DBRS Confirms All Classes of Real Estate Asset Liquidity Trust, Series 2015-1

DBRS Limited (DBRS) confirmed the ratings on the following classes of the Commercial Mortgage Pass-Through Certificates, Series 2015-1 issued by Real Estate Asset Liquidity Trust, Series 2015-1:

--Class A-1 at AAA (sf)
--Class A-2 at AAA (sf)
--Class B at AA (sf)
--Class C at A (sf)
--Class X at A (sf)
--Class D at BBB (sf)
--Class E at BBB (low) (sf)
--Class F at BB (sf)
--Class G at B (sf)

All trends are Stable.

The rating confirmations reflect the overall performance of the transaction since issuance. At issuance, the pool consisted of 46 loans with a trust balance of $335.0 million. Since issuance, there has been a collateral reduction of 7.5% due to scheduled amortization and repayment, with a remaining trust balance of $309.7 million. The transaction is currently reporting a weighted-average (WA) debt-service coverage ratio (DSCR) and debt yield of 1.70 times (x) and 11.3%, respectively. At issuance, the DBRS WA DSCR and debt yield was 1.50x and 9.6%, respectively. Based on the YE2016 financials, the top 15 loans are reporting a WA DSCR and debt yield of 1.67x and 11.0%, respectively. This represents a WA net cash flow (NCF) growth of 9.7% over DBRS NCF figures.

As at the April 2018 remittance, there are two loans, representing 3.2% of the current pool balance, on the servicer’s watchlist. The York Industrial Leduc loan (Prospectus ID#15, 2.2% of the current pool) was added to the servicer’s watchlist as Raptor Manufacturing (Raptor) vacated the subject due to bankruptcy. However, Matrix Canada now occupies Raptor’s vacated space as at September 2017, increasing the in-place occupancy rate to 100%. The 16A Street Multi Res Calgary loan (Prospectus ID#30, 1.2% of the current pool) was added to the servicer’s watchlist in February 2018 due to declining cash flow performance because of lower average rents stemming from the poor performance of Calgary’s economy.
The U-Haul SAC 3 Portfolio loan (Prospectus ID#35-38, 41-46; 3.7% of the current pool) is secured by a portfolio of ten individual loans backed by self-storage properties totaling 4,985 units across ten cities in Ontario. The portfolio is reporting a YE2016 WA DSCR of 1.91x, representing an improvement from the YE2015 WA DSCR of 1.82x. At issuance, DBRS shadow-rated this loan as investment grade. DBRS confirms the rating with this review as the performance of the loan remains consistent with investment-grade loan characteristics.

Class X is an interest-only (IO) certificates that references 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:

-- Prospectus ID#1 – Alta Vista Manor Retirement Ottawa
-- Prospectus ID#6 – Speedvale Center
-- Prospectus ID#15 – York Industrial Leduc
-- Prospectus ID#30 – 16A Street Multi-Residential Calgary

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 Canadian 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.