DBRS Confirms All Classes of MSCCG Trust 2015-ALDR

DBRS Limited (DBRS) confirmed the Commercial Mortgage Pass-Through Certificates, Series 2015-ALDR issued by MSCCG Trust 2015-ALDR as follows:

--Class A-1 at AAA (sf)
--Class A-2 at AAA (sf)
--Class X-A at AAA (sf)
--Class B at AA (sf)
--Class C at A (sf)
--Class D at BBB (sf)

All trends are Stable.

The rating confirmations reflect the stable performance of the transaction. The original $355.0 million whole loan consists of six separate notes, four of which are pari passu notes included in this transaction. As at the May 2018 remittance, there has been a collateral reduction of 4.4% due to scheduled amortization, resulting in a current trust balance of $244.3 million. The loan is secured by a super-regional mall with two open-air sections located in Lynnwood, Washington, approximately 17.5 miles north of Seattle. The subject is owned by affiliates of General Growth Properties Inc. (GGP), which manages the property and is considered a strong sponsor gives its experience in mall ownership, and the New York State Common Retirement Fund, forming the joint venture GGP/Homart II LLC.

The collateral portion of the property consists of 575,704 square feet (sf) of the 1.3 million sf Alderwood Mall. Anchor tenants include Macy’s (18.2% of the total net rentable area (NRA), expiring November 2019), JCPenney (11.6% of the total NRA, expiring November 2019), Loews Cineplex (Loews), (13.6% of the collateral NRA, expiring December 2025) and Nordstrom (11.2% of the total NRA, expiring November 2019), of which only Loews serves as collateral for the loan.

Former non-collateral tenant, Sears, vacated the mall in March 2017. It announced that it would be closing this location in January 2017 as part of a round of closures for the company throughout the United States. Sears previously occupied 177,679 sf with the parcel owned by a joint venture between Sears and GGP. This is beneficial as it provides the sponsor with increased control over the re-development of the empty parcel. Per recent news articles, DICK’S Sporting Goods Inc., The Cheesecake Factory and Dave & Buster’s are expected to occupy the former Sears space. The three tenants are expected to occupy more than 120,000 sf of the 177,679 sf vacant space. Per the most recent rent roll dated December 2017, the collateral was 96.5% occupied, in comparison with the December 2016 occupancy rate of 98.5%. Per the YE2017 financials, the loan is reporting a debt-service coverage ratio (DSCR) of 1.72x, in comparison with the YE2016 DSCR of 1.73x, YE2015 DSCR of 1.71x and DBRS Term DSCR derived at issuance of 1.58x.

Class X-A is an interest-only (IO) certificate that references 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 this transaction.

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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.

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