Morningstar DBRS Assigns Provisional Credit Ratings to NYC Commercial Mortgage Trust 2025-1155

DBRS, Inc. (Morningstar DBRS) assigned provisional credit ratings to the following classes of Commercial Mortgage Pass-Through Certificates, Series 2025-1155 (the Certificates) to be issued by NYC Commercial Mortgage Trust 2025-1155:

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

All trends are Stable.

The NYC Commercial Mortgage Trust 2025-1155 single-asset/single-borrower transaction is collateralized by the borrower's leasehold and fee interest in 1155 Avenue of the Americas, a 42-story, 797,891-square-foot (sf) office tower and retail property on Sixth Avenue between 44th Street and 45th Street in Midtown Manhattan, New York. The office tower was constructed in 1984 and has since seen major renovations, not only to the ground-floor lobby area and top of the building, but also to the facade of the building, which benefits the interiors by providing floor-to-ceiling window views from each of the corners. These major renovations started in 2017, after a major tenant vacated approximately 300,000 sf, and were completed in 2020 for a total cost of $330.0 million. The collateral also consists of 10,766 sf of ground-floor retail. The subject is encumbered by a ground lease for 17,786 sf of the total 33,639 sf of land, amounting to 52.9% of the land under a ground lease; this lease extends until 2104.

As of April 1, 2025, the property was 88.9% leased to 32 unique tenants. Property performance had been suppressed given the prior largest tenant vacating and the renovations; however, leasing remained slow for several years after the renovations were completed. Leasing picked up over the past two years, primarily because of the sponsor moving an affiliate's (Royal Realty Corp.) headquarters to the collateral from One Bryant Park. Royal Realty Corp. is now the largest tenant at the property, representing approximately 122,948 sf or 15.4% of the total net rentable area (NRA). Royal Realty Corp. moved into the building in 2024 and has a lease that expires in 2034. The collateral is now viewed as the headquarters of the Sponsor group, The Durst Organization. The second largest tenant at the property is Global Relay USA, which accounts for 9.6% of the total NRA and occupies the two-story penthouse suite on the 41st and 42nd floors of the building. In total, 24.3% of the NRA will roll through 2030, which is the final year of the fully extended loan maturity; however, there are no reserves to combat this risk beyond ongoing monthly deposits.

As the property was renovated in 2020, with continued maintenance done throughout the building, the Sponsor has no plans for future capital expenditure programs. The sponsor has continued to invest in the building as evidenced through its extensive renovation projects and tenant improvement packages.

The Sponsor for this transaction is The Durst Organization. The Durst Organization was founded in 1915 and is one of New York City's oldest family-run commercial and real estate companies. It currently has a portfolio of more than 13 million sf of Class A Manhattan office and retail space and 6,000 apartment units. The company focuses on a long-term asset strategy that is evidenced through its commitment to maintain the status of, and to continue to improve, the assets it holds. The company has invested a large amount of money into the property and, as of 2024, the subject will serve as the headquarters for The Durst Organization after its relocation from One Bryant Park.

Morningstar DBRS' credit ratings on the Certificates address the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. The associated financial obligations are the related Principal Distribution Amounts and Interest Distribution Amounts for the rated classes.

Morningstar DBRS' credit ratings do not address nonpayment risk associated with contractual payment obligations contemplated in the applicable transaction document(s) that are not financial obligations. For example, the credit ratings do not address Spread Maintenance Premiums.

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

Other methodologies referenced in this transaction are listed at the end of this press release.

With regard to due diligence services, Morningstar DBRS was provided with the Form ABS Due Diligence-15E (Form-15E), which contains a description of the information that a third party reviewed in conducting the due diligence services and a summary of the findings and conclusions. While due diligence services outlined in Form-15E do not constitute part of Morningstar DBRS' methodology, Morningstar DBRS used the data file outlined in the independent accountant's report in its analysis to determine the credit ratings referenced herein.

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 this credit rating action.

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

A provisional credit rating is not a final credit rating with respect to the above-mentioned securities and may change or be different than the final credit rating assigned or may be discontinued. The assignment of final credit ratings on the above-mentioned securities is subject to receipt by Morningstar DBRS of all data and/or information and final documentation that Morningstar DBRS deems necessary to finalize the credit 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 Commercial Mortgage Servicer Rankings (August 23, 2024), https://dbrs.morningstar.com/research/438283
-- 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

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