Press Release

DBRS Morningstar Confirms Ratings on Mortgage Loan Made to Morguard Corporation & 131 Queen Street Limited

Commercial Mortgages
May 10, 2023

DBRS Limited (DBRS Morningstar) confirmed the rating on the mortgage loan made to Morguard Corporation & 131 Queen Street Limited (the Borrower) by a major Canadian financial institution as follows:

-- 5.31% Mortgage Loan Due November 1, 2026, at AAA

The trend is Stable.

The rating confirmation reflects the overall stable performance of the transaction since DBRS Morningstar’s last review. The loan is secured by the Borrower’s leasehold interest in a mixed-use building at 131 Queen Street in Ottawa. Built in 2006, the property is a 13-storey building comprising 312,486 square feet (sf) of office space, 16,776 sf of retail space, and 36 furnished residential apartments. The subject is well located in downtown Ottawa and benefits from its close proximity to Parliament Hill, the courthouse, and public transit. The primary tenant at the subject is the Government of Canada (rated as of March 9, 2023, at AAA with a Stable trend by DBRS Morningstar), which fully occupies the office component of the property. The tenant is on a triple net lease through August 2026, two months prior to the loan maturity date.

As mentioned above, the office portion of the property is 100% occupied by a single tenant in the Government of Canada. The retail portion was 80.5% occupied while the residential portion was 69.4% occupied, as per the March 2022 rent roll. The most recent operating statement on file with DBRS Morningstar, dated December 31, 2021, showed property revenues for the year of $13.8 million, down slightly from the effective gross income of $14.2 million assumed by DBRS Morningstar when ratings were assigned in 2020. The YE2022 financial reporting package was not made available to DBRS Morningstar but given the concentrated tenancy with lease expiration dates in the future, it is unlikely there have been material year-over-year changes in cash flows.

The property is managed by Morguard Corporation (rated as of April 18, 2023, at BB (high) with a Stable trend by DBRS Morningstar). DBRS Morningstar’s rating on the loan takes into consideration the credit quality of the Government of Canada, in the form of additional amortization credit for the loan-to-value sizing benchmarks given in the direct sizing approach. As such, any change to DBRS Morningstar’s rating on the tenant during the loan term will likely have an effect on the rating of the mortgage loan.

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 (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.

All figures are in Canadian dollars unless otherwise noted.

The principal methodology is the North American CMBS Surveillance Methodology (March 16, 2023;

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:

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.

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:

North American Single-Asset/Single-Borrower Ratings Methodology (February 23, 2023;

DBRS Morningstar North American Commercial Real Estate Property Analysis Criteria (September 12, 2022;

Interest Rate Stresses for U.S. Structured Finance Transactions (August 30, 2022;

Legal Criteria for Canadian Structured Finance (June 22, 2022;

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