Morningstar DBRS Confirms Credit Ratings on 39 Manulife/John Hancock Mortgage Loan Transactions

DBRS, Inc. (Morningstar DBRS) confirmed the credit ratings on 39 mortgage loan transactions comprising 48 loans, as discussed in greater detail below. The credit rating confirmations generally reflect the overall stable performance of each loan since the last review. All trends are Stable. All loans were made by John Hancock Life Insurance Company (the Lender), a subsidiary of Manulife Financial Corporation. All outstanding loans are reported current and paid as agreed according to the Lender.

Thirty-two transactions comprising 41 loans are secured by 24 co-operative apartment properties in New York; New Jersey; Connecticut; and Washington, D.C. The AA credit ratings on these 32 transactions reflect (1) the stability of debt payments provided by the co-operative structure of ownership, in which shareowners are highly incentivized to meet their share of the loan payments to protect their ownership interest in their co-operative; (2) the low loan-to-value (LTV) ratios; and (3) each property's strong location within a major metropolitan area.

Three of the transactions in this review, (John Hancock El Segundo California Capital Relief; 527727:11 John Hancock 1111 Pennsylvania Avenue, Washington, D.C. Capital Relief; and 527372:11 Beverly Wilshire Investment Company, LLC) are secured by office properties or ground leases underlying office properties. In the analysis of these transactions where applicable, Morningstar DBRS maintained stressed cap rates and/or updated market volatility adjustments to reflect an approach consistent with that of other Morningstar DBRS-rated single-asset/single-borrower transactions secured by office properties.

One transaction (John Hancock El Segundo California Capital Relief) is secured by an office building in El Segundo, California. The A (high) credit rating reflects (1) the expected stability of debt payments, given the strong operating history and institutional-quality sponsorship; (2) a moderate LTV ratio; and (3) the expected partial amortization that will take place over the remaining term of the loan.

One transaction (527727:11 John Hancock 1111 Pennsylvania Avenue, Washington, D.C. Capital Relief) is secured by the ground lease on a land parcel accommodating an office building at 1111 Pennsylvania Avenue in Washington, D.C. The A credit rating reflects (1) the expected stability of debt payment, given the strong operating history and institutional-quality sponsorship; (2) a moderate LTV ratio; (3) the property's strong location between the White House and the United States Capitol Building; and (4) its historic occupancy by a global law firm, ranked the 10th largest in the United States, with approximately seven years remaining on the lease term.

One transaction (527372:11 Beverly Wilshire Investment Company, LLC) is secured by a 12-story, 166,971-square-foot (sf) office property on Wilshire Boulevard in Beverly Hills, California. The A credit rating reflects (1) the expected stability of debt payments, given the strong operating history and consistent cash flow generated by the property; (2) a moderate LTV ratio; and (3) the property's convenient location in a highly trafficked area of Beverly Hills.

Two transactions (527805:51 Regent Garden Associates, LLC and Capital Relief East Side 11th and 28th Ground Lease Loan) are secured by a multifamily property and a ground lease underlying a multifamily property in San Diego and New York City, respectively. The A (high) credit ratings reflect (1) the expected stability of debt payments; (2) moderate LTV ratios; and (3) the properties' locations in well-established residential submarkets with stable demand.

One transaction (521835:11 Rainbow Arroyo Commons, LLC) is secured by the leasehold interest in The Arroyo Market Square, an 880,864 sf power center at 6780-7345 Arroyo Crossing Parkway in Las Vegas. The A (low) credit rating reflects (1) the expected stability of debt payments, given the strong operating history and consistent high occupancy of both the property and submarket; (2) a moderate LTV ratio; and (3) loan amortization that has reduced the loan balance to $49.7 million as of the March 2025 loan payment from the initial loan amount of $73.5 million.

One transaction (John Hancock Colony Cove MHC Ellenton FL) is secured by a manufactured housing community (MHCs) in Florida. The A (high) credit rating on this transaction reflects (1) the expected stability of debt payments, given the strong operating history and institutional sponsorship; (2) moderate LTV ratios; (3) the strong location of the property in well-established communities with demand for highly amenitized MHCs; and (4) the expected partial amortization that will take place over the remaining term of the loan.

The credit rating implied by the LTV Sizing Benchmarks is higher by three or more notches than the credit rating assigned to the notes backing the John Hancock Colony Cove MHC Ellenton FL transaction. The rationale for the variance is the structural features (loan or transaction) and/or provisions in other relevant methodologies that outweigh the LTV Sizing Benchmarks, as well as uncertain loan-level event risk.

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 factor(s) 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) 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 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 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.

For more information on Morningstar DBRS' policy regarding the solicitation status of credit ratings, please refer to the Credit Ratings Global Policy, which can be found in the Morningstar DBRS Understanding Ratings section of the website (https://dbrs.morningstar.com/understanding-ratings).

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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 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.