Morningstar DBRS Confirms Credit Ratings on All Classes of BBCMS Trust 2015-SRCH

DBRS Limited (Morningstar DBRS) confirmed its credit ratings on all classes of the Commercial Mortgage Pass-Through Certificates, Series 2015-SRCH issued by BBCMS Trust 2015-SRCH as follows:

-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class X-A at AAA (sf)
-- Class B at AA (sf)
-- Class C at A (sf)
-- Class X-B at BBB (high) (sf)
-- Class D at BBB (sf)
-- Class E at BBB (low) (sf)

All trends are Stable.

The credit rating confirmations and Stable trends reflect that the performance of the underlying collateral remains in line with Morningstar DBRS' expectations since the last credit rating action in April 2024. The loan is secured by Moffett Place, a three-building, 943,056-square foot, Class A office complex in Sunnyvale, California. As per the rent roll dated June 2024, the subject is 100% occupied by an investment-grade-rated tenant, Google LLC (Google), which has a lease co-terminous with the loan's initial maturity through August 2027 with two seven-year renewal options and no termination options.

The transaction is collateralized by the $430.0 million senior portion of $650.0 million in total debt, which includes a $71.0 million junior loan and $149.0 million in mezzanine debt, both held outside the trust. The fixed-rate loan was originally structured with a partial interest-only (IO) period that ended in September 2020, and it is now amortizing on a 30-year schedule through its maturity date in August 2027. As of the January 2025 remittance, the outstanding balance has been paid down by 7.9% since issuance. The loan is sponsored by the Jay Paul Company, a privately held San Francisco-based real estate investor.

Google has a large presence in the immediate area with Google Technology Corners less than one mile away and the Googleplex headquarters in Mountain View, California, within five miles. The loan is structured with a cash flow sweep in the event of certain triggers, including Google's failure to provide notice of its intent to renew two years prior to lease expiration. According to the most recent financial statement for the trailing six months ended June 30, 2024, the debt service coverage ratio (DSCR) was reported at 1.72 times (x) compared with the YE2023 DSCR of 1.71x and YE2022 DSCR of 1.69x.

The April 2024 Morningstar DBRS credit rating analysis and action included an updated collateral valuation. For more information regarding the approach and analysis conducted, please refer to the press release titled "Morningstar DBRS Takes Rating Actions on North American Single-Asset/Single-Borrower Transactions Backed by Office Properties," published on April 15, 2024. Morningstar DBRS maintained the valuation approach from the April 2024 review, which was based on a capitalization rate of 7.25% applied to the Morningstar DBRS net cash flow of $38.8 million. For purposes of this credit rating action, Morningstar DBRS updated the current balance as per the January 2025 remittance to reflect the loan amortization. Morningstar DBRS also maintained positive qualitative adjustments to the loan-to-value ratio sizing benchmarks totalling 7.0% to reflect the subject property's quality and generally long-term in-place tenancy of the investment-grade tenant. The Morningstar DBRS concluded value of $535.5 million represents a 37.4 % variance from the issuance appraised value of $855.0 million.

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.

Classes X-A and X-B are IO certificates that reference 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.

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 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. (July 17, 2023)

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