Morningstar DBRS Assigns Provisional Credit Ratings to NRTH 2024-PARK Mortgage Trust

DBRS, Inc. (Morningstar DBRS) assigned provisional credit ratings to the following classes of Commercial Mortgage Pass-Through Certificates, Series 2024-PARK (the Certificates) to be issued by NRTH 2024-PARK Mortgage Trust (the Trust):

--Class A at AAA (sf)
--Class HRR at AAA (sf)

All trends are Stable.

The NRTH 2024-PARK single-asset/single-borrower transaction is collateralized by the borrower’s fee-simple interest in NorthPark Center, a 1,917,075 million sf Class A, luxury, super-regional mall in Dallas. Built in 1965, the property is anchored by Neiman Marcus, Nordstrom, Dillard’s, Macy’s, and Eataly which all serve as collateral for the transaction. Notably, the anchor tenants have consistently been in the top 10.0% of their respective national performance metrics, with the exception of Neiman Marcus, which has been the number one or two store nationally for decades. There are over 200 tenants, inclusive of 75 market exclusive tenants catering to luxury and lifestyle brands. NorthPark Center is the top luxury destination for shoppers in the Dallas-Fort Worth Metroplex with tenants such as Gucci, Louis Vuitton, Prada, Burberry, Bottega Veneta, Balenciaga, and more. In addition to retail and restaurant offerings, NorthPark Center displays over 50 pieces of museum-grade art from 20th and 21st century acclaimed artists that are presented throughout the hallways and common areas at the property providing guests with a unique, cultural experience. NorthPark Center attracts approximately 26.0 million visitors annually.

NorthPark Center is well located within Dallas, and benefits from close proximity to the affluent suburbs of the Dallas-Fort Worth Metroplex. The property also offers excellent connectivity and accessibility via a plethora of regional thoroughfares. The collateral was 96.6% occupied as of December 1, 2023. NorthPark Center has maintained generally consistent occupancy rates in recent years, with an average annual occupancy rate of 95.6% achieved between 2015 and 2023. The collateral demonstrated extraordinarily strong comparable in-line sales of approximately $1.359 billion ($1,276 psf) in the T-12 ended November 2023. NorthPark Center also displayed impressive sales of $1.286 billion ($1,160 psf) in 2021 and $1.437 billion ($1,273 psf) in 2022, highlighting the collateral’s dominance as one of the premier shopping destinations in the Dallas-Fort Worth Metroplex, as well as the United States.

Morningstar DBRS has a positive view on the property considering the collateral’s favorable location, historically strong in-line sales, generally consistent occupancy trends, and strong sponsorship. Although brick-and-mortar retailers are facing secular headwinds and the continued proliferation of e-commerce continues to gain traction, the collateral has displayed consistent improvement in performance and impressive sales.

Morningstar DBRS’ credit rating on the Certificates addresses the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. The associated financial obligations are the related Principal Amounts and interest Distribution Amounts for the rated classes.

Morningstar DBRS’ credit rating does not address nonpayment risk associated with contractual payment obligations contemplated in the applicable transaction document(s) that are not financial obligations. For example, Prepayment Premiums.

Morningstar DBRS’ long-term credit ratings provide opinions on risk of default. Morningstar DBRS considers risk of default to be the risk that an issuer will fail to satisfy the financial obligations in accordance with the terms under which a long-term obligation has been issued. The Morningstar DBRS short-term debt rating scale provides an opinion on the risk that an issuer will not meet its short-term financial obligations in a timely manner.

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

A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at (January 23, 2024) at https://dbrs.morningstar.com/research/427030.

All credit ratings are subject to surveillance, which could result in credit ratings being upgraded, downgraded, placed under review, confirmed, or discontinued by Morningstar DBRS.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is the North American Single-Asset/Single-Borrower Ratings Methodology (October 19, 2023), https://dbrs.morningstar.com/research/422174.

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

With regard to due diligence services, Morningstar DBRS was provided with the Form ABS Due Diligence-15E (Form-15E), which contains a description of the information that a third party reviewed in conducting the due diligence services and a summary of the findings and conclusions. While due diligence services outlined in Form-15E do not constitute part of Morningstar DBRS’ methodology, Morningstar DBRS used the data file outlined in the independent accountant’s report in its analysis to determine the credit ratings referenced herein.

The credit rating was initiated at the request of the rated entity.

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

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

This is a solicited credit rating.

A provisional credit rating is not a final credit rating with respect to the above-mentioned securities and may change or be different than the final credit rating assigned or may be discontinued. The assignment of final credit ratings on the above-mentioned securities is subject to receipt by Morningstar DBRS of all data and/or information and final documentation that Morningstar DBRS deems necessary to finalize the credit ratings.

Please see the related appendix for additional information regarding the sensitivity of assumptions used in the credit rating process.

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

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

-- DBRS Morningstar North American Commercial Real Estate Property Analysis Criteria (September 22, 2023), https://dbrs.morningstar.com/research/420982
-- North American Commercial Mortgage Servicer Rankings (August 23, 2023), https://dbrs.morningstar.com/research/419592
-- Legal Criteria for U.S. Structured Finance (December 7, 2023), https://dbrs.morningstar.com/research/425081

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