DBRS Morningstar Confirms All Classes of Real Estate Asset Liquidity Trust, Series 2018-1

DBRS Limited (DBRS Morningstar) confirmed all ratings on the Commercial Mortgage Pass-Through Certificates, Series 2018-1 (the Certificates) issued by Real Estate Asset Liquidity Trust, Series 2018-1 as follows:

-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class B at AA (sf)
-- Class X at A (high) (sf)
-- Class C at A (sf)
-- Class D-1 at BBB (sf)
-- Class D-2 at BBB (sf)
-- Class E at BBB (low) (sf)
-- Class F at BB (sf)
-- Class G at B (sf)

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction since issuance. As of the December 2020 remittance, 59 of the original 70 loans remain in the pool, with an aggregate trust balance of $309.2 million, representing a collateral reduction of approximately 12.1% since issuance. The transaction is concentrated by property type, as nine loans, representing 33.7% of the current trust balance, are secured by retail assets, while 18 loans, representing 20.5% of the current trust balance, are secured by industrial properties. In addition, there are three loans secured by healthcare facilities, representing 12.9% of the current trust balance. All loans remaining in the pool amortize through their respective loan terms, while more than half of the loans remaining in the pool benefit from some level of meaningful recourse to the loan’s sponsor.

According to the December 2020 remittance report, there are eight loans on the servicer’s watchlist, representing 17.8% of the current trust balance. Two of these loans, Gateway Boulevard Retail Edmonton (Prospectus ID#3, 7.5% of the current trust balance) and Quality Hotel Dorval (Prospectus ID#9, 3.4% of the current trust balance) received short-term forbearances that ended in July 2020 and December 2020, respectively. Both loans are current as of the December 2020 reporting and have made their recent principal and interest payments in accordance with the modified terms. Of the remaining six loans on the servicer’s watchlist, two loans (1.5% of the current trust balance) were added for near-term maturities, but they are likely to repay in full, while the other four loans (5.4% of the current trust balance) were flagged for either performance declines or tenant rollover; however all loans remain current as of the December 2020 reporting.

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.
Class X is an interest-only (IO) certificate that references 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.
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Notes:
All figures are in Canadian 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.

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