DBRS Confirms Ratings of Wells Fargo Commercial Mortgage Trust 2015-NXS1

DBRS Limited (DBRS) confirmed all classes of Commercial Mortgage Pass-Through Certificates, Series 2015-NXS1 (the Certificates) issued by Wells Fargo Commercial Mortgage Trust 2015-NXS1 Trust as follows:

-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class A-3 at AAA (sf)
-- Class A-4 at AAA (sf)
-- Class A-5 at AAA (sf)
-- Class A-SB at AAA (sf)
-- Class A-S at AAA (sf)
-- Class X-A at AAA (sf)
-- Class B at AA (low) (sf)
-- Class X-B at A (sf)
-- Class C at A (low) (sf)
-- Class PEX at A (low) (sf)
-- Class D at BBB (low) (sf)
-- Class X-E at BB (sf)
-- Class E at BB (low) (sf)
-- Class X-F at B (sf)
-- Class F at B (low) (sf)

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction since issuance when the collateral consisted of 68 fixed-rate loans secured by 93 commercial properties. As of the April 2018 remittance, all 68 loans remained in the pool with an aggregate principal balance of $935.8 million, representing a collateral reduction of 2.0% since issuance. One loan, representing 0.6% of the pool, is fully defeased. The pool benefits from a significant concentration of loans secured by properties located in urban locations (over 30.0% of the pool) and a relatively low concentration of limited- and full-service hotels, which represent less than 10.0% of the pool. The pool is somewhat concentrated compared with other WFCM deals of similar vintage, with the top 15 representing 57.7% of the transaction balance.

To date, 51 loans, representing 84.0% of the pool, have reported year-end 2017 financials, while 13 loans, representing 14.0% of the pool, have most recently reported partial-year 2017 financials. Based on the most recent year-end financials available, the pool had a weighted-average (WA) debt service coverage ratio (DSCR) and a WA debt yield of 1.71 times (x) and 9.3%, respectively, compared with the DBRS Term DSCR and WA Debt Yield derived at issuance of 1.56x and 8.2%, respectively. Based on the same financials, the top 15 loans (excluding Prospectus ID #6, 100 West 57th Street (3.7% of the pool), which was structured to cover debt service at 1.0x) reported a WA DSCR of 1.88x compared with the WA DBRS Term DSCR of 1.58x, representing a WA net cash flow (NCF) growth of 22.4% over the DBRS issuance figures.

As of the April 2018 remittance, there are no loans in special servicing and 12 loans, representing 19.2% of the pool, on the servicer’s watchlist. Five watchlisted loans (12.6% of the pool) were flagged due to tenant rollover and/or dark space, while another five loans (5.0% of the pool) were flagged for deferred maintenance. Of the remaining two watchlisted loans, one loan (1.0% of the pool) was flagged because of a recent performance decline caused by ongoing renovations and exposure to the energy market, while the other loan (0.4% of the pool) was flagged for not providing updated financials. The seven loans on the watchlist for reasons not related to deferred maintenance reported a WA DSCR of 1.80x (based on the most recent financials available) compared with the WA DBRS Term DSCR of 1.22x, representing a 49.0% WA NCF growth over the DBRS issuance figures.

At issuance, DBRS shadow-rated both the Patriots Park (Prospectus ID#1, 10.1% of the pool) and 45 Waterview Boulevard (Prospectus ID#9, 2.8% of the current pool balance) loans as investment grade. With this review, DBRS confirms that the performance of both loans remains consistent with investment-grade loan characteristics.

Classes X-A, X-B, X-E, X-F and X-G are interest-only (IO) certificates that reference a single rated tranche or multiple rated tranches. The IO rating mirrors the lowest-rated reference tranche adjusted upward by one notch if senior in the waterfall.

All ratings will be subject to ongoing surveillance, which could result in ratings being upgraded, downgraded, placed under review, confirmed or discontinued by DBRS.

For more information on this transaction and supporting data, please log into www.viewpoint.dbrs.com. DBRS will continue to monitor this transaction with periodic updates provided in the DBRS Viewpoint platform.

As part of this review, DBRS has provided updated analysis and in-depth commentary in the DBRS Viewpoint platform for the following loans in the transaction:
-- Patriots Park (Prospectus ID#1, 10.1% of the pool)
-- 760 & 800 Westchester Avenue (Prospectus ID #7, 3.7% of the pool)
-- 45 Waterview Boulevard (Prospectus ID#9, 2.9% of the pool)
-- Hotel Valencia (Prospectus ID #10, 2.8% of the pool)
-- Colonades II (Prospectus ID#16, 2.1% of the pool)

For complimentary access to this content on the DBRS Viewpoint platform, please register at www.viewpoint.dbrs.com. The platform includes loan-level data for the entire CMBS universe, as well as deal and loan-level commentary for all DBRS-rated transactions.

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

The principal methodology is CMBS North American Surveillance, which can be found on dbrs.com under Methodologies. For a list of the Structured Finance-related methodologies that may be used during the rating process, please see the DBRS Global Structured Finance Related Methodologies document on www.dbrs.com. Please note that not every related methodology listed under a principal Structured Finance asset class methodology may be used to rate or monitor an individual structured finance or debt obligation.

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 under Related Documents or by contacting us at info@dbrs.com.

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

The rated entity or its related entities did participate in the rating process for this rating action. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

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