Press Release

DBRS Morningstar Downgrades One Class and Confirms All Other Classes of COMM 2015-LC21 Mortgage Trust

CMBS
March 24, 2021

DBRS, Inc. (DBRS Morningstar) downgraded one class of the Commercial Mortgage Pass-Through Certificates, Series 2015-LC21 issued by COMM 2015-LC21 Mortgage Trust as follows:

-- Class F to CCC (sf) from B (low) (sf)

DBRS Morningstar also confirmed the following classes:

-- Class A-2 at AAA (sf)
-- Class A-SB at AAA (sf)
-- Class A-3 at AAA (sf)
-- Class A-4 at AAA (sf)
-- Class A-M at AAA (sf)
-- Class X-A at AAA (sf)
-- Class B at AA (low) (sf)
-- Class X-B at A (sf)
-- Class C at A (low) (sf)
-- Class X-C at BBB (sf)
-- Class D at BBB (low) (sf)
-- Class X-D at BB (sf)
-- Class E at BB (low) (sf)

In addition, DBRS Morningstar discontinued its rating on Class X-E as it references a class with a CCC (sf) rating.

DBRS Morningstar removed Classes E, F, and X-D from Under Review with Negative Implications, where they were placed on August 6, 2020. Class F has a rating that does not carry a trend. All other classes have Stable trends. The downgrade is reflective of a loss incurred by the trust since the last review, as well as anticipated losses upon resolution of several specially serviced loans.

As of the March 2021 remittance, the pool’s balance had been reduced to $1.1 billion from $1.3 billion at issuance, a collateral reduction of 18.6%. This resulted from the payoff of nine loans including the pool’s largest loan at issuance, the $87.0 million Courtyard by Marriott Portfolio, which paid off in February 2020.

There are nine loans, representing 8.4% of the pool, with the special servicer. The largest specially serviced loan is the Anchorage Business Park loan (Prospectus ID#11, 2.1% of the pool) which is secured by a 176,799 square-foot (sf) Class C office property in Anchorage, Alaska. The property has struggled maintaining anticipated occupancy levels and reported 81% occupancy at midyear 2020 compared with the issuance level of 86%. The 2019 net cash flow (NCF) was 40% below the Issuer’s level and the debt service coverage ratio (DSCR) has been below breakeven for several years. The servicer’s commentary indicated that the borrower intends to return the title to the lender. DBRS Morningstar liquidated the loan as part of this analysis and expects a loss upon resolution.

There are an additional 25 loans, representing 32.9% of the pool, on the servicer’s watchlist. These loans are being monitored for various reasons, including low DSCRs or occupancy, tenant rollover risk, and/or Coronavirus Disease (COVID-19) pandemic-related forbearance requests.

The largest loan remaining in the pool is the Courtyard by Marriott Pasadena (Prospectus ID#2, 6.2% of the pool), which is secured by a 314-room limited-service hotel in Pasadena, California. It briefly transferred to the special servicer in April 2020 for coronavirus-related default. The 2019 NCF was already 13% below the 2018 NCF and 7% below the Issuer’s level, resulting from a combination of increased expenses and decreased revenue. A forbearance was granted in August 2020 which allowed the borrower to use furniture, fixtures, and equipment reserves to cover loan payments from September 2020 through November 2020. The loan was returned to the master servicer and has remained current as it is being monitored on the watchlist.

Another loan of concern is the Honeywell Building loan (Prospectus ID#27, 1.6% of the pool), which is secured by a 156,784-sf office property in Houston, about 16 miles west of the central business district. The main tenant, Honeywell, which occupied 85% of the property, vacated at its December 2019 lease expiration, and occupancy declined to only 7% as of the December 2020 financials. The loan has remained current but faces substantial hurdles in its re-leasing efforts.

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, X-C, and X-D 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 issuance metrics and all historical surveillance commentary on the DBRS Viewpoint platform.

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 date 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.

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

Ratings

  • Date IssuedDebt RatedRatingTrendActionAttributesi
    24-Mar-21Commercial Mortgage Pass-Through Certificates, Series 2015-LC21, Class A-2AAA (sf)StbConfirmed
    US
    24-Mar-21Commercial Mortgage Pass-Through Certificates, Series 2015-LC21, Class A-3AAA (sf)StbConfirmed
    US
    24-Mar-21Commercial Mortgage Pass-Through Certificates, Series 2015-LC21, Class A-4AAA (sf)StbConfirmed
    US
    24-Mar-21Commercial Mortgage Pass-Through Certificates, Series 2015-LC21, Class A-MAAA (sf)StbConfirmed
    US
    24-Mar-21Commercial Mortgage Pass-Through Certificates, Series 2015-LC21, Class A-SBAAA (sf)StbConfirmed
    US
    24-Mar-21Commercial Mortgage Pass-Through Certificates, Series 2015-LC21, Class X-AAAA (sf)StbConfirmed
    US
    24-Mar-21Commercial Mortgage Pass-Through Certificates, Series 2015-LC21, Class BAA (low) (sf)StbConfirmed
    US
    24-Mar-21Commercial Mortgage Pass-Through Certificates, Series 2015-LC21, Class X-BA (sf)StbConfirmed
    US
    24-Mar-21Commercial Mortgage Pass-Through Certificates, Series 2015-LC21, Class CA (low) (sf)StbConfirmed
    US
    24-Mar-21Commercial Mortgage Pass-Through Certificates, Series 2015-LC21, Class X-CBBB (sf)StbConfirmed
    US
    24-Mar-21Commercial Mortgage Pass-Through Certificates, Series 2015-LC21, Class DBBB (low) (sf)StbConfirmed
    US
    24-Mar-21Commercial Mortgage Pass-Through Certificates, Series 2015-LC21, Class X-DBB (sf)StbConfirmed
    US
    24-Mar-21Commercial Mortgage Pass-Through Certificates, Series 2015-LC21, Class EBB (low) (sf)StbConfirmed
    US
    24-Mar-21Commercial Mortgage Pass-Through Certificates, Series 2015-LC21, Class FCCC (sf)--Downgraded
    US
    24-Mar-21Commercial Mortgage Pass-Through Certificates, Series 2015-LC21, Class X-EDiscontinued--Disc.-W/drwn
    US
    More
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COMM 2015-LC21 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.