Press Release

DBRS Morningstar Downgrades Four Classes of JPMBB Commercial Mortgage Securities Trust 2015-C27, Removes Under Review with Negative Implications Statuses

CMBS
December 01, 2020

DBRS Limited (DBRS Morningstar) removed the Under Review with Negative Implications statuses and downgraded the following ratings on the Commercial Mortgage Pass-Through Certificates, Series 2015-C27 issued by JPMBB Commercial Mortgage Securities Trust 2015-C27:

-- Class E to B (sf) from BB (low) (sf)
-- Class F to CCC (sf) from B (low) (sf)
-- Class X-E to B (high) (sf) from BB (sf)
-- Class X-FG to B (low) (sf) from B (sf)

DBRS Morningstar also confirmed the ratings on the following classes:

-- Class A-3A1 at AAA (sf)
-- Class A-3A2 at AAA (sf)
-- Class A-4 at AAA (sf)
-- Class A-SB at AAA (sf)
-- Class A-S at AAA (sf)
-- Class B at AA (low) (sf)
-- Class C at A (low) (sf)
-- Class D at BBB (sf)
-- Class EC at A (low) (sf)
-- Class X-A at AAA (sf)
-- Class X-B at AA (sf)
-- Class X-C at A (sf)
-- Class X-D at BBB (high) (sf)

In addition, DBRS Morningstar changed the trends on Classes D and X-D to Negative from Stable. The trends for Classes E, X-E, and X-FG are Negative, while the trends for the 11 remaining Classes are Stable. DBRS Morningstar notes its concerns with the second-largest remaining loan in the pool, Branson at Fifth (Prospectus ID#3; 11.4% of the current trust balance), which has shown a steady decline in performance since its transfer to the special servicer in July 2019. Secured by a mixed-use property that contains 31 multifamily units and 14,881 square feet of retail space in Midtown Manhattan, the loan was transferred to the special servicer when the sponsor failed to remit $2.0 million into the rollover reserve account given the termination of the lease of the sole retail tenant, Domenico Vacca, without lender consent. Following delinquent rent payments from the tenant in February 2019 and a countersuit from the tenant claiming that the sponsor inflated rents to obtain financing for the collateral, the tenant vacated the property in mid-2019. According to the Asset Summary Report from January 2020, the proposed loan modification terms included the interest-only (IO) period for the loan to be extended until maturity, the borrower to make a payment guaranty of $20.0 million over five years, and the borrower to fund the rollover reserve totalling $2.0 million. Per a recent servicer update from November 2020, the loan modification has yet to be finalized. The sponsor for this loan is Assa Properties and Black Bear Asset Management, and the chief executive officer of Assa Properties, Salim Assa, and two other individuals serve as guarantors for the loan. DBRS Morningstar liquidated the loan in its analysis for this review, which resulted in a high expected loss scenario. DBRS Morningstar also liquidated the other loan in special servicing, Hampton Inn & Suites – Union Center (Prospectus ID#25; 1.6% of the current trust balance), in its analysis given the lender’s intent to pursue foreclosure and receivership.

According to the November 2020 remittance, there are 13 loans, representing 29.0% of the current trust balance, on the servicer’s watchlist, including four loans in the Top 15. Shaner Hotels Portfolio (Prospectus ID#5; 5.1% of the current trust balance), secured by four hotels across four different states, totalling 605 keys, was added to the servicer’s watchlist in April 2020 given the borrower’s request for payment relief due to Coronavirus Disease (COVID-19). The portfolio reported year-to-date occupancy of 41.4%, representing a significant decrease from the 2019 figure of 81.6%, while revenue per available room declined to $67 from $151 for the same period. DBRS Morningstar analyzed this loan with an inflated probability of default (POD) factor to reflect the short-term increased risk with this loan and generally increased POD factors for loans on the watchlist.

At issuance, the transaction consisted of 44 loans at an original trust balance of $836.5 million. According to the November 2020 remittance, 37 loans remain in the transaction at a current trust balance of $636.2 million. The transaction is concentrated by property type as eight loans, representing 36.4% of the pool balance, are secured by office collateral while the next largest property concentration is lodging, represented by eight loans and 17.5% of the current trust balance. Thirteen loans, representing 52.2% of the current trust balance, have a DBRS Morningstar Market Rank of 5 or greater, and there is one loan, representing 1.1% of the current pool balance, that is fully defeased.

ESG CONSIDERATIONS

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework and its methodologies can be found at: https://www.dbrsmorningstar.com/research/357792.

Classes X-A, X-B, X-C, X-D, X-E, and X-FG are 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 are subject to surveillance, which could result in ratings being upgraded, downgraded, placed under review, confirmed, or discontinued by DBRS Morningstar.

DBRS Morningstar provides updated analysis and in-depth commentary in the DBRS Viewpoint platform.

For complimentary access to this content, please register for the DBRS Viewpoint platform at www.viewpoint.dbrsmorningstar.com. The platform includes issuer and servicer data for most outstanding CMBS transactions (including non-DBRS Morningstar rated), as well as loan-level and transaction-level commentary for most DBRS Morningstar-rated and -monitored transactions.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is North American CMBS Surveillance Methodology (March 6, 2020), which can be found on dbrsmorningstar.com under Methodologies & Criteria. For a list of the structured-finance-related methodologies that may be used during the rating process, please see the DBRS Morningstar Global Structured Finance Related Methodologies document, which can be found on dbrsmorningstar.com in the Commentary tab under Regulatory Affairs. 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.

For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/357883.

For more information regarding structured finance rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/358308.

For more information regarding the structured finance rating approach and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/359905.

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@dbrsmorningstar.com.

The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar 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. Please note a sensitivity analysis is not performed for CMBS bonds rated CCC or lower. The DBRS Morningstar long-term rating scale definition indicates that ratings of CCC or lower are assigned when the bond is highly likely to default or default is imminent, thereby prevailing over a sensitivity analysis.

Generally, the conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. DBRS Morningstar’s outlooks and ratings are monitored.

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

DBRS Limited
DBRS Tower, 181 University Avenue, Suite 700
Toronto, ON M5H 3M7 Canada
Tel. +1 416 593-5577

Ratings

  • Date IssuedDebt RatedRatingTrendActionAttributesi
    01-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class A-3A1AAA (sf)StbConfirmed
    CA
    01-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class A-3A2AAA (sf)StbConfirmed
    CA
    01-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class A-4AAA (sf)StbConfirmed
    CA
    01-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class A-SAAA (sf)StbConfirmed
    CA
    01-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class A-SBAAA (sf)StbConfirmed
    CA
    01-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class X-AAAA (sf)StbConfirmed
    CA
    01-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class X-BAA (sf)StbConfirmed
    CA
    01-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class BAA (low) (sf)StbConfirmed
    CA
    01-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class X-CA (sf)StbConfirmed
    CA
    01-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class CA (low) (sf)StbConfirmed
    CA
    01-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class ECA (low) (sf)StbConfirmed
    CA
    01-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class X-DBBB (high) (sf)NegTrend Change
    CA
    01-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class DBBB (sf)NegTrend Change
    CA
    01-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class X-EB (high) (sf)NegDowngraded
    CA
    01-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class EB (sf)NegDowngraded
    CA
    01-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class X-FGB (low) (sf)NegDowngraded
    CA
    01-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2015-C27, Class FCCC (sf)--Downgraded
    CA
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JPMBB Commercial Mortgage Securities Trust 2015-C27
  • US = Lead Analyst based in USA
  • CA = Lead Analyst based in Canada
  • EU = Lead Analyst based in EU
  • UK = Lead Analyst based in UK
  • E = EU endorsed
  • U = UK endorsed
  • Unsolicited Participating With Access
  • Unsolicited Participating Without Access
  • Unsolicited Non-participating

ALL MORNINGSTAR DBRS RATINGS ARE SUBJECT TO DISCLAIMERS AND CERTAIN LIMITATIONS. PLEASE READ THESE DISCLAIMERS AND LIMITATIONS AND ADDITIONAL INFORMATION REGARDING MORNINGSTAR DBRS RATINGS, INCLUDING DEFINITIONS, POLICIES, RATING SCALES AND METHODOLOGIES.