TRTX 2019-FL3 Issuer, Ltd.: Surveillance Performance Update

DBRS, Inc. (DBRS Morningstar) confirmed its ratings on all classes of notes issued by TRTX 2019-FL3 Issuer, Ltd. with Stable trends. The rating confirmations reflect the increased credit support to the bonds as a result of successful loan repayment, as there has been collateral reduction of 60.6% since issuance. The increased credit support to the bonds serves as a mitigant to potential adverse selection in the transaction as seven loans are secured by office properties (64.0% of the current trust balance). As a result of complications initially arising from impacts of the Coronavirus Disease (COVID-19) pandemic and the ongoing challenges with leasing available space, the borrowers of these loans have generally been unable to increase occupancy and rental rates to initially projected levels, resulting in lower-than-expected cash flows. While all loans remain current, given the decline in desirability for office product across tenants, investors, and lenders alike, there is greater uncertainty regarding the borrowers’ exit strategies upon loan maturity.