Morningstar DBRS Confirms MOR CS3 Commercial Mortgage Special Servicer Ranking for Green Loan Services LLC

DBRS, Inc. (Morningstar DBRS) confirmed its MOR CS3 commercial mortgage special servicer ranking for Green Loan Services LLC (GLS or the Company), a wholly owned subsidiary of SL Green Realty Corp. (SL Green). The trend for the ranking remains Stable.

The confirmed ranking reflects the following considerations:
-- GLS' successful, albeit still modest, asset resolution record that has centered on single-asset single-borrower (SASB) loans in commercial mortgage-backed securities (CMBS) transactions. During the past year, the Company gained several new assignments as a named third-party special servicer.
-- Corresponding with SL Green's position as the largest office building owner/manager in Manhattan (according to SL Green and other sources), GLS' activity and area of expertise especially involves large-scale office loans in the same market. However, the Company manages large loans secured by retail and other property types in other metropolitan areas. Although GLS' CMBS special servicing work has involved only loans rather than real estate owned (REO) assets, it has handled some foreclosures over the years and has advised clients on the management and sale of their privately held real estate.
-- The Company's well-experienced and tenured managers. Although GLS does not have personnel dedicated exclusively to special servicing, its three seniormost portfolio managers directly handle every specially serviced asset. The collaborative organizational approach also leverages SL Green's resources and expertise for consultation on leasing, construction management, property management, market intelligence, and asset repositioning.
-- Adequate technology that relies on spreadsheet files used in tandem with purchased applications for data management, valuations/cash flow modeling, and property accounting. Unlike most special servicers, the Company does not have a singular asset management application. Through SL Green, GLS has overall acceptable protocols for data backup, recovery testing, and cybersecurity.
-- Proactive loan surveillance, thorough analytics, and acceptable approval controls based on GLS' stated practices. The Company updated its policies and procedures in late 2024, although they remain not especially detailed.
-- GLS's satisfactory handling of its CMBS reporting responsibilities thus far.
-- An acceptable audit function consisting of annual Regulation AB attestations that have been clear of exceptions. GLS also noted that SL Green's Sarbanes-Oxley 404 financial reporting examinations, although not operationally focused, touch on some areas of GLS.

As of December 31, 2024, GLS was a named special servicer on 17 SASB/large-loan CMBS transactions with an aggregate unpaid principal balance (UPB) of approximately $10.90 billion, up from six large-loan transactions with an aggregate remaining UPB of $5.12 billion as of YE2023. The Company is not affiliated with any of the controlling classholders in its named CMBS transactions.

As of YE2024, the active special servicing portfolio had a total UPB of $2.85 billion and consisted of four CMBS loans (four collateral properties) and one non-CMBS mezzanine loan. GLS also served in an advisory role for four nonsecuritized REO properties with a combined $2.12 billion book balance held by banks and other clients.

All rankings are subject to surveillance, which could result in rankings being raised, lowered, placed under review, confirmed, or discontinued by Morningstar DBRS.

Morningstar DBRS North American commercial mortgage servicer rankings are not credit ratings. Instead, they are designed to evaluate the quality of the parties that service commercial mortgage loans. Although the servicer's financial condition contributes to the applicable ranking, its relative importance is such that a servicer's ranking should never be considered as a proxy of its creditworthiness.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is North American Commercial Mortgage Servicer Rankings (August 23, 2024), https://dbrs.morningstar.com/research/438283.

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

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