Fitch Ratings has affirmed BLOX Trust 2021-BLOX commercial mortgage pass-through certificates series 2021-BLOX .

Fitch only rates the class A notes which remain at 'AAAsf'/ Outlook Stable. The affirmation and Stable Rating Outlook reflect long-term creditworthy tenancy, the high-quality, new construction property, and institutional sponsorship.

RATING ACTIONS

Entity / Debt

Rating

Prior

BLOX 2021-BLOX

A 055522AA4

LT

AAAsf

Affirmed

AAAsf

Page

of 1

VIEW ADDITIONAL RATING DETAILS

KEY RATING DRIVERS

Long-Term Tenancy: The property is 99.6% leased to Meta Platforms, Inc., a creditworthy tenant and the parent company of Facebook, through leases expiring in June 2033 and October 2033. The leases do not have any termination options and include two renewal options, with the first renewal option for seven years and the second option for five years. The leases also provide for annual 3% rental rate increases.

Steady Performance in 2022: The servicer-reported YE 2022 net cash flow (NCF) of $21.9 million exceeds the Fitch issuance sustainable NCF of $17.8 million, which is in line with Fitch's current NCF of approximately $18 million. This analysis accounts for the single tenant risk, as well as the increased availability in the sub-market. According to Costar, the submarket vacancy, availability rates and average asking rents for Suburban Bellevue for 2023 year to date average were 5.7%, 15.5% and $52.78 psf, compared with 2021 average of 2.5%, 1.9% and $52.19 psf, respectively.

Fitch incorporated a higher Fitch capitalization rate of 9.25% up from 8.50% at the initial rating action, to reflect increased office sector concerns, leasehold interest with a ground rent payment indexed to CPI. Fitch also considered the credit contraction in the wake of bank sector stresses and worsening macroeconomic conditions that have heightened loan refinance risk.

Fitch Leverage: The $205 million whole mortgage loan has moderate Fitch leverage at a Fitch DSCR and loan-to-value (LTV) ratio of 0.86x and 104.9%, respectively. The leverage at the 'AAAsf' rating category is 1.63x for Fitch DSCR and 57.6% for Fitch LTV.

High-Quality, New Construction Asset: The property consists of two office buildings built in 2020 and 2021 and located in the Spring District in Suburban Bellevue, Washington. The Spring District is a new development that features offices, retail and dining options, residential uses and a hotel once fully completed. A Spring District light rail station was expected to be delivered in 2023, which will provide access to the Bellevue CBD. However, the delivery has been delayed several times and is now slated for delivery in mid-2025.

Single Asset Concentration: The transaction is secured by a single property and, therefore, is more susceptible to single-event risk related to the market, sponsor or the largest tenants occupying the property.

Institutional Ownership: The sponsor of the loan is Brookfield Premier Real Estate Partners Office Holding LLC, which is a core-plus fund managed by Brookfield Asset Management and is partially owned by Brookfield Property Partners. The fund focuses on long-term ownership in office, retail, multifamily and industrial properties across the U.S.

Interest-Only: The loan is floating rate and interest only for the entire loan term. The initial maturity of the loan is September 2023 and has three one-year extension options. According to the servicer, the borrower has indicated its intention to extend; however, a formal written request for an extension had not been received as of July 6, 2023. The borrower is allowed up to 10 days prior to maturity to provide a written request for extension.

Leasehold Interest: The collateral consists of the leasehold interest in Block 16 and Block 24. Both ground leases were newly executed and had a term of 99 years at issuance. The initial ground rent across both ground leases was $7,250,000 and had grown to $7,662.500 as of YE 2022. The ground rent is structured with semiannual escalations based on the non-seasonally adjusted U.S. City Average All Items CPI for all Urban Consumers (CPI-U). The ground lease contains lender provisions that include notices of default, cure rights and the ability to assign the lease to the lender without the lessor's consent.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade

A downgrade to class A is not considered likely due to the leverage of the transaction, and long-term credit tenancy, but may occur should the loan experience a material and sustained performance decline.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

An upgrade is not possible as class A is rated 'AAAsf'.

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

Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action.

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.

ESG Considerations

The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' 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. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit https://www.fitchratings.com/topics/esg/products#esg-relevance-scores.

Additional information is available on www.fitchratings.com

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