BANK5 2023-5YR2 Annual Report

Hey there! Curious about BANK5 2023-5YR2? You're in the right spot. This isn't a typical bank. It doesn't take deposits or make loans to individuals. Instead, BANK5 2023-5YR2 is a special investment called a Commercial Mortgage-Backed Security (CMBS) trust. Its name, "2023-5YR2," tells us a few things. It started in 2023. It's the fifth deal from its sponsor group that year. It's also the second series within that fifth deal. This helps set it apart from other similar investments.

Think of it this way: Big banks (like Morgan Stanley, Wells Fargo, JPMorgan Chase, and Bank of America, who are "sponsors" here) collect many commercial real estate loans. These are loans to businesses for properties like shopping centers, offices, or apartments. They put these loans into a trust, like a special financial container. Then, they sell "slices" of this container to investors as bonds. When businesses repay their loans, that money goes through the trust to the bondholders.

You don't "invest" in BANK5 2023-5YR2 by buying stock. It has no publicly traded stock. Instead, you invest in bonds. These bonds give you a claim on payments from those commercial mortgage loans.

This report covers the year ending December 31, 2025. We'll explain how this trust is doing in simple terms. You'll understand the health of its loans. You'll also see what that means for bond investors. No complex finance jargon, just the key information.

Here's what we'll cover in this report:

1. What This "Company" Does and Loan Performance This Year

BANK5 2023-5YR2 is not a traditional company. It's a trust holding a specific group of commercial mortgage loans. Its purpose is to collect payments from these loans. Then, it passes them to investors who bought its bonds. The trust's success depends on timely payments of loan principal and interest.

This trust includes several important mortgage loans:

• Miracle Mile Shops (a retail property)
• Back Bay Office (an office property)
• ICP/IRG Holdings Portfolio (likely industrial or mixed-use)
• One & Two Commerce Square (office properties)
• Heritage Plaza (an office property)
• 6330 West Loop South (likely office or commercial)
• 1201 Third Avenue (an office property)

BANK5 2023-5YR2's "performance" shows how well these commercial mortgage loans are doing. Good performance means property owners pay on time. Properties also keep strong occupancy and operating income. No loans move to special servicing. Poor performance means loans are late (30, 60, or 90+ days past due). They might move to special servicing due to likely or actual default. Property values or debt coverage ratios could also drop significantly.

Who Manages These Loans? (It's like a nesting doll!) It's a bit complicated. BANK5 2023-5YR2 is a "trust of trusts." This means it holds parts of other CMBS trusts. Each smaller trust has its own loan managers.

Trimont LLC became the main servicer for BANK5 2023-5YR2 on March 1, 2025. Wells Fargo Bank, National Association previously held this role. However, specific servicers manage individual loans within this trust. They follow their original agreements. Here are the key players for each loan in 2025:

• Miracle Mile Shops mortgage loan (part of MIRA 2023-MILE):
  • Midland Loan Services is the primary servicer (all year).
  • KeyBank National Association is the special servicer (all year). They step in if the loan faces trouble.
  • Computershare Trust Company, National Association is the custodian (all year).
• Back Bay Office mortgage loan (part of Benchmark 2023-B39):
  • Midland Loan Services is the primary servicer (all year).
  • Situs Holdings, LLC is the special servicer (all year).
  • Computershare Trust Company, National Association is the custodian (all year).
  • Interesting detail: BANK5 2023-5YR2 holds an "initial note A-6" for this loan. This means our trust holds a specific, typically lower-rated bond piece. This piece offers higher potential returns but carries more risk. It absorbs losses before more senior bond pieces (like A-1, A-2, etc.). This happens if the loan defaults or property value drops.
• ICP/IRG Holdings Portfolio mortgage loan (part of Benchmark 2023-V2):
  • Midland Loan Services is the primary servicer (all year).
  • 3650 REIT Loan Servicing LLC is the special servicer (all year).
  • Computershare Trust Company, National Association is the custodian (all year).
• One & Two Commerce Square and 1201 Third Avenue mortgage loans (part of BANK 2023-BNK46):
  • Wells Fargo Bank, National Association was the master servicer from January 1 to February 28, 2025.
  • Trimont LLC took over as master servicer from March 1 to December 31, 2025.
  • LNR Partners, LLC is the special servicer (all year).
  • CoreLogic Solutions, LLC helps with servicing tasks (all year).
  • Computershare Trust Company, National Association is the custodian (all year).
• Heritage Plaza and 6330 West Loop South mortgage loans (part of BANK5 2023-5YR3):
  • Wells Fargo Bank, National Association was the master servicer from January 1 to February 28, 2025.
  • Trimont LLC took over as master servicer from March 1 to December 31, 2025.
  • Greystone Servicing Company LLC is the special servicer (all year).
  • CoreLogic Solutions, LLC helps with servicing tasks (all year).
  • Computershare Trust Company, National Association is the custodian (all year).

Other companies also help manage the loans. Computershare Trust Company, National Association acts as certificate administrator and custodian for the whole trust. CoreLogic Solutions, LLC helps with servicing for specific loans. They all handle daily tasks and reporting for this complex structure.

2. Cash Flow from Loans

This isn't a traditional business. So, we don't track "revenue" or "profit." Instead, we focus on the cash flow from the mortgage loans. This is the money collected from borrowers. It includes interest, principal, prepayments, and late fees. This cash is then available for bondholders after fees. A "waterfall" structure dictates how this cash is paid out. Senior bond classes get paid first. "Growth" isn't a factor here. The loan pool is usually fixed when created. Cash flow typically shrinks as loans are paid off or mature.

3. Wins and Challenges This Year

For a CMBS trust, a "win" means all mortgage loans perform as expected. Borrowers pay consistently. No loans move to special servicing. This shows stable cash flow for bondholders. A "challenge" means loans become late or default. They might transfer to special servicing. This could reduce or delay payments to bondholders. It could also mean losses if property values drop.

Legal Challenges in Loan Servicing: Legal issues in loan servicing can arise. Lawsuits against CWCapital Asset Management LLC (CWCAM), another large special servicer, highlight potential legal disputes in the commercial mortgage servicing industry.

• CWCapital Cobalt Vr Ltd. v. CWCapital Investments LLC, et al.: This lawsuit began in 2017. It accused CWCAM of helping others breach their duties in servicing loans. On January 13, 2026, the court dismissed the remaining claims against CWCAM. CWCAM is no longer a defendant. The rest of the lawsuit continues against a different entity.
• ROC Debt Strategies II Bond Investments LLC v. CWCapital Asset Management LLC: This lawsuit, filed in January 2025, claimed CWCAM was negligent. It involved servicing loans for another trust. This case was dismissed permanently on January 22, 2026. The parties reached a settlement.

These lawsuit resolutions are positive for the CMBS servicing industry. The dismissal of claims against CWCAM reduces uncertainty. It also lessens the chance of similar lawsuits. This helps servicer operations and investor returns.

4. Financial Health: Cash, Debt, and Liquidity

BANK5 2023-5YR2's "financial health" means stable cash flow from its mortgage loans. It holds cash from loan payments. This cash sits in separate trust accounts managed by the custodian. Its "debt" is the bonds it sold to investors. "Liquidity" means the properties can earn enough to cover mortgage payments. We often measure this by debt service coverage ratio (DSCR). Occupancy rates and the ability to re-lease space also matter. The trust structure involves "servicers," now mainly Trimont LLC. They manage loans and collect payments. This ensures cash flows smoothly. It also ensures cash is distributed as the trust documents require.

5. Key Risks to Bond Value

This trust has no stock price. So, we discuss risks that could hurt the value of its bonds. The biggest risks are:

• Commercial Real Estate Market: Property values could fall if the market for certain property types declines. This increases the risk of losses for bondholders. For example:
  • Retail properties (like Miracle Mile Shops) face challenges from online shopping. Consumer habits also keep changing.
  • Office properties (like Back Bay Office, One & Two Commerce Square, 1201 Third Avenue, Heritage Plaza, and 6330 West Loop South) are vulnerable. Remote work, high vacancies, and lower demand can reduce rents and property values.
  • Industrial properties (possibly in the ICP/IRG Holdings Portfolio) are usually stronger. But they still face economic downturns and supply chain changes.
• Borrower Defaults: Businesses owning these properties might struggle. If they can't make mortgage payments, it affects cash flow to bondholders. A default sends the loan to special servicing. The servicer then tries to fix the issue. This might involve changing loan terms, foreclosure, or selling the property. These processes can take time and may lead to losses.
• Interest Rate Changes: Higher interest rates can impact the real estate market. They increase borrowing costs. Property owners find it harder and more costly to refinance maturing loans. This could lead to more defaults. Higher rates can also increase capitalization rates. This lowers property values, reducing recovery in a default.

The legal cases mentioned earlier, though not against this trust's main servicer, highlight potential operational and legal challenges in the broader CMBS market.

6. Competitive Positioning

This section doesn't really apply to BANK5 2023-5YR2. It's a trust holding a specific group of loans. It doesn't "compete" like a traditional company. Its performance depends only on the loans it holds. Its "success" comes from consistent loan repayments.

7. Leadership or Strategy Changes

A CMBS trust doesn't have "leaders" or a changing "strategy." Its operations follow strict legal agreements. These agreements, like "pooling and servicing agreements," detail how loans are managed. They also outline how payments are distributed.

However, there were important operational updates this year:

• On March 1, 2025, Trimont LLC bought Wells Fargo Bank's commercial mortgage servicing business. This was a big industry event. Wells Fargo was a major CMBS servicer. As a result, Trimont LLC took over many servicing roles for BANK5 2023-5YR2. Trimont LLC became the master servicer for loans in the BANK 2023-BNK46 and BANK5 2023-5YR3 securitizations. These include One & Two Commerce Square, 1201 Third Avenue, Heritage Plaza, and 6330 West Loop South. Trimont served from March 1 to year-end. Wells Fargo Bank, National Association, served these roles for January and February 2025. This means a new company now manages a large part of BANK5 2023-5YR2's assets. This includes collecting payments and handling troubled loans within this specific trust.
• The trust also files regular reports. These are called "Compliance with Applicable Servicing Criteria" and "Servicer Compliance Statements." All companies managing the loans provide them. These reports confirm that servicers and participants meet their regulatory duties. This includes Computershare, Trimont, Wells Fargo, CWCapital, Midland Loan Services, KeyBank, Situs Holdings, 3650 REIT Loan Servicing, Greystone Servicing, and LNR Partners. This widespread compliance shows good operational care and stability.
• Good News on Computershare's Compliance: PricewaterhouseCoopers (PwC), a major accounting firm, confirmed something important. Computershare Trust Company, National Association followed all rules for servicing these securities. This covers the year ending December 31, 2025. Computershare helps manage the trust's records and money. This independent audit gives a clean bill of health. It's a positive sign for investors. It ensures proper record-keeping and cash management.

8. Future Outlook

BANK5 2023-5YR2's future depends entirely on the commercial real estate market. It also depends on the specific properties whose mortgages are in the trust. If properties keep earning stable income and stay highly occupied, and borrowers pay, the trust will do well for bondholders. Negative trends in commercial real estate sectors could be a challenge. This is especially true for office and retail markets. Many underlying properties are in these sectors. Such trends could hurt loan performance and bond value.

9. Market Trends or Regulatory Changes

The biggest market trends affecting this trust are:

• Commercial Real Estate Trends: Demand changes for specific property types. For example, remote work still affects office space demand. This can mean higher vacancies and lower property values for office loans. Industrial properties (like those in the ICP/IRG Holdings Portfolio) might benefit from e-commerce growth. Retail properties, such as Miracle Mile Shops, face ongoing pressure from online shopping. Consumer preferences also keep changing.
• Interest Rate Environment: Long periods of higher interest rates can greatly impact the trust. Property owners find it harder and more costly to refinance maturing loans. This could lead to more defaults. Higher rates can also increase capitalization rates. This lowers property values, reducing recovery in a default.
• Regulatory Changes: The trust is highly regulated (under Regulation AB). But new rules could affect it indirectly. These include rules for commercial real estate lending, securitization, or ESG factors for properties. For example, stricter capital rules for banks holding commercial real estate loans could change future market dynamics.

Cybersecurity and market risks are general concerns for the wider financial and real estate markets. Cybersecurity risks could affect servicers or borrowers, potentially disrupting payments or data. Market risks, such as economic downturns, could affect property performance and borrowers' ability to repay loans.