % of
Total SF Rolling
Approx. Cumulative %
of SF Rolling
UW Base
Rent PSF Rolling
Total UW Base Rent Rolling Approx. % of Total Base Rent Rolling Approx. Cumulative %
of Total Base Rent Rolling
2017 0  0 0.0% 0.0% $0.00  $0 0.0% 0.0%
2018 0  0 0.0% 0.0% $0.00  $0 0.0% 0.0%
2019 0  0 0.0% 0.0% $0.00  $0 0.0% 0.0%
2020 0  0 0.0% 0.0% $0.00  $0 0.0% 0.0%
2021 0  0 0.0% 0.0% $0.00  $0 0.0% 0.0%
2022 0  0 0.0% 0.0% $0.00  $0 0.0% 0.0%
2023 0  0 0.0% 0.0% $0.00  $0 0.0% 0.0%
2024 0  0 0.0% 0.0% $0.00  $0 0.0% 0.0%
2025 0  0 0.0% 0.0% $0.00  $0 0.0% 0.0%
2026 0  0 0.0% 0.0% $0.00  $0 0.0% 0.0%
2027 0  0 0.0% 0.0% $0.00  $0 0.0% 0.0%
2028 & Beyond 1 176,000 100.0% 100.0% $41.40 $7,286,400 100.0% 100.0%
Vacant 0 0 0.0% 100.0% $0.00 $0 0.0% 100.0%
Total/Wtd. Avg. 1 176,000 100.0%   $41.40 $7,286,400 100.0%  

 

 

(1)Information is based on the underwritten rent roll.

 

The Market. The Ionis Pharmaceuticals - Gazelle Ct Property is located in Carlsbad, California, approximately 25 miles north of the San Diego central business district. Carlsbad is a coastal city in northwest San Diego County and is comprised of approximately 39 square miles, bounded by the Pacific Ocean on the west, the city of Encinitas on the south, the city of San Marcos on the east and Highway 78 on the north. Highway 78 provides east/west access between costal Carlsbad, Oceanside and inland north San Diego County communities. Interstate 5, located approximately five miles west, is a major north/south interstate providing access to the United States/Canadian Border in Blaine, Washington to the north and to the United States/Mexican border in San Ysidro, California to the south.

 

According to a third party market research report, San Diego is the third largest “Biotech Hub” in the United States alongside Greater Boston and the San Francisco Bay area with inventory of approximately 17.0 million SF. Carlsbad’s key industry clusters feature life sciences; information, communications and technology; action sports manufacturing; and clean technology, and include corporate headquarters for many well-known national and international companies. Life science is a large industry in Carlsbad, which includes biotech, medical device, diagnostic and technology companies and institutes. According to the appraisal, approximately 24% of all Carlsbad jobs are in the life science sector. Employers include Thermo Fisher, Genoptix and OptumRx. Carlsbad is also a leader in action sports manufacturing with more than half of all San Diego County action sports manufacturers based in this submarket, employing approximately 4,000 people. Notable employers include Callaway Golf, TaylorMade/Adidas, Acushnet/Titleist, Cobra Golf, Reef, Prana and Spy Optics. According to a third party market research report, the estimated 2017 average household income within a one-, three-, and five-mile radius is $132,277, $107,809 and $102,806, respectively.

 

According to a third party market research report, the Ionis Pharmaceuticals - Gazelle Ct Property is in the Carlsbad office submarket. The Carlsbad office submarket contains 329 buildings, accounting for approximately 7.1 million SF of office space. Overall vacancy in the Carlsbad office submarket was 17.1% with an average rental rate of $29.97 per SF as of the second quarter of 2017. According to a third party market research report, the Ionis

 

THE INFORMATION IN THIS 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.

 

  16 

 

 

2855 Gazelle Court
Carlsbad, CA 92010

Collateral Asset Summary – Loan No. 1

Ionis Pharmaceuticals - Gazelle Ct

Cut-off Date Balance:

Cut-off Date LTV Ratio:

UW NCF DSCR:

UW NOI Debt Yield:

$51,350,000

45.8%

2.22x

13.5%

 

Pharmaceuticals - Gazelle Ct Property is in the North County San Diego life science/wet lab submarket, which contains 2.4 million SF of space. Overall vacancy in the North County life science/wet lab submarket was 1.1% as of the first quarter of 2017. According to the appraisal and a third party market research report, the Ionis Pharmaceuticals - Gazelle Ct Property has an office/lab space market rent of $25.44 PSF to $54.00 PSF, with an average market rent of $43.34 PSF including the Ionis Pharmaceuticals - Gazelle Ct Property.

 

The following tables present certain information relating to sales and lease comparables for the Ionis Pharmaceuticals - Gazelle Ct Property:

 

Office/Lab Lease Comparables
Property Name Property Location

Year Built/

Renovated

Distance
to Subject
Tenant Name Lease Date NRA Lease Term (yrs) Base
Rent PSF(1)

Lease

Type

Ionis Pharmaceuticals - Gazelle Ct Property Carlsbad, CA 2011/N/A Ionis(2) July 2017(2) 176,000(2) 15.0(2) $41.40(2) NNN
DNAe Carlsbad, CA NAV 2.4 miles DNAe NAV 24,000 NAV NAV NAV

Genoptix Flex/R&D

Bio-tech Lab Building

Carlsbad, CA 2002/N/A 2.5 miles Genoptix Jan 2015 61,618 5.0 $25.44 NNN
AutoGenomics Carlsbad, CA NAV 3.0 miles AutoGenomics NAV 60,000 NAV NAV NAV
Coast9 San Diego, CA NAV 21.9 miles Nielsen Biosciences, Inc. June 2017 7,588 10.6 $37.80 NNN
Torrey Pines Science Center San Diego, CA NAV 22.6 miles

Molecular Assemblies

Impact Genomics

Aug 2016

April 2017

4,181

5,193

3.0

4.0

$41.40

$42.00

NNN

NNN

Torrey Pines Lab Building San Diego, CA 1991/N/A 22.9 miles Fate Therapeutics Jan 2017 76,084 7.0 $45.48 NNN
Torrey Ridge Science Center San Diego, CA NAV 22.9 miles AltheaDx Jan 2017 35,984 7.0 $49.56 NNN
3565 General Atomics Ct San Diego, CA NAV 23.0 miles

Astellas Pharma

Fate Therapeutics

Vividion Therapeutics

Sept 2016

Feb 2017

July 2017

25,457

47,924

12,442

10.0

6.4

3.3

$46.80

$46.20

$48.00

NNN

NNN

NNN

Office/Lab Property San Diego, CA 2000/N/A 23.1 miles Sorrento Therapeutics Mar 2017 76,687 8.8 $36.00 NNN
Spectrum I San Diego, CA NAV 23.6 miles

Ideaya BioSciences

Wellsprings Biosciences

April 2017

July 2017

3,722

17,823

3.0

2.5

$48.00

$48.60

NNN

NNN

Vertex B-T-S San Diego, CA NAV 23.7 miles Vertex Pharmaceuticals Jan 2018 170,523 16.0 $54.00 NNN
Arenisca San Diego, CA 1990/N/A 23.9 miles Calibr Aug 2017 72,419 10.4 $46.20 NNN
Oberlin Science Center San Diego, CA NAV 24.0 miles Ohr Pharma Sept 2016 4,452 1.3 $36.12 NNN
AXIOM - Bldg 3 San Diego, CA 1998/2016 24.6 miles La Jolla Pharmaceuticals Nov 2017 83,008 10.0 $43.80 NNN

 

 

Source: Appraisal and third party market research report

 

(1)Ionis has 10% rent steps every five years. All office/lab lease comparables have 3% annual rent steps.

 

(2)Based on the underwritten rent roll.

 

THE INFORMATION IN THIS 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.

 

  17 

 

 

2855 Gazelle Court
Carlsbad, CA 92010

Collateral Asset Summary – Loan No. 1

Ionis Pharmaceuticals - Gazelle Ct

Cut-off Date Balance:

Cut-off Date LTV Ratio:

UW NCF DSCR:

UW NOI Debt Yield:

$51,350,000

45.8%

2.22x

13.5%

 

Operating History and Underwritten Net Cash Flow. The following table presents certain information relating to the historical operating performance and the Underwritten Net Cash Flow at the Ionis Pharmaceuticals - Gazelle Ct Property:

 

Cash Flow Analysis  
  2014   2015   2016   UW   UW PSF  
Gross Potential Rent(1) $6,179,106   $6,179,106   $6,549,852   $7,286,400   $41.40  
Total Recoveries $821,320   $653,155   $997,402   $213,754   $1.21  
Total Other Income $0   $0   $0   $0   $0.00  
Less Vacancy & Credit Loss(2)

$0

 

$0

 

$0

 

($375,008)

 

($2.13)

 
Effective Gross Income $7,000,426   $6,832,261   $7,547,254   $7,125,147   $40.48  
Total Operating Expenses

$822,912

 

$654,879

 

$999,557

 

$213,754

 

$1.21

 
Net Operating Income $6,177,514   $6,177,382   $6,547,697   $6,911,392   $39.27  
Capital Expenditures $0   $0   $0   $26,400   $0.15  
TI/LC

$0

 

$0

 

$0

 

$451,106

 

$2.56

 
Net Cash Flow $6,177,514   $6,177,382   $6,547,697   $6,433,887   $36.56  
                     
Occupancy % 100.0%   100.0%   100.0%   100.0%      
NOI DSCR (P&I) 2.13x   2.13x   2.26x   2.38x      
NCF DSCR (P&I) 2.13x   2.13x   2.26x   2.22x      
NOI Debt Yield 12.0%   12.0%   12.8%   13.5%      
NCF Debt Yield 12.0%   12.0%   12.8%   12.5%      

    
(1)Gross Potential Rent has been underwritten based on 100.0% physical occupancy as of the Cut-off Date.

(2)Vacancy & Credit Loss is underwritten to a vacancy rate of 5.0% of all revenue. The Ionis Pharmaceuticals - Gazelle Ct Property is underwritten based on 100.0% physical occupancy as of the Cut-off Date.

 

Escrows and Reserves. Ongoing monthly escrows for real estate taxes, insurance premiums and capital expenditures are not required so long as (i) no event of default has occurred and is continuing, (ii) the Ionis Pharmaceuticals - Gazelle Ct Property is demised pursuant to the Ionis lease, (iii) the Ionis lease is in full force and effect, (iv) no Material Tenant Trigger Event (as defined below) has occurred, (v) Ionis (a) pays all taxes directly to the applicable government authorities, (b) maintains insurance according to its lease or (c) maintains the Ionis Pharmaceuticals - Gazelle Ct Property in a condition reasonably acceptable to the lender (as applicable) and (vi) Ionis performs its obligations under clause (v) above in a timely manner and provides the Ionis Pharmaceuticals - Gazelle Borrower evidence reasonably satisfactory to the lender of such performance in a timely manner. Ongoing monthly escrows for tenant improvements and leasing commissions are not required so long as (i) no event of default has occurred or is continuing, (ii) the Ionis Pharmaceuticals - Gazelle Ct Property is demised pursuant to the Ionis lease, (iii) the Ionis lease is in full force and effect and (iv) no Material Tenant Trigger Event has occurred.

 

A “Material Tenant Trigger Event” will commence upon the earlier of (i) if the Material Tenant (as defined below) fails to extend or renew its lease upon terms and conditions set forth in the Material Tenant’s lease (or as otherwise acceptable to the lender) on or prior to the earlier of (a) the date required for such notice period pursuant to the Material Tenant’s lease and (b) the date that is at least 12 months prior to the then-applicable expiration date of the Material Tenant’s lease, (ii) if an event of default under the Material Tenant’s lease has occurred, (iii) the Material Tenant or lease guarantor of the Material Tenant’s lease becomes insolvent or a debtor in any bankruptcy action, (iv) if the Material Tenant’s lease is terminated or no longer in full force or effect, (v) if the Material Tenant “goes dark,” vacates, ceases to occupy or discontinues its operations at the Ionis Pharmaceuticals - Gazelle Ct Property or (vi) if Ionis fails to maintain liquid assets of at least $85,000,000. A Material Tenant Trigger Event will continue until, in regard to clause (i) above, the Material Tenant has entered into a renewal of all of its leased premises in accordance with the requirements of the loan documents or certain re-leasing conditions have been satisfied with respect to the Material Tenant space, in regard to clause (ii) above, the applicable event of default has been cured, in regard to clause (iii) above, the Material Tenant’s lease is unconditionally affirmed in the applicable bankruptcy and the Material Tenant is paying full unabated rent or, if applicable, the guarantor bankruptcy has been discharged or dismissed, in regard to clause (iv) above, certain re-leasing conditions have been satisfied with respect to the Material Tenant space, in regard to clause (v) above, the applicable Material Tenant re-commences its operations at its leased premises and is paying full unabated rent, or in regard to clause (vi) above, the Ionis Pharmaceuticals - Gazelle Ct Borrower delivers written evidence that Ionis has liquid assets of at least $85,000,000.

 

A “Material Tenant” means (i) Ionis or (ii) a tenant or an affiliate of such tenant that leases space comprising 30% or more of either (a) the total rentable SF at the Ionis Pharmaceuticals - Gazelle Ct Property or (b) the total in-place base rent at the Ionis Pharmaceuticals - Gazelle Ct Property.

 

Lockbox and Cash Management. A hard lockbox is in place with respect to the Ionis Pharmaceuticals - Gazelle Ct Mortgage Loan. The Ionis Pharmaceuticals - Gazelle Ct Mortgage Loan has springing cash management (i.e., has cash management only after the initial occurrence of a Trigger Period (as defined below)). During the continuance of a Trigger Period, funds in the lockbox account are required to be applied on each monthly payment date to pay debt service on the Ionis Pharmaceuticals - Gazelle Ct Mortgage Loan, to fund the required reserves deposits as described above under “Escrows and Reserves”, to disburse, provided that no event of default has occurred and is continuing, to the Ionis Pharmaceuticals - Gazelle Ct Borrower the monthly amount payable for operating expenses not otherwise paid or reserved for as described above under “Escrows and Reserves” and referenced in the annual budget approved by the lender together with other amounts incurred by the Ionis Pharmaceuticals - Gazelle Ct Borrower in connection with the operation and maintenance of the Ionis Pharmaceuticals - Gazelle Ct Property reasonably approved by the lender, and to disburse the remainder to the Ionis Pharmaceuticals - Gazelle Ct Borrower (or, during the continuance of a Cash Sweep Period (as defined below), provided that no Material Tenant Trigger Event has occurred, to an account to be held by the lender as additional security for the Ionis Pharmaceuticals - Gazelle Ct Mortgage Loan). During the continuance of a Material Tenant Trigger Event, on each monthly payment date, all excess cash flow is required to be deposited into a Material Tenant rollover reserve to be held by the lender as additional security for the Ionis Pharmaceuticals - Gazelle Ct Mortgage Loan.

 

THE INFORMATION IN THIS 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.

 

  18 

 

 

2855 Gazelle Court
Carlsbad, CA 92010

Collateral Asset Summary – Loan No. 1

Ionis Pharmaceuticals - Gazelle Ct

Cut-off Date Balance:

Cut-off Date LTV Ratio:

UW NCF DSCR:

UW NOI Debt Yield:

$51,350,000

45.8%

2.22x

13.5%

 

A “Trigger Period” will commence upon the occurrence of (i) an event of default, (ii) any bankruptcy action involving the Ionis Pharmaceuticals - Gazelle Ct Borrower, the borrower sponsor, the guarantor or the property manager, (iii) the debt service coverage ratio based on the trailing 12-month period falling below 1.25x, if the Ionis Lease Condition (as defined below) is not satisfied, (iv) a Material Tenant Trigger Event or (v) any indictment for fraud or misappropriation of funds by the Ionis Pharmaceuticals - Gazelle Ct Borrower, the guarantor or the property manager or any director or officer of the Ionis Pharmaceuticals - Gazelle Ct Borrower, the guarantor or the property manager. A Trigger Period will continue until, in regard to clause (i) above, the cure of such event of default and acceptance of such cure by the lender, in regard to clause (ii) above, upon the filing being discharged, stayed or dismissed within 90 days for the Ionis Pharmaceuticals - Gazelle Ct Borrower, the borrower sponsor or the guarantor, or within 120 days for the property manager, and the lender’s determination that such filing does not materially affect the Ionis Pharmaceuticals - Gazelle Ct Borrower’s, the borrower sponsor’s, the guarantor’s, or the property manager’s monetary obligations, in regard to clause (iii) above, if the Ionis Lease Condition is not satisfied, upon the date the debt service coverage ratio based on the trailing 12-month period is at least 1.25x for two consecutive calendar quarters, in regard to clause (iv) above, the Material Tenant Trigger Event is cured, or in regard to clause (v) above, with respect to the property manager, when the Ionis Pharmaceuticals - Gazelle Ct Borrower replaces the property manager with a qualified manager or, with respect to the Ionis Pharmaceuticals - Gazelle Ct Borrower or the guarantor, when a judicial determination determines no such fraud or misappropriation of funds has occurred.

 

A “Cash Sweep Period” will commence upon the occurrence of (i) an event of default, (ii) any bankruptcy action involving the Ionis Pharmaceuticals - Gazelle Ct Borrower, the borrower sponsor, the guarantor or the property manager or (iii) the debt service coverage ratio based on the trailing 12-month period falling below 1.20x, if the Ionis Lease Condition is not satisfied. A Cash Sweep Period will continue until, in regard to clause (i) above, the cure of such event of default and acceptance of such cure by the lender, in regard to clause (ii) above, upon the filing being discharged, stayed or dismissed within 90 days for the Ionis Pharmaceuticals - Gazelle Ct Borrower, the borrower sponsor or the guarantor, or within 120 days for the property manager, and the lender’s determination that such filing does not materially affect the Ionis Pharmaceuticals - Gazelle Ct Borrower’s, the borrower sponsor’s, the guarantor’s, or the property manager’s monetary obligations, or in regard to clause (iii) above, if the Ionis Lease Condition is not satisfied, upon the date the debt service coverage ratio based on the trailing 12-month period is at least 1.20x for two consecutive calendar quarters.

 

An “Ionis Lease Condition” means (i) the Ionis Pharmaceuticals - Gazelle Ct Property is subject to the Ionis lease as of the applicable date of determination, (ii) no event of default under the Ionis lease, (iii) the Ionis lease is in full force and effect, (iv) no Material Tenant Trigger Event has occurred with respect to the Ionis lease and (v) Ionis is paying full unabated rent pursuant to the terms of the Ionis lease.

 

Additional Secured Indebtedness (not including trade debts). Not permitted.

 

Mezzanine Loan and Preferred Equity. Not permitted.

 

Release of Property. Not permitted.

 

Terrorism Insurance. Ionis is required to obtain and maintain property insurance, commercial general liability insurance, and business income or rental loss insurance that covers perils of terrorism and acts of terrorism, both foreign and domestic. So long as certain conditions in in the Ionis Pharmaceuticals - Gazelle Ct Mortgage Loan documents are satisfied, the Ionis Pharmaceuticals - Gazelle Ct Borrower is not required to obtain insurance.

 

THE INFORMATION IN THIS 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.

 

  19 

 

 

2855 Gazelle Court
Carlsbad, CA 92010

Collateral Asset Summary – Loan No. 1

Ionis Pharmaceuticals - Gazelle Ct

Cut-off Date Balance:

Cut-off Date LTV Ratio:

UW NCF DSCR:

UW NOI Debt Yield:

$51,350,000

45.8%

2.22x

13.5%

 

(MAP)

 

THE INFORMATION IN THIS 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.

 

  20 

 

  

(THIS PAGE INTENTIONALLY LEFT BLANK)

 

 

  21 

 

 

3525 West Carson Street

Torrance, CA 90503

Collateral Asset Summary – Loan No. 2

Del Amo Fashion Center

Cut-off Date Balance:

Cut-off Date LTV Ratio:

UW NCF DSCR:

UW NOI Debt Yield:

$50,000,000

39.8%

3.34x

12.9%

 

 

(GRAPHIC) 

 

THE INFORMATION IN THIS 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.

 

  22 

 

 

3525 West Carson Street

Torrance, CA 90503

Collateral Asset Summary – Loan No. 2

Del Amo Fashion Center

Cut-off Date Balance:

Cut-off Date LTV Ratio:

UW NCF DSCR:

UW NOI Debt Yield:

$50,000,000

39.8%

3.34x

12.9%

 

Mortgage Loan Information   Property Information
Mortgage Loan Seller: Société Générale   Single Asset/Portfolio: Single Asset
Original Balance(1): $50,000,000   Location: Torrance, CA 90503
Cut-off Date Balance(1): $50,000,000   General Property Type: Retail
% of Initial Pool Balance: 7.1%   Detailed Property Type: Super Regional Mall
Loan Purpose: Refinance   Title Vesting: Fee
Borrower Sponsors:

Simon Property Group, L.P.;

Commingled Pension Trust Fund

(Strategic Property) of

JPMorgan Chase Bank, N.A.

  Year Built/Renovated: 1961/2017
    Size: 1,769,525 SF
    Cut-off Date Balance per SF(1): $260
    Maturity Date Balance per SF(1): $260
Mortgage Rate(1): 3.6575%   Property Manager: Simon Management Associates II, LLC (borrower-related)
Note Date: 5/12/2017  
First Payment Date: 7/1/2017    
Maturity Date: 6/1/2027      
Original Term to Maturity: 120 months    
Original Amortization Term: 0 months      
IO Period: 120 months   Underwriting and Financial Information
Seasoning: 2 months   UW NOI: $59,343,892
Prepayment Provisions(2): LO (26); DEF (87); O (7)   UW NOI Debt Yield(1): 12.9%
Lockbox/Cash Mgmt Status: Hard/Springing   UW NOI Debt Yield at Maturity(1): 12.9%
Additional Debt Type(1)(3): Pari Passu/Subordinate Debt   UW NCF DSCR(1): 3.34x
Additional Debt Balance(1)(3): $409,300,000/$125,700,000   Most Recent NOI: $53,218,707 (3/31/2017 TTM)
Future Debt Permitted (Type): No (N/A)   2nd Most Recent NOI: $51,101,092 (12/31/2016)
Reserves(4)   3rd Most Recent NOI: $35,039,436 (12/31/2015)
Type Initial Monthly Cap   Most Recent Occupancy(5): 85.2% (5/15/2017)
RE Tax: $0 Springing N/A   2nd Most Recent Occupancy: 91.5% (12/31/2016)
Insurance: $0 Springing N/A   3rd Most Recent Occupancy: 86.1% (12/31/2015)
Replacements: $0 Springing $446,400   Appraised Value (as of): $1,155,000,000 (4/23/2017)
TI/LC: $0 Springing $6,465,600   Cut-off Date LTV Ratio(1): 39.8%
Other: $8,071,240 $0 N/A   Maturity Date LTV Ratio(1): 39.8%
               

Sources and Uses
Sources Proceeds % of Total   Uses Proceeds % of Total
Loan Amount(1): $585,000,000 100.0%   Loan Payoff: $511,127,344 87.4%
        Closing Costs: $3,288,487 0.6%
        Return of Equity: $70,584,168 12.1%
Total Sources: $585,000,000 100.0%   Total Uses: $585,000,000 100.0%

 

 

(1)The Del Amo Fashion Center Mortgage Loan is part of the Del Amo Fashion Center Whole Loan, which is comprised of seventeen promissory A-Notes (which are pari passu with each other) with an aggregate principal balance of $375,800,000, seventeen promissory B-Notes (which are subordinate to the A-Notes and pari passu with each other) with an aggregate principal balance of $83,500,000 (together, the “Del Amo Fashion Center Senior Loan”), and twelve subordinate mortgage notes with an aggregate principal balance of $125,700,000 (together, the “Del Amo Fashion Center Subordinate Loan”). The Cut-off Date Balance per SF, Maturity Date Balance per SF, UW NOI Debt Yield, UW NOI Debt Yield at Maturity, UW NCF DSCR, Cut-off Date LTV Ratio and Maturity Date LTV Ratio numbers presented above are based on the aggregate principal balance of the promissory notes comprising the Del Amo Fashion Center Senior Loan. The Cut-off Date Balance per SF, Maturity Date Balance per SF, UW NOI Debt Yield, UW NOI Debt Yield at Maturity, UW NCF DSCR, Cut-off Date LTV Ratio and Maturity Date LTV Ratio numbers based on the combined principal balance of the promissory notes comprising the Del Amo Fashion Center Senior Loan and the Del Amo Fashion Center Subordinate Loan are $331, $331, 10.1%, 10.1%, 2.63x, 50.6% and 50.6%, respectively.

(2)Defeasance is permitted at any time after the earlier to occur of (a) the end of the two-year period commencing on the closing date of the securitization of the last Del Amo Fashion Center Whole Loan promissory note to be securitized and (b) May 2, 2020. The assumed lockout period of 26 payments is based on the closing date of this transaction in August 2017.

(3)See “The Mortgage Loan” and “Additional Secured Indebtedness (not including trade debts)” below for further discussion of additional debt.

(4)See “Escrows and Reserves” below for further discussion of reserve requirements.

(5)Most Recent Occupancy includes ten tenants (1.7% of NRA and 2.5% of underwritten base rent) with signed leases with future commencement dates (June 13, 2017 to January 1, 2018). Most Recent Occupancy also includes three tenants (4.5% of NRA and 5.3% of underwritten base rent) with signed leases not yet in occupancy: Dave & Buster’s (expected lease commencement date of May 2018), Marshalls (expected lease commencement date of May 2018) and EMC Seafood & Raw Bar (expected lease commencement date of January 2018), for which a ten-year master lease was signed by the Del Amo Fashion Center Whole Loan guarantor which provides for annual rent equivalent to the tenants’ combined annual rent.

 

THE INFORMATION IN THIS 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.

 

  23 

 

 

3525 West Carson Street

Torrance, CA 90503

Collateral Asset Summary – Loan No. 2

Del Amo Fashion Center

Cut-off Date Balance:

Cut-off Date LTV Ratio:

UW NCF DSCR:

UW NOI Debt Yield:

$50,000,000

39.8%

3.34x

12.9%

 

The Mortgage Loan. The second largest mortgage loan (the “Del Amo Fashion Center Mortgage Loan”) is part of a whole loan (the “Del Amo Fashion Center Whole Loan”) evidenced by seventeen promissory A-Notes in the aggregate original principal amount of $375,800,000, which are pari passu with each other, seventeen promissory B-Notes in the aggregate original amount of $83,500,000, which are subordinate to the A-Notes and pari passu with each other, and twelve subordinate promissory notes in the aggregate original principal amount of $125,700,000, which are evidenced by four notes from each of three tranches (C-Notes, D-Notes and E-Notes, each of which is subordinate to the Del Amo Fashion Center Senior Loan and to each other such tranche with a prior alphabetical designation, which are secured by a first priority fee mortgage encumbering 1,769,525 SF of a super regional mall in Torrance, California (the “Del Amo Fashion Center Property”). Promissory Note A-3-2, Note A-3-4, Note B-3-2, and Note B-3-4 (contributed by Société Générale) in the aggregate principal amount of $50,000,000, are from each of the two A and B tranches of pari passu components that comprise the Del Amo Fashion Center Senior Loan and represent the Del Amo Fashion Center Mortgage Loan and will be included in the UBS 2017-C3 Trust.

 

The Del Amo Fashion Center Whole Loan was co-originated by Société Générale, Bank of America, N.A., Barclays Bank PLC and Wells Fargo Bank, National Association. The proceeds of the Del Amo Fashion Center Whole Loan were used to pay off previous mortgage debt, pay closing costs and to return equity to the borrower sponsors. Based on the total cost basis in the Del Amo Fashion Center Property, the borrower sponsors have over $350 million of equity invested in the asset. Following the lockout period, the borrower has the right to defease the Del Amo Fashion Center Whole Loan in whole, but not in part, on any date before December 1, 2026. In addition, the Del Amo Fashion Center Whole Loan is prepayable without penalty on or after December 1, 2026. The lockout period will expire on the earlier to occur of (i) two years after the closing date of the securitization that includes the last note to be securitized and (ii) May 2, 2020.

 

The following table presents a summary of the promissory notes comprising the Del Amo Fashion Center Whole Loan. The lender provides no assurances that any non-securitized notes will not be split further. The Del Amo Fashion Center Whole Loan is serviced pursuant to the trust and servicing agreement for the DAFC 2017-AMO Trust. See “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced AB Whole Loans” and “Pooling and Servicing Agreement” in the Preliminary Prospectus.

 

Del Amo Fashion Center Whole Loan Summary
 Note(1) Original Balance Cut-off Date Balance Note Holder(2) Controlling Piece
A-1-1 $12,125,000 $12,125,000 DAFC 2017-AMO Yes
A-1-2 $36,821,000 $36,821,000 BANK 2017-BNK5 No
A-1-3 $24,547,000 $24,547,000 BANK 2017-BNK6 No
A-1-4 $20,457,000 $20,457,000 Bank of America, NA No
A-2-1 $12,125,000 $12,125,000 DAFC 2017-AMO No
A-2-2-A $24,547,333 $24,547,333 Barclays Bank PLC No
A-2-2-B $12,273,667 $12,273,667 Barclays Bank PLC No
A-2-3 $24,547,000 $24,547,000 WFCM 2017-C38 No
A-2-4 $20,457,000 $20,457,000 Barclays Bank PLC No
A-3-1 $12,125,000 $12,125,000 DAFC 2017-AMO No
A-3-2 $40,912,500 $40,912,500 UBS 2017-C3 No
A-3-3 $36,821,250 $36,821,250 UBS 2017-C2 No
A-3-4 $4,091,250 $4,091,250 Société Générale No
A-4-1 $12,125,000 $12,125,000 DAFC 2017-AMO No
A-4-2 $36,821,000 $36,821,000 BANK 2017-BNK5 No
A-4-3 $24,547,000 $24,547,000 WFCM 2017-C38 No
A-4-4 $20,457,000 $20,457,000 BANK 2017-BNK6 No
B-1-1 $2,700,000 $2,700,000 DAFC 2017-AMO No
B-1-2 $8,179,000 $8,179,000 BANK 2017-BNK5 No
B-1-3 $5,453,000 $5,453,000 BANK 2017-BNK6 No
B-1-4 $4,543,000 $4,543,000 BANK 2017-BNK6 No
B-2-1 $2,700,000 $2,700,000 DAFC 2017-AMO No
B-2-2-A $5,452,667 $5,452,667 Barclays Bank PLC No
B-2-2-B $2,726,333 $2,726,333 Barclays Bank PLC No
B-2-3 $5,453,000 $5,453,000 WFCM 2017-C38 No
B-2-4 $4,543,000 $4,543,000 Barclays Bank PLC No
B-3-1 $2,700,000 $2,700,000 DAFC 2017-AMO No
B-3-2 $9,087,500 $9,087,500 UBS 2017-C3 No
B-3-3 $8,178,750 $8,178,750 UBS 2017-C2 No
B-3-4 $908,750 $908,750 Société Générale No
B-4-1 $2,700,000 $2,700,000 DAFC 2017-AMO No
B-4-2 $8,179,000 $8,179,000 BANK 2017-BNK5 No
B-4-3 $5,453,000 $5,453,000 WFCM 2017-C38 No
B-4-4 $4,543,000 $4,543,000 Wells Fargo Bank, NA No
Del Amo Fashion Center Subordinate Loan $125,700,000 $125,700,000 DAFC 2017-AMO No
Total Del Amo Fashion Center Whole Loan $585,000,000 $585,000,000    

 

 

(1)The B-Notes are subordinate to the A-Notes.

(2)The promissory notes currently held by Société Générale, Bank of America, N.A., Barclays Bank PLC and Wells Fargo Bank, National Association are expected to be contributed to future securitization transactions or may be otherwise transferred at any time.

 

THE INFORMATION IN THIS 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.

 

  24 

 

 

3525 West Carson Street

Torrance, CA 90503

Collateral Asset Summary – Loan No. 2

Del Amo Fashion Center

Cut-off Date Balance:

Cut-off Date LTV Ratio:

UW NCF DSCR:

UW NOI Debt Yield:

$50,000,000

39.8%

3.34x

12.9%

 

The Borrower and the Borrower Sponsors. The borrower is Del Amo Fashion Center Operating Company, L.L.C. (the “Del Amo Fashion Center Borrower”), which is a single-purpose Delaware limited liability company structured to be bankruptcy-remote, with at least two independent directors. Simon Property Group, L.P. is the non-recourse carveout guarantor (the “Del Amo Fashion Center Whole Loan Guarantor”). The Del Amo Fashion Center Whole Loan will be recourse to the Del Amo Fashion Center Whole Loan Guarantor pursuant to standard non-recourse carveouts, however, the non-recourse carveout guaranty and the environmental indemnity agreement provide that so long as Simon Property Group, L.P. is the Del Amo Fashion Center Whole Loan Guarantor (or SPF (as defined below) or certain affiliates of SPF should it be a replacement guarantor), its liability may not exceed $117,000,000 plus all reasonable out-of-pocket costs and expenses incurred by the lender in the enforcement of the guaranty and the environmental indemnity agreement or the preservation of the lender’s rights thereunder.

 

The borrower sponsors are a 50/50 joint venture between subsidiaries of Simon Property Group, L.P. and Commingled Pension Trust Fund (Strategic Property) of J.P. Morgan Chase Bank, N.A. (“SPF”) (collectively, the “Del Amo Fashion Center Borrower Sponsors”). Simon Property Group, L.P. is the operating partnership of Simon Property Group, Inc. (“Simon”) (NYSE: SPG). Simon is a publicly traded, self-administered and self-managed real estate investment trust focused on retail property ownership and management. Simon is one of the largest publicly-traded owners, operators and developers of retail assets in the United States. As of March 31, 2017, Simon owned or had an interest in 206 properties consisting of 108 malls, 67 Premium Outlet-branded centers, 14 Mills-branded centers, four lifestyle centers and thirteen other retail properties in 37 states and Puerto Rico, as well as redevelopment and expansion projects underway at 25 properties in the United States, Canada and Europe. Simon Property Group, L.P., one of the related borrower sponsors, has sponsored other real estate projects over the last 10 years that have been the subject of mortgage loan defaults, foreclosure proceedings and deeds-in-lieu of foreclosure. See “Description of the Mortgage Pool—Non-Recourse Carveout Limitations” and “Description of the Mortgage Pool—Loan Purpose; Default History, Bankruptcy Issues and Other Proceedings” in the Preliminary Prospectus.

 

SPF is a JPMorgan Asset Management fund with a reported net asset value of approximately $30.9 billion and a gross asset value of approximately $41.7 billion as of March 31, 2017. SPF’s investment portfolio focuses on office, retail, residential and industrial investments.

 

The Property. The Del Amo Fashion Center Property consists of 1,769,525 SF of traditional mall, open-air lifestyle and entertainment space which together with the non-collateral Macy’s and Sears anchors comprise the 2.51 million SF Del Amo Fashion Center mall, the largest shopping center in the western United States. The Del Amo Fashion Center Property is located in the suburban community of Torrance, California, at the intersection of Hawthorne and Sepulveda Boulevards. Hawthorne Boulevard is a ten-lane arterial providing access to the Pacific Coast Highway to the south and I-105 to the north. Sepulveda Boulevard is an eight-lane thoroughfare that provides access between Redondo Beach and I-110.

 

The Del Amo Fashion Center Property is a two-level super regional mall with a diverse retail tenancy including large chain stores such as Dick’s Sporting Goods, H&M, XXI Forever and Crate & Barrel; restaurants, including P.F. Chang’s China Bistro, Lazy Dog Cafe, Great Maple and Din Tai Fung (a Michelin-starred restaurant); entertainment options including the 18-screen AMC Theatres and Dave & Buster’s (not yet open) and over 100 in-line retailers and brands including Arhaus Furniture, Kate Spade New York, Hugo Boss, J. Crew, Lululemon and Michael Kors. Anchor tenants whose leases premises are included in the collateral include J.C. Penney and Nordstrom. Additionally, 11,892 parking spaces (approximately 6.7 spaces per 1,000 SF) are included in the collateral.

 

The Del Amo Fashion Center Property is currently undergoing a $423 million redevelopment that started in 2013. The multi-phased project includes (i) the renovation of the north mall area and creation of the new Patio Café Dining Pavilion which opened in 2014 and includes ten eateries, seating for 700 people, floor-to-ceiling living plant walls, skylights and lounge areas with complimentary WiFi, (ii) the addition of approximately 350,000 SF of in-line shops, the Nordstrom anchor and a multilevel parking deck, delivered in 2015, (iii) the renovation of the south mall area, completed in November 2016, (iv) the construction of the Dick’s Sporting Goods store, which opened in June 2017, and additional adjacent in-line stores and renovation of neighboring in-line stores, which construction and renovation was expected to have been completed in May 2017, (v) the build-out of two restaurant pads which are leased to BRIO Tuscan Grille and EMC Seafood & Raw Bar and which are expected to be completed in 2017), and (vi) the construction of the Marshalls and Dave & Buster’s spaces which are expected to be completed in May 2018. The remaining cost of the redevelopment has not been reserved for under the Del Amo Fashion Center Whole Loan documents and such redevelopment is not required to be completed by the Del Amo Fashion Center Borrower.

 

The Del Amo Fashion Center Property was 85.2% leased as of May 15, 2017 to 208 retail and restaurant tenants. The following table presents a summary of the historical in-line occupancy at the Del Amo Fashion Center Property.

 

Historical In-Line Occupancy
Historical Occupancy 2013 2014 2015 2016
In-Line (including Temp Tenants) 80.1% 92.8% 88.5% 93.8%
In-Line (excluding Temp Tenants) 75.2% 85.7% 79.7% 86.6%

 

THE INFORMATION IN THIS 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.

 

  25 

 

 

3525 West Carson Street

Torrance, CA 90503

Collateral Asset Summary – Loan No. 2

Del Amo Fashion Center

Cut-off Date Balance:

Cut-off Date LTV Ratio:

UW NCF DSCR:

UW NOI Debt Yield:

$50,000,000

39.8%

3.34x

12.9%

 

The 2016 estimated total gross sales for the Del Amo Fashion Center Property were approximately $543.4 million. The following table presents a summary of historical anchor sales at the Del Amo Fashion Center Property:

 

Anchor Sales Summary
Tenant 2014 2015 2016 Sales PSF(1)
Macy’s (non-collateral)(2)(3) $75,100,000 $62,000,000 $73,895,000 $175
Sears (non-collateral)(2)(4) $32,500,000 $30,200,000 N/A(5) $96
Nordstrom(6) N/A N/A $51,480,000 $373
J.C. Penney $23,689,000 $24,372,000 $21,061,000 $129
AMC Theatres(7) $17,979,000 $18,114,000 $17,307,000 $961,500

 

 

(1)Sales PSF reflects most recent year-end sales figures available.

(2)Sales figures reflect estimates for non-collateral anchors.

(3)Macy’s currently operates two stores at the Del Amo Fashion Center, totaling 423,307 SF. Sales figures are representative of both stores. 2014 sales represent three Macy’s stores.

(4)Sears occupies 313,495 SF, with approximately two levels being used for merchandising and one level being used for office space. When excluding the office space, the adjusted estimated Sales PSF are approximately $144 PSF.

(5)2016 sales data not yet available.

(6)Nordstrom opened in October 2015.

(7)AMC Theaters Sales PSF reflects sales per screen.

 

As of the trailing twelve-month period that ended March 31, 2017, the Del Amo Fashion Center Property had total comparable in-line sales of $124.3 million, with average in-line sales of $611 PSF and an occupancy cost of 13.7%. Although the renovations and redevelopment have been ongoing at the Del Amo Fashion Center Property since 2013, in-line sales PSF have grown from $441 PSF to $611 PSF, representing a 39% increase from 2013 to the trailing twelve-month period ended March 31, 2017.

 

Comparable In-line Sales Summary(1)
  2013 2014 2015 2016 3/31/2017 TTM
In-Line Sales PSF $441 $449 $499 $560 $611
Occupancy Cost 14.3% 14.7% 15.9% 14.4% 13.7%

 

 

(1)Information as provided by the Del Amo Fashion Center Borrower and only include tenants reporting comparable sales.

 

THE INFORMATION IN THIS 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.

 

  26 

 

 

3525 West Carson Street

Torrance, CA 90503

Collateral Asset Summary – Loan No. 2

Del Amo Fashion Center

Cut-off Date Balance:

Cut-off Date LTV Ratio:

UW NCF DSCR:

UW NOI Debt Yield:

$50,000,000

39.8%

3.34x

12.9%

 

The following table presents certain information relating to the major tenants at the Del Amo Fashion Center Property:

 

Tenant Summary(1) 

Tenant Name Credit Rating (Fitch/Moody’s/S&P)(2) Tenant SF Approx.
% of SF
Annual UW
Base Rent
  Annual
UW Base Rent PSF(3)(4)
Most Recent Sales(4) Occ.
Cost
%
Lease Expiration
% of
Annual
UW Base Rent
$ PSF
Anchor Tenants – Not Part of Collateral                  
Macy’s BBB/Baa3/BBB- 423,307   ANCHOR OWNED – NOT PART OF THE COLLATERAL  
Sears CC/Caa2/CCC+ 313,495    
                     
Anchor Tenants                    
J.C. Penney B+/B1/B+ 163,346 9.2% $457,325 0.9% $2.80 21,061,000 $129 N/A 12/31/2018
Nordstrom BBB+/Baa1/BBB+ 138,000 7.8% $0(5) 0.0%(5) $0(5) 51,480,000 $373 N/A 2/28/2031
AMC Theaters NR/B1/NR 76,800 4.3% $3,066,624 6.1% $39.93 $17,307,000 $961,500(7) 17.7% 9/30/2021
Total Anchor Tenants   378,146 21.4% $3,523,949 7.0% $14.67(6)        
                     
Major Tenants(8)                    
LA Fitness NR/NR/NR 47,137 2.7% $1,792,237 3.6% $38.02 N/A N/A N/A 1/31/2022
Dave & Buster’s(9) NR/NR/NR 42,336 2.4% $1,439,424 2.9% $34.00 N/A N/A N/A 4/30/2033
Dick’s Sporting Goods NR/NR/NR 83,210 4.7% $1,352,163 2.7% $16.25 N/A N/A N/A 4/30/2027
H&M NR/NR/NR 25,086 1.4% $1,076,189 2.1% $42.90 N/A N/A N/A 1/31/2026
Zara NR/NR/NR 26,802 1.5% $1,050,625 2.1% $39.20 $8,791,000 $328 12.0% 10/31/2027
 Burlington Coat Factory(10) NR/NR/NR 60,000 3.4% $840,000 1.7% $14.00 N/A N/A N/A 1/31/2025
Marshalls(9) NR/A2/A+ 30,716 1.7% $752,542 1.5% $24.50 N/A N/A N/A 2/29/2028
Express NR/NR/NR 11,208 0.6% $741,858 1.5% $66.19 N/A N/A N/A 1/31/2026
Old Navy BB+/Baa2/BB+ 17,990 1.0% $712,799 1.4% $39.62 $7,784,000 $433 9.7% 1/31/2024
XXI Forever NR/NR/NR 20,217 1.1% $707,595 1.4% $35.00 $7,613,000 $377 13.4% 1/31/2018
                     
Subtotal/Wtd. Avg.   742,848 42.0% $13,989,380 27.8% $18.83        
Other Retail Tenants(11)   764,810 43.2% $36,415,851 72.2% $47.61        
Vacant Space   261,867 14.8%              
                     
Total/Wtd. Avg.   1,769,525 100.0% $50,405,231   $33.43        

 

 

(1)Information is based on the underwritten rent roll.

(2)Certain ratings are those of the parent company whether or not the parent guarantees the lease.

(3)Wtd. Avg. Annual UW Base Rent PSF excludes vacant space.

(4)Most Recent Sales $ and PSF represent trailing 12 months ending March 31, 2017 information for Old Navy and XXI Forever, and 2016 information for all other tenants.

(5)Nordstrom opened in October 2015 and does not pay base rent but pays percentage rent equivalent to 2% of sales over a $60.0 million breakpoint.

(6)The Total Anchor Tenants UW Base Rent PSF excludes Nordstrom SF. Including Nordstrom, the Annual UW Base Rent PSF is $9.32.

(7)Most Recent Sales PSF for AMC Theaters represents Sales per screen.

(8)Major Tenants are ordered by Annual UW Base Rent.

(9)Dave & Buster’s and Marshalls have executed leases with expected May 2018 commencement dates. The Del Amo Fashion Center Whole Loan Guarantor has signed a ten-year master lease which provides for the annual rent obligations for these tenants.

(10)Burlington Coat Factory has the option to terminate its lease at any time upon at least 270 days’ prior written notice.

(11)Other Retail Tenants includes 11 tenants (representing 2.1% of NRA and 3.4% of underwritten base rent) with signed leases with future commencement dates (June 13, 2017 to January 1, 2018).

 

THE INFORMATION IN THIS 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.

 

  27 

 

 

3525 West Carson Street

Torrance, CA 90503

Collateral Asset Summary – Loan No. 2

Del Amo Fashion Center

Cut-off Date Balance:

Cut-off Date LTV Ratio:

UW NCF DSCR:

UW NOI Debt Yield:

$50,000,000

39.8%

3.34x

12.9%

 

The following table presents certain information relating to the lease rollover at the Del Amo Fashion Center Property:

 

Lease Rollover Schedule(1)(2)
Year # of Leases Rolling SF Rolling Approx. %
of Total SF
Rolling
Approx. Cumulative %
of SF Rolling
UW Base Rent
PSF Rolling(3)
Total UW Base Rent
Rolling
Approx. %
of Total
Base Rent
Rolling
Approx. Cumulative % of Total
Base Rent Rolling
MTM/2017 8 26,342 1.5% 1.5% $39.50 $1,040,552 2.1% 2.1%
2018 11 204,233 11.5% 13.0% $10.06 $2,054,097 4.1% 6.1%
2019 16 45,696 2.6% 15.6% $44.89 $2,051,118 4.1% 10.2%
2020 12 88,993 5.0% 20.6% $24.44 $2,174,566 4.3% 14.5%
2021 10 115,598 6.5% 27.2% $39.74 $4,593,303 9.1% 23.6%
2022 11 67,982 3.8% 31.0% $47.71 $3,243,680 6.4% 30.1%
2023 4 75,763 4.3% 35.3% $18.02 $1,365,309 2.7% 32.8%
2024 17 51,974 2.9% 38.2% $69.18 $3,595,680 7.1% 39.9%
2025 44 176,862 10.0% 48.2% $50.40 $8,913,244 17.7% 57.6%
2026 56 222,472 12.6% 60.8% $51.91 $11,548,229 22.9% 80.5%
2027 22 202,821 11.5% 72.3% $33.39 $6,772,847 13.4% 93.9%
2028 & Beyond 6 228,922 12.9% 85.2% $13.33 $3,052,606 6.1% 100.0%
Vacant 0 261,867 14.8% 100.0% $0.00 $0 0.0% 100.0%
Total/Wtd. Avg. 217 1,769,525 100.0%   $33.43 $50,405,231 100.0%  

 

 

(1)Information is based on the underwritten rent roll and includes ten tenants (1.7% of NRA and 2.5% of underwritten base rent) with signed leases with future commencement dates (June 13, 2017 to January 1, 2018) and three tenants (4.5% of NRA and 5.3% of underwritten base rent) with signed leases not yet in occupancy: Dave & Buster’s (expected lease commencement date of May 2018), Marshalls (expected lease commencement date of May 2018) and EMC Seafood & Raw Bar (expected lease commencement date of January 2018), for which a ten-year master lease was signed by the Del Amo Fashion Center Whole Loan Guarantor which provides for annual rent equivalent to the tenants’ combined annual rent.

(2)Certain tenants may have lease termination options that are exercisable prior to the originally stated expiration date of the subject lease and that are not considered in the lease rollover schedule.

(3)Wtd. Avg. Annual UW Base Rent PSF Rolling excludes vacant space.

 

The Market. The Del Amo Fashion Center Property is located in Torrance, California, in the coastal area of Los Angeles’ South Bay. Family-friendly destinations such as Disneyland Resort and Santa Catalina Island as well as the numerous local beaches provide tourist attractions within a short distance of Torrance. Torrance is also the U.S. home base for the Japanese corporations Honda, Mitsuwa and All Nippon Airways, as well as Honeywell and Robinson Helicopters.

 

According to the appraisal, the Del Amo Fashion Center Property is located within 4.5 miles of the Kings Harbor Marina, within 10.5 miles of the Los Angeles Airport (LAX), in close proximity to I-110 and I-405, and near high income demographic areas including Palos Verdes Peninsula, Redondo Beach, Hermosa and Manhattan Beach. Demographics surrounding the Del Amo Fashion Center Property include a 5-mile radius population of 504,851 with an average household income of $112,287 as of December 2016.

 

The Del Amo Fashion Center Property is located in the South Bay/Torrance submarket of Los Angeles, which as of year-end 2016 contained 6,154,000 SF (9.1% of the broader Los Angeles retail market inventory) with a vacancy rate of 3.9% and average asking rents of $35.43 PSF, as compared to the Los Angeles retail market which had a vacancy rate of 6.2% and average asking rents of $32.00 PSF. According to the appraisal, there is no proposed new competitive supply within the submarket and none of the proposed supply within the broader Los Angeles market would be competitive with the Del Amo Fashion Center Property.

 

THE INFORMATION IN THIS 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.

 

  28 

 

 

3525 West Carson Street

Torrance, CA 90503

Collateral Asset Summary – Loan No. 2

Del Amo Fashion Center

Cut-off Date Balance:

Cut-off Date LTV Ratio:

UW NCF DSCR:

UW NOI Debt Yield:

$50,000,000

39.8%

3.34x

12.9%

 

The following table presents certain competitive retail properties to the Del Amo Fashion Center Property:

 

Competitive Property Summary
Property, Location Type Year Built/ Renovated Size (SF) Occupancy Comparable
In-line
Sales PSF
Anchor Tenants

Distance

to
Subject (mi.)

Del Amo Fashion Center

Torrance, CA

Super Regional Mall  1961/2017 1,769,525  85.2%(1) $611(2) Macy’s (non-collateral), Sears (non-collateral), Nordstrom, J.C. Penney N/A

South Bay Galleria

Redondo Beach, CA

Super Regional Mall 1984/2014 960,200 84.9% $435-$445 Macy’s, Kohl’s, Cinemas 3.5

Promenade on the Peninsula

Rancho Palos Verdes, CA

Regional Center 1981/N/A 374,186 80.6% $350-$375 Equinox Fitness, Cinemas 5.4

Manhattan Village 

Manhattan Beach, CA

Super Regional Mall 1981/N/A 620,008 99.4% $450-$475 Macy’s, Fry’s Electronics, Ralph’s/CVS 7.5

South Bay Pavilion

Carson, CA

Super Regional Mall 1973/ N/A 1,016,554 82.2% N/A J.C. Penney, Target, IKEA, 24-Hour Fitness, Cinemas 8.5

 

 

Source: Appraisal

(1)Occupancy as of May 15, 2017 which includes ten tenants (1.7% of NRA and 2.5% of underwritten base rent) with signed leases with future commencement dates (June 13, 2017 to January 1, 2018) and three tenants (4.5% of NRA and 5.3% of underwritten base rent) with signed leases not yet in occupancy: Dave & Buster’s (expected lease commencement date of May 2018), Marshalls (expected lease commencement date of May 2018) and EMC Seafood & Raw Bar (expected lease commencement date of January 2018), for which a ten-year master lease was signed by the Del Amo Fashion Center Whole Loan Guarantor which provides for annual rent equivalent to the tenants’ combined annual rent.

(2)Comparable inline sales shown as of March 31, 2017.

 

Operating History and Underwritten Net Cash Flow. The following table presents certain information relating to the historical operating performance and the Underwritten Net Cash Flow at the Del Amo Fashion Center Property:

 

Cash Flow Analysis
  2014 2015 2016 3/31/2017 TTM UW UW PSF
Gross Potential Rent(1)(2) $29,467,993 $33,241,859 $45,831,077 $46,804,573 $51,545,895 $29.13
Vacant Space $0 $0 $0 $0 $11,430,694 $6.46
Total Recoveries $12,142,979 $15,224,540 $25,514,526 $26,374,801 $25,211,150 $14.25
Specialty Leasing $1,960,645 $2,348,117 $3,373,175 $3,266,342 $3,366,899 $1.90
Other Income(3) $584,173 $964,983 $1,396,597 $1,359,783 $1,135,576 $0.64
Less Vacancy & Credit Loss

($316,274) 

($134,368)

($441,700)

($630,344)

($11,430,694)

($6.46) 

Effective Gross Income $43,839,516 $51,645,131 $75,673,675 $77,175,155 $81,259,520 $45.92
Total Operating Expenses

$14,855,360

$16,605,695

$24,572,583

$23,956,448

$21,915,628

$12.39

Net Operating Income $28,984,156 $35,039,436 $51,101,092 $53,218,707 $59,343,892 $33.54
Capital Expenditures $0 $0 $0 $0 $223,460 $0.13
TI/LC

$0

$0

$0

$0

$2,154,999

$1.22

Net Cash Flow $28,984,156 $35,039,436 $51,101,092 $53,218,707 $56,965,434 $32.19
             
Occupancy % 93.5% 86.1% 91.5% 85.2%(2) 87.0%  
NOI DSCR(4) 1.70x 2.06x 3.00x 3.12x 3.48x  
NCF DSCR(4) 1.70x 2.06x 3.00x 3.12x 3.34x  
NOI Debt Yield(4) 6.3% 7.6% 11.1% 11.6% 12.9%  
NCF Debt Yield(4) 6.3% 7.6% 11.1% 11.6% 12.4%  

 

 

(1)UW Base Rent is based on the May 15, 2017 underwritten rent roll and includes contractual rent steps through July 1, 2018.

(2)Occupancy as of May 15, 2017. The May 15, 2017 underwritten rent roll includes ten tenants (1.7% of NRA and 2.5% of underwritten base rent) with signed leases with future commencement dates (June 13, 2017 to January 1, 2018) and three tenants (4.5% of NRA and 5.3% of underwritten base rent) with signed leases not yet in occupancy: Dave & Buster’s (expected lease commencement date of May 2018), Marshalls (expected lease commencement date of May 2018) and EMC Seafood & Raw Bar (expected lease commencement date of January 2018), for which a ten-year master lease was signed by the Del Amo Fashion Center Whole Loan Guarantor which provides for annual rent equivalent to the tenants’ combined annual rent.

(3)Other income includes income from storage, stroller rentals, ATMs and other miscellaneous rental income.

(4)Debt service coverage ratios and debt yields are based on the Del Amo Fashion Center Senior Loan and exclude the Del Amo Fashion Center Subordinate Loan.

 

THE INFORMATION IN THIS 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.

 

  29 

 

 

3525 West Carson Street

Torrance, CA 90503

Collateral Asset Summary – Loan No. 2

Del Amo Fashion Center

Cut-off Date Balance:

Cut-off Date LTV Ratio:

UW NCF DSCR:

UW NOI Debt Yield:

$50,000,000

39.8%

3.34x

12.9%

 

Escrows and Reserves. During either an event of default or a DSCR Reserve Trigger Period (as defined below), the Del Amo Fashion Center Borrower is required to deposit monthly escrows for real estate taxes, insurance premiums (unless the Del Amo Fashion Center Property is insured under an acceptable blanket insurance policy), $18,600 for replacement reserves, capped at $446,400, and $179,600 for tenant improvement and leasing commissions, capped at $6,465,600. The Del Amo Fashion Center Borrower will additionally be required to deposit monthly escrows for real estate taxes if the Del Amo Fashion Center Borrower fails to provide evidence that the real estate taxes have been paid prior to the assessment of any penalty for late charges.

 

At origination of the Del Amo Fashion Center Whole Loan, the Del Amo Fashion Center Whole Loan Guarantor provided guarantees in the amount of $7,242,346 for outstanding landlord obligations relating to fourteen tenants and $828,894 for abated rent periods relating to eleven tenants which continue through as late as February 1, 2018.

 

A “DSCR Reserve Trigger Period” will commence upon the debt service coverage ratio for the Del Amo Fashion Center Whole Loan being less than 1.50x for two consecutive quarters based on the trailing four quarters and will end (provided no event of default has occurred and is continuing) upon the debt service coverage ratio for the Del Amo Fashion Center Whole Loan being equal to or greater than 1.50x for two consecutive quarters based on the trailing four quarters.

 

Lockbox and Cash Management. A hard lockbox is in place with respect to the Del Amo Fashion Center Whole Loan. Upon the occurrence of a Lockbox Event (as defined below), the Del Amo Fashion Center Borrower is required to establish a lender-controlled cash management account to which all amounts in the lockbox account are required to be automatically transferred, on a weekly basis for the payment of, among other things, debt service, monthly escrows and operating expenses pursuant to an approved annual budget, with all excess cash being deposited to an excess cash reserve to be held as additional collateral for the Del Amo Fashion Center Whole Loan until the Lockbox Event ends.

 

A “Lockbox Event” will occur upon (i) an event of default, (ii) a bankruptcy action involving the Del Amo Fashion Center Borrower, (iii) a bankruptcy action involving Simon Management Associates II, LLC (or a borrower-affiliated manager) occurred without the manager being replaced within 60 days, (iv) a DSCR Trigger Period (as defined below), or (v) a Nordstrom Trigger Event (as defined below). A Lockbox Event will end, provided no event of default is continuing, upon, as applicable, (i) the lender’s acceptance of a cure of the event of default, (ii) Simon Management Associates II, LLC (or a borrower-affiliated manager) being replaced with a qualified manager or the bankruptcy involving the manager being discharged or dismissed, (iii) the end of a DSCR Trigger Period, or (iv) the end of a Nordstrom Trigger Event. A Lockbox Event may not be cured if triggered by a bankruptcy action of the Del Amo Fashion Center Borrower.

 

A “DSCR Trigger Period” will commence upon the debt service coverage ratio for the Del Amo Fashion Center Whole Loan being less than 1.40x for two consecutive quarters based on the trailing four quarters and will end upon the debt service coverage ratio for the Del Amo Fashion Center Whole Loan being equal to or greater than 1.40x for two consecutive quarters based on the trailing four quarters.

 

A “Nordstrom Trigger Event” will occur upon Nordstrom (i) vacating or terminating or giving notice to vacate or terminate its lease or (ii) commencing to exercise remedies pursuant to its lease in connection with the Del Amo Fashion Center Borrower’s failure to complete the removal of the former TJ Maxx/Marshalls space from the Del Amo Fashion Center Property, and will end upon the earlier of (i) at least 75% of Nordstrom’s leased space being released to one or more replacement tenants, which tenant(s) are in occupancy, open for business and paying full unabated rent with no outstanding landlord obligations, or (ii) the balance collected to the excess cash flow reserve during the Nordstrom Trigger Event being equal to or greater than $1,380,000.

 

Additional Secured Indebtedness (not including trade debts). The Del Amo Fashion Center Property also secures seventeen senior pari passu promissory A-Notes with an aggregate principal balance of $334,887,500 (which are pari passu with each other and the A-Notes included in the Del Amo Fashion Center Mortgage Loan) and seventeen senior promissory B-Notes (which are pari passu with each other and the B-Notes included in the Del Amo Fashion Center Mortgage Loan) with an aggregate principal balance of $74,412,500 (the “Del Amo Fashion Center Non-Serviced Pari Passu Companion Loans”) as well as the Del Amo Fashion Center Subordinate Loan, which includes twelve subordinate mortgage notes, comprised of four notes from each of three tranches (C-Notes, D-Notes and E-Notes, each of which is subordinate to the Del Amo Fashion Center Senior Loan and to each other such tranche with a prior alphabetical designation), with an aggregate principal balance of $125,700,000. The Del Amo Fashion Center Non-Serviced Pari Passu Companion Loans and the Del Amo Fashion Center Subordinate Loan accrue interest at the same rate as the Del Amo Fashion Center Mortgage Loan. The Del Amo Fashion Center Mortgage Loan is entitled to payments of principal (if applicable) and interest on a pro rata and pari passu basis with the Del Amo Fashion Center Non-Serviced Pari Passu Companion Loans (provided that all A-Notes are entitled to payments of principal (if applicable) and interest prior to all B-Notes) before payments of principal (if applicable) and interest to the Del Amo Fashion Center Subordinate Loan. The holders of the Del Amo Fashion Center Mortgage Loan, the Del Amo Fashion Center Non-Serviced Pari Passu Companion Loans and the Del Amo Fashion Center Subordinate Loan have entered into a co-lender agreement which sets forth the allocation of collections on the Del Amo Fashion Center Whole Loan. See “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced AB Whole Loans” in the Preliminary Prospectus.

 

Mezzanine Loan and Preferred Equity. Not permitted.

 

Release of Property. No material releases permitted.

 

Terrorism Insurance. The Del Amo Fashion Center Borrower is required to obtain and maintain property insurance, public liability insurance and rental loss and/or business interruption insurance that covers perils of terrorism and acts of terrorism, provided that the Del Amo Fashion Center Whole Loan documents provide for an annual terrorism premium cap of two times the cost of the premiums for property insurance required under the related Del Amo Fashion Center Whole Loan documents (on a standalone basis), but excluding the wind and flood components of such premiums.

 

THE INFORMATION IN THIS 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.

 

  30 

 

 

3525 West Carson Street

Torrance, CA 90503

Collateral Asset Summary – Loan No. 2

Del Amo Fashion Center

Cut-off Date Balance:

Cut-off Date LTV Ratio:

UW NCF DSCR:

UW NOI Debt Yield:

$50,000,000

39.8%

3.34x

12.9%

 

(MAP) 

 

THE INFORMATION IN THIS 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.

 

  31 

 

 

3525 West Carson Street

Torrance, CA 90503

Collateral Asset Summary – Loan No. 2

Del Amo Fashion Center

Cut-off Date Balance:

Cut-off Date LTV Ratio:

UW NCF DSCR:

UW NOI Debt Yield:

$50,000,000

39.8%

3.34x

12.9%

 

(MAP) 

 

THE INFORMATION IN THIS 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.

 

  32 

 

 

(THIS PAGE INTENTIONALLY LEFT BLANK)

 

 

  33 

 

 

Various, FL

Collateral Asset Summary – Loan No. 3

TZA Multifamily Portfolio I

Cut-off Date Balance:

Cut-off Date LTV Ratio:

UW NCF DSCR:

UW NOI Debt Yield:

$50,000,000

73.7%

1.55x

10.5%

 

 (GRAPHIC)

 

THE INFORMATION IN THIS 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.

 

  34 

 

 

Various, FL

Collateral Asset Summary – Loan No. 3

TZA Multifamily Portfolio I

Cut-off Date Balance:

Cut-off Date LTV Ratio:

UW NCF DSCR:

UW NOI Debt Yield:

$50,000,000

73.7%

1.55x

10.5%

 

Mortgage Loan Information   Property Information(4)
Mortgage Loan Seller: Société Générale   Single Asset/Portfolio: Portfolio
Original Balance(1): $50,000,000   Location: Various, FL
Cut-off Date Balance(1): $50,000,000   General Property Type: Multifamily
% of Initial Pool Balance: 7.1%   Detailed Property Type: Garden
Loan Purpose: Refinance   Title Vesting: Fee
Borrower Sponsor: Adam Hendry   Year Built/Renovated: Various
Mortgage Rate: 4.9500%   Size: 2,382 Units
Note Date: 6/23/2017   Cut-off Date Balance per Unit(1): $45,340
First Payment Date: 8/1/2017   Maturity Date Balance per Unit(1): $40,090
Maturity Date: 7/1/2027   Property Manager:

Tzadik Properties, LLC (borrower-related)

 

Original Term to Maturity: 120 months    
Original Amortization Term: 360 months   Underwriting and Financial Information(4)
IO Period: 36 months   UW NOI: $11,320,015
Seasoning: 1 month   UW NOI Debt Yield(1): 10.5%
Prepayment Provisions(2): LO (25); DEF (91); O (4)   UW NOI Debt Yield at Maturity(1): 11.9%
Lockbox/Cash Mgmt Status: Soft/Springing   UW NCF DSCR(1): 1.98x (IO)              1.55x (P&I)
Additional Debt Type: Pari Passu   Most Recent NOI: $11,829,875 (3/31/2017 TTM)
Additional Debt Balance: $50,000,000   2nd Most Recent NOI(5): $10,511,963 (12/31/2016)
Future Debt Permitted (Type): No (N/A)   3rd Most Recent NOI(6): N/A
Reserves(3)   Most Recent Occupancy(7): 95.4% (5/3/2017)
Type Initial Monthly Cap   2nd Most Recent Occupancy: 94.1% (3/31/2017)
RE Tax: $1,033,388 $114,695 N/A   3rd Most Recent Occupancy: 94.0% (12/31/2016)
Insurance: $845,916 $93,991 N/A   Appraised Value (as of): $146,630,000 (Various)
Deferred Maintenance: $904,090 $0 N/A   Cut-off Date LTV Ratio(1): 73.7%
Replacements: $2,095,910 $174,409 N/A   Maturity Date LTV Ratio(1): 65.1%
               
Sources and Uses
Sources Proceeds % of Total   Uses Proceeds % of Total
Loan Amount(1): $108,000,000 9