Press Release

DBRS Morningstar Confirms All Classes of CSAIL 2018-CX11 Commercial Mortgage Trust, Removes Three Classes from UR-Neg.

CMBS
January 27, 2021

DBRS, Inc. (DBRS Morningstar) confirmed all ratings of the following classes of Commercial Mortgage Pass-Through Certificates, Series 2018-CX11 issued by CSAIL 2018-CX11 Commercial Mortgage Trust:

-- 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-SB 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 X-D at BBB (high) (sf)
-- Class D at BBB (sf)
-- Class E-RR at BBB (low) (sf)
-- Class F-RR at BB (low) (sf)
-- Class G-RR at B (high) (sf)

With this review, DBRS Morningstar removed Classes E-RR, F-RR, and G-RR from Under Review with Negative Implications, where they were placed on August 6, 2020. All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction since the last review. At issuance, the trust consisted of 56 fixed-rate loans secured by 118 commercial and multifamily properties with a total trust balance of $952.9 million. Per the January 2021 remittance report, all loans and properties remained in the trust with a total trust balance of $936.5 million, representing a collateral reduction of 1.7% since issuance. The pool is relatively diverse based on loan size with the largest 15 loans comprising 59.1% of the trust balance. Five loans, representing 16.1% of the trust balance, exhibited credit characteristics consistent with investment-grade shadow ratings at issuance. Nine loans, representing 21.9% of the trust balance, are located in urban markets with DBRS Morningstar Market Ranks of 6 or greater. Twenty loans, representing 45.2% of the trust balance, are structured with interest-only (IO) payments for the full term. An additional 14 loans, representing 22.6% of the trust balance, are structured with partial IO payments. The population of these loans includes the three shadow-rated investment-grade loans.

Per the January 2021 remittance report, eight loans, consisting of 13.6% of the trust balance, transferred to the special servicer after the underlying collateral was negatively affected by the Coronavirus Disease (COVID-19) pandemic. An additional 15 loans, representing 24.4% of the trust balance, are on the servicer’s watchlist, which include three of the largest 13 loans by loan balance.

The 6-8 West 28th Street loan (Prospectus ID#13 - 2.8% of the pool) is secured by the fee-interest in a 26,600 square-foot mixed-use building between Broadway and Fifth Avenue in Manhattan. The property was constructed in 1915 and was purchased by the sponsor in April 2015 for $16.0 million. The sponsor then invested $6.4 million into the collateral prior to issuance. The $26.0 million loan transferred to the special servicer in June 2020 after coronavirus relief was requested with the last loan payment made in March 2020. An August 2020 rent roll showed the property was 60.3% occupied, down from the 100.0% occupancy rate at issuance. The sponsor-related tenant, JTRE, LLC, which formerly occupied 23.7% of net rentable area with a lease expiration of October 2029, was not listed on the rent roll. In addition, a Commercial Observer article dated July 2020 noted the sponsor lost two judgments totaling $5.6 million related to two unrelated New York commercial properties. Negotiations for a forbearance agreement have since stalled and the special servicer is giving consideration to selling the note. The collateral was reappraised in August 2020 for $29.1 million, down 28.2% from the appraised value of $40.5 million at issuance. The loan-to-value (LTV) ratio increased to 89.3% from 64.2% based on that updated appraised value. For purposes of this analysis, the loan was liquidated from the trust based on the August 2020 appraised value, which resulted in an implied loss severity in excess of 15.0%. The remaining specially serviced loans were reviewed based on higher LTVs following their respective post-transfer appraisals.

At issuance, DBRS Morningstar assigned an investment-grade shadow rating to One State Street (Prospectus ID#3 - 5.3% of the trust balance), Moffett Towers II – Building 2 (Prospectus ID#9 - 3.2% of the trust balance), Northrop Grumman Portfolio (Prospectus ID#11 - 2.7% of the trust balance), Lehigh Valley Mall (Prospectus ID#12 - 2.8% of the trust balance), and Yorkshire & Lexington Tower (Prospectus ID#15 - 2.1% of the trust balance). With this review, DBRS Morningstar confirmed that the performances of these loans remain consistent with investment-grade loan characteristics.

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.

DBRS Morningstar materially deviated from its CMBS North American CMBS Insight Model when determining the ratings assigned to Classes A-S and B, as the quantitative results suggested a lower rating. The material deviation is warranted given the uncertain loan-level event risk.

Classes X-A, X-B, and X-D 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 the following loans in the transaction:

-- Prospectus ID#13 – 6-8 West 28th Street (2.8% of the pool)

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 the 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 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, Inc.
22 West Washington Street
Chicago, IL 60602 USA
Tel. +1 312 696-6293

Ratings

  • Date IssuedDebt RatedRatingTrendActionAttributesi
    27-Jan-21Commercial Mortgage Pass-Through Certificates, Series 2018-CX11, Class A-1AAA (sf)StbConfirmed
    US
    27-Jan-21Commercial Mortgage Pass-Through Certificates, Series 2018-CX11, Class A-2AAA (sf)StbConfirmed
    US
    27-Jan-21Commercial Mortgage Pass-Through Certificates, Series 2018-CX11, Class A-3AAA (sf)StbConfirmed
    US
    27-Jan-21Commercial Mortgage Pass-Through Certificates, Series 2018-CX11, Class A-4AAA (sf)StbConfirmed
    US
    27-Jan-21Commercial Mortgage Pass-Through Certificates, Series 2018-CX11, Class A-5AAA (sf)StbConfirmed
    US
    27-Jan-21Commercial Mortgage Pass-Through Certificates, Series 2018-CX11, Class A-SAAA (sf)StbConfirmed
    US
    27-Jan-21Commercial Mortgage Pass-Through Certificates, Series 2018-CX11, Class A-SBAAA (sf)StbConfirmed
    US
    27-Jan-21Commercial Mortgage Pass-Through Certificates, Series 2018-CX11, Class X-AAAA (sf)StbConfirmed
    US
    27-Jan-21Commercial Mortgage Pass-Through Certificates, Series 2018-CX11, Class X-BAA (sf)StbConfirmed
    US
    27-Jan-21Commercial Mortgage Pass-Through Certificates, Series 2018-CX11, Class BAA (low) (sf)StbConfirmed
    US
    27-Jan-21Commercial Mortgage Pass-Through Certificates, Series 2018-CX11, Class CA (low) (sf)StbConfirmed
    US
    27-Jan-21Commercial Mortgage Pass-Through Certificates, Series 2018-CX11, Class X-DBBB (high) (sf)StbConfirmed
    US
    27-Jan-21Commercial Mortgage Pass-Through Certificates, Series 2018-CX11, Class DBBB (sf)StbConfirmed
    US
    27-Jan-21Commercial Mortgage Pass-Through Certificates, Series 2018-CX11, Class E-RRBBB (low) (sf)StbConfirmed
    US
    27-Jan-21Commercial Mortgage Pass-Through Certificates, Series 2018-CX11, Class F-RRBB (low) (sf)StbConfirmed
    US
    27-Jan-21Commercial Mortgage Pass-Through Certificates, Series 2018-CX11, Class G-RRB (high) (sf)StbConfirmed
    US
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CSAIL 2018-CX11 Commercial Mortgage Trust
  • 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.