Press Release

DBRS Morningstar Confirms All Classes with Stable Trends on Benchmark 2019-B15 Mortgage Trust

CMBS
December 07, 2020

DBRS Limited (DBRS Morningstar) confirmed the following classes of Commercial Mortgage Pass-Through Certificates, Series 2019-B15 issued by Benchmark 2019-B15 Mortgage Trust 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-AB at AAA (sf)
-- Class A-S at AAA (sf)
-- Class X-A at AAA (sf)
-- Class X-B at AA (sf)
-- Class B at AA (low) (sf)
-- Class C at A (low) (sf)
-- Class D at BBB (high) (sf)
-- Class X-D at BBB (sf)
-- Class E at BBB (low) (sf)
-- Class X-F at BB (sf)
-- Class F at BB (low) (sf)
-- Class G-RR at B (high) (sf)

All trends are Stable.

Classes E, F, G-RR, X-D, and X-F were removed from Under Review with Negative Implications where they were placed on August 6, 2020.

The rating confirmations reflect the overall stable performance of the transaction since issuance, when the transaction consisted of 32 fixed-rate loans secured by 87 commercial and multifamily properties. The initial trust balance of $846.6 million has been reduced by only a nominal amount as of the November 2020 remittance, as all loans from issuance remain in the pool and there has been negligible amortization to date. The transaction is concentrated by property type as eight loans, representing 37.1% of the current trust balance, are secured by office collateral; mixed-use properties back the second-largest concentration of loans, with eight loans representing 29.9% of the current trust balance. As of the November 2020 remittance, seven loans, representing 16.8% of the pool, are on the servicer’s watchlist, and there are no loans in special servicing. The watchlisted loans are being monitored for various reasons, including delinquent payments, servicing trigger events, low debt service coverage ratios (DSCRs), and/or Coronavirus Disease (COVID-19) pandemic-related forbearance requests. Some of these issues have been resolved and the servicer expects that status will be reflected in the reporting within the near term.

The largest loan on the servicer’s watchlist is Kildeer Village Square (Prospectus ID#6, 5.7% of pool), which was flagged for delinquent payments and a servicing trigger event. The loan is secured by a 199,245-square foot (sf) shopping centre in Kildeer, Illinois, approximately 40 miles northwest of Chicago. In early March 2020, the largest tenant, Art Van Furniture (Art Van) (20.4% of net rentable area (NRA)), went dark following the company’s bankruptcy filing, which ultimately resulted in the company declaring that all assets would be liquidated and all stores would be closed. These events triggered a cash sweep and cash trap, according to the loan documents. The loan was also flagged for delinquent debt service payments as the loan was more than 30 days delinquent as of October 2020 before payments were made current with the November 2020 payment date. As of June 2020, the subject was 80.0% occupied with a strong tenant mix including Nordstrom Rack, Sierra Trading Post, Nike, and DSW. At issuance, a Forever 21 Red store was in the process of closing and that space was eventually backfilled by La-Z-Boy Furniture.

The trailing six months (T-6) ended June 2020 DSCR was reported at 1.41 times (x), below the DBRS Morningstar DSCR of 1.70x, but indicated that there is extra cash available for trapping. However, the in-place DSCR will likely decline as the full impact of the loss of Art Van bears out in the revenues. At issuance, Art Van’s rent represented 14.7% of the DBRS Morningstar base rent figure, suggesting a decline of 1.13x for the in-place DSCR when deducting that tenant’s rent. The remaining tenant mix is desirable, as is the subject’s location along a heavily travelled thoroughfare for the northwestern suburbs of Chicago. In addition, the property is a relatively new, modern, and attractive development that should fare better than other product in the area trying to backfill vacant boxes. There are near-term challenges in the state and local government mandates affecting the several restaurant tenants at the property, as well as the Orange Theory gym, which could be affecting rent collections. However, the sponsor, who contributed $940,000 in additional equity to close the subject loan and developed the property from the ground up, should be incentivized to support the property and loan because the medium-term prospects for stabilization remain healthy.

The second-largest loan on the servicer’s watchlist is Legends at Village West (Prospectus ID#10, 4.1% of the pool). It was flagged for the sponsor’s pandemic relief request, which was ultimately granted to allow for a three-month deferral of payments that were paid out of the nontax and insurance reserves. The deferred amounts will be repaid over a period of time as outlined in the modification agreement. The loan is secured by a 702,750-sf outlet mall in Kansas City, Kansas. The property is currently open and operating and, despite its location a cold Midwestern climate, benefits amid the pandemic in the outdoor configuration of the property that allows for more social distancing and less crowding indoors. The collateral is anchored by AMC Theatres, Dave & Buster’s, and T.J. Maxx. As of the T-6 ended June 2020 reporting, the loan reported a DSCR of 1.24x, down from the issuer’s figure of 1.67x and the DBRS Morningstar DSCR of 1.41x.

Although the concentration of entertainment operators in AMC Theatres and Dave & Buster’s (together comprising 19.4% of the collateral NRA) is concerning given the widely reported struggles amid the pandemic for both companies, the overall strength of the property within the Kansas City metropolitan statistical area is noteworthy in terms of mitigating factors. The property was initially developed as a traditional mall and was later converted to the current outlet format. There is significant development surrounding the property, including the Kansas Speedway, Great Wolf Lodge, and the stadium for Kansas City’s soccer club, Sporting KC, that drive both visiting and local traffic to the relatively far western portion of the area. The sponsor recently announced a Tory Burch outlet store would be added to the mall, joining relatively recent additions as of issuance in Michael Kors and Kate Spade as part of the mall’s strategy to offer more upscale retailers. In addition, Aldi recently announced it would be constructing a free-standing store in the vicinity, speaking to the continued desirability of the area for businesses catering to local traffic, a trend driven by increases in residential development over the last decade. As such, DBRS Morningstar believes the loan is generally well positioned but will monitor it closely for tenant developments.

At issuance, DBRS Morningstar shadow-rated Century Plaza Towers (Prospectus ID#3, 7.4% of pool) at A (sf), The Essex (Prospectus ID#14, 2.9% of pool) at BBB (high) (sf), and Osborn Triangle (Prospectus ID#16, 2.4% of pool) at BBB (low) (sf). DBRS Morningstar confirmed the shadow rating on all three loans given the continued stable performance since issuance.

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-D, and X-F 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 are subject to surveillance, which could result in ratings being upgraded, downgraded, placed under review, confirmed, or discontinued by DBRS Morningstar.

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.

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
    07-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2019-B15, Class A-1AAA (sf)StbConfirmed
    CA
    07-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2019-B15, Class A-2AAA (sf)StbConfirmed
    CA
    07-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2019-B15, Class A-3AAA (sf)StbConfirmed
    CA
    07-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2019-B15, Class A-4AAA (sf)StbConfirmed
    CA
    07-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2019-B15, Class A-5AAA (sf)StbConfirmed
    CA
    07-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2019-B15, Class A-ABAAA (sf)StbConfirmed
    CA
    07-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2019-B15, Class A-SAAA (sf)StbConfirmed
    CA
    07-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2019-B15, Class X-AAAA (sf)StbConfirmed
    CA
    07-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2019-B15, Class X-BAA (sf)StbConfirmed
    CA
    07-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2019-B15, Class BAA (low) (sf)StbConfirmed
    CA
    07-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2019-B15, Class CA (low) (sf)StbConfirmed
    CA
    07-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2019-B15, Class DBBB (high) (sf)StbConfirmed
    CA
    07-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2019-B15, Class X-DBBB (sf)StbConfirmed
    CA
    07-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2019-B15, Class EBBB (low) (sf)StbConfirmed
    CA
    07-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2019-B15, Class X-FBB (sf)StbConfirmed
    CA
    07-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2019-B15, Class FBB (low) (sf)StbConfirmed
    CA
    07-Dec-20Commercial Mortgage Pass-Through Certificates, Series 2019-B15, Class G-RRB (high) (sf)StbConfirmed
    CA
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Benchmark 2019-B15 Mortgage Trust
  • Date Issued:Dec 7, 2020
  • Rating Action:Confirmed
  • Ratings:AAA (sf)
  • Trend:Stb
  • Rating Recovery:
  • Issued:CA
  • Date Issued:Dec 7, 2020
  • Rating Action:Confirmed
  • Ratings:AAA (sf)
  • Trend:Stb
  • Rating Recovery:
  • Issued:CA
  • Date Issued:Dec 7, 2020
  • Rating Action:Confirmed
  • Ratings:AAA (sf)
  • Trend:Stb
  • Rating Recovery:
  • Issued:CA
  • Date Issued:Dec 7, 2020
  • Rating Action:Confirmed
  • Ratings:AAA (sf)
  • Trend:Stb
  • Rating Recovery:
  • Issued:CA
  • Date Issued:Dec 7, 2020
  • Rating Action:Confirmed
  • Ratings:AAA (sf)
  • Trend:Stb
  • Rating Recovery:
  • Issued:CA
  • Date Issued:Dec 7, 2020
  • Rating Action:Confirmed
  • Ratings:AAA (sf)
  • Trend:Stb
  • Rating Recovery:
  • Issued:CA
  • Date Issued:Dec 7, 2020
  • Rating Action:Confirmed
  • Ratings:AAA (sf)
  • Trend:Stb
  • Rating Recovery:
  • Issued:CA
  • Date Issued:Dec 7, 2020
  • Rating Action:Confirmed
  • Ratings:AAA (sf)
  • Trend:Stb
  • Rating Recovery:
  • Issued:CA
  • Date Issued:Dec 7, 2020
  • Rating Action:Confirmed
  • Ratings:AA (sf)
  • Trend:Stb
  • Rating Recovery:
  • Issued:CA
  • Date Issued:Dec 7, 2020
  • Rating Action:Confirmed
  • Ratings:AA (low) (sf)
  • Trend:Stb
  • Rating Recovery:
  • Issued:CA
  • Date Issued:Dec 7, 2020
  • Rating Action:Confirmed
  • Ratings:A (low) (sf)
  • Trend:Stb
  • Rating Recovery:
  • Issued:CA
  • Date Issued:Dec 7, 2020
  • Rating Action:Confirmed
  • Ratings:BBB (high) (sf)
  • Trend:Stb
  • Rating Recovery:
  • Issued:CA
  • Date Issued:Dec 7, 2020
  • Rating Action:Confirmed
  • Ratings:BBB (sf)
  • Trend:Stb
  • Rating Recovery:
  • Issued:CA
  • Date Issued:Dec 7, 2020
  • Rating Action:Confirmed
  • Ratings:BBB (low) (sf)
  • Trend:Stb
  • Rating Recovery:
  • Issued:CA
  • Date Issued:Dec 7, 2020
  • Rating Action:Confirmed
  • Ratings:BB (sf)
  • Trend:Stb
  • Rating Recovery:
  • Issued:CA
  • Date Issued:Dec 7, 2020
  • Rating Action:Confirmed
  • Ratings:BB (low) (sf)
  • Trend:Stb
  • Rating Recovery:
  • Issued:CA
  • Date Issued:Dec 7, 2020
  • Rating Action:Confirmed
  • Ratings:B (high) (sf)
  • Trend:Stb
  • Rating Recovery:
  • Issued:CA
  • 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.