DBRS Morningstar Upgrades Two Classes of Citigroup Commercial Mortgage Trust 2019-PRM

DBRS Limited (DBRS Morningstar) upgraded the ratings on the following classes of Commercial Mortgage Pass-Through Certificates, Series 2019-PRM issued by Citigroup Commercial Mortgage Trust 2019-PRM:

-- Class B to AAA (sf) from AA (high) (sf)
-- Class C to AA (sf) from AA (low) (sf)

In addition, DBRS Morningstar confirmed the ratings on the following classes:

-- Class A at AAA (sf)
-- Class X at A (low) (sf)
-- Class D at BBB (high) (sf)
-- Class E at BB (low) (sf)
-- Class F at B (sf)

All trends are Stable.

The rating upgrades are primarily driven by the defeasance of Portfolio I (Prospectus ID#1, 21.9% of the pool), which was reflected in the August 2021 remittance. As of the August 2021 remittance, the remaining nondefeased Portfolio II loan (Prospectus ID#2, 78.1% of the pool) continues to perform in line with issuance expectations, reporting a YE2020 debt service coverage ratio (DSCR) of 1.86 times (x) and an occupancy rate of 85.0%. The trailing 12 months ended Q1 2021 DSCR and occupancy rate were reported at 2.01x and 88.0%, respectively.

The collateral for the mortgage trust consists of two five-year, interest-only (IO), first-lien mortgage loans originally secured by self-storage facilities, 11 properties in Portfolio I and 38 properties in Portfolio II, in urban and suburban locations in 18 states in the Eastern United States. With the defeasance of the Portfolio I loan, the state distribution has been reduced to the 14 states containing the Portfolio II properties. The two loans are not cross-collateralized or cross-defaulted.

Portfolio I has a trust mortgage loan of $61.0 million and Portfolio II has a trust mortgage loan of $217.0 million for a total loan balance of $278.0 million in the trust. Each portfolio includes additional mezzanine financing secured by the borrowing entities’ ownership interests. The Portfolio I mezzanine debt has a total commitment of $12.0 million (per the offering documents, full repayment of the mezzanine loan was a condition of defeasance) and the Portfolio II mezzanine debt has a total commitment of $40.0 million. The Portfolio II ownership entities are obligated to repay the total advanced mezzanine debt up to $40.0 million. The mezzanine loans are subordinate to and held outside the trust. The mortgage loans and mezzanine loans are be co-terminous.

Each of the Portfolio I and Portfolio II borrowers is indirectly wholly owned by Prime Storage Fund I, LLC, one of the related guarantors, which is indirectly controlled by the borrower sponsor, Robert Moser. Prime Group is one of the largest private owner-operators of self-storage facilities in the United States. The company operates the properties as Prime Storage Group and, at issuance, managed more than 10.0 million square feet of self-storage properties in 23 states, primarily in the Eastern United States.

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.

Class X is an IO certificate that references 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.

The DBRS Viewpoint platform provides additional information on this transaction and underlying loans including DBRS Morningstar metrics, commentary, servicer-reported cash flows, and other performance-related data.

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 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].

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 [email protected].

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