DBRS Confirms All Classes of MSJP 2015-HAUL

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

-- Class A at AAA (sf)
-- Class X-A at AAA (sf)
-- Class X-B at AA (high) (sf)
-- Class 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.

The rating confirmations reflect the continued stable performance of the transaction. The transaction consists of a $170.0 million trust 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. There is no limit on the guaranty executed with AMERCO.

The $254.3 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 $84.3 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.

At YE2016, the amortizing debt service coverage ratio (DSCR) was 1.93 times (x), representative of a 16.1% debt yield, compared with the DBRS term DSCR and debt yield of 1.18x and 9.2%, respectively; however, DBRS believes this to be a reporting error, as Other Income appears to be heavily inflated from figures reported at issuance and could include truck rental income. DBRS has contacted the servicer for further clarification and a breakdown of the Other Income line item. Revenue from storage rents remains in line with figures reported at issuance, with the portfolio’s occupancy rate as of March 2017 at 87.0%, remaining in line with the previous year but down slightly from 92.6% at issuance. DBRS expects performance of the portfolio to remain stable.

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.

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

The principal methodology is CMBS North American Surveillance, which can be found on dbrs.com under Methodologies.