KBRA affirms SDAL 2025-DAL CMBS ratings after surveillance review
Performance at the Sheraton Dallas-backed SDAL 2025-DAL transaction shows a modest decline since securitization, but not enough to trigger rating changes. The loan remains backed by a large downtown Dallas convention hotel property with an outstanding principal balance of $300.0 million as of April 2026.
Highlights
- KBRA affirms all outstanding ratings for SDAL 2025-DAL after surveillance review despite slight performance weakening since securitization.
- The Sheraton Dallas hotel CMBS loan shows a KBRA net cash flow (KNCF) of $33.7 million and a KBRA value of $321.2 million, or $174,485 per key.
- In-trust KLTV rises to 93.4% from 85.9% at issuance, indicating higher leverage, but KBRA maintains a Perform outlook on the loan.
Surveillance review of Dallas hotel loan
As reported by Kroll Bond Rating Agency, all outstanding ratings for SDAL 2025-DAL are affirmed following a surveillance review of the CMBS single-borrower transaction. The review finds that performance has weakened slightly since securitization, although the change is not large enough to justify rating adjustments at this time.The transaction is backed by a non-recourse, first lien mortgage loan secured by the borrower’s fee simple and leasehold interests in the Sheraton Dallas. The 1,841-key full-service convention hotel sits on 5.4 acres in downtown Dallas, Texas, along North Olive Street near the junction of Interstate 30 and U.S. Highway 75.
The property is described as the largest hotel in Texas by key count and includes the 42-story Center Tower, the 31-story North Tower, the 28-story South Tower, and a three-story convention center and garage across the street. The loan sponsors are Elliott Investment Management L.P. and The Chartres Lodging Group, LLC.
Credit metrics and market implications
KBRA says it analyzes property cash flow using information from the trustee and servicer to determine KNCF. That analysis produces a KNCF of $33.7 million and a KBRA value of $321.2 million, or $174,485 per key.The resulting in-trust KLTV stands at 93.4%, compared with 85.9% at securitization, indicating a weaker leverage profile than at issuance. Even so, KBRA assigns a KPO of Perform on the loan, signaling that the agency still views the asset as performing despite softer transaction metrics.
In our earlier article on KBRA’s rating review of Pagaya auto ABS transactions, we covered the agency’s decision to affirm 19 note classes and upgrade 14 across seven deals after assessing performance through the March 2026 distribution date. We noted that KBRA pointed to higher credit enhancement and a record of timely interest payments as key supports for the revised and affirmed ratings, alongside context on Pagaya’s financial position and loan-origination framework.
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