Fitch Ratings has assigned final ratings and Rating Outlooks on
RATING ACTIONSENTITY/DEBT RATING PRIOR
A
LT AAAsf New RatingAAA (EXP)sf
B
LT NRsf New Rating NR(EXP)sf
C
LT NRsf New Rating NR(EXP)sf
D
LT NRsf New Rating NR(EXP)sf
E
LT NRsf New Rating NR(EXP)sf
HRR
LT NRsf New Rating NR(EXP)sf
VIEW ADDITIONAL RATING DETAILS
The following classes are not rated by Fitch:
(a) Horizontal credit risk retention interest
The final ratings are based on information provided by the issuer as of
Transaction Summary
The trust certificates represent the beneficial interests in the five-year, fully-extended floating-rate mortgage loan securing the leasehold interests in Spring District Block 16 and Block 24, two newly-constructed office properties totaling 542,680 sf, located in
Loan proceeds were used to recapitalize the property, fund a
KEY RATING DRIVERS
Long-Term Creditworthy Tenant: The collateral consists of two office buildings, both leased to
Property Quality and Location: Both properties feature large floorplates, multiple rooftop decks, bicycle storage, lockers, a restaurant-quality kitchen and a dining hall. The properties are located within the
Leasehold Interest: The collateral consists of the leasehold interest in Block 16 and Block 24. Both ground leases are newly executed and have a term of 99 years. The initial ground rent across both ground leases is
Institutional Sponsorship: The sponsor of the loan is
Moderate Fitch Leverage: The
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative rating action/downgrade:
Declining cash flow decreases property value and capacity to meet its debt service obligations. The table below indicates the model implied rating sensitivity to changes to the same one variable, Fitch NCF:
Original Rating: 'AAAsf'
10% NCF Decline: 'AA-sf'
20% NCF Decline: 'BBB+sf'
30% NCF Decline: 'BB+sf'
Factors that could, individually or collectively, lead to positive rating action/upgrade:
Improvement in cash flow increases property value and capacity to meet its debt service obligations. However, Fitch only expects to rate the 'AAAsf' class and further upgrades are not possible for this transaction.
Best/Worst Case Rating Scenario
International scale credit ratings of Structured Finance transactions have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of seven notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of seven notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit https://www.fitchratings.com/site/re/10111579.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Fitch was provided with Form ABS Due Diligence-15E (Form 15E) as prepared by
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS
A description of the transaction's representations, warranties and enforcement mechanisms (RW&Es) that are disclosed in the offering document and which relate to the underlying asset pool is available by clicking the link to the Appendix. The appendix also contains a comparison of these RW&Es to those Fitch considers typical for the asset class as detailed in the Special Report titled 'Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions'.
ESG Considerations
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg.
Additional information is available on www.fitchratings.com
PARTICIPATION STATUS
The rated entity (and/or its agents) or, in the case of structured finance, one or more of the transaction parties participated in the rating process except that the following issuer(s), if any, did not participate in the rating process, or provide additional information, beyond the issuer's available public disclosure.
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