Morningstar DBRS Changes Trend on One Class of MSJP 2015-HAUL Mortgage Trust to Positive from Stable; Confirms Credit Ratings on All Classes

DBRS Inc. (Morningstar DBRS) confirmed its credit ratings on all classes of Commercial Mortgage Pass-Through Certificates issued by MSJP 2015-HAUL Mortgage Trust (the Issuer) as follows:

-- Class A at AAA (sf)
-- Class B at AAA (sf)
-- Class C at AAA (sf)
-- Class D at AAA (sf)
-- Class E at A (sf)
-- Class XA at AAA (sf)
-- Class XB at AAA (sf)

Morningstar DBRS changed the trend on Class E to Positive from Stable. All other trends are Stable.

The credit ratings are reflective of the continued deleveraging of the collateral, with the amortization of the senior debt pieces held outside the subject transaction, as well as the stable performance of the underlying properties as evidenced by the healthy debt service coverage ratio (DSCR) of 2.44 times (x) and occupancy rate of 89.9% as of the trailing 12 months (T-12) ended September 30, 2024, in line with the YE2023 figures of 2.39x and 89.3%, respectively. The whole loan is fully amortizing on a 20-year schedule wherein the nontrust companion notes will receive payments first and fully amortize over the first 10 years of the loan term followed by payments to the subject trust notes, which are scheduled to begin paying down in 2025 and will fully amortize by the scheduled September 2035 maturity date. Since the last credit rating action in April 2024, the outstanding balance for the amortizing nontrust companion notes has been reduced to $6.6 million from $17.7 million. Given the continued performance of the underlying properties, deleveraging of the nontrust companion notes, and the upcoming amortization of the trust, the positive trend on the lowest-rated class is warranted.

The subject transaction consists of a $170.0 million trust loan secured by the fee-simple interest in a portfolio of 105 self-storage properties totalling 32,519 units and about 2.7 million rentable square feet across 35 states, all owned and operated by U-Haul. The top three largest geographic concentrations by allocated loan amount are New York (14%), Texas (12%), and Pennsylvania (8%). In addition to this geographical diversity, the transaction also benefits from a strong sponsor, AMERCO, the parent company of U-Haul.

As of the February 2025 remittance report, the whole loan balance has decreased to $176.6 million from $270 million at issuance. The whole loan comprises six separate pari passu notes, two of which, A-1A and A-1B, are companion loans with issuance balances of $50 million each and were contributed to two Morningstar DBRS-rated multi-borrower transactions in JPMBB 2015-C32 and MSBAM 2015-C27. The remainder of the whole loan was contributed to the subject transaction and consists of two senior A-2A and A-2B notes in the amount of $29.5 million each as well as two subordinate B notes with a balance of $55.0 million each.

For the T-12 ended September 30, 2024, the loan reported net cash flow (NCF) of $51.6 million compared with the YE2023 NCF of $50.5 million, YE2022 NCF of $54.3 million, and the Morningstar DBRS NCF from issuance of $24.9 million. However, a significant driver of the increase in reported cash flows from the Morningstar DBRS NCF is the servicer's inclusion of reported truck and miscellaneous incomes, which were not considered in the Morningstar DBRS analysis at issuance. At the 2023 review, Morningstar DBRS derived an updated, stressed NCF of $30.3 million based on a 20.0% haircut to the normalized YE2022 NCF figure to remain consistent with the approach taken at issuance.

Given the stable performance over the last year, for this review, Morningstar DBRS maintained the value of $356.6 million based on an 8.5% cap rate on the Morningstar DBRS NCF, which implies a loan-to-value ratio (LTV) of 49.5% on the outstanding whole loan balance of $176.6 million as of the February 2025 reporting. Qualitative adjustments, including a 1.5% adjustment for cash flow volatility and a -1.5% adjustment for property quality, were applied to account for the positive trending NCF performance since issuance and the age and small number of climate-controlled units.

The Morningstar DBRS credit rating assigned to Class E is lower than the result implied by the LTV sizing benchmarks by three or more notches. Despite the continued deleveraging of the companion notes since Morningstar DBRS' last review, this variance is warranted given the decrease in occupancy rate since YE2022 and lower credit enhancement at the bottom of the stack, as well as the interest-only (IO) structure that remains for the transaction's underlying debt through 2025.

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 XA and XB 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 (February 28, 2025), https://dbrs.morningstar.com/research/448963.

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.

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, Inc.
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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 Single-Asset/Single-Borrower Ratings Methodology (February 28, 2025), https://dbrs.morningstar.com/research/448962

-- 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

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