DBRS Confirms All Classes of MSJP 2015-HAUL Mortgage Trust

DBRS Limited (DBRS) has today confirmed all classes of MSJP 2015-HAUL Mortgage Trust as listed below:

-- Class A at AAA (sf)
-- Class X-A at AAA (sf)
-- Class B at AA (sf)
-- Class X-B at AA (sf)
-- Class C at AA (low) (sf)
-- Class D at A (sf)
-- Class E at BBB (low) (sf)

All trends are Stable.

At the time of the transaction’s close in October 2015, the trust consisted of a $170.0 million loan secured by the fee simple interest in a portfolio of 105 self-storage properties totalling 32,519 units and 2.7 million rentable square feet (sf) across the United States. Each property is owned and operated under the U-Haul brand and features a minimum of 89 units to a maximum of 958 units. The properties are situated across 35 states and were constructed between 1902 and 2003.

This loan is sponsored by AMERCO, the parent company of U-Haul; AMERCO is considered to be a strong sponsor because of its extensive experience in the self-storage industry and ample financial means. In addition, there is no limit on the guaranty executed with AMERCO.

The $262.7 million whole mortgage loan consists of six separate notes: A-1A, A-1B, A-2A, A-2B, A-3A and A-3B. The A-1A and A-1B notes, which total $92.7 million, are companion loans and are not contributed to the trust. The whole-loan has a 20-year term and amortizes on a 20-year schedule, wherein principal is first applied to the non-trust companion loans before being applied to the trust notes. As a result, the trust notes do not amortize until year 11 of the loan term. The DBRS rating is based on the whole-loan fully amortizing debt service payment.

According to the trailing 12-month March 2016 OSAR, the loan had a debt service coverage ratio (DSCR) of 1.97 times (x), which is an increase from the DBRS underwritten figure of 1.18x; however, DBRS believes this to be a reporting error, as Other Income appears to be inflated from figures reported at issuance. DBRS has contacted the servicer for further clarification. Revenue from storage rents remains in line with figures reported at issuance, with the portfolio’s occupancy rate as of March 2016 at 88.3%, down slightly from 92.6%. DBRS expects the portfolio to continue to exhibit stable performance.

Notes:
All figures are in U.S. dollars unless otherwise noted.

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 applicable methodologies are North American CMBS Rating Methodology (March 2016) and CMBS North American Surveillance (December 2015), which can be found on our website under Methodologies.

This rating is endorsed by DBRS ratings limited for use in the European Union.