DBRS Morningstar Confirms All Ratings on LIFE 2021-BMR Mortgage Trust

DBRS Limited (DBRS Morningstar) confirmed its ratings on the following classes of Commercial Mortgage Pass-Through Certificates, Series 2021-BMR issued by LIFE 2021-BMR Mortgage Trust:

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

All trends are Stable.

The underlying loan for this transaction is secured by a portfolio of 17 properties totaling approximately 2.4 million square feet (sf) of Class A office and laboratory space. The collateral is well located in the life sciences hubs of Cambridge, Massachusetts; San Diego; and San Francisco. The whole loan of $2.01 billion is interest only throughout the fully extended five-year loan term. The loan has a partial pro rata structure that allows for paydowns on the first 30% of the principal balance, followed by a sequential pay structure thereafter. The sponsor is BioMed Realty, a fully integrated real estate investment trust founded in 2004 that merged with Blackstone Group in 2016.

According to the February 2022 remittance, two small properties, totaling 5.3% of net rentable area (124,053 sf), have been released from the portfolio, resulting in nominal collateral reduction of 1.7% since issuance. The current trust balance stands at $1.98 billion. At issuance, the portfolio was approximately 97.1% occupied by 43 unique tenants, with a debt service coverage ratio of 3.79 times. The trailing 12 months ended September 30, 2021, financials indicate a marginal increase in net cash flow (NCF) and occupancy of 1.8% and 98.0%, respectively.

DBRS Morningstar expects performance to remain stable given the granularity of the rent roll, institutional quality tenancy, desirable location of the assets in the most prominent educational and research hubs, and strong historical performance. The portfolio had a weighted average lease term of 6.5 years at issuance, 1.5 years beyond the fully extended loan term. In addition, DBRS Morningstar is optimistic that rents in the collateral’s markets will continue to rise as laboratory space in the life sciences and biotechnology industries becomes more expensive and companies continue to congregate around established universities, research centers, and hospitals, most often in dense urban areas.

The DBRS Morningstar NCF derived at issuance was not adjusted for this review, and qualitative adjustments remain unchanged. Properties released to date formerly accounted for 2.3% of NCF; therefore, no material impact on consolidated financial performance is expected.

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.

DBRS Morningstar provides updated analysis and in-depth commentary in the DBRS Viewpoint platform for this transaction.

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 4, 2022), 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.

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

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