Press Release

Morningstar DBRS Assigns Provisional Credit Ratings to MSRW 2025-CC Pass-Through Trust

CMBS
June 30, 2025

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

-- Class A at (P) AAA (sf)
-- Class B at (P) AA (low) (sf)
-- Class X-IO at AA (low) (sf)
-- Class C at (P) A (low) (sf)
-- Class D at (P) BBB (sf)
-- Class HRR at (P) BBB (low) (sf)

All trends are Stable.

MSRW 2025-CC is collateralized by the borrower's fee-simple interest in a 502,730-square-foot (sf) portion of Cross Creek Mall, an 896,508-sf Class B/C regional retail mall in Fayetteville, North Carolina. The unowned parcels include tenants JCPenney (166,833 sf), Belk (163,947 sf), US Foods Chef'store (20,004 sf), and a vacant outparcel (42,994 sf). The collateral was constructed in 1974 and most recently renovated in 2013, which included updates to the property's exterior and interior as well as an approximate 46,000-sf expansion of the premises. Since 2016, the sponsor has spent an additional $5.5 million of capital, of which $3.9 million was spent on building and equipment improvements and the remaining $1.6 million was used for tenant improvements. Going forward, the sponsor anticipates spending an additional $2.9 million in nonleasing related capital through 2028.

Cross Creek Mall is a retail center in Fayetteville and is the largest enclosed mall within a 60-mile radius. Fayetteville is home to Fort Bragg, a major U.S. Army installation and the largest military installation by population in the world, with a total base population of approximately 282,000. Fayetteville is a tertiary market with a population of more than 390,000 people and an economy that is heavily dependent on the presence of Fort Bragg. The subject is located along three primary corridors within its neighborhood, including good access and visibility from U.S. Highway 401 Bypass and the All-American Freeway.

Per the June 2025 rent roll provided, the collateral mall is currently 97.1% occupied by 107 tenants (104 tenants as collateral) with an approximate 3.32-year weighted-average (WA) lease term remaining. The owned collateral is anchored by Macy's (132,408 sf), and other notable tenants include H&M (21,565 sf), Victoria's Secret (9,745 sf), American Eagle (9,711 sf), Finish Line (7,881 sf), Champs Sports (6,687 sf), and Foot Locker (5,529 sf). No tenant comprises more than 3.8% of total revenue. The collateral faces lease rollover throughout loan maturity, with leases representing 65.7% of cumulative total net rentable area and 87.0% of cumulative Morningstar DBRS gross rent scheduled to roll through 2030. The most notable tenants whose leases expire during 2030 are the collateral's anchor tenant, Macy's and the Bank of America (18,656 sf) outparcel.

The collateral has demonstrated declining in-line sales since its peak in 2021 of $628.09 per square foot (psf) and is less than the YE2019 reported in-line sales of $529.26 psf. As of YE2024, reported in-line sales at the property are approximately $485.05 psf, a 3.2% decrease from the YE2023 sales of $500.91 psf. The collateral performance has been steadily decreasing since pre-coronavirus pandemic sales reporting. This decline may lead to in-place tenants negotiating lower base rental rates upon current lease expiration, if not outright vacating the property at expiry as a result of the mall's overall declining performance.

The sponsor for this transaction is CBL Properties (New York Stock Exchange: CBL), a publicly traded real estate investment trust that specializes in the ownership and management of retail properties, with a primary focus on market-dominant properties in growing communities across the U.S. CBL's current portfolio consists of 88 properties across 21 states, totaling approximately 55.4 million sf. Fifty-three properties are malls, outlets, or lifestyle centers, with the remaining 30 properties being open-air centers. CBL successfully emerged from chapter 11 bankruptcy in November 2021 after filing for voluntary relief in November 2020 during the COVID-19 pandemic. As a result of the bankruptcy, the company eliminated approximately $1.7 billion in debt and preferred obligations, thus significantly reducing interest expenses for its overall portfolio.

As a result of this transaction, the sponsor will be infusing the collateral with an additional $7.5 million in cash equity in addition to transaction proceeds of $78.0 million to refinance existing debt encumbering the property in the amount of $81.9 million, fund $1.8 million in upfront reserves, and cover $1.8 million in closing costs. Morningstar DBRS typically views cash-in refinances more favorably than cash-out refinancings as it demonstrates a borrower's willingness to preserve operational cash flow at the property because of an increased economic interest in the collateral and potential loss of equity should property valuations deteriorate over the course of the loan term.

Morningstar DBRS determined the provisional credit ratings for each class of certificates by analyzing the cash flow generated by the portfolio, giving consideration to the quality and location of the property, the fundamentals of the property's real estate market, and legal and structural features of the mortgage loan. Morningstar DBRS' analysis of the property's operations, based on information provided by the Issuer, yielded a net cash flow of approximately $12.8 million. The Morningstar DBRS NCF represents a trust DSCR of 1.94 times (x) on the $78.0 million senior mortgage loan, assuming a fixed interest rate of 7.0000%. Morningstar DBRS valued the collateral at approximately $116.4 million based on the concluded NCF and an estimated capitalization rate of 11.0%. Morningstar DBRS' valuation resulted in a trust LTV of 67.0% based on the $78.0 million senior mortgage loan. Morningstar DBRS determined the credit ratings on each class of certificates by performing quantitative and qualitative collateral, structural, and legal analysis.

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 Yield 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. 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) https://dbrs.morningstar.com/research/454196.

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 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

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.

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