DBRS Confirms Rating on High Park Bayview Inc. – Bayview Village Apartments Mortgage Loan

DBRS has today confirmed the rating of BBB (low) with a Stable trend on the 5.86% Mortgage Loan due November 1, 2017 (the Mortgage Loan), by a major Canadian financial institution in relation to Bayview Village Apartments, Toronto.

The Mortgage Loan was made on October 30, 2009, with an interest rate of 5.86% per annum, calculated and compounded semi-annually, not in advance, for a term maturing on November 1, 2017, with a 25-year amortization period. The Mortgage Loan had an outstanding balance of $34,368,756 as of July 1, 2014.

The Mortgage Loan is secured by a fee interest in a large-scale multifamily rental complex, including three 19-storey high-rise rental apartment buildings containing a total of 382 residential suites. The complex is situated in the suburban neighbourhood of Bayview Village on a site of approximately 4.453 acres. It has frontage onto the north side of Sheppard Avenue East and extensive flankage along the east side of Hawksbury Drive.

Over the last year, the Bayview Village Apartments continued to perform well. The in-place rental income remained stable, experiencing a slight increase compared to a year ago, derived from higher occupancy and rent increases, while operating expenses increased at a slower pace, improving the net operating income results.

The rating confirmation is based on operating performance as expected over the last year. DBRS’s rating assumes that the Borrower will refinance in 2017 to pay off the principal remaining on the Mortgage Loan and considers its ability to refinance at the end of the Mortgage Loan term. The location, condition and the financial performance of the property, the projected refinance debt service coverage ratio, the reasonable loan amount per suite and the amortization continue to collectively support the BBB (low) rating.

The confirmation of the rating takes into consideration the in-place rental income of the subject property and the principal and interest payment obligations of the Borrower with respect to the Mortgage Loan, but does not take into consideration other obligations of the Borrower or any structural deficiencies that may exist in any organizational or transaction documents.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The applicable methodologies are CMBS Rating Methodology and CMBS North American Surveillance, which can be found on our website under Methodologies.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link to the right under Related Research or by contacting us at info@dbrs.com.

The full report providing additional analytical detail is available by clicking on the link under Related Research at the right of the screen or by contacting us at info@dbrs.com.