DBRS Morningstar Confirms All Classes of CSMC 2020-TMIC

DBRS Limited (DBRS Morningstar) confirmed the ratings on the Commercial Mortgage Pass-Through Certificates, Series 2020-TMIC issued by CSMC 2020-TMIC as follows:

-- Class A at AAA (sf)
-- Class X-CP at AAA (sf)
-- Class X-NCP at AAA (sf)
-- Class B at AA (low) (sf)
-- Class C at A (sf)
-- Class D at A (low) (sf)
-- Class HRR at BBB (high) (sf)

All trends are Stable.

The rating confirmations reflect the transaction’s overall stable performance since issuance. The loan is secured by The Mall in Columbia, a 1.4 million-square-foot (sf) regional mall in Columbia, Maryland. The $250.0 million loan is structured with a two-year initial term with a single one-year extension option and is interest only (IO) throughout the duration of the fully extended loan term. The loan is sponsored by Brookfield Asset Management, which has owned the mall since 2018 after it acquired GGP Inc. The loan is structured with extremely stringent cash management provisions with all excess cash flow being trapped in a lender-controlled account. Additionally, a debt service shortfall guaranty was executed and will remain in place throughout the loan’s entire three-year fully extended term.

The mall is in an affluent area between Baltimore and Washington, D.C., and had relatively strong in-line sales (excluding Apple) of approximately $523 per sf (psf) in 2019. As a result of the Coronavirus Disease (COVID-19) pandemic, sales expectedly decreased in 2020, with total mall sales being reported at $246 psf and in-line tenant sales (excluding Apple) being reported at $319 psf. For the trailing 12-month period ended June 30, 2021, total mall sales and in-line tenant sales (excluding Apple) were reported at $294 psf and $434 psf, respectively.

The sponsor has invested $68.6 million into the property since 2014. The sponsor added a 70,000-sf open-air lifestyle centre and successfully repositioned the former Sears box, which included backfilling the space with leases to the German supermarket chain Lidl (officially opened in June 2021) and an entertainment offering known as Main Event. The mall is currently anchored by Macy’s (18.1% of net rentable area (NRA), through August 2030), Nordstrom (14.0% of NRA, through February 2030), and JCPenney (noncollateral, through August 2051). A noncollateral Lord & Taylor previously anchored the property as well but vacated in Q4 2020 after its parent company filed for bankruptcy. No replacement tenant has been signed yet. As of June 2021, the total property was 93.9% occupied and the in-line portion of the mall was 87.0% occupied compared with 88.7% at issuance. The loan reported a YE2020 net cash flow (NCF) of $31.4 million, which remains above the DBRS Morningstar issuance NCF of $28.1 million. The annualized trailing six-month period ended June 30, 2021, NCF was reported at $42.0 million.

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-CP and X-NCP are 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.

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.

The DBRS Morningstar Sovereign group releases baseline macroeconomic scenarios for rated sovereigns. DBRS Morningstar analysis considered impacts consistent with the baseline scenarios as set forth in the following report: https://www.dbrsmorningstar.com/research/384482/baseline-macroeconomic-scenarios-application-to-credit-ratings.

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.

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

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