Morningstar DBRS Confirms All Credit Ratings on BX Trust 2021-VIEW

DBRS, Inc. (Morningstar DBRS) confirmed its credit ratings on all classes of Commercial Mortgage Pass-Through Certificates, Series 2021-VIEW issued by BX Trust 2021-VIEW as follows:

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

All trends are Stable.

The credit rating confirmations and Stable trends reflect the collateral property's overall stable to improving performance since issuance. Although occupancy declines in 2021 and 2022 drove in-place cash flows below the Morningstar DBRS Net Cash Flow (NCF) figure derived at issuance, performance has since stabilized, and the property's occupancy rate has increased significantly in the last year with several lease signings, as further described below. The transaction benefits from strong sponsorship, the collateral retail property's location within a dense urban area, and a tenant roster primarily composed of national tenants and strong anchor draws.

The underlying loan for the transaction is a first mortgage secured by the fee-simple interest in a 509,500-square-foot (sf) portion of The Shops at Skyview, a retail complex in downtown Flushing, Queens. The property, constructed in 2010, consists of two retail buildings, known as the West Retail building and the East Retail building, and a parking garage. The West Retail building is anchored by BJ's Wholesale Club (BJ's), and the East Retail building is anchored by a noncollateral tenant, Target. The servicer reported an occupancy rate of 86.0% at year-end (YE) 2024, up from the reported occupancy rate of 81.0% at YE2023.

As of April 2025, the largest collateral tenants are BJ's, Marshalls, Sky Foods, and Burlington; the former second-largest collateral tenant, Best Buy, vacated its space at lease expiry in February 2025. In 2024, national tenants Sephora, Bath & Body Works, Foot Locker, and GNC were added to the property's tenant roster. Recently, multiple news outlets reported that three new tenants were signed: Round1 Bowling & Arcade (Round1), Sky Zone Trampoline Park (Sky Zone) and Jongro BBQ. Information provided by the servicer shows executed leases for Round1 and Jongro BBQ for just under 80,000 sf combined, with leases beginning in July 2026 and March 2025, respectively. A Commercial Observer article dated April 1, 2025, reported the Sky Zone space will be 49,733 sf and will be on the fifth floor of the West Retail building. Morningstar DBRS has requested confirmation of the property's leased rate with these new tenants, and the servicer's response is pending as of the date of this press release. Outside of Marshalls (approximately 9.0% of the collateral sf at issuance; lease expires October 31, 2025), scheduled rollover is relatively minimal over the next few years.

The floating-rate loan had a two-year initial term, with three 12-month extension options, and pays interest only (IO) through the fully extended maturity date of June 2026. Morningstar DBRS expects the borrower will exercise the final 12-month extension option through June 2026 in the coming months. The loan documents also stipulate that the borrower maintain an interest rate protection agreement with a strike price of 2.50%, and as of the commencement date of any extension, equal to the greater of 2.50% and the yearly rate of interest that yields a debt service coverage ratio of no less than 1.10 times. The borrower used whole loan proceeds to refinance existing debt of $306.0 million and contributed approximately $44.8 million of cash equity at closing, demonstrating a strong commitment to the property. The loan sponsors are two affiliates of Blackstone Inc., a real estate investment group with $1.1 trillion in assets under management as of YE2024.

The servicer reported a YE2024 NCF figure of $27.4 million, up from the YE2023 figure of $22.5 million. The cash flow growth in 2024 was primarily the result of increased revenues following the increase in the property's occupancy rate from a low of 75.0% at YE2021. Morningstar DBRS expects cash flow growth to continue given the recent lease signings and high occupancy rate expected to be achieved once all new tenants are in place. Given the sustained trend of cash flow growth for the past few years, the Morningstar DBRS Value was updated with this credit rating action to reflect a Morningstar DBRS NCF figure of $22.0 million (based on the YE2023 NCF figure with a haircut of 2.0%). The 7.0% capitalization rate applied at issuance was maintained for a resulting Morningstar DBRS Value of $314.7 million, a -28.4% variance from the issuance as-is appraised value of $440.0 million. The Morningstar DBRS Value results in a loan-to-value (LTV) of 90.6% on the full loan amount of $285.0 million and 77.4% on the investment-grade rated portion of the capital stack (Classes A, B, C, D, and E). The LTV Sizing analysis reflected qualitative adjustments totaling 4.5% for market fundamentals, property quality, and cash flow volatility. The resulting LTV Sizing Benchmarks supported the credit rating confirmations with this review.

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-NCP is an interest-only (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 (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.

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.

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.

-- 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
-- Interest Rate Stresses for U.S. Structured Finance Transactions (March 27, 2025), https://dbrs.morningstar.com/research/450750
-- 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.