Morningstar DBRS Assigns Provisional Credit Ratings to Legends (Kansas City, KS) SASB Pass-Through Trust Certificates, Series 2024-LEGENDS

DBRS, Inc. (Morningstar DBRS) assigned provisional credit ratings to the following classes of Commercial Mortgage Pass-Through Certificates, Series 2024-LEGENDS (the Certificates) to be issued by Legends (Kansas City, KS) SASB Pass-Through Trust (the Trust):

-- Class A at (P) AAA (sf)
-- Class B at (P) AA (low) (sf)
-- Class C at (P) A (low) (sf)
-- Class D at (P) BBB (low) (sf)
-- Class E at (P) BB (low) (sf)
-- Class G at (P) B (low) (sf)

The Legends (Kansas City, KS) SASB Pass-Through Trust Certificates, Series 2024-LEGENDS transaction is collateralized by the borrower's fee-simple interest in Legends Outlet, a 739,248-sf regional retail outlet in Kansas City. Built in 2005, the property is anchored by Dave & Buster's, H&M, T.J.Maxx, HomeGoods, and AMC Theatres, which all serve as collateral for the transaction. Legends Outlets features a variety of apparel and F&B tenants, providing a family-oriented atmosphere within the Village West retail and entertainment district. The village West retail and entertainment district features venues such as Children's Mercy Park, Kansas Speedway, Hollywood Casino, Nebraska Furniture Mart, and many more, generating more than $1 billion in sales revenue on an annual basis. Legends Outlets holds a dominant position in the market, being the only designer outlet center in Kansas, and attracts approximately 13.0 million visitors annually.

The property offers ample connectivity and accessibility via a plethora of regional thoroughfares. Legends Outlets has maintained consistent occupancy rates, achieving above 90% occupancy since the sponsor's acquisition in 2016. The collateral achieved in-line sales of $369 psf YE2023, excluding F&B tenants. Comparable in-line sales have increased 9.6% from 2021 and 5.4% from 2022, highlighting the collateral's consistent performance in the market.

According to the appraisal, there are limited shopping center competitors near the subject. The subject has an expansive trading area, because the property is the only outlet center within 175 miles of Kansas City and the largest outlet center in the state of Kansas.

The sponsor for this transaction is Walton Street Capital, LLC (Walton Street), a private equity real estate investment firm based in Chicago that sponsors equity and debt investment funds. Since its founding in 1994, Walton Street's affiliates have received total equity commitments of $12 billion and have committed to invest in more than 350 separate transactions in the U.S. and international real estate, including development and acquisition of office, lodging, retail, industrial, multifamily, senior and student housing, for-sale residential, gaming, and other assets.

Morningstar DBRS believes the loan will perform during its term, considering the collateral's dominant market position, historically consistent in-line sales, occupancy trends, and strong sponsorship. Although brick-and-mortar retailers are facing secular challenges and the proliferation of e-commerce continues to gain traction, the collateral has weathered well against this trend and posted consistent 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 Principle Distribution Amounts and Interest Distribution Amounts for the rated classes.

Morningstar DBRS' credit rating does not address non-payment risk associated with contractual payment obligations contemplated in the applicable transaction document(s) that are not financial obligations. For example, the credit does not address Yield Maintenance 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.

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

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 US dollars unless otherwise noted.

The principal methodology is North American Single-Asset/Single-Borrower Ratings Methodology (September 19, 2024), https://dbrs.morningstar.com/research/439699.

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

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

With regard to due diligence services, Morningstar DBRS was not provided with the Form ABS Due Diligence-15E (Form-15E), which typically 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.

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.

Morningstar DBRS North American Commercial Real Estate Property Analysis Criteria (September 19, 2024), https://dbrs.morningstar.com/research/439702

Legal Criteria for U.S. Structured Finance (April 15, 2024)
https://dbrs.morningstar.com/research/431205

North American Commercial Mortgage Servicer Rankings (August 23, 2024)
https://dbrs.morningstar.com/research/438283

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