DBRS Morningstar Assigns Rating of AA (sf), Stable Trend, to Mortgage Loan Add On Made to John Hancock 61 West 62nd Owners Corporation

DBRS, Inc. (DBRS Morningstar) assigned a rating of AA (sf) with a Stable trend to the Mortgage Loan Add On due November 1, 2027 (the Mortgage Loan), made to John Hancock 61 West 62nd Owners Corporation (the Harmony) Capital Relief.

The Mortgage Loan is secured by a 29-story, full-service cooperative apartment building located in Manhattan’s Upper West Side submarket west of Central Park and north of Columbus Circle. The building overlooks Columbus Avenue and Broadway and is within one block of Lincoln Center for the Performing Arts, the premier New York arts complex. Originally built in 1978–81, the 61 West 62nd Owners Corporation was organized in 1985 to acquire the residential condominium and four of the five commercial units.

The coop features 261 apartments including 93 studios averaging 610 square feet (sf), 53 one-bedroom units averaging 710 sf, 41 junior one-bedroom units averaging 905 sf, 46 two-bedroom units averaging 1,203 sf, 22 three-bedroom units averaging 1,824 sf, and six four-bedroom units averaging 2,397 sf.

The Mortgage Loan, with a $2.50 million balance as of March 31, 2021, was made as an addition to an existing John Hancock loan with the then-outstanding balance of $11.5 million. Both loans mature on the same date. The AA (sf) rating reflects: (1) the expected stability of debt payments, given more than 30 years of operating history; (2) a significantly low loan-to-value ratio; (3) the property’s location in a well-established New York residential submarket; and (4) the expected financial support of the coop apartment unit owners to protect their ownership interests if payment problems arise on this underlying Mortgage Loan.

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:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is North American Single-Asset/Single-Borrower Ratings Methodology (March 2, 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.

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.

This rating was disclosed to the John Hancock Life Insurance Company.

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

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