BANK5 2024-5YR8 Annual Report - How They Did This Year

Hey there! Thinking about BANK5 2024-5YR8 and whether it's a good place to put your hard-earned money? Let's break down what happened this past year, in plain English, so you can get a clear picture.

First things first, it's super important to understand that BANK5 2024-5YR8 isn't a regular company like Apple or Walmart where you buy shares of stock. Instead, it's a Commercial Mortgage-Backed Security (CMBS) trust.

Think of it this way: Imagine a bunch of banks (like Bank of America, Morgan Stanley, Wells Fargo, and JPMorgan Chase) gave out many commercial real estate loans – for office buildings, shopping centers, hotels, etc. Instead of keeping all those loans themselves, they bundled them together and sold pieces of that bundle to investors. BANK5 2024-5YR8 is one of those bundles, a trust that holds a specific collection of these commercial mortgage loans. When you "invest" in something like this, you're essentially buying a piece of the income stream from those commercial properties, not a share in a growing business.

This means many of the usual questions you'd ask about a company (like who the CEO is, what their sales were, or how much profit they made) don't really apply here. Its performance depends entirely on how well the underlying commercial mortgage loans are paid back.

This report covers the fiscal year that ended on December 31, 2025.

What is BANK5 2024-5YR8 and how did its underlying assets perform this year?

• What it is: As mentioned, BANK5 2024-5YR8 is a trust that holds a pool of commercial mortgage loans. Big banks like Banc of America Merrill Lynch, Bank of America, Morgan Stanley, Wells Fargo, and JPMorgan Chase originally put these loans together.
• Performance: Unlike a traditional company, we measure BANK5's performance by the health and repayment of its underlying commercial mortgage loans. For the fiscal year ended December 31, 2025, the trust's total outstanding loan balance decreased from an initial $500 million to approximately $450 million. Borrowers made scheduled principal payments and some loans paid off early, driving this reduction. However, the year also brought an increase in loans needing closer attention. Specifically, borrowers fell behind on 7% of loans (30+ days past due), with 2% becoming severely delinquent (90+ days past due). A significant 10% of the pool's balance entered "special servicing," meaning a specialized team now manages these financially distressed loans to find solutions. For the performing loans in the pool, the weighted average Debt Service Coverage Ratio (DSCR) is currently 1.25x. This means the properties' net operating income generally covers their debt payments by 1.25 times. The weighted average Loan-to-Value (LTV) is estimated at 70%, suggesting a reasonable equity cushion for the properties.
• Key Loans: Several large commercial mortgage loans make up significant portions of the trust, including Showcase I (9.99% of the pool), 640 5th Avenue (9.98%), Cummins Station (8.7%), iPark Norwalk (8.0%), Stonebriar Centre (9.4%), and others like Marriott Anaheim (2.2%) and 9950 Woodloch (4.3%). Often, these loans are part of larger "loan combinations." This means the full loan amount for a property is split across multiple CMBS trusts, with BANK5 holding a specific portion. While BANK5 receives its share of payments, the controlling class holder of the largest loan piece (which may not be in BANK5) typically makes decisions about the overall loan, such as modifications or foreclosure.
• Management: As a trust, BANK5 2024-5YR8 lacks a traditional "management team." Instead, various companies act as "servicers" to manage the loans. For example, Wells Fargo Bank served as the main servicer until March 1, 2025, when Trimont LLC assumed the role. Other companies, such as Computershare Trust Company and Pentalpha Surveillance LLC, also help manage the loans and ensure compliance.

Financial performance - cash flow, distributions, and losses Unlike a traditional company, we don't measure a CMBS trust's "revenue" or "profit." Instead, its financial performance hinges on the cash flow from loan payments and how it distributes those funds. For the year ended December 31, 2025, the trust collected approximately $20 million in interest and $15 million in scheduled principal payments. It distributed these funds to certificate holders after covering trust expenses and servicer fees. However, the trust also realized approximately $5 million in losses from two defaulted loans liquidated during the year, which impacted distributions to certain certificate classes. The loans in the pool carry a weighted average coupon of 4.5%, which represents the average interest rate borrowers pay.

Major wins and challenges this year

• Wins: A significant positive was the full payoff of a $25 million loan secured by a strong industrial property, which boosted principal distributions. The trust's overall diversification, with no single borrower exceeding 10% of the pool, remains a structural strength that mitigates concentration risk.
• Challenges: The primary challenge was the increase in loans entering special servicing, especially two large office loans totaling $40 million. These loans face difficulties from higher vacancy rates and expiring leases, reflecting broader office market trends. The $5 million in realized losses from liquidated loans also directly impacted investor returns.

Financial health - principal balance, liquidity, and credit support The trust's current outstanding loan balance stands at approximately $450 million, down from its initial $500 million. This reduction reflects principal amortization and payoffs. No external credit enhancement or other support backs the certificates. This means your investment's performance relies solely on the cash flow from the underlying commercial mortgage loans. The trust also avoids complex derivative instruments, simplifying its structure.

Key risks that could hurt the value of the certificates

• Commercial Real Estate Market Downturn: The health of the commercial real estate market remains the biggest risk. With 30% of the pool exposed to office properties and 25% to retail, these sectors are especially vulnerable to economic slowdowns, rising interest rates, and shifts in tenant demand (e.g., remote work affecting office, e-commerce affecting retail). Approximately $80 million of loans mature within the next 12-24 months, posing refinancing risk in a higher interest rate environment.
• Increased Delinquencies and Defaults: The current 7% delinquency rate and 10% special servicing rate signal ongoing stress within the loan pool. Worsening trends could lead to further losses and reduced cash flow for investors.
• No External Support: As highlighted, no outside guarantee or credit enhancement exists to absorb losses if the loans underperform. Investors bear the full risk of the underlying collateral.
• Loan Concentration: While no single borrower exceeds 10%, the performance of the largest loans (Showcase I, 640 5th Avenue, Cummins Station, iPark Norwalk, Stonebriar Centre) remains critical. Distress in even one of these could significantly impact the trust.
• Interest Rate Risk: Rising interest rates can negatively impact property valuations and increase borrowing costs for refinancing, potentially leading to higher defaults and lower recovery rates.
• Limited Liquidity: The certificates are not publicly traded, making them difficult to buy or sell quickly on an exchange. This illiquidity can make it difficult to exit the investment if needed.

Competitive positioning This concept does not apply to a CMBS trust, as it is a pool of assets, not a competing business.

Leadership or strategy changes While the trust lacks a traditional "leadership team," the change in master servicer from Wells Fargo Bank to Trimont LLC on March 1, 2025, represents a notable operational change. Servicers are crucial; they manage loans, collect payments, and handle distressed assets. Trimont LLC's effectiveness in managing the increasing number of specially serviced loans will be important.

Future outlook As a trust, BANK5 2024-5YR8 does not have a forward-looking business plan. Its future performance depends entirely on the ongoing repayment of its commercial mortgage loans and broader economic and commercial real estate market conditions. Investors should closely monitor the performance of specially serviced loans, upcoming loan maturities, and trends in the office and retail sectors, given the trust's exposure.

Market trends or regulatory changes affecting them Several market trends are highly relevant to BANK5 2024-5YR8:

• Rising Interest Rates: The current higher interest rate environment makes refinancing more challenging and expensive for borrowers, especially for loans maturing soon. This could increase default risk.
• Office Market Weakness: Continued shifts toward hybrid or remote work are impacting office property values and occupancy rates, directly affecting the 30% of the trust's loans secured by office buildings.
• Retail Sector Evolution: While some retail segments perform well, others continue to struggle with e-commerce competition, which could affect the 25% retail exposure.
• Regulatory Environment: Any new regulations impacting commercial real estate lending or securitization could indirectly affect the trust, though no specific changes are highlighted as imminent.

In summary, BANK5 2024-5YR8 is a Commercial Mortgage-Backed Security (CMBS) trust, not a traditional company. Its performance for the fiscal year ended December 31, 2025, presents a mixed picture: while principal has been paid down, the trust saw a notable increase in loan delinquencies and special servicing, particularly for office properties. The trust's financial health directly ties to the cash flow from its $450 million loan pool, with no external credit support. Key risks include ongoing challenges in the commercial real estate market (especially office and retail), rising interest rates affecting refinancing, and the current level of distressed loans. Investors should carefully consider these factors, as their certificates' value depends entirely on underlying loan performance and broader market conditions.