KBRA cuts Benchmark 2020-B18 class E ratings after CMBS loss realization

Traders Union
All News
Financial Institutions
Benchmark 2020-B18 ratings cut

Highlights

KBRA downgraded Benchmark 2020-B18 Class E and IO Class X-D certificates to D (sf) from CCC (sf) after $30.5 million realized loss exceeded prior estimates.
Loss severity for the Brass Professional Center loan reached 99.7% versus the earlier estimate of 85.5%, reducing Class E certificates to $14.0 million, or 83.3% below original balance.
The liquidation of the 575,771 square foot San Antonio office property in October 2026 generated $10.7 million gross sale proceeds but left only $86,096 for distribution after expenses.

October remittance triggers downgrade

As reported by Kroll Bond Rating Agency, the rating of the Class E certificates and related IO Class X-D in Benchmark 2020-B18 is downgraded to D (sf) from CCC (sf) after realized losses hit the transaction's outstanding principal balance following the resolution of Brass Professional Center.

The asset carried a $32.7 million trust balance at securitization. KBRA says the realized loss totals $30.5 million, above its prior expectation of $26.1 million, with loss severity reaching 99.7% on the outstanding loan balance versus an earlier estimated 85.5%.

Realized losses are allocated first to the Class NR certificates, reducing them to zero, and then to the Class E certificates, which are reduced to $14.0 million, or 83.3% of the original certificate balance. KBRA says its other outstanding ratings on the transaction are unchanged for now.

San Antonio office liquidation highlights pressure

The Brass Professional Center is backed by a 575,771 square foot Class-B office complex in San Antonio, Texas, about 10 miles northwest of the city's central business district. The property includes 11 suburban office buildings developed in phases between 1968 and 1998 on a 34.6-acre site.

The loan becomes REO in October 2023, and the servicer makes a non-recoverable determination in October 2025. The property is auctioned for sale in June 2026 and liquidated in October 2026, generating gross sale proceeds of $10.7 million against $9.2 million of fees, advances, and expenses, leaving about $86,096 available for distribution.

Future rating actions depend on KBRA's ongoing assessment of the timing and likelihood of ultimate payment of principal and accrued interest on the rated certificates. That review will consider expected and actual losses on the remaining assets in the transaction, along with the scale and extent of any interest shortfalls.

In our earlier coverage of KBRA’s Credit Compass on Europe, we noted that the IMF’s October forecasts pointed to an uneven recovery, with improving prospects in Germany and the UK, relative strength in Spain, and continued weakness in France. The piece also emphasized how persistent inflation risks, tight fiscal constraints, and shifting competitiveness and trade dynamics can influence borrowing conditions and credit sentiment across markets.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.