DBRS Assigns Final Ratings to ACRE Commercial Mortgage 2017-FL3 Ltd.

DBRS, Inc. (DBRS) has today assigned final ratings to the following classes of secured Floating Rate Notes (the Notes) issued by ACRE Commercial Mortgage 2017-FL3 Ltd.

-- Class A at AAA (sf)
-- Class A-S at AAA (sf)
-- Class B at AA (low) (sf)
-- Class C at A (low) (sf)
-- Class D at BBB (low) (sf)
-- Class E at BB (low) (sf)
-- Class F at B (low) (sf)

All trends are Stable.

Classes A, A-S, B, C and D have been privately placed.

Classes E and F are non-offered classes.

With respect to the deferrable notes (Class E and Class F), to the extent that interest proceeds are not sufficient on a given payment date to pay accrued interest, interest will not be due and payable on the payment date and will instead be deferred and capitalized. The ratings assigned by DBRS contemplate the timely payments of distributable interest and, in the case of deferred interest notes, the ultimate recovery of deferred interest (inclusive of interest payable thereon at the applicable rate, to the extent permitted by law).

The collateral for the transaction consists of 12 floating-rate mortgages secured by 16 transitional commercial real estate properties totaling $341.2 million. The loans are secured by current cash flowing assets, most of which are in a period of transition, with plans to stabilize and improve the asset value. The transaction has a Reinvestment Period that is expected to expire on March 15, 2019, and DBRS will have the ability to provide a Rating Agency Confirmation on loans that are being added to the pool during the Reinvestment Period in order to evaluate any credit drift caused by potential loan concentrations. The initial pool consists of 12 loans, 11 of which, or 90.0% of the loan pool, have a pari passu companion participation held by a subsidiary of the trust asset seller and sponsor, ACRC Lender LLC.

The ratings assigned to the Notes by DBRS are based exclusively on the credit provided by the transaction structure and underlying trust assets. All classes will be subject to ongoing surveillance, which could result in upgrades or downgrades by DBRS after the date of issuance.

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

This rating is endorsed by DBRS Ratings Limited for use in the European Union.

The principal methodologies are the North American CMBS Rating Methodology, Unified Interest Rate Model for Rating U.S. Structured Finance Transactions, and the DBRS Commercial Real Estate Property Analysis Criteria, which can be found on dbrs.com under Methodologies.

With regard to due diligence services, DBRS was provided with the Form ABS Due Diligence-15E (Form 15-E), which contains a description of the information that the third party reviewed in conducting the due diligence services and a summary of the findings and conclusions. While DBRS did not rely on the due diligence services outlined in Form 15-E, DBRS did use the Data File outlined in the Independent Accountant’s Report in its analysis to determine the ratings.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.