KBRA Downgrades Four Ratings, Affirms Two Ratings, and Removes Four Ratings from Watch Downgrade for MSC 2019-NUGS

KBRA downgrades the ratings of four classes of certificates and affirms two ratings for MSC 2019-NUGS, a CMBS SASB transaction. Simultaneously, four ratings are removed from Watch Downgrade (DN), where they were placed on September 9, 2025. The downgrades reflect the significant increase in interest shortfalls, and continued decline in KNCF and value of the loan collateral, Wells Fargo Center, since KBRA’s last ratings adjustments in March 2025. We also considered the loan’s specially serviced status, the updated lower appraised value, and the deterioration in the Denver office submarket. There is a $171.8 million ARA and a $7.5 million cumulative ASER as of October 2025. Interest shortfalls may continue to affect all classes as the special servicer works to resolve the loan.

The transaction collateral is a $277.1 million portion of a $327.7 million non-recourse, first-lien mortgage loan secured by the borrower’s fee simple interests in Wells Fargo Center, a 52-story LEED Gold-certified Class A office building with 1.2 million sf, plus a 12-story parking garage, in Denver, Colorado. The trust collateral is a $277.1 million senior A note. The non-trust collateral consists of $50.6 million of subordinate B notes. There is also $45.3 million of existing mezzanine debt held outside the trust. The floating-rate IO loan had an initial two-year term that ended in December 2021 with three one-year extension options.

The borrower extended the loan until December 2022 and had two extension options remaining. However, the borrower did not extend the loan when it reached maturity at the end of 2022, and it was transferred to special servicing as a matured performing loan in December 2022. The sponsors of the borrower are Beacon Capital Partners and Brookfield Strategic Real Estate Partners, but a receiver was appointed in August 2023 and is currently managing the property.

KBRA analyzed the cash flow for the property utilizing information from the trustee and servicer to determine KNCF. The analysis produced a KNCF of $11.1 million and a KBRA value of $110.9 million ($91 per sf). The resulting in-trust KLTV on the senior note is 249.9%, up from 200.5% at last review and 90.7% at securitization. KBRA maintains the loan’s K-LOC status and KPO of Underperform.

Details concerning the classes with a rating adjustment are as follows:

KBRA affirms the following ratings:

To access ratings and relevant documents, click here.

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