DBRS Morningstar Confirms All Classes of MSJP 2015-HAUL Mortgage Trust

DBRS, Inc. (DBRS Morningstar) confirmed all classes of the Commercial Mortgage Pass-Through Certificates issued by MSJP 2015-HAUL Mortgage Trust (the Issuer) as follows:

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

All trends are Stable.

The rating confirmations reflect the continued stable performance of the transaction driven by ongoing demand for self-storage, the geographic diversity of the underlying portfolio of assets, and the amortization of the whole loan, which totals 22.5% since issuance. DBRS Morningstar previously considered the portfolio’s improving performance and overall deleveraging in its upgrade of three classes of this transaction in June 2021. (For additional information on those ratings, please see the press release dated June 1, 2021.)

The subject transaction consists of a $170.0 million trust loan secured by the fee-simple interest in a multistate portfolio of 105 self-storage properties totaling 32,519 units and 2.7 million rentable square feet. Each property is owned and operated under the U-Haul brand, ranging in size from 89 units to 958 units. The properties are situated across 35 states and were originally constructed between 1902 and 2003.

According to the April 2022 remittance, the whole mortgage loan had a total balance of $209.3 million consisting of six separate notes: A-1A, A-1B, A-2A, A-2B, A-3A, and A-3B. The A-1A and A-1B notes, which totaled $39.4 million as of April 2022, are companion loans and were contributed to the JPMBB 2015-C32 and MSBAM 2015-C27 transactions. The whole loan has a 20-year term and amortizes on a 20-year schedule, wherein the principal is first applied to the nontrust companion notes before being applied to the trust notes. The A-1A, A-1B, A-2A, and A2B notes are pari passu; however, the A-3A and A-3B notes are subordinate. In Year 11 of the loan term, the trust notes will begin to amortize. This loan is sponsored by AMERCO, the parent company of U-Haul, which is considered to be a strong sponsor, given its extensive experience in the self-storage industry and ample financial means. There is no limit on the guaranty provided by AMERCO.

The reported Q3 2021 amortizing debt service coverage ratio was 2.46 times, representing a 32.7% increase in annualized net cash flow compared with YE2020. This cash flow increase is attributable to an increase in occupancy to 94.5%, up from 88.1% at YE2020 and 84.2% at YE2019, but in line with 92.6% at issuance. Since issuance, the portfolio has been reporting significantly higher Other Income compared with issuance figures. DBRS Morningstar believes this is due to truck rental income and miscellaneous income being included in the total reported revenue for the portfolio, neither of which were considered in DBRS Morningstar’s analysis at issuance. DBRS Morningstar expects stable to improved cash flow performance through the loan term, given the growth in rental rates, market locations for the underlying properties, and continued favorable outlook for the self-storage sector.

ESG CONSIDERATIONS
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 and X-B 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 this transaction.

The DBRS Viewpoint platform provides additional information on this transaction and underlying loan 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.

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 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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