DBRS Morningstar Confirms All Classes of ACAM 2019-FL1, Ltd.

DBRS, Inc. (DBRS Morningstar) confirmed its ratings on the following classes of Commercial Mortgage-Backed Notes issued by ACAM 2019-FL1, Ltd.:

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

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction, which has remained in line with DBRS Morningstar’s expectations since issuance. DBRS Morningstar has published a Surveillance Performance Update report with in-depth analysis and credit metrics for the transaction and with business plan updates on select loans. To access this report, please click on the link under Related Documents below or contact us at [email protected].

The initial collateral consisted of 21 floating-rate mortgages secured by 35 mostly transitional properties with a cut-off balance totaling $400.3 million that excluded $87.4 million of future funding commitments, as most loans were in a period of transition with plans to stabilize and improve asset value. The transaction included a 24-month reinvestment period that expired in December 2021, at which point the bonds began to amortize sequentially with loan repayment and scheduled loan amortization.

As of the June 2022 remittance, there were 16 loans in the transaction with a current trust balance of $340.7 million. Since DBRS Morningstar’s previous rating action in August 2021, four loans, totaling $80.0 million, have been repaid from the transaction. Additionally, four loans, totaling $87.1 million, were added to the Trust over the same period. According to an update from the collateral manager, a cumulative amount of $53.9 million in future funding commitments had been released to 14 individual borrowers through May 2022 to aid in business plan realization. A cumulative amount of $77.7 million allocated to 14 individual borrowers has yet to be released.

The transaction is concentrated by property type as 10 loans, totaling 54.6% of the current trust balance, are secured by office properties followed by two loans, totaling 15.8% of the current trust balance, secured by mixed-use properties. In August 2021, the transaction consisted of 10 loans, representing 55.1% of the pool, secured by office properties and two loans, representing 16.4% of the pool, secured by office properties. There are no longer any loans in the transaction secured by retail properties. The remaining properties are distributed quite evenly between urban and suburban markets with six loans, representing 50.5% of the pool, in urban markets, defined by DBRS Morningstar as markets with a DBRS Morningstar Market Rank of 6, 7, or 8. The remaining 10 properties, representing 49.5% of the pool, are in suburban markets, defined as having a DBRS Morningstar Market Rank of 3, 4, or 5.

As of the June 2022 remittance, no loans were in special servicing; however, six loans, representing 42.6% of the current pool balance, were on the servicer’s watchlist, including the pool’s only loan secured by a hotel property, James Hotel NYC (Prospectus ID#3, 11.3% of the pool). The loan is being monitored for cash flow concerns along with the upcoming loan maturity, which was recently extended for three months to August 2022. DBRS Morningstar expects the loan to remain on the servicer’s watchlist through the extended maturity date.

ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS
There were no Environmental/Social/Governance factors that had a significant or relevant effect on the credit analysis.

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/396929/dbrs-morningstar-criteria-approach-to-environmental-social-and-governance-risk-factors-in-credit-ratings.

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#22 – 95 Greene Street (12.2% of the pool)
-- Prospectus ID#3 – James Hotel NYC (11.3% of the pool)
-- Prospectus ID#4 – Valencia Corporate Center (9.0% of the pool)
-- Prospectus ID#23 – 500 West Jefferson (5.7% of the pool)
-- Prospectus ID#8 – Interchange Office Center (5.6% of the pool)

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.

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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