DBRS Morningstar Confirms Ratings on Mortgage Loans Made to Paramount Apartments Limited

DBRS Limited (DBRS Morningstar) confirmed the ratings on the following mortgage loans made to Paramount Apartments Limited by a major Canadian financial institution as follows:

-- 3.510% Mortgage Loan due February 1, 2025 at BBB (low)
-- 3.530% Mortgage Loan due February 1, 2025 at BBB (low)

All trends are Stable.

The rating confirmations reflect the overall performance of the transaction, which remains in line with DBRS Morningstar’s expectations. The mortgage loans are secured by Paramount Apartments, a 174-unit apartment complex with ground-level commercial space in downtown Halifax. The most recent rent roll available was dated March 2022 and reported an occupancy rate of 99.4%, an improvement from the January 2021 occupancy rate of 86.2% and generally in line with pre-Coronavirus Diseases (COVID-19) pandemic levels. According to the Canada Mortgage and Housing Corporation’s October 2022 market data, the city of Halifax reported a vacancy rate of 1.0%, unchanged from October 2021. Based on the YE2021 reporting, the net operating income (NOI) reflected a 9.3% increase from the YE2020 figure and was 7.2% above the DBRS Morningstar NOI. DBRS Morningstar requested an updated rent roll and YE2022 financials; however, the request is pending as of the date of this press release.

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 (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.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The principal methodology is the North American CMBS Surveillance Methodology (March 16, 2023; https://www.dbrsmorningstar.com/research/410912).

Other methodologies referenced in this transaction are listed at the end of this press release.

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 rating was initiated at the request of the lender.

The rated entity or its related entities did participate in the rating process for this rating action.

DBRS Morningstar had access to the accounts, management, and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

This is a solicited credit rating.

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

DBRS Limited
DBRS Tower, 181 University Avenue, Suite 700
Toronto, ON M5H 3M7 Canada
Tel. +1 416 593-5577

The rating methodologies used in the analysis of this transaction can be found at: https://www.dbrsmorningstar.com/about/methodologies.

North American Single-Asset/Single-Borrower Ratings Methodology (February 23, 2023;
https://www.dbrsmorningstar.com/research/410191)

DBRS Morningstar North American Commercial Real Estate Property Analysis Criteria (September 12, 2022; https://www.dbrsmorningstar.com/research/402646)

Interest Rate Stresses for U.S. Structured Finance Transactions (August 30, 2022; https://www.dbrsmorningstar.com/research/402153)

Legal Criteria for Canadian Structured Finance (June 22, 2022; https://www.dbrsmorningstar.com/research/398729)

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