KBRA Places One Rating of MSBAM 2025-5C1 On Watch Downgrade
2 Apr 2026 | New York
KBRA places the rating of class G-RR of MSBAM 2025-5C1 on Watch Downgrade (DN). The Watch action is due to the Waterford Grove Apartments loan ($62.5 million, 6.7% of the pool balance) transferring to the special servicer for imminent monetary default in February. The loan is secured by a 584-unit multifamily property in Houston. According to the servicer, the borrower applied for but failed to obtain a Housing Finance Corporation (HFC) tax exemption by February 2026, which triggered a requirement for the borrower to pay down the loan’s principal balance to satisfy debt yield and DSC thresholds pursuant to the terms of the loan agreement. The borrower’s failure to remit the required funds to satisfy the tests triggered the transfer to special servicing.
As of the March 2026 remittance period, the CMBS conduit transaction had 40 loans and an outstanding balance of $934.5 million. KBRA identified Waterford Grove Apartments as a K-LOC. No other loans are delinquent or specially serviced.
KBRA will continue to monitor the transaction and the underlying loans' performance and will seek to resolve or update the Watch Downgrade within 90 days.
Details concerning the class that has been placed on Watch are as follows:
- Class G-RR to BB- (sf) DN from BB- (sf)
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