Press Release

Morningstar DBRS Confirms Credit Ratings on All Classes of BANK 2017-BNK6

CMBS
June 30, 2025

DBRS Limited (Morningstar DBRS) confirmed its credit ratings on all classes of Commercial Mortgage Pass-Through Certificates, Series 2017-BNK6 issued by BANK 2017-BNK6 as follows:

-- Class A-4 at AAA (sf)
-- Class A-SB at AAA (sf)
-- Class A-5 at AAA (sf)
-- Class A-S at AAA (sf)
-- Class B at AAA (sf)
-- Class X-A at AAA (sf)
-- Class X-B at AA (low) (sf)
-- Class C at A (high) (sf)
-- Class X-D at BBB (low) (sf)
-- Class D at BB (high) (sf)
-- Class X-E at CCC (sf)
-- Class E at CCC (sf)
-- Class X-F at C (sf)
-- Class F at C (sf)

In addition, Morningstar DBRS maintained the Negative trends on Classes B, C, D, X-B, and X-D. All other classes have Stable trends with the exception of Classes E, F, X-E, and X-F which have credit ratings that do not typically carry a trend in commercial mortgage-backed securities (CMBS) transactions.

At the previous credit rating action in August 2024, Morningstar DBRS downgraded its credit ratings on Classes C, D, E, F, X-B, X-D, X-E, and X-F to reflect the increased loss projections across several distressed assets suggesting realized losses could fully erode the unrated Class G certificate balance and slightly reduce the Class F certificate balance. At that time, various distressed office assets exhibited performance and/or value declines along with an increased propensity for interest shortfalls, which were the primary considerations for the trend changes to Negative from Stable on Classes B, C, D, X-B, and X-D with the July 2024 review cycle.

The credit rating confirmations and Stable trends reflect the increased credit support to the certificates following the full repayment of the second-largest loan in the pool, Gateway Net Lease Portfolio (previously 6.3% of the pool balance), with the September 2024 remittance. In addition, the overall pool remains healthy with the majority of loans secured by retail collateral and a weighted-average (WA) debt service coverage ratio (DSCR) of 2.09 times (x). The pool also benefits from the two largest loans in the pool, which are shadow-rated investment grade and account for 19.5% of the current pool balance. The Negative trends are reflective of Morningstar DBRS' outlook for several office-backed loans in the top 15 that have exhibited increased refinance risk because of declines in performance and value, most notably the Hall Office G4 loan (Prospectus ID#16; 2.2% of the current pool balance), which is secured by a suburban Texas office property that is fully dark. The recent transfer of the Starwood Capital Group Hotel Portfolio (Prospectus ID#4; 7.7% of the current pool balance) loan to special servicing may also contribute to increased refinance risk as the loan matures in June 2027. Morningstar DBRS notes that the bulk of accumulated interest shortfalls, including all shorted interest on Classes E and F, was repaid with the June 2025 remittance cycle as part of the sale of the Trumbull Marriott loan (Prospectus ID#12; 2.5% of the current pool balance), details of which are outlined below. Interest shortfalls are now contained to the unrated Class G certificate. Morningstar DBRS also notes that credit support has deteriorated, most notably for the Class B and C certificates as a result of the liquidation and loss projections, the primary considerations for maintaining the Negative trends on those classes.

As of the June 2025 remittance, 62 of the original 72 loans remained in the trust with an aggregate balance of $747.0 million, representing a collateral reduction of 20.0% since issuance. To date, seven loans, representing 6.8% of the current pool balance, have defeased. The pool is concentrated by property type, with retail, office, and mixed-use collateral representing 30.8%, 17.0%, and 15.4% of the pool, respectively. Since the previous credit rating action, Gateway Net Lease Portfolio (previously 6.3% of the pool balance) was fully repaid with the September 2024 payment period. In addition, the Trumbull Marriott loan was liquidated from the trust and reflected with the June 2025 reporting cycle. Realized losses totaling $19.4 million compared favorably with the $19.6 million projected loss at Morningstar DBRS' previous credit rating action in August 2024.

The Starwood Capital Group Hotel Portfolio loan represents the transaction's only special serviced loan. The loan, which is secured by 65 lodging properties (35% extended stay, 59% limited service, and 6% full service) totaling 6,366 keys across 21 states, transferred to special servicing in February 2025 for imminent default and remains current as of the June 2025 reporting. According to recent servicer commentary, the borrower and servicer are discussing a loan modification, however, no further details were provided. As of April 2025, there was approximately $41.2 million in reserves including $19.2 million in swept cash and $16.6 million in a furniture, fixtures, and equipment reserve. According to the December 2024 reporting, the consolidated revenue per available room penetration rate was 103.3%, with an annualized September 2024 net cash flow (NCF) of $34.5 million (reflecting a DSCR of 1.32x) compared with the YE2023 NCF of $37.4 million NCF (a DSCR of 1.43x). The drop in cash flow is attributed to increased repairs, advertising, and marketing expenses. The collateral was last appraised at issuance at a value of $956.0 million, however, Morningstar DBRS expects the value of the collateral has likely declined since that time. As a result of the recent transfer to special servicing, Morningstar DBRS applied an elevated probability of default assumption in the analysis for this review, resulting in an expected loss that was almost four times the pool average.

Ten loans, representing 10.2% of the current pool balance, are on the servicer's watchlist being monitored for performance concerns, deferred maintenance items, and the occurrence of trigger events, and one loan, representing 7.9% of the current pool balance, is in special servicing. Morningstar DBRS is most concerned about The Hall Office G4 loan, which is secured by a 117,500 square foot Class B suburban office building in Frisco, Texas. The loan was added to the servicer's watchlist in November 2020 for upcoming lease expirations primarily related to the former largest tenant, Randstad Professional (Randstad; previously 34.9% of net rentable area (NRA)). Randstad subsequently vacated the property in August 2021, triggering a cash flow sweep. In February 2022, the second-largest tenant, Schlumberger (previously 33.4% of NRA), also vacated the property after its lease expired, causing the occupancy rate to fall to just 16.0%. Consequently, cash flow and DSCR have declined as the borrower has not been successful in backfilling the vacant space. A property inspection report dated March 2025 indicated that the only remaining tenant, University of Northern Texas (16.0% of NRA), had also vacated the property ahead of its lease expiration in December 2025, although the tenant continues to pay rent at a rate of $25.30 per square foot. According to Reis, office properties in the Plano/Allen submarket reported a Q1 2025 vacancy rate of 27.8% compared with the Q1 2024 vacancy rate of 28.3%. No updated appraisal has been provided since issuance when the property was valued at $25.8 million; however, given the sponsor's inability to backfill vacant space, combined with soft submarket fundamentals and general challenges for office properties in suburban Texas, Morningstar DBRS expects that the collateral's value has likely declined significantly, elevating the credit risk to the trust. Morningstar DBRS' liquidation scenario considered a conservative haircut to the property's appraised value at issuance, resulting in a loss severity of 77.0%.

At issuance, Morningstar DBRS shadow-rated three loans¿General Motors Building (Prospectus ID#1; 11.7% of the pool), Gateway Net Lease Portfolio (previously 6.3% of the pool), and Del Amo Fashion Center (Prospectus ID#3; 7.2% of the pool)¿as investment grade. With this review, Morningstar DBRS maintained the shadow ratings on the General Motors Building and Del Amo Fashion Centre loans and the Gateway Net Lease Portfolio loan was repaid in full, as outlined above. Morningstar DBRS confirms that the characteristics of the two loans remain consistent with the investment-grade shadow ratings, as supported by the strong credit metrics, strong sponsorship strength, and the historically stable performance of the collateral underlying those loans.

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 (May 16, 2025) at https://dbrs.morningstar.com/research/454196

Classes XA, XB, XD, XE, and XF are interest-only (IO) certificates that reference 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 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.

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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Toronto, ON M5H 3M7 Canada
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) and 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.

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

Ratings

  • US = Lead Analyst based in USA
  • CA = Lead Analyst based in Canada
  • EU = Lead Analyst based in EU
  • UK = Lead Analyst based in UK
  • E = EU endorsed
  • U = UK endorsed
  • Unsolicited Participating With Access
  • Unsolicited Participating Without Access
  • Unsolicited Non-participating

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