DBRS Morningstar Confirms Ratings on Four Single-Asset/Single-Borrower Transactions Issued in 2021

DBRS, Inc. (DBRS Morningstar) conducted its surveillance review of 30 classes of Commercial Mortgage Pass-Through Certificates from four single-asset/single-borrower commercial mortgage-backed security (CMBS) transactions. DBRS Morningstar confirmed its ratings on all 30 classes. All four transactions were closed in November 2021 and, given their recent vintage, there is limited updated financial reporting. The rating confirmations reflect the overall stable performance, based on the information made available since issuance, and all trends are Stable.

The four transactions confirmed by DBRS Morningstar are AOA 2021-1177 Mortgage Trust (AOA 2021-1177), BX 2021-21M Mortgage Trust (BX 2021-21M), BX Trust 2021-BXMF (BX 2021-BXMF), and J.P. Morgan Chase Commercial Mortgage Securities Trust 2021-NYAH (JPMCC 2021-NYAH).

AOA 2021-1177 is secured by the fee simple interest in 1177 Avenue of the Americas, a 47-story 1.0 million square foot office tower located between 45th and 46th Streets on 6th Avenue. It is a high-quality asset in one of Manhattan’s high-rise office corridors with good access to transit. The rent roll is granular, consisting mainly of law firms, banks, and other financial services firms. The largest tenant, Kramer Levin Naftalis & Frankel, occupies 27.0% of the net rentable area (NRA) on a lease that expires in 2035. It maintains its headquarters at the property and has been in occupancy since 2005. No other tenant occupies more than 8.5% of the NRA. As of June 2022, the property was 91.0% occupied, up from 87.0% at issuance. There is rollover concentration in 2024 with five tenant leases, representing 14.4% of gross rents, scheduled to expire.

BX 2021-21M is secured by the fee-simple interest in 21 Class A and B multifamily properties located across seven states. The weighted-average year built for the properties is 2002. At issuance, DBRS Morningstar toured four of the underlying properties and found them to be of Above Average quality. The portfolio’s properties are considered to be in strong, high-growth markets with favorable multifamily demand trends. As of June 2022, the portfolio occupancy was 93.0%, relatively in line with the issuance occupancy of 94.9%. Two of the underlying properties, representing 13.8% of the allocated loan balance, are in Sarasota, Florida, near an area recently struck by Hurricane Ian. The loan agreement requires the borrower to insure the mortgaged properties and DBRS Morningstar’s issuance analysis included a review of insurance coverage. DBRS Morningstar will continue to review servicer reporting to determine if the hurricane has affected either property.

BX 2021-BXMF is secured by the fee-simple interest in 13 Class A multifamily properties located across seven states. The weighted-average year built for the properties is 2012, with only two of the underlying assets built before 2004. The portfolio includes one student housing property. The properties are in predominantly suburban, high-growth markets. At issuance, DBRS Morningstar toured four collateral properties and found the property quality to be Average +. DBRS Morningstar did not receive updated financial reporting for this review but, based on property trends noted at issuance and the underlying market fundamentals, expects overall performance to be stable to improved. Four of the underlying properties are in Florida, however, they are in areas that experienced minimal damage from Hurricane Ian.

JPMCC 2021-NYAH is secured by the fee-simple interest in 11 multifamily portfolios comprising 31 properties across the Bronx, Brooklyn, Queens, and Upper Manhattan boroughs of New York. The properties are generally older, however, the sponsor has invested heavily in capital improvements since its acquisition of the properties, with unit renovations in progress at the time of issuance. Approximately 86.9% of the collateral units are affordable housing, which DBRS Morningstar views as favorable because of the enhanced cash flow stability. DBRS Morningstar did not receive updated financial reporting for this review but, based on the nature of the collateral, the metropolitan New York City locations, and underlying market fundamentals, expects overall performance to be stable to improved.

ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS
There were no Environmental/ Social/Governance (ESG) 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 (May 17, 2022).

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 these transactions.

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 the North American CMBS Surveillance Methodology (October 3, 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 entities or their 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].

DBRS, Inc.
22 West Washington Street
Chicago, IL 60602 USA
Tel. +1 312 332-3429