FeaturedJul 17, 2024
What to Make of Single Asset CMBS Credit Ratings amid Defaults
The Midtown Manhattan property at 1740 Broadway, made news in May 2024 because the AAA tranche of the commercial mortgage-backed security (CMBS) incurred at 26% haircut following the sale of the building. Media outlets took note of this, and we at TRA have received questions about what happened.
While TRA is not party to this transaction or the tenants involved, after reviewing the events precipitating the haircut, we have pieced together why the credit rating remained AAA despite signs that recovery of the full value was in doubt.
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