DBRS Morningstar Confirms Ratings on All Classes of COMM 2015-PC1 Mortgage Trust

DBRS Limited (DBRS Morningstar) confirmed its ratings on the Commercial Mortgage Pass-Through Certificates, Series 2015-PC1 issued by COMM 2015-PC1 Mortgage Trust as follows:

-- Class A-4 at AAA (sf)
-- Class A-5 at AAA (sf)
-- Class A-SB 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)
-- Class F at CCC (sf)

All trends are Stable with the exception of Class F, which has a rating that does not carry a trend. DBRS Morningstar also removed the Interest in Arrears designation on Class F.

The rating confirmations reflect the overall stable performance of the transaction since its last review. As of the January 2022 remittance, 71 of the original 80 loans remain in the pool, representing a collateral reduction of 19.4% since issuance and a current trust balance of $1.2 billion. Six loans, representing 4.3% of the current pool balance, are fully defeased. There are seven loans in special servicing, representing 12.6% of the current pool balance, inclusive of three top 10 loans. There is an additional 16 loans on the servicer’s watchlist, representing 21.5% of the current pool balance.

The largest loan in special servicing, The Plaza at Harmon Meadow (Prospectus ID#4, 4.1% of the current pool balance), is secured by a 219,000-square-foot (sf) mixed-use building in Secaucus, New Jersey. The loan transferred to special servicing in April 2020 as a result of maturity default after the borrower was unable to secure refinancing and resolve additional outstanding issues including the death of the loan guarantor and subsequent inability to find a suitable replacement. The borrower is unwilling to contribute additional capital to the project and the servicer has initiated foreclosure proceedings. The initial foreclosure sale was set for August 2021, however it was postponed until January 2022. As of the August 2021 rent roll, the collateral was 83.1% occupied, although the June 2021 financial reporting showed that cash flow had gone negative. The most recent appraisal reported by the servicer valued the property at $68.1 million as of July 2021, up 4.0% from the appraised value of $65.5 million at issuance and slightly higher than a post-transfer appraisal from October 2020. The property is well-located in the Meadowlands submarket in Northern New Jersey, with good access to I-95 and I-495, as well as strong consumer demand from nearby neighborhoods, offices, and hotels. DBRS Morningstar notes that the risk of loss to the trust is currently small based on the the most recent appraisal.

The second-largest loan in special servicing, Riverview Center (Prospectus ID#6, 2.4% of the current pool balance), is secured by a 977,000-sf mixed-use property in Menands, New York. The loan transferred to the special servicer in December 2019 after the borrower requested a short-term extension for the April 2020 loan maturity date. The loan was ultimately not refinanced and attempts to negotiate a forbearance agreement were unsuccessful. The borrower agreed to a voluntary foreclosure and the loan became a real estate owned asset in May 2021. The most recent appraisal, dated June 2021, valued the property at $20.8 million, an 8.7% improvement compared to the September 2020 appraisal value of $19.0 million, however still down 63.0% from the issuance appraised value of $56.0 million. The subject is a unique asset in the market given that is a mixed-use property with a variety of uses including office, storage, warehouse, and retail and is primarily occupied by State of New York entities. DBRS Morningstar liquidated this loan from the pool in this analysis with a loss severity in excess of 50.0%.

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 updated analysis and in-depth commentary in the DBRS Viewpoint platform for the following loans in the transaction:

-- Prospectus ID#4 – The Plaza at Harmon Meadow (4.1% of the pool)
-- Prospectus ID#6 – Riverview Center (2.4% of the pool)
-- Prospectus ID#8 – Sentinel Hotel (2.4% of the pool)

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.

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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