Morningstar DBRS Changes Trends on Three Classes of JPMBB Commercial Mortgage Securities Trust 2014-C22 to Negative From Stable; Confirms All Credit Ratings

DBRS Limited (Morningstar DBRS) confirmed its credit ratings on all classes of Commercial Mortgage Pass-Through Certificates, Series 2014-C22 issued by JPMBB Commercial Mortgage Securities Trust 2014-C22 as follows:

-- Class A-S at AAA (sf)
-- Class X-A at AAA (sf)
-- Class B at A (high) (sf)
-- Class C at BB (high) (sf)
-- Class EC at BB (high) (sf)
-- Class D at C (sf)
-- Class E at C (sf)

In addition, Morningstar DBRS changed the trends on Classes B, C, and EC to Negative from Stable. All other trends are Stable, except Classes D and E, which have credit ratings that do not typically carry a trend in commercial mortgage-backed securities (CMBS) transactions.

The Negative trends are reflective of the reduced credit support implied by Morningstar DBRS' increased-loss projections for the specially serviced assets in the pool, all of which are in default and missed their respective maturity dates. All seven of those loans were analyzed with liquidation scenarios, with cumulative projected losses of $68.8 million that would fully erode the Class E and F certificate balances and approximately half of the Class D balance, currently rated C (sf). The projected liquidated losses are approximately double the $37.1 million figure analyzed at the previous credit rating action. Morningstar DBRS notes that the Negative trend on the Class B certificate is primarily tied to the uncertainty regarding the two largest specially serviced assets, Queens Atrium (Prospectus ID#1, 32.1% of the current pool balance) and One Met Center (Prospectus ID#2, 30.1% of the pool). Although the two loans--which collectively account for 62.2% of the remaining pool balance--are expected to be fully recovered based on conservative haircuts to the most recent appraised values, both loans exhibit significantly increased risks; a factor which could manifest in value and performance volatility over the remainder of the workout period.

The Negative trend on the Class C certificate is also reflective of the continued accumulation of interest shortfalls, having increased to $7.8 million as of the March 2025 remittance, with shortfalls through Class D (which is receiving partial interest), currently outstanding. This is an increase from total interest shortfalls of $6.0 million at last review, as monthly shortfalls have increased by more than $40,000 since April 2024, as of the March 2025 reporting. Morningstar DBRS expects shortfalls will continue to accumulate on the Class D certificate, given the recent transfer to special servicing for six defaulted loans. The Negative trend on the Class C certificate is suggestive of the propensity for interest shortfalls to affect that class in the near to moderate term.

The credit rating confirmations reflect the recoverability prospects for the nonspecially serviced loan, U-Haul Self Storage (Prospectus ID#11, 4.0% of the remaining pool balance), which continues to exhibit healthy credit metrics and a far out maturity date in 2034, as well as the implied proceeds in the liquidation scenarios for the specially serviced loans in the pool, which would repay Classes A-S and B in full.

Since the prior credit rating action in April 2024, 39 loans have successfully repaid in full. The current trust balance of $267.7 million represents a collateral reduction of 76.4% from issuance. Of the eight loans remaining in the pool, seven loans (96.0% of the pool balance) are in special servicing, flagged for maturity default. While the U-Haul Self Storage loan is on the servicer's watchlist for deferred maintenance, it's performing above issuance expectations. All remaining loans are past their respective maturity dates except for the U-Haul Self Storage loan, which has a maturity date in August 2034.

The largest contributor to the increased liquidated loss projections is Laurel Park Place (Prospectus ID#10, 8.4% of the current pool balance), secured by a 356,500-square-foot (sf) Class B suburban mixed-use building in Livonia, Michigan, approximately 20.0 miles west of the Detroit central business district. The subject consists primarily of office space, with 43,000 sf dedicated to a 10-screen theatre. The loan transferred to special servicing in August 2024 for maturity default. The loan has struggled since the 2020 departure of the previous largest tenant, Tower Automotive (21.6% of the net rentable area (NRA)). Vacancy was reported at 44.6% as of the June 2024 rent roll, with slow leasing traction likely related to the softened West Wayne County submarket, which reported a Q4 2024 average vacancy rate of 25.2%, according to Reis. The property was appraised in October 2024 for $19.1 million, approximately 50% less than the issuance appraised value of $37.4 million. Morningstar DBRS analyzed the loan with a liquidation scenario by applying a 40.0% haircut to the October 2024 appraised value, resulting in a total loss of $13.4 million and a loss severity of 63.0%.

The third largest loan in special servicing, 10333 Richmond (Prospectus ID#7, 12.4% of the current pool balance), is secured by a 218,700-sf suburban office property in Houston. The loan originally transferred to special servicing in December 2017 after the occupancy rate fell significantly; payments have not been made on the loan since August 2023. The property was just 42.4% occupied as of the December 2024 rent roll with a debt service coverage ratio close to zero. Over the next 12 months, 10 tenants, representing 21.3% of the NRA are scheduled to roll, including several recently expired leases. According to Reis, the Westchase/Westheimer submarket reported a Q4 2024 vacancy rate of 25.9%, having widened considerably from the Q4 2023 figure of 16.1%. Morningstar DBRS analyzed the loan with a liquidation scenario, resulting in a full loss of $31.4 million to the trust.

The three smallest specially serviced assets are flagged for maturity default. The first, 120 Mountain View Blvd (Prospectus ID#18, 6.3% of the pool), is backed by a suburban New Jersey office property that was 46.0% occupied as of the September 2024 rent roll and was liquidated with a total loss of $12.7 million and a loss severity of 80.0%. The two remaining loans, 244 Jackson Street (Prospectus ID#22, 5.4% of the pool) and 630 Forest Avenue (Prospectus ID#65, 1.2% of the pool), are backed by mixed-use office/retail and retail properties, respectively. Both properties are fully dark after key tenants vacated over the last two years. The loans were analyzed with liquidation scenarios with conservative haircuts to the most recent appraised values, resulting in a 61.0% loss severity for the 244 Jackson Street loan and a full loss to the trust for the 630 Forest Avenue loan. The total projected loss across both loans was $11.3 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.

Class X-A 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 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 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

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.

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 Limited
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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 CMBS Multi-Borrower Rating Methodology (April 9, 2025)/North American CMBS Insight Model v 1.3.0.0, https://dbrs.morningstar.com/research/451739
-- 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.