NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of
preliminary ratings to nine classes of HPLY Trust 2019-HIT, an $826.5
million CMBS single-borrower securitization.
The collateral for the securitization consists of an $870.0 million
non-recourse, first lien, floating-rate mortgage loan that is secured by
the borrowers’ interests in 92 hotels including fee simple interests in
84 lodging properties (94.5% of portfolio balance) totaling 9,873 keys,
and its leasehold interests in eight hotels (5.5%) totaling 926 keys.
For the TTM 2/2019 period, the portfolio’s occupancy was 74.5% with an
average daily rate (ADR) of $124.00, resulting in revenue per available
room (RevPAR) of $92.39.
The underlying collateral consists of 32 select-service hotels (3,934
keys, 34.3% of loan balance), 38 limited-service properties (4,444 keys,
33.3%), 21 extended-stay properties (2,175 keys, 29.0%), and one
full-service hotel (246 keys, 3.5%) located in 64 different MSAs in 30
states. All portfolio properties are operated under national flags
including Hampton Inn (29 properties, 25.4%), Courtyard by Marriott (16
properties, 18.4%), Residence Inn (15 properties, 19.4%), Hyatt Place
(15 properties, 15.0%), Homewood Suites (six properties, 9.6%),
SpringHill Suites (six hotels, 5.6%), Fairfield Inn (two properties,
1.8%), Embassy Suites (one property, 3.5%), Hilton Garden Inn (one
property, 0.9%), and Holiday Inn Express (one property, 0.5%).
KBRA’s analysis of the transaction included a detailed evaluation of the
properties’ cash flows using our U.S.
CMBS Property Evaluation Methodology and the application of our U.S.
CMBS Single Borrower & Large Loan Rating Methodology. The
results of our analysis yielded a KBRA net cash flow (KNCF) for the
portfolio of roundly $96.3 million. To value the portfolio, KBRA applied
a blended capitalization rate of 11.26% to arrive at a KBRA value of
$855.3 million. The resulting KBRA Loan-to-Value (KLTV) is 101.7%. In
our analysis of the transaction, we considered the third-party
engineering, environmental, seismic, and appraisal reports; management
and franchise agreements; the results of our site inspections; and legal
The preliminary ratings are based on information known to KBRA at the
time of this publication. Information received subsequent to this
release could result in the assignment of final ratings that differ from
the preliminary ratings.
Preliminary Ratings Assigned: HPLY Trust 2019-HIT
Initial Class Balance
Expected KBRA Rating
1Notional balances. 2Represents the “eligible
vertical interest” in satisfaction of the US Risk Retention Rules.
Related Publications: (available at www.kbra.com)
Trust 2019-HIT Pre-Sale Report
CMBS Property Evaluation Methodology
CMBS Single Borrower & Large Loan Rating Methodology
for Rating Interest-Only Certificates in CMBS Transactions
Structured Finance Counterparty Methodology
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About KBRA and KBRA Europe
KBRA is a full-service credit rating agency registered with the U.S.
Securities and Exchange Commission as an NRSRO. In addition, KBRA is
designated as a designated rating organization by the Ontario Securities
Commission for issuers of asset-backed securities to file a short form
prospectus or shelf prospectus. KBRA is also recognized by the National
Association of Insurance Commissioners as a Credit Rating Provider, and
is a certified Credit Rating Agency (CRA) by the European Securities and
Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is
registered with ESMA as a CRA
Kockenmeister, Senior Managing Director
B. Brown, Managing Director
Keagle, Senior Director