DBRS Morningstar Confirms All Classes of Morgan Stanley Bank of America Merrill Lynch Trust 2014-C15; Removes Two Classes From UR-Neg.

DBRS, Inc. (DBRS Morningstar) confirmed the ratings on all classes of the Commercial Mortgage Pass-Through Certificates, Series 2014-C15 (the Certificates) issued by Morgan Stanley Bank of America Merrill Lynch Trust 2014-C15 (the Trust) as follows:

-- Class A-SB at AAA (sf)
-- Class A-3 at AAA (sf)
-- Class A-4 at AAA (sf)
-- Class A-S at AAA (sf)
-- Class X-A at AAA (sf)
-- Class X-B at AA (high) (sf)
-- Class B at AA (sf)
-- Class C at A (high) (sf)
-- Class PST at A (high) (sf)
-- Class D at BBB (sf)
-- Class E at BBB (low) (sf)
-- Class F at BB (sf)
-- Class G at BB (low) (sf)
-- Class X-C at B (sf)
-- Class H at B (low) (sf)

DBRS Morningstar also removed Classes H and X-C from Under Review with Negative Implications, where they were placed on August 6, 2020. All trends are Stable.

The ratings confirmation reflects the overall stable performance of the transaction over the previous 12 months. At issuance, the trust comprised 48 fixed-rate loans secured by 76 commercial and multifamily properties with a trust balance of $1.08 billion. Per the February 2021 remittance report, there are 38 loans secured by 65 properties remaining in the trust with a total trust balance of $851.0 million, representing a 21.2% collateral reduction. Over the previous 12 months, there were two loans, totaling $36.2 million, that were repaid in full and one additional loan that fully defeased. In total, five loans, or 8.3% of the trust balance, are fully defeased. The pool is concentrated by loan size as the largest loan, Arundel Mills & Marketplace (Prospectus ID#1), comprises 17.5% of the trust balance and the largest 10 loans comprise 72.8% of the trust balance. The transaction is concentrated by property type as loans secured by retail properties and hospitality properties total 44.1% and 25.9% of the trust balance, respectively. The pool benefits from a higher concentration of urban market properties as 10 loans, comprising 37.0% of the trust balance, have a DBRS Morningstar Market Rank of five or greater.

Per the February 2021 remittance report, there is one loan, Darby Row & the Belfry Apartments (Prospectus ID#42 – 0.4% of the trust balance), in special servicing. An additional 10 loans, representing 30.9% of the trust balance, are on the servicer’s watchlist with most loans exhibiting low debt service coverage ratios (DSCR) during the Coronavirus Disease (COVID-19) pandemic. Five of the watchlisted loans are secured by hospitality properties that had low DSCRs, which is to be expected given the travel restrictions during the pandemic.

The Arundel Mills & Marketplace loan is secured by a 1.7 million sf regional mall and the Arundel Mills Marketplace in Hanover, Maryland, approximately 12 miles southwest of Baltimore. The subject was developed in 2000 and is anchored by Live! Casino & Hotel Maryland (27.9% of total net rentable area (NRA)), which opened in 2012 and is subject to a ground lease extending through June 2111. A 17-story 310-key hotel and conference center was constructed and opened in June 2018. Other notable tenants include Bass Pro Shops Outdoor, Cinemark Theatres, H&M, Burlington Coat Factory, Dave & Buster’s, and T.J. Maxx. A September 2020 rent roll noted the entire property was 96.8% occupied with an average rent of $18.15 psf, compared to the occupancy rate and average base rent of 98.6% and $24.61 psf, respectively, at issuance. Average base rent decreased following the addition of the hotel and conference center as the new improvements do not pay ground rent. Notable upcoming lease expirations in 2021 include Skechers USA, Disney Store Outlet, Hanesbrands, Bed Bath & Beyond, Off Broadway Shoes, and Staples. The Bed Bath & Beyond closed its store at the property in Q3 2020. It should also be noted Modell’s Sporting Goods closed all of its locations after filing for Chapter 11 bankruptcy in March 2020. The loan exhibited a relatively strong net cash flow in 2020 despite temporarily closing due to the coronavirus pandemic between March 2020 and June 2020. The loan reported a trailing nine-month ending September 30, 2020, DSCR of 2.84 times (x), compared to the year-end (YE) 2019 DSCR of 3.02x, YE2018 DSCR of 2.95x, and YE2017 DSCR of 2.87x. The loan benefits from a granular tenant base with nationally recognized tenants, the experienced sponsorship provided by Simon Property Group, and the property’s destination status given the casino and adjacent hotel.

At issuance, DBRS Morningstar shadow-rated the Arundel Mills & Marketplace and JW Marriott and Fairfied Inn & Suites loans (23.2% of the trust balance) investment grade. With this review, DBRS Morningstar confirms that the performance of the loans remains consistent with investment-grade loan characteristics.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/373262.

Classes X-A, X-B, and X-C 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.

DBRS Morningstar provides updated analysis and in-depth commentary in the DBRS Viewpoint platform for the following loans in the transaction:

-- Prospectus ID#3 – La Concha Hotel & Tower (8.9% of the pool)
-- Prospectus ID#13 – Northway Mall (2.3% of the pool)
-- Prospectus ID#42 – Darby Row & The Belfry Apartments (0.4% 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 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.

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