DBRS Changes Trends on Two Classes of J.P. Morgan Chase Commercial Mortgage Securities Trust 2017-FL11 to Positive

DBRS Limited (DBRS) changed the trends to Positive from Stable on Commercial Mortgage Pass-Through Certificates, Series 2017-FL11, Class B and Commercial Mortgage Pass-Through Certificates, Series 2017-FL11, Class C issued by J.P. Morgan Chase Commercial Mortgage Securities Trust 2017-FL11. DBRS also confirmed the ratings on all classes of Commercial Mortgage Pass-Through Certificates, Series 2017-FL11 as follows:

-- Class A at AAA (sf)
-- Class B at AA (low) (sf)
-- Class C at A (sf)
-- Class D at BBB (high) (sf)
-- Class E at BB (low) (sf)

All trends are Stable, with the exceptions of Classes B and C.

The rating confirmations reflect the overall stable performance exhibited since issuance; the Positive trends for Classes B and C reflect the increased credit support to the bonds as a result of successful loan repayment. As of the September 2018 remittance, five of the original six loans remain in the trust with an aggregate principal balance of $386.6 million, representing a collateral reduction of 22.2% since issuance due to loan repayment. With the August 2018 remittance, the largest loan at issuance, the Eagle Hotel Portfolio (22.2% of the issuance trust balance), repaid in full with principal proceeds of $110.0 million to the trust.

To date, all loans have reported updated net cash flow (NCF) figures since issuance, with the most recent figures ending in either Q1 2018 or Q2 2018. However, only two of the loans (44.7% of the current pool balance) reported full-year financials, while the remaining three loans (55.3% of the current pool balance) reported partial-year financials. Generally, performance has been positive, with the most recent financials reflecting weighted-average (WA) NCF growth of 13.1% over the WA DBRS NCF figure derived at issuance. In addition to being concentrated by loan size, the pool is also concentrated by property type, as two loans (44.7% of the current pool balance) are secured by hotel properties, while the remaining three loans (55.3% of the current pool balance) are secured by office properties. However, all loans benefit from properties located in core suburban markets.

As of the September 2018 remittance, there was one loan, representing 17.7% of the current pool balance, on the servicer’s watchlist. The Hyatt Regency Jacksonville Riverfront loan (Prospectus ID#5) was added to the watchlist in January 2018, as the property was affected by Hurricane Irma in September 2017. DBRS was aware that the property was closed at issuance; however, the property has since reopened and recently reported a Q1 2018 trailing 12 months NCF in line with the DBRS NCF derived at issuance.

At issuance, DBRS shadow-rated one loan, Cooper Hotel Portfolio (Prospectus ID#2; representing 28.4% of the current pool balance), investment grade. With this review, DBRS confirms that the performance of the loan remains consistent with the investment-grade shadow rating.

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:

-- Cooper Hotel Portfolio
-- Hyatt Regency Jacksonville Riverfront
-- One Westchase Center

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 commercial mortgage-backed securities 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 North American CMBS Surveillance Methodology, 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.

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.

Please see the related appendix for additional information regarding the sensitivity of assumptions used in the rating process.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.