DBRS Morningstar Confirms Ratings of Mortgage Loans Made to Paramount Apartments Limited

DBRS Limited (DBRS Morningstar) confirmed the ratings on the following mortgage loans made to Paramount Apartments Limited by a major Canadian financial institution:

-- 3.510% Mortgage Loan due February 1, 2025 at BBB (low)
-- 3.530% Mortgage Loan due February 1, 2025 at BBB (low)

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction, which remains in line with DBRS Morningstar’s expectations. The mortgage loans are secured by Paramount Apartments, a 174-unit apartment complex that also includes 3,800 square feet of street-level commercial space. The property is at 1545-1551 South Park Street in downtown Halifax. The in-place vacancy for the residential portion was 13.8% as of January 31, 2021. This is higher than historical levels, which were generally below 5.0%, and higher than the subject’s Halifax Peninsula South submarket rate of 3.7% (according to the Canada Mortgage and Housing Corporation’s October 2020 market data). In addition, the property’s YE2020 net operating income declined by 14.3% from the prior year primarily because of a decrease in parking income generated from the adjacent hotel and retail complex.

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.

All ratings are subject to surveillance, which could result in ratings being upgraded, downgraded, placed under review, confirmed, or discontinued by DBRS Morningstar.

Notes:
The principal methodology is North American CMBS Surveillance Methodology (March 26, 2021), 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 [email protected].

This rating was initiated at the request of the lender.

The rated entity or its related entities did not 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.

For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at [email protected].

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