BANK5 2023-5YR2 Details Servicing Overhaul, CWCAM Faces Legal Battle

TL;DR

**This CMBS trust is a servicing hot potato, with a major servicer change and a key special servicer, CWCAM, still battling a lawsuit for aiding and abetting fiduciary breach – proceed with extreme caution.**

AI Summary

The BANK5 2023-5YR2 10-K filing for the fiscal year ended December 31, 2025, primarily details the complex servicing structure of its mortgage pool, which includes seven specific mortgage loans like the Miracle Mile Shops and Heritage Plaza. The filing highlights significant changes in servicing, with Trimont LLC replacing Wells Fargo Bank, National Association as master servicer, primary servicer, and special servicer effective March 1, 2025. This transition impacts the servicing of all loans within the BANK5 2023-5YR2 pool and several Outside Pooling and Servicing Agreements. The document also clarifies the limited roles of trustees, certificate administrators, operating advisors, and asset representations reviewers, stating they do not perform full servicing functions under Regulation AB. A key risk disclosed is an ongoing legal proceeding against CWCapital Asset Management LLC (CWCAM), a special servicer, involving claims of aiding and abetting breach of fiduciary duty and unjust enrichment, with 2 counts remaining against CWCAM after an August 20, 2019 dismissal order. The filing omits typical financial statements, risk factors, and management's discussion, focusing instead on compliance with Regulation AB regarding servicing participants and legal disclosures.

Why It Matters

This filing is crucial for investors in BANK5 2023-5YR2 as it details the intricate web of servicing agreements and a significant change in master servicer from Wells Fargo to Trimont LLC, effective March 1, 2025. Such a transition can impact loan performance and investor returns due to potential operational shifts or changes in servicing efficiency. The ongoing legal proceedings against CWCapital Asset Management LLC (CWCAM) for aiding and abetting breach of fiduciary duty and unjust enrichment, with 2 counts still active, introduce a material risk to the trust's operations and could affect the resolution of distressed assets. This level of detail on servicing participants and legal risks is vital for assessing the stability and oversight of the underlying mortgage pool, especially given the competitive landscape of commercial mortgage-backed securities.

Risk Assessment

Risk Level: high — The risk level is high due to the significant change in master servicer from Wells Fargo Bank, National Association to Trimont LLC effective March 1, 2025, which introduces operational uncertainty. Furthermore, the ongoing legal proceedings against CWCapital Asset Management LLC (CWCAM), a special servicer, for aiding and abetting breach of fiduciary duty and unjust enrichment, with 2 counts remaining after an August 20, 2019 dismissal order, represent a direct legal and reputational risk to the servicing of the mortgage pool.

Analyst Insight

Investors should scrutinize the performance of the mortgage loans serviced by Trimont LLC post-March 1, 2025, to assess any operational impacts from the servicing transition. Additionally, closely monitor the legal proceedings involving CWCapital Asset Management LLC, as adverse outcomes could affect the resolution of specific mortgage loans within the pool and potentially impact certificateholder distributions.

Financial Highlights

debt To Equity

N/A

revenue

$0

operating Margin

N/A

total Assets

$0

total Debt

$0

net Income

$0

eps

$0

gross Margin

N/A

cash Position

$0

revenue Growth

N/A

Key Numbers

• 2025-12-31 — Fiscal Year End Date (The period covered by this 10-K filing.)
• 2025-03-01 — Servicer Transition Date (Effective date when Trimont LLC replaced Wells Fargo Bank, National Association as servicer.)
• 7 — Number of Mortgage Loans (The specific mortgage loans included in the BANK5 2023-5YR2 mortgage pool.)
• 2 — Remaining Legal Counts (Number of claims against CWCapital Asset Management LLC for aiding and abetting breach of fiduciary duty and unjust enrichment.)
• 2017-12-01 — Original Complaint Filing Date (Date the initial lawsuit against CWCAM and others was filed in the U.S. District Court.)
• 2019-08-20 — Court Order Date (Date the court dismissed 11 of 16 counts and partially dismissed 2 additional counts against CWCAM.)
• 5% — Mortgage Pool Threshold (Minimum percentage of the mortgage pool serviced by a party to be considered a 'servicing function participant' but not a 'servicer' under Regulation AB.)
• 10% — Mortgage Pool Threshold (Maximum percentage of the mortgage pool serviced by a party to be considered a 'servicing function participant' but not a 'servicer' under Regulation AB.)

Key Players & Entities

• BANK5 2023-5YR2 (company) — issuing entity of the mortgage pool
• Wells Fargo Bank, National Association (company) — former master servicer, primary servicer, and special servicer; also a sponsor
• Trimont LLC (company) — successor master servicer, primary servicer, and special servicer effective March 1, 2025
• CWCapital Asset Management LLC (company) — special servicer facing ongoing legal proceedings
• Morgan Stanley Capital I Inc. (company) — depositor
• JPMorgan Chase Bank, National Association (company) — sponsor
• Morgan Stanley Mortgage Capital Holdings LLC (company) — sponsor
• Bank of America, National Association (company) — sponsor
• Situs Holdings, LLC (company) — special servicer for Back Bay Office mortgage loan
• LNR Partners, LLC (company) — special servicer for One & Two Commerce Square and 1201 Third Avenue mortgage loans

Forward-Looking Statements

• BANK5 2023-5YR2 will continue to file its annual reports in a timely manner, maintaining regulatory compliance. (BANK5 2023-5YR2) — high confidence, target: 2027-03-31
• The detailed exhibits, particularly EX-33.2 and EX-33.1, will contain significant information regarding the performance of the underlying asset pools. (EX-33.2, EX-33.1) — medium confidence, target: N/A

FAQ

Risk Factors

• Ongoing Litigation Against Special Servicer [high — legal]: CWCapital Asset Management LLC (CWCAM), a special servicer, faces ongoing legal proceedings with 2 counts remaining. These include claims of aiding and abetting breach of fiduciary duty and unjust enrichment. An August 20, 2019 court order dismissed 11 of 16 counts and partially dismissed 2 others, but the case continues.

Industry Context

The commercial mortgage-backed securities (CMBS) market is characterized by complex servicing structures and significant regulatory oversight. Changes in servicers, especially for large loan pools, can introduce operational risks and require careful management. The industry is also sensitive to legal and compliance issues, as demonstrated by the ongoing litigation against CWCAM.

Regulatory Implications

The filing emphasizes compliance with Regulation AB, particularly concerning the roles and responsibilities of various servicing participants. The transition of servicing functions to Trimont LLC and the ongoing legal proceedings against a former special servicer highlight potential regulatory scrutiny and the importance of robust compliance frameworks.

What Investors Should Do

1. Monitor the ongoing litigation against CWCapital Asset Management LLC.
2. Assess the operational impact of the servicer transition from Wells Fargo to Trimont LLC.
3. Review the specific pooling and servicing agreements for the seven mortgage loans mentioned.

Key Dates

• 2025-12-31: Fiscal Year End Date — Marks the end of the reporting period for the 10-K filing.
• 2025-03-01: Servicer Transition Date — Trimont LLC replaced Wells Fargo Bank, National Association as master, primary, and special servicer for the mortgage pool, impacting servicing operations.
• 2019-08-20: Court Order Date — A significant court order dismissed 11 of 16 counts and partially dismissed 2 additional counts against CWCAM, reducing the scope of the ongoing litigation.
• 2017-12-01: Original Complaint Filing Date — The initial lawsuit against CWCAM and others was filed, commencing the legal proceedings that continue to impact the company.

Glossary

Master Servicer

The entity responsible for overseeing the overall servicing of a pool of mortgage loans, including collecting payments, managing escrows, and remitting payments to investors. (Trimont LLC assumed this role from Wells Fargo, impacting the administration of the BANK5 2023-5YR2 mortgage pool.)

Primary Servicer

The entity that directly interacts with borrowers, collects payments, handles inquiries, and manages loan modifications. (Trimont LLC's assumption of this role signifies a direct change in borrower interaction for the loans in the pool.)

Special Servicer

An entity responsible for managing and resolving defaulted or troubled mortgage loans, often involving workouts, foreclosures, or restructurings. (The ongoing litigation against CWCAM, a former special servicer, highlights a key legal risk. Trimont LLC also assumed this role.)

Regulation AB

A U.S. Securities and Exchange Commission (SEC) regulation that governs the disclosure requirements for asset-backed securities, including information about the securitization process and parties involved. (The filing focuses on compliance with Regulation AB regarding servicing participants and their limited roles.)

Servicing Function Participant

Under Regulation AB, an entity that performs certain servicing functions but does not meet the definition of a 'servicer,' typically based on the percentage of the mortgage pool serviced. (The filing clarifies that trustees, certificate administrators, etc., are considered servicing function participants, not full servicers, based on thresholds (5%-10% of the pool).)

Year-Over-Year Comparison

This filing is unique in its focus on servicing participants and legal disclosures, omitting typical financial statements and management discussions. Therefore, a direct comparison of key financial metrics like revenue growth or margin changes to a previous filing is not possible. The primary change highlighted is the significant servicer transition effective March 1, 2025, and the continuation of a specific legal proceeding.

Filing Documents

• bak23yr2_10k-2025.htm (10-K) — 151KB
• bak23yr2_31.htm (EX-31) — 23KB
• bak23yr2_33-1.htm (EX-33.1) — 1420KB
• bak23yr2_33-2.htm (EX-33.2) — 3113KB
• bak23yr2_33-3.htm (EX-33.3) — 600KB
• bak23yr2_33-4.htm (EX-33.4) — 626KB
• bak23yr2_33-5.htm (EX-33.5) — 118KB
• bak23yr2_33-6.htm (EX-33.6) — 992KB
• bak23yr2_33-7.htm (EX-33.7) — 172KB
• bak23yr2_33-8.htm (EX-33.8) — 86KB
• bak23yr2_33-18.htm (EX-33.18) — 2773KB
• bak23yr2_33-19.htm (EX-33.19) — 991KB
• bak23yr2_33-20.htm (EX-33.20) — 79KB
• bak23yr2_33-21.htm (EX-33.21) — 264KB
• bak23yr2_33-22.htm (EX-33.22) — 177KB
• bak23yr2_34-1.htm (EX-34.1) — 11KB
• bak23yr2_34-2.htm (EX-34.2) — 11KB
• bak23yr2_34-3.htm (EX-34.3) — 13KB
• bak23yr2_34-4.htm (EX-34.4) — 10KB
• bak23yr2_34-5.htm (EX-34.5) — 7KB
• bak23yr2_34-6.htm (EX-34.6) — 693KB
• bak23yr2_34-7.htm (EX-34.7) — 9KB
• bak23yr2_34-8.htm (EX-34.8) — 8KB
• bak23yr2_34-18.htm (EX-34.18) — 10KB
• bak23yr2_34-19.htm (EX-34.19) — 9KB
• bak23yr2_34-20.htm (EX-34.20) — 37KB
• bak23yr2_34-21.htm (EX-34.21) — 89KB
• bak23yr2_34-22.htm (EX-34.22) — 9KB
• bak23yr2_35-1.htm (EX-35.1) — 999KB
• bak23yr2_35-2.htm (EX-35.2) — 1289KB
• bak23yr2_35-3.htm (EX-35.3) — 2577KB
• bak23yr2_35-4.htm (EX-35.4) — 2224KB
• bak23yr2_35-5.htm (EX-35.5) — 232KB
• bak23yr2_35-6.htm (EX-35.6) — 290KB
• bak23yr2_35-14.htm (EX-35.14) — 1086KB
• 0001888524-26-005047.txt ( ) — 21196KB

financial statements

financial statements. Not applicable. Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to 240.10D-1(b). Not applicable. Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ___ No X non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter. Not applicable. Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Not applicable. Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. Not applicable. DOCUMENTS INCORPORATED BY REFERENCE List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1)Any annual report to security holders; (2) Any proxy or information statement; and (3)Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1980). Not applicable. EXPLANATORY NOTES The BANK5 2023-5YR2 mortgage pool includes the following mortgage loans, each of which is serviced pursuant to a separate pooling and servicing agreement (each, an "Outside Pooling and Servicing Agreement"

of Regulation AB

Item 1123 of Regulation AB. The asset representations reviewer under a pooling and servicing agreement has a limited obligation to review certain delinquent mortgage loans after a specified delinquency threshold has been met and the required percentage of certificateholders vote to direct a review of such delinquent mortgage loans, and has no obligation to collect or disburse funds in respect of the mortgage pool, to administer any of the underlying mortgage loans or to perform any servicing function. Consequently, the asset representations reviewer under a pooling and servicing agreement does not participate in the servicing function for purposes of Item 1122 of Regulation AB, is not responsible for the "management or collection of the pool assets or making allocations or distributions to holders of the asset-backed securities" within the meaning of "servicer" under Item 1101 of Regulation AB and does not perform the functions of a servicer for purposes of Item 1123 of Regulation AB. K-Star Asset Management LLC, as general special servicer under the Benchmark 2023-B39 pooling and servicing agreement, does not have any obligations in respect of the Back Bay Office mortgage loan or any other mortgage loan included in the BANK5 2023-5YR2 mortgage pool. National Cooperative Bank, N.A. as co-op master servicer and co-op special servicer under the BANK 2023-BNK46 pooling and servicing agreement, only has obligations in respect of certain mortgage loans sold to the BANK 2023-BNK46 securitization trust by Wells Fargo Bank, National Association, each of which is secured by a mortgage on a property operated as a residential cooperative. Each such party acting in such capacity has no obligations with respect to any mortgage loan included in the BANK5 2023-5YR2 mortgage pool and therefore in such capacity does not constitute a reporting "servicing function participant" for purposes of Item 1122 of Regulation AB, as specified in the Instruction 3 to Item 1122, and does not

of Regulation AB, as specified in the Instruction to Item 1123

Item 1123 of Regulation AB, as specified in the Instruction to Item 1123. 3650 REIT Loan Servicing LLC is the special servicer under the Benchmark 2023-V2 pooling and servicing agreement, pursuant to which the ICP/IRG Holdings Portfolio mortgage loan is currently serviced. Because 3650 REIT Loan Servicing LLC is not the BANK5 2023-5YR2 special servicer, is not affiliated with any sponsor and services only the ICP/IRG Holdings Portfolio mortgage loan, which constitutes more than 5% but less than 10% of the mortgage pool, 3650 REIT Loan Servicing LLC, as Benchmark 2023-V2 special servicer, constitutes a reporting "servicing function participant" for purposes of Item 1122 of Regulation AB, as specified in the Instruction 3 to Item 1122, but does not constitute a reporting "servicer" for purposes of Item 1123 of Regulation AB, as specified in the Instruction to Item 1123. LNR Partners, LLC is the special servicer under the BANK 2023-BNK46 pooling and servicing agreement, pursuant to which the One & Two Commerce Square mortgage loan and the 1201 Third Avenue mortgage loan are currently serviced. Because LNR Partners, LLC is not the BANK5 2023-5YR2 special servicer, is not affiliated with any sponsor and services only the One & Two Commerce Square mortgage loan and the 1201 Third Avenue mortgage loan, which collectively constitute more than 5% but less than 10% of the mortgage pool, LNR Partners, LLC, as BANK 2023-BNK46 special servicer, constitutes a reporting "servicing function participant" for purposes of Item 1122 of Regulation AB, as specified in the Instruction 3 to Item 1122, but does not constitute a reporting "servicer" for purposes of Item 1123 of Regulation AB, as specified in the Instruction to Item 1123. Greystone Servicing Company LLC is the special servicer under the BANK5 2023-5YR3 pooling and servicing agreement, pursuant to which the Heritage Plaza mortgage loan and the 6330 West Loop South mortgage loan are currently serviced. Because Greystone S

Financial Statements and

Financial Statements and Supplementary Data. Omitted. Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. Omitted. Item 9A.

Controls and Procedures

Controls and Procedures. Omitted. Item 9B. Other Information. None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. None. PART III Item 10. Directors, Executive Officers and Corporate Governance. Omitted. Item 11.

Executive Compensation

Executive Compensation. Omitted. Item 12.

Security Ownership of Certain

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. Omitted. Item 13. Certain Relationships and Related Transactions, and Director Independence. Omitted. Item 14. Principal Accountant Fees and Services. Omitted. ADDITIONAL DISCLOSURE ITEMS FOR REGULATION AB Item 1112(b) of Regulation AB, Significant Obligor Financial Information. Not applicable. Item 1114(b)(2) of Regulation AB, Significant Enhancement Provider Financial Information. No entity or group of affiliated entities provides any enhancement or other support for the certificates as described under Item 1114 (a) of Regulation AB. Item 1115(b) of Regulation AB, Certain Derivatives Instruments (Financial Information). No entity or group of affiliated entities provides any derivative instruments for the certificates as described under Item 1115 of Regulation AB.

of Regulation AB, Legal Proceedings

Item 1117 of Regulation AB, Legal Proceedings. The registrant knows of no legal proceeding pending against the sponsors, depositor, trustee, issuing entity, servicer contemplated by Item 1108(a)(3) of Regulation AB, originator contemplated by Item 1110(b) of Regulation AB, or other party contemplated by Item 1100(d)(1) of Regulation AB, or of which any property of the foregoing is the subject, that is material to security holders, other than as follows: From time to time, CWCapital Asset Management LLC, a Delaware limited liability company ("CWCAM"), is a party to lawsuits and other legal proceedings as part of its duties as a special servicer (e.g., enforcement of loan obligations) and/or arising in the ordinary course of business. Other than as set forth in the following paragraphs, there are currently no legal proceedings pending, and no legal proceedings known to be contemplated by governmental authorities, against CWCAM or of which any of its property is the subject, that are material to the certificateholders. On December 1, 2017, a complaint against CWCAM and others was filed in the United States District Court for the Southern District of New York styled as CWCapital Cobalt Vr Ltd. v. CWCapital Investments LLC, et al., No. 17-cv-9463 (the "Original Complaint"). The gravamen of the Original Complaint alleged breaches of a contract and fiduciary duties by CWCAM's affiliate, CWCapital Investments LLC in its capacity as collateral manager for the collateralized debt obligation transaction involving CWCapital Cobalt Vr, Ltd. In total, there are 14 counts pled in the Original Complaint. Of those 14, 5 claims were asserted against CWCAM for aiding and abetting breach of fiduciary duty, conversion and unjust enrichment. On May 23, 2018, the Original Complaint was dismissed for lack of substantially similar complaint in the Supreme Court of the State of New York, County of New York

View Full Filing

View this 10-K filing on SEC EDGAR