KBRA Downgrades Five Ratings and Affirms One Rating for CSMC 2021-ADV

KBRA downgrades the ratings for five classes and affirms one rating for CSMC 2021-ADV, a CMBS single borrower transaction. The downgrades follow a surveillance review of the transaction and are driven by a continued decline in collateral performance coupled with weakness in the collateral properties’ submarkets. In addition, the downgrades reflect the likelihood that interest shortfalls, which are currently impacting Classes D and lower, will continue to reach higher in the capital structure as the special servicer works to resolve the loan.

The loan transferred to the special servicer on March 13, 2023, after the borrower defaulted on the March debt service payment. This came after the loan’s sponsor, Adventus Holdings, LP, a wholly owned subsidiary of Adventus Realty Trust, a Vancouver based Canadian REIT, announced a suspension of its monthly distributions in response to a changing interest rate environment and its impact on the REIT’s variable rate debt. The REIT subsequently made voluntary assignments for the benefit of its creditors pursuant to Section 49 of Canada’s Bankruptcy and Insolvency Act in July 2023. According to the special servicer, none of the US based entities are included in the bankruptcy.

The transaction collateral is a non-recourse, first lien mortgage loan secured by the borrower’s fee simple interests in seven suburban office properties. At closing, the eight-property portfolio totaled 2.2 million sf, with properties located in the Atlanta MSA (five, 71.3% of the closing ALA) and Chicago MSA (three, 28.7%). According to the July 2025 servicer commentary, all of the Atlanta area assets are foreclosed, and one asset, TownPark Commons, was liquidated from the collateral in February 2025. The portfolio currently encompasses 1.9 million sf with four properties in the Atlanta MSA (67.2% of the current ALA) and three in the Chicago MSA (32.9%). The loan continues to have an outstanding balance of $350.0 million ($187 per sf) as of July 2025. According to the servicer, proceeds from the sale were not utilized to pay down the loan’s principal balance but were applied to outstanding servicer advances for P&I and taxes, along with interest on advances. The loan was structured with an initial two-year term, which matured on July 9, 2023, and was not extended. It requires monthly interest-only payments based on one-month SOFR plus a spread of 3.85%. The weighted average coupon as reflected in the July remittance is 8.16%.

According to the July reporting, the mortgage loan status is non-performing matured balloon, there are currently $10.5 million in outstanding P&I advances and the workout strategy continues to be foreclosure. An ARA of $198.2 million was applied on April 9, 2025, and the loan carries a cumulative ASER of $20.6 million. Appraisals dated December 2024 valued the initial eight assets at $220.3 million ($99 per sf), a 49.8% decrease from $439.0 million ($197 per sf) at closing. The remaining seven assets, excluding TownPark Commons, are valued at $178.9 million ($95 per sf).

KBRA analyzed the cash flow for the properties utilizing information from the trustee and servicer to determine KNCF. The analysis produced a KNCF of $13.8 million and a KBRA value of $140.4 million ($75 per sf). The resulting in-trust KLTV is 249.3%, a change from 173.5% at last review and 130.5% at securitization. KBRA’s valuation takes into account an estimate of the distressed liquidation value of the portfolio. In addition to the loan’s status with the special servicer and weakness in the Atlanta and Chicago office market submarkets where the assets are located, KBRA maintains the loan’s K-LOC status and KPO of Underperform.

Details for the classes with rating changes are as follows:

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