Morningstar DBRS Downgrades Credit Ratings on Five Classes of Benchmark 2020-IG2 Mortgage Trust, Changes Trends on Five Classes

On April 9, 2025, Morningstar DBRS updated this press release to clarify the projected loss to the trust, relative to the whole loan amount, with respect to the liquidation of the 255 Bush loan. This change is not material to the analysis or credit ratings rationale but is provided for informational purposes.

DBRS Limited (Morningstar DBRS) downgraded its credit ratings on five classes of Commercial Mortgage Pass-Through Certificates, Series 2020-IG2 issued by Benchmark 2020-IG2 Mortgage Trust as follows:

-- Class A-M to A (high) (sf) from AAA (sf)
-- Class X-A to AA (low) (sf) from AAA (sf)
-- Class B to BB (sf) from A (sf)
-- Class C to CCC (sf) from BBB (sf)
-- Class D to C (sf) from B (high) (sf)

In addition, Morningstar DBRS confirmed the following credit ratings:

-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class A-3 at AAA (sf)
-- Class UBR-B at A (sf)
-- Class UBR-C at BBB (low) (sf)
-- Class UBR-D at BB (low) (sf)

Morningstar DBRS changed the trends on Classes A-M and B to Stable from Negative and the trends on Classes UBR-B, UBR-C, and UBR-D to Negative from Stable. The trend changes on Classes UBR-B, UBR-C, and UBR-D reflect the generally increased risks surrounding the near-term maturity for a San Francisco office property in the current lending environment, despite a generally strong story with the collateral property benefiting from a long-term lease to a single tenant. Further information on the trend rationale for those three classes is below. Classes C and D no longer carry trends given the CCC (sf) or lower credit ratings, which typically do not carry trends in commercial mortgage-backed securities (CMBS) credit ratings. The trends on all remaining classes are Stable.

The credit rating downgrades reflect Morningstar DBRS' increased loss expectations for the 225 Bush loan (Prospectus ID#11; 4.7% of the pool), which transferred to special servicing since the last credit rating action. While the property has yet to be reappraised, Morningstar DBRS expects that the as-is value has plummeted since issuance, given the sustained deterioration in property performance. Morningstar DBRS liquidated the loan in the analysis for this review (as further described below), resulting in liquidated losses that would erode more than 82.0% of the Class D certificate balance, which significantly reduces the credit support for Class C, supporting the credit rating downgrades to C (sf) and CCC (sf), respectively. The subject transaction has a top-heavy structure, and the projected liquidation goes through the first-loss classes and erodes support for the middle of the capital stack, a factor that provided support for the credit rating downgrade for Class B. In addition, all loans in the pool are collateralized by office or mixed-use properties with office components, with select loans exhibiting performance declines from issuance and/or elevated rollover risk. As such, Morningstar DBRS maintains a conservative outlook and maintained stressed scenarios to reflect these increased credit risks, with the resulting sizing results further supporting the credit rating downgrades for Classes B and A-M. Morningstar DBRS changed the trends on those classes to Stable from Negative as the scenarios considered with this review were relatively conservative, with performance expected to remain generally stable through the near term.

The credit rating confirmations and Stable trends on the top three classes reflect the transaction's overall stable performance since Morningstar DBRS' prior credit rating action in April 2024. The 181 West Madison loan (Prospectus ID#12; 2.2% of the pool) that was in special servicing at the time of that review has since been returned to the master servicer, and the pool continues to report overall healthy performance metrics, with a weighted-average debt service coverage ratio (DSCR) of 2.85 times (x) per the most recent financials. Additionally, a majority of the loans benefit from subordinate debt held outside the trust, which contributes to relatively low loan-to-value ratios (LTVs) on the senior debt held in the subject transaction. As of the January 2025 remittance, all original 11 interest-only (IO) loans remained in the pool, with no loan prepayments or amortization since issuance. There are two specially serviced loans (12.6% of the pool), including 225 Bush and Stonemont Net Lease Portfolio (Prospectus ID#5; 8.8% of the pool), which transferred the current month for maturity default. Three loans (39.0% of the pool) are being monitored on the servicer's watchlist for upcoming maturity, declining performance, and/or informational reasons. Given the pool's significant exposure to office properties, Morningstar DBRS has a conservative outlook and maintained elevated adjustments to the individual LTV sizing benchmarks, where appropriate, to reflect increased credit risks.

Classes UBR-B, UBR-C, and UBR-D are loan-specific certificates that are collateralized by two subordinate companion notes in an aggregate amount of $155 million on the Chase Center Tower I/II loan (Prospectus IDs #1 and #2; 15.8% of the pool), the largest loans in the pool, secured by two LEED Gold-certified Class A office buildings in San Francisco's Mission Bay district. The buildings are part of the larger Chase Center/Golden State Warriors complex and are fully leased to Uber Technologies, Inc. (Uber) through September and October 2039. The sponsor is a joint venture between GSW Sports LLC (45%), Uber (45%), and Alexandria Real Estate Equities, Inc. (Alexandria; 10%), with Uber investing more than $158.0 million in equity to build its space across the two buildings. Morningstar DBRS notes that Uber leases a total of four buildings at this complex, and in October 2023, CoStar reported that OpenAI took occupancy on a sublease at the two noncollateral buildings. Morningstar DBRS has confirmed there are no subleases in place at the collateral buildings. Morningstar DBRS also notes that the upcoming maturity dates in March 2025 mean the sponsor is navigating a tighter lending environment for office and a rise in interest rates over the past few years. Morningstar DBRS believes the sponsor remains committed to the property, as supported by a July 2024 article posted by Crain's Business Journal, which noted that Alexandria has publicly expressed its interest in contributing additional equity into the joint venture.

The loan-specific certificates are an asset of the issuing entity but are not being pooled with the other mortgage loans and are only entitled to payments of interest and principal from the subordinate companion notes. Given the loan's upcoming maturity, Morningstar DBRS changed the trends on those certificates to Negative from Stable to reflect Morningstar DBRS' expectation that there could be some volatility as part of the refinance process given the collateral's location, particularly given the higher LTV when including the subordinate debt that backs these certificates. Morningstar DBRS notes that the Morningstar DBRS value of $481.7 million, derived in 2024, yielded low to moderate implied LTVs ranging from 64.0% and 89.0% on the total senior debt of $270.0 million and the combined debt figure of $425.0 million that includes the subordinate debt in the subject transaction, respectively. Uber was assigned investment-grade credit ratings by Fitch Ratings and S&P Global Ratings as of August 2024. Should Uber meet the requirements for long-term credit tenant treatment as outlined in the "Morningstar DBRS North American Commercial Real Estate Property Analysis Criteria" and if an updated Morningstar DBRS value were derived, it would likely be significantly above the 2024 figure.

The 225 Bush loan is secured by a mixed-use Class A office/retail property in San Francisco's financial district. The loan transferred to special servicing in November 2024 for maturity default and most recently reported an annualized net cash flow (NCF) of $7.5 million (reflecting a DSCR of 1.09x for the A Note; 0.64x for the whole loan) for the trailing nine-month period ended September 30, 2024. In comparison, the NCF at issuance was $26.2 million. The property's occupancy rate dropped to 43.8% per the July 2024 rent roll from 97.8% at issuance, following the departure of several tenants since issuance, including the former largest tenant, Twitch Interactive (formerly 14.5% of the net rentable area). While the loan's workout strategy remains unconfirmed as of January 2025, Morningstar DBRS considered a liquidation scenario for the loan given the significant performance deterioration and maturity default. The liquidation scenario considered a value of $117.8 million, based on an 80% haircut to the issuance appraised value, resulting in a loss severity of approximately 46.5% on the $203.6 million senior debt portion of the $350.0 million whole loan balance. Morningstar DBRS' liquidation scenario also includes consideration for the outstanding fees, advances, and future projected costs to the trust.

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.

Class X-A is an IO certificate that references 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 (December 13, 2024) https://dbrs.morningstar.com/research/444617.

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 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.

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

The conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. Morningstar DBRS' outlooks and credit ratings are monitored.

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 (December 13, 2024)
https://dbrs.morningstar.com/research/444616
-- North American Single-Asset/Single-Borrower Ratings Methodology (December 13, 2024)
https://dbrs.morningstar.com/research/444612
-- 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 (December 3, 2024)
https://dbrs.morningstar.com/research/444064
-- North American Commercial Mortgage Servicer Rankings (August 23, 2024)
https://dbrs.morningstar.com/research/438283

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.