Morningstar DBRS Finalizes Provisional Credit Ratings on FMBT Trust 2024-FBLU

DBRS, Inc. (Morningstar DBRS) finalized its provisional credit ratings on the following classes of Commercial Mortgage Pass-Through Certificates, Series 2024-FBLU (the Certificates) issued by FMBT Trust 2024-FBLU:

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

All trends are Stable.

The FBMT 2024-FBLU transaction is secured by the fee-simple and leasehold interests of five special purpose entities (collectively, the "Borrowers) in, among other things, a portion of the Fontainebleau Miami Beach Resort, a 1,594-key, full-service resort. Of the 1,594 keys, 846 keys are hotel guest rooms located in two towers, the Chateau and the Versailles. The remaining keys for the subject, located in the Trésor and Sorrento towers, are condominiums that are third-party owned but participate in the hotel revenue-sharing program further detailed in the presale report on this transaction. The historical participation rate for the condominium program has averaged 84.9% since 2011. The 15.5-acre resort is opportunely situated in the mid-beach area of Miami Beach, Florida. The resort provides a host of amenities for hotel guests and non-guests alike, which Morningstar DBRS views positively, in addition to its strong historical performance, property quality, and experienced and dedicated sponsor.

Since 2005, the property has undergone approximately $1.1 billion in capital improvements including a comprehensive renovation of the entire property in 2008 for a total cost of $571.8 million. Since 2019 the property has spent approximately $232 million on capital improvements which includes the development costs for the convention center. Additionally, three of the four towers have had their guest rooms renovated over the last five years with the remaining tower, the Versailles, scheduled to undergo a $15.4 million renovation beginning in 2025, with $6.3 million spent in 2024 for materials. In total, approximately $38.0 million in planned capital improvements are scheduled to be completed between 2025 and 2027.

The borrower sponsor for this transaction is Jeffrey Soffer, who runs Fontainebleau Development, a real estate development and hospitality group with a portfolio based on the premise of designing, owning, marketing, and operating its assets throughout the entire development of each project. The portfolio of hospitality assets includes the JW Turnberry Marriott, Hilton Nashville Downtown, and the Fontainebleau Las Vegas. Fontainebleau Development is led by Jeffrey Soffer, the loan guarantor, chairman, and chief executive officer, who has been investing in real estate for over 25 years, helping to expand the company from a regional leader to a nationally recognized organization. The resort is self-managed by the borrower.

Morningstar DBRS' credit ratings on the Certificates address the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. The associated financial obligations are the related Principal Distribution Amounts and Interest Distribution Amounts for the rated classes.

Morningstar DBRS' credit ratings do not address nonpayment risk associated with contractual payment obligations contemplated in the applicable transaction document(s) that are not financial obligations. For example, the credit ratings do not address Spread 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. 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.

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 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.

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 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.

This is a solicited credit rating.

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.

-- Legal Criteria for U.S. Structured Finance (December 3, 2024), https://dbrs.morningstar.com/research/444064
-- North American Commercial Mortgage Servicer Rankings (August 23, 2024), https://dbrs.morningstar.com/research/438283
-- Morningstar DBRS North American Commercial Real Estate Property Analysis Criteria (December 3, 2024), https://dbrs.morningstar.com/research/439702

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