DBRS Upgrades One Class of COMM 2015-CCRE23 Mortgage Trust

DBRS Limited (DBRS) upgraded the rating on one class of Commercial Mortgage Pass-Through Certificates, Series 2015-CCRE23 issued by COMM 2015-CCRE23 Mortgage Trust as follows:

--Class CM-B to AA (sf) from A (sf)

Additionally, DBRS confirmed the remaining ratings as follows:

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

All trends are Stable.

The rating confirmations and upgrade for Class CM-B reflect the overall healthy performance of the transaction since issuance, with a collateral reduction of 2.0% for the pooled certificates since issuance as a result of scheduled amortization, as well as the partial prepayment and partial defeasance for the Courtyard by Marriott Portfolio loan (Prospectus ID #2, 7.5% of the pool), which resulted in a full repayment of the Class CM-A certificates in Q1 2018. As of the April 2018 remittance, all 83 loans remain in the pool. To date, 81 loans, representing 97.6% of the current pool balance, reported YE2016 financials, with a weighted-average (WA) debt service coverage ratio (DSCR) of 2.22 times (x) and debt yield of 11.0%. Based on the same financials, the top 15 loans (representing 47.3% of the current pool balance) reported a WA DSCR and debt yield of 2.19x and 8.2%, respectively. In comparison, the DBRS WA DSCR at issuance for the top 15 loans was 1.89x, representing a WA net cash flow growth of 12.9% over the DBRS issuance figures. There are two loans, representing 1.6% of the current pool balance, that are fully defeased.

As of the April 2018 remittance, there are four loans, representing 1.7% of the current pool, that are on the servicer’s watchlist. All loans on the watchlist are being monitored for declining cash flow performance. There is one loan, DoubleTree Norwalk (Prospectus ID #20, 1.1% of the current pool balance) in special servicing. This loan was transferred to the Special Servicer for imminent default caused by declining cash flow performance and the Special Servicer expects foreclosure in May 2018. In its analysis for this review, DBRS assumed a loss severity in excess of 50.0%.

The Courtyard by Marriott Portfolio loan was secured by the fee and leasehold interest in 49 hotels, the fee interest in nine hotels and the leasehold interest in seven hotels at issuance. In early 2018, a release was processed for 13 properties at a combined release price of $95.5 million, $62.0 million of which was defeased and the remainder prepaid. This release was contemplated at issuance and was structured in the original documents. At issuance, the trust loan consisted of a $33.5 million A-1 piece and $100.0 million A-2A piece of the whole Senior A-note debt of $315.0 million, as well as the controlling subordinate B-note debt of $355.0 million. The A-1 piece and B-note debt were included in the trust as non-pooled rake bonds, while the A-2A piece is pooled in the trust. The prepayment funds resulted in the payoff of the A-1 note, with the remaining $62.0 million in defeasance allocated across the A-2A, A-2B, A-2C and B-notes.

At issuance, DBRS shadow-rated the Courtyard by Marriott Portfolio loan as investment grade and with this review, confirmed the performance of the loan remains consistent with investment-grade loan characteristics.

Classes X-A, X-B, X-C and X-D are interest-only (IO) certificates that reference a single rated tranche or multiple rated tranches. The IO rating mirrors the lowest-rated applicable reference obligation 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.

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:

• #2 – Courtyard by Marriott Portfolio
• #8 – DoubleTree San Diego
• #6 – Sherman Plaza
• #20 – DoubleTree Norwalk
• #23 – 525 Park Avenue

For complimentary access to this content, please register for the DBRS Viewpoint platform at www.viewpoint.dbrs.com. The platform includes issuer and servicer 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.