Morningstar DBRS Confirms All Credit Ratings of Ready Capital Mortgage Trust 2018-4

DBRS, Inc. (Morningstar DBRS) confirmed all credit ratings on the classes of Ready Capital Mortgage Trust 2018-4 Commercial Mortgage Pass-Through Certificates issued by Ready Capital Mortgage Trust 2018-4 as follows:

-- Class A at AAA (sf)
-- Class B at AAA (sf)
-- Class C at AAA (sf)
-- Class IO-A at AAA (sf)
-- Class IO-B/C at AAA (sf)
-- Class D at A (sf)
-- Class E at BBB (sf)
-- Class F at BB (low) (sf)
-- Class G at B (low) (sf)

All trends are Stable.

The credit rating confirmations reflect the overall stable performance of the transaction.

As of the November 2024 remittance, 22 of the original 50 loans remain in the pool. The initial pool balance of $164.96 million has been reduced by 63.2%, to $60.6 million, which includes $1.42 million of losses from loan liquidations. Loans secured by retail properties represent the greatest property-type concentration, accounting for 35.5% of the current pool balance, followed by multifamily properties at 18.9%. The largest geographic concentration is North Carolina, accounting for 20.5% of the balance, followed by Georgia at 10.8%.

Ten loans, representing 41.3% of the pool balance, are on the servicer's watchlist, and there are no loans in special servicing. The loans on the servicer's watchlist have been flagged for a variety of reasons, including below breakeven debt service coverage ratios (DSCRs), declines in property occupancy rates, and deferred maintenance issues. The largest loan on the servicer's watchlist, The Shops at Northgate (Prospectus ID#5, 8.8% of the current trust balance), is secured by a retail property in Durham, North Carolina. The loan has been on the servicer's watchlist since September 2023 for a low DSCR as a result of a decline in occupancy. While the loan remains current, the borrower has been unsuccessful in increasing the occupancy rate at the subject, which was reported at 64.0% as of the June 2024 rent roll. The figure is unchanged from the occupancy rate as reported in the October 2023 rent roll. The property has been negatively affected by the closure of the adjacent Northgate Mall, which historically helped drive traffic to the subject property. Vacant spaces at the subject range in size from 1,245 square feet (sf) to 10,153 sf. The largest tenant, Sky Zone (27.2% of the NRA), executed an early five-year lease extension in 2023 with a lease expiration date in October 2029. The lease of the second-largest tenant, Planet Fitness (21.7% of the NRA), does not expire until July 2027. According to the trailing six month's financials ended June 30, 2024, property cash flow yielded a DSCR of 0.88x, a decline from the YE2023 figure of 0.99x. Given the ongoing leasing challenges at the property and prolonged decline in cash flow, Morningstar DBRS applied an increased Probability of Default adjustment to the loan, which resulted in an increased loan expected loss. The loan expected loss is approximately two times greater than the weighted-average expected loss for the pool.

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 credit 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 IO-A and IO-B/C are interest-only (IO) certificates that reference a single rated tranche or multiple rated tranches. The IO credit 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 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, Inc.
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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
-- 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 (December 3, 2024), https://dbrs.morningstar.com/research/444064
-- Rating North American CMBS Interest-Only Certificates (June 28, 2024), https://dbrs.morningstar.com/research/435294

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/410863.

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