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KBRA Assigns Preliminary Ratings to Aventura Mall Trust 2018-AVM

Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of
preliminary ratings to six classes of Aventura Mall Trust 2018-AVM, a
CMBS single asset, single borrower (SASB) securitization.

The collateral for the transaction is a $750.0 million portion of a
$1.75 billion, non-recourse, first lien mortgage loan. The fixed-rate
loan requires interest-only payments and has a 10-year term. The loan is
secured by the borrower’s fee simple interest in 1.2 million sf of
Aventura Mall, a mostly two-story, 2.2 million sf, super-regional mall
located in Aventura, Florida, approximately 18 miles north of the Miami
CBD. The collateral includes an approximately 226,000-sf expansion of
the mall that was completed in November 2017, which offers a new food
court and in-line tenant space. The expansion is still in its initial
lease up phase.

Aventura Mall is anchored by Bloomingdales, JCPenney, Nordstrom, Macy’s,
and Macy’s Men & Home. Only the JCPenney space serves as collateral for
the loan. The remaining anchors own their stores and lease the
underlying land from an affiliate of the sponsors. The largest major
tenants include well known retailers such as Apple, Equinox Fitness,
H&M, Topshop, XXI Forever, and Zara. There is also a 24-screen AMC
Theatre. As of February 2018, the total mall including non-owned anchors
was 95.9% occupied, while the space serving as collateral for the loan
was 92.8% leased.

KBRA’s analysis of the transaction included a detailed evaluation of the
property’s cash flows using our CMBS
Property Evaluation Methodology and the application of our CMBS
Single Borrower and Large Loan Rating Methodology. The results
of our analysis yielded a KBRA net cash flow (KNCF) of $149.0 million.
To value the property, we applied a capitalization rate of 6.75% to
arrive at a KBRA Value of $2.21 billion and a KBRA Loan to Value (KLTV)
of 79.3%. In our analysis of the transaction, we also reviewed and
considered third-party engineering, environmental, and appraisal
reports; the results of our site inspection of subject; and legal
documentation.

For further details on KBRA’s analysis, please see our pre-sale report,
entitled Aventura
Mall Trust 2018-AVM, published at www.kbra.com.

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: Aventura Mall Trust 2018-AVM

*Notional balance

**To satisfy the US risk retention rules, BREDS III SD NQ Holdco L.L.C.,
a third-party purchaser, will purchase and retain an “eligible
horizontal residual interest” consisting of the Class HRR certificates,
representing at least 5.0% of the fair value of all interests issued on
the closing date.

Representations & Warranties Disclosure

All Nationally Recognized Statistical Rating Organizations are required,
pursuant to SEC Rule 17g-7, to provide a description of a transaction’s
representations, warranties and enforcement mechanisms that are
available to investors when issuing credit ratings. KBRA’s disclosure
for this transaction can be found in the report entitled Aventura
Mall Trust 2018-AVM Representations & Warranties Disclosure.

Related Publications: (available
at www.kbra.com)

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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
recognized by the National Association of Insurance Commissioners as a
Credit Rating Provider and 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.

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