Morningstar DBRS Confirms Credit Ratings on UBS-Citigroup Commercial Mortgage Trust, Series 2011-C1

DBRS, Inc. (Morningstar DBRS) confirmed its credit ratings on the Commercial Mortgage Pass-Through Certificates Series 2011-C1 issued by UBS-Citigroup Commercial Mortgage Trust, Series 2011-C1 as follows:

-- Class E at C (sf)
-- Class F at C (sf)
-- Class G at C (sf)

All classes have credit ratings that do not typically carry trends in commercial mortgage-backed securities (CMBS) credit ratings.

The credit ratings are reflective of continued unpaid interest to all remaining classes. The sole remaining loan in the transaction, Poughkeepsie Galleria (Prospectus ID#2), is secured by the borrower's fee-simple interest in a 691,325-square foot (sf) portion of a 1,206,057-sf regional mall in Poughkeepsie, New York. The loan was modified in June 2023, terms of which included an extension of the maturity date to January 2025 with two one-year extension options in addition to the loan remaining in cash management. The interest rate was also reduced, which has contributed to ongoing interest shortfalls. Classes E, F, and G have been shorted interest for a year or more as of the November 2024 remittance.

The subject is anchored by Target and Macy's, neither of which are collateral for the loan. The largest collateral tenants are Regal Cinemas and Dick's Sporting Goods. Although performance has continued to stabilize since the loan was modified, the most recent appraised value of $68.0 million, dated March 2023, represents a 71.3% decline from the issuance appraised value of $237 million. The mall is owned and operated by Pyramid Management Group, which has faced challenges meeting debt payments and maturity dates on other encumbered assets within its portfolio. Although the subject loan is not currently in special servicing and continues to perform in accordance with the modification terms, Morningstar DBRS' analysis included a liquidation scenario to determine recoverability of the bonds. Based on a stress to the most recent appraised value, all remaining classes may be exposed to losses, further supporting the credit ratings.

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); 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 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 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.

Morningstar DBRS notes that a sensitivity analysis was not performed for this review as the transaction is in wind down, with only one loan remaining. In such cases, Morningstar DBRS credit ratings are typically based on a recoverability analysis.

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.

-- North American CMBS Multi-Borrower Rating Methodology (March 1, 2024);
https://dbrs.morningstar.com/research/428797
-- Morningstar DBRS North American Commercial Real Estate Property Analysis Criteria (September 19, 2024); https://dbrs.morningstar.com/research/439702
-- North American Commercial Mortgage Servicer Rankings (August 23, 2024);
https://dbrs.morningstar.com/research/438283
-- Legal Criteria for U.S. Structured Finance (October 28, 2024);
https://dbrs.morningstar.com/research/441840

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