Morningstar DBRS Confirms All Credit Ratings of Wells Fargo Commercial Mortgage Trust 2015-LC22
CMBSDBRS, Inc. (Morningstar DBRS) confirmed its credit ratings on all classes of Commercial Mortgage Pass-Through Certificates, Series 2015-LC22 issued by Wells Fargo Commercial Mortgage Trust 2015-LC22 as follows:
-- Class A-4 at AAA (sf)
-- Class A-S at AAA (sf)
-- Class B at AA (low) (sf)
-- Class C at A (low) (sf)
-- Class D at BBB (low) (sf)
-- Class E at BB (low) (sf)
-- Class F at B (sf)
-- Class X-A at AAA (sf)
-- Class X-E at BB (sf)
-- Class X-F at B (high) (sf)
-- Class PEX at A (low) (sf)
Morningstar DBRS changed the trends on Classes D, X-E, and E to Stable from Negative. The trends on Classes F and X-F remain Negative. The trends on all other classes are Stable.
The credit rating confirmations reflect pool performance that remains in line with Morningstar DBRS' expectations as evidenced by the pool's weighted-average (WA) debt service coverage ratio (DSCR) of 1.57 times (x) and WA debt yield of 12.5% based on the most recent year-end financials.
Previously, Morningstar DBRS cited specific concerns with the 40 Wall Street loan (Prospectus ID#1, 13.3% of the pool balance) regarding performance declines and increased maturity risk, previously supporting the Negative trends on Classes D, E, F, X-E, and X-F. The servicer confirmed the loan was repaid on June 13, 2025, and is expected to be reflected in the July 2025 remittance. Given confirmation of successful repayment, the pool's exposure to loans that Morningstar DBRS had identified as being at increased maturity risk has decreased, supporting the trend changes on Classes D, E, and X-E to Stable from Negative.
Although a positive development for 40 Wall Street, Morningstar DBRS continues to monitor an additional eight loans, representing 27.5% of the pool for elevated maturity risk. These loans have been flagged given recent performance challenges, weakening submarket fundamentals, and generally less liquidity available for this property type. Notably, this includes the largest loan in the pool, The Meadows (Prospectus ID#2, 16.6% of the pool), which transferred to the special servicer in May 2025, discussed below. For the loans with elevated refinance risk, Morningstar DBRS applied an elevated probability of default (POD) penalty and/or a stressed loan-to-value ratio (LTV) in the analysis to increase the loan-level expected losses (ELs) for this review. Should these or other loans default, or should performance for the specially serviced loans deteriorate further, Morningstar DBRS' projected losses for the pool could increase, supporting the Negative trends on Classes X-F and F.
As of the June 2025 remittance, 61 of the original 100 loans remain in the trust, with an aggregate balance of $509.9 million, representing a collateral reduction of 47.1% since issuance. The pool benefits from four loans, representing 2.6% of the pool balance, that have been fully defeased. An additional four loans, representing 20.3% of the pool, are in special servicing, one of which was analyzed under a liquidation scenario, HIE Natchez (Prospectus ID#45, 1.0% of the pool), resulting in an implied loss of $2.2 million, well contained in the unrated Class G.
The largest loan in the pool, The Meadows, is secured by two Class A office buildings totaling 603,000 square feet in Rutherford, New Jersey. The loan transferred to special servicing in May 2025 and, according to the previous servicer commentary, the borrower requested the transfer to facilitate a loan modification. In recent years, the subject's occupancy and performance have declined with the YE2024 reporting noting a DSCR of 1.28x compared with 1.49x in YE2023. As of the April 2025 rent roll, occupancy declined to 79.0% from 85% at YE2023 with leases comprising a total of 12.0% of the net rentable area are expected to roll in the next 12 months. According to Reis, Inc., the submarket vacancy for the Rutherford/Lyndhurst submarket was 10.4% in Q1 2025; however, it is expected to increase to 17.1% by 2030. Given the recent declines in performance and expected softening of the submarket, Morningstar DBRS expects that the property's value has declined from the $128.0 million at issuance. In light of those concerns, coupled with the loan's transfer to special servicing, Morningstar DBRS stressed the LTV, applying a conservative cap rate to the YE2024 net cash flow, and increased the loan's POD. The resulting loan level EL was nearly triple the pool average.
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 credit 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
Classes X-A, X-E, and X-F 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 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.
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, 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 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
For more information on this credit or on this industry, visit https://dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.
Ratings
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