Morningstar DBRS Confirms All Credit Ratings on BANK 2021-BNK32

DBRS Limited (Morningstar DBRS) confirmed its credit ratings on all classes of Commercial Mortgage Pass Through Certificates, Series 2021-BNK32 issued by BANK 2021-BNK32 as follows:

-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class A-SB at AAA (sf)
-- Class A-3 at AAA (sf)
-- Class A-4 at AAA (sf)
-- Class A-5 at AAA (sf)
-- Class A-S at AAA (sf)
-- Class B at AAA (sf)
-- Class C at AA (high) (sf)
-- Class D at A (high) (sf)
-- Class E at A (low) (sf)
-- Class F at BB (high) (sf)
-- Class G at BB (high) (sf)
-- Class X-A at AAA (sf)
-- Class X-B at AAA (sf)
-- Class X-D at A (sf)
-- Class X-F at BBB (low) (sf)
-- Class X-G at BBB (low) (sf)
-- Class A-4-1 at AAA (sf)
-- Class A-4-2 at AAA (sf)
-- Class A-4-X1 at AAA (sf)
-- Class A-4-X2 at AAA (sf)
-- Class A-5-1 at AAA (sf)
-- Class A-5-2 at AAA (sf)
-- Class A-5-X1 at AAA (sf)
-- Class A-5-X2 at AAA (sf)
-- Class A-S-1 at AAA (sf)
-- Class A-S-2 at AAA (sf)
-- Class A-S-X1 at AAA (sf)
-- Class A-S-X2 at AAA (sf)
-- Class B-1 at AAA (sf)
-- Class B-2 at AAA (sf)
-- Class B-X1 at AAA (sf)
-- Class B-X2 at AAA (sf)
-- Class C-1 at AA (high) (sf)
-- Class C-2 at AA (high) (sf)
-- Class C-X1 at AA (high) (sf)
-- Class C-X2 at AA (high) (sf)

All trends are Stable.

The credit rating confirmations and Stable trends reflect the transaction's overall stable performance, which remains in line with Morningstar DBRS' expectations at issuance. Overall, the pool continues to exhibit healthy credit metrics, as evidenced by the strong weighted-average (WA) debt service coverage ratio (DSCR) of 3.00 times (x) and the WA debt yield of 11.5% based on the most recent financial reporting available.

The transaction consists of 64 loans secured by 106 properties with a current trust balance of $899.5 million, representing a minimal collateral reduction of 0.6% since issuance, per the August 2024 remittance report. Amortization will be limited through the deal's life as 38 loans, representing 79.0% of the pool balance, are interest only (IO) for their full term. By property type, the pool is most concentrated by loans backed by office and retail properties, which represent 25.6% and 20.9% of the pool, respectively. Six loans, representing 7.2% of the pool, are on the servicer's watchlist, with only one loan, 111 Fourth Avenue (Prospectus ID#15, 1.6% of the pool), being monitored for low cash flow while the other five loans are being monitored for various noncredit issues, including unsubmitted financial statements and outstanding deferred maintenance. There is one loan, Blossom Gardens Apartments, Inc. (Prospectus ID#28, 0.8% of the pool), in special servicing.

Although the pool has a notable concentration of loans secured by office properties, these loans are generally performing in line with issuance expectations, reporting a WA DSCR of 3.74x and a WA occupancy rate of 93.8%. The pool's office exposure is concentrated in four of the top 10 loans, which represent 23.8% of the pool. The largest of these is Pathline Park 9 & 10 (Prospectus ID#1, 10.0% of the pool), which is secured by an office building in Sunnyvale, California. The property is 100.0% occupied by Proofpoint, Inc. on a lease through 2031 with no termination options.

The second-largest office loan, 605 Third Avenue (Prospectus ID#4, 7.9% of the pool), is secured by a Class A office property in Manhattan's Grand Central submarket. The property continues to report stable occupancy, most recently at 98.0% as of March 2024, with a YE2023 net cash flow (NCF) of $26.9 million (DSCR of 3.86x) in comparison with the Morningstar DBRS NCF of $21.5 million derived at issuance. The two largest tenants include Univision (18.9% of net rentable area (NRA), lease expires December 2028) and United Nations Population Fund (12.7% of NRA, lease expires December 2025). At issuance, Morningstar DBRS assigned an investment-grade shadow rating to the loan given its low A note loan-to-value ratio (LTV) of 33.7%, stable tenancy, and below-market rents. With this review, Morningstar DBRS confirms that the loan's performance remains consistent with the investment-grade shadow rating.

In addition to 605 Third Avenue, Morningstar DBRS assigned an investment-grade shadow rating to the 530 Seventh Avenue Fee loan (Prospectus ID#5, 6.1% of the pool). With this review, Morningstar DBRS confirms that the loan's performance remains consistent with investment-grade characteristics based on the loan's low A note LTV of 39.0% and the stability of cash flow provided by the long-term ground lease, which expires nearly 20 years beyond the loan's maturity.

Morningstar DBRS' credit ratings on the applicable classes address the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. Where applicable, a description of these financial obligations can be found in the transactions' respective press releases at issuance.

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 factors 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 Factors in Credit Ratings (August 13, 2024) at https://dbrs.morningstar.com/research/437781.

Classes X-A, X-B, X-D, X-F, and X-G are IO certificates that reference a single rated tranche or multiple rated tranches. The IO rating mirrors the lowest-rated applicable reference obligation tranche adjusted upward by one notch if senior in the waterfall.

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 North American CMBS Surveillance Methodology (March 1, 2024), https://dbrs.morningstar.com/research/428798.

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

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 info-DBRS@morningstar.com.

The credit ratings were initiated at the request of the rated entity.

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

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

These are solicited credit ratings.

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

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

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

-- North American CMBS Multi-Borrower Rating Methodology (March 1, 2024)/North American CMBS Insight Model version 1.2.0.0, https://dbrs.morningstar.com/research/428797
-- Rating North American CMBS Interest-Only Certificates (June 28, 2024), https://dbrs.morningstar.com/research/435294
-- Morningstar DBRS North American Commercial Real Estate Property Analysis Criteria (June 28, 2024), https://dbrs.morningstar.com/research/435293
-- North American Commercial Mortgage Servicer Rankings (August 23, 2024), https://dbrs.morningstar.com/research/438283
-- Legal Criteria for U.S. Structured Finance (April 15, 2024), https://dbrs.morningstar.com/research/431205

A description of how Morningstar DBRS analyzes structured finance transactions and how the methodologies are collectively applied can be found at: https://dbrs.morningstar.com/research/417279.

For more information on this credit or on this industry, visit https://dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.