DBRS Confirms All Classes of CSAIL 2017-C8 Commercial Mortgage Trust

DBRS, Limited. (DBRS) confirmed the ratings on the following classes of Commercial Mortgage Pass-Through Certificates, Series 2017-C8 (the Certificates) issued by CSAIL 2017-C8 Commercial Mortgage Trust:

-- 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-SB at AAA (sf)
-- Class X-A at AAA (sf)
-- Class A-S at AAA (sf)
-- Class V1-A at AAA (sf)
-- Class B at AA (sf)
-- Class 85BD-A at AA (low) (sf)
-- Class V1-85A at AA (low) (sf)
-- Class X-B at A (high) (sf)
-- Class C at A (sf)
-- Class V1-B at A (sf)
-- Class 85BD-B at A (low) (sf)
-- Class V1-85B at A (low) (sf)
-- Class D at BBB (sf)
-- Class V1-D at BBB (sf)
-- Class 85BD-C at BBB (low) (sf)
-- Class V1-85C at BBB (low) (sf)
-- Class V2-85 at BBB (low) (sf)
-- Class E at BB (sf)
-- Class F at B (high) (sf)

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction, which has remained in line with DBRS’s expectations since issuance. The transaction closed in June 2017, with an original trust balance of $811.0 million, with 32 loans secured by 55 commercial and multifamily properties. As of the June 2018 remittance, all loans remain in the pool with a collational reduction of 0.22% since issuance. At issuance, the transaction had a DBRS Term Debt Service Coverage Ratio (DSCR) and DBRS Debt Yield of 2.15 times (x) and 10.5%, respectively. There are 15 loans, representing 61.0% of the pool balance, with a DBRS Term DSCR in excess of 1.50x. Given the mid-2017 closing date, financial reporting for the underlying loans is generally limited to quarterly reporting, with annualized cash flows quite skewed given the point in the ownership cycle for many of the underlying properties.

At issuance, DBRS shadow-rated five loans in the pool, four of which were shadow-rated investment-grade; however, with the review of the JPMCC 2017-JP6 transaction in June 2018, the non-investment grade shadow rating for the 245 Park Avenue loan was removed due to developments with the loan sponsor, HNA Group. For additional information, please see the press release dated June 4, 2018, for that transaction. As such, there are now four loans with shadow ratings in the subject transaction. These loans collectively represent 27.6% of the transaction balance and include Prospectus ID #1, 85 Broad Street; Prospectus ID #3, Apple Sunnyvale; Prospectus ID #6, Urban Union Amazon; and Prospectus ID #12, 71 Fifth Avenue. With this review, DBRS confirms that all four loans continue to exhibit characteristics consistent with the investment-grade shadow ratings. For more information on these loans, please see the loan commentary for each in the DBRS Viewpoint platform, for which information has been provided below.

Two loans representing 5.3% of the pool are on the servicer’s watchlist. The largest of these loans, Urban Union Amazon (Prospectus ID #6, 4.72% of the pool), was flagged for routine monitoring through the servicer’s recovery of advanced property taxes over the next three to four months. The smaller loan, Audubon Village (Prospectus ID #32, 0.61% of the pool) was flagged due to outstanding differed maintenance items.

Classes X-A and X-B 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.

Classes 85BD-A, 85BD-B and 85BD-C are non-pooled rake bonds backed by the non-pooled $72.0 million 85 Broad Street A-B note. The loan's non-pooled $58.8 million B-A note and $58.8 million B-B note are subordinate to both the rake bonds and the $169.0 million pooled A-note.

The Class V certificates are grouped into separate groups of exchangeable certificates. Balances shown represent the maximum balance of each class that could be issued in exchanges. Any uniform tranche percentage interest in an exchangeable group of certificates may be exchanged for the same tranche percentage interest in the other exchangeable group of certificates. This process may occur repeatedly.

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:

-- 85 Broad Street
-- 245 Park Avenue
-- Apple Sunnyvale
-- Urban Union Amazon
-- 71 Fifth Ave

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.