DBRS Confirms All Classes of JPMCC 2017-JP7

DBRS Limited (DBRS) confirmed the ratings for all classes of the Commercial Mortgage Pass-Through Certificates, Series 2017-JP7 issued by JPMCC Commercial Mortgage Securities Trust 2017-JP7 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-S at AAA (sf)
-- Class A-SB at AAA (sf)
-- Class X-A at AAA (sf)
-- Class B at AA (high) (sf)
-- Class X-B at A (high) (sf)
-- Class C at A (sf)
-- Class D at A (low) (sf)
-- Class E-RR at BBB (low) (sf)
-- Class F-RR at BB (sf)
-- Class G-RR 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 collateral consists of 37 loans secured by 168 commercial and multifamily properties. As of the June 2018 remittance, the pool had an aggregate principal balance of $808.9 million, representing a collational reduction of 0.3% since issuance. Loans representing 78.4% of the current pool balance are reporting updated year-end 2017 figures. Based on these financials, those loans reported a weighted-average (WA) debt-service coverage ratio (DSCR) and WA debt yield of 1.90 times (x) and 10.2%, respectively. The DBRS WA DSCR and WA debt yield at issuance for those loans were 1.78x and 9.8%, respectively.

At issuance, two loans, representing 12.4% of the current pool balance, were shadow-rated investment grade. These loans include Gateway Net Lease Portfolio (Prospectus ID#2) and West Town Mall (Prospectus ID#7). With this review, DBRS confirms that the performance of these loans remains consistent with investment-grade loan characteristics. In addition, 245 Park Avenue (Prospectus ID#1), was shadow-rated BB at issuance but, due to DBRS’s concerns with the sponsor’s efforts to sell the property amid mounting debt, the shadow rating has been removed. For additional information on these loans, please see the DBRS Viewpoint platform, for which information has been provided below.

As of the June 2018 remittance, there were four loans on the servicer’s watchlist, representing 10.7% of the current pool balance. Three of these loans are being monitored for DSCR declines from issuance and the fourth is being monitored for deferred maintenance. In general, DBRS expects the DSCR declines are temporary and does not have any significant concerns with any of the watchlisted loans. For further information on the DBRS view, please see the Loan Commentary on the DBRS Viewpoint platform.

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.

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 – 245 Park Avenue
-- Prospectus ID#2 – Gateway Net Lease Portfolio
-- Prospectus ID#7 – West Town Mall
-- Prospectus ID#10 – Crystal Corporate Centre
-- Prospectus ID#11 – Marriott Park City

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.

The rating assigned to Class G-RR materially deviates from the higher rating implied by the quantitative results. DBRS considers a material deviation to be a rating differential of three or more notches between the assigned rating and the rating implied by the quantitative results that is a substantial component of a rating methodology. The deviations are warranted given the sustainability of loan performance trends were not demonstrated.

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.