Morningstar DBRS Confirms Credit Ratings on Starwood Retail Property Trust 2014-STAR

DBRS, Inc. (Morningstar DBRS) confirmed its credit ratings on all classes of Commercial Mortgage Pass-Through Certificates, Series 2014-STAR issued by Starwood Retail Property Trust 2014-STAR as follows:

-- Class A at C (sf)
-- Class B at C (sf)
-- Class C at C (sf)
-- Class D at C (sf)
-- Class E at C (sf)

All classes have credit ratings that do not typically carry trends in commercial mortgage-backed securities (CMBS) ratings.

The credit rating confirmations reflect the stable liquidated loss expectations for the remaining collateral regional malls, as based on the total appraised value for the remaining three collateral malls of $160.0 million as at August 2024. Based on that figure, Morningstar DBRS expects that all classes, including the $309.1 million Class A certificate, will take a loss upon the final resolution. One of the original collateral properties, MacArthur Center, was liquidated from the trust, with the initial loss reflected in the August 2023 reporting, As of the April 2025 reporting, the loss remains contained to the first loss piece, Class F (no longer rated by Morningstar DBRS), which has a remaining balance of $23.2 million. All classes are being shorted interest, with the Class A certificate receiving less than 25.0% of the scheduled interest due and no other classes receiving interest payments. As of the April 2025 reporting, interest shortfalls totaled $118.0 million.

The special servicer reported that a second property sale has been executed for the Northlake Mall in Charlotte, North Carolina. A sales price has not been disclosed to date, but according to an article published by the Charlotte Observer in March 2025, the property was sold for $39.0 million. The special servicer's April 2025 commentary noted the proceeds from the sale were being held until the finalization of court proceedings, which was expected to occur within the next 30 to 60 days.

The underlying floating-rate loan had an original balance of $725.0 million and, as of the April 2025 reporting, had an outstanding principal balance of $646.6 million. The remaining portfolio includes one regional mall and one lifestyle center. The Mall at Wellington Green is a 1.3 million-square-foot (sf) indoor regional mall in Palm Beach County, Florida. The subject is anchored by City Furniture and noncollateral anchors Macy's, Dillard's, and JCPenney. At issuance, Nordstrom was in place on a ground lease but closed in 2019 and the special servicer reported that the ground lease for that space was terminated, and the trust acquired ownership of the parcel in early 2024. The Mall at Partridge Creek is a 626,000-sf lifestyle center in Clinton Township, Michigan, about 30 miles north of downtown Detroit. The property's only remaining anchor is MJR Digital Cinemas, as Nordstrom vacated in September 2019 and Carson's vacated in 2018 following its bankruptcy filing. The special servicer also reported that the ground lease for the Nordstrom space at this property has been terminated and the trust acquired the parcel in late 2023.

The loan initially matured in 2017, with extension options available that were subject to debt yield hurdle requirements; however, those could not be met, and as a result the sponsor was required to make a principal paydown of $25.0 million and monthly principal payments of $0.8 million to satisfy a loan modification to extend the maturity to 2019. With the paydown amounts, the loan balance was ultimately reduced by approximately $44.0 million. Despite the deleveraging, the borrower was still unable to repay at the extended maturity given the sustained occupancy and cash flow declines for the portfolio, and the loan was transferred to special servicing. The initial resolution strategy considered another loan modification, but ultimately the borrower agreed to an orderly transition of the properties to a receiver that was to work toward stabilizing the assets prior to disposition. The special servicer reported a November 2024 occupancy rate hovering around 70.0% for the Mall at Partridge Creek and around 90.0% for the Mall at Wellington Green (not including the Nordstrom spaces for each).

As of the April 2025 remittance, the principal balance of the loan totaled $646.6 million, with outstanding servicer advances and other amounts bringing the total trust exposure to $771.4 million. According to the servicer, there is $9.4 million held in the cash management reserves that can be used for capital expenditures, operating expenses, repaying advances, and other property expenses and serves as additional cash collateral.

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 at (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 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. Please note a sensitivity analysis is not performed for CMBS bonds rated CCC or lower. The Morningstar DBRS Long-Term Obligation Rating Scale definition indicates that credit ratings of CCC or lower are assigned when the bond is highly likely to default or default is imminent, thereby prevailing over a sensitivity analysis.

DBRS, Inc.
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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
-- 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.