Class A at
Class A-1 at
Class B at
Class C at AA (high) (sf)
Class D at AA (low) (sf)
Class E at A (low) (sf)
Class F at BBB (low) (sf)
Class G at BB (sf)
Class HRR at BB (low) (sf)
Class X-CP at
Class X-EXT at
All trends are Stable.
Classes X-CP and X-EXT are interest-only (IO) classes whose balances are notional.
Despite the disruptions and ongoing uncertainty in the lodging and gaming sectors attributable to the Coronavirus Disease (COVID-19) pandemic, DBRS Morningstar takes a generally positive view on
The Aria and Vdara properties are well located along the central portion of the Las Vegas Strip, which results in a critical mass of foot traffic attributable to numerous nearby attractions and properties, including the Bellagio and Cosmopolitan. Furthermore, the properties are the centerpiece of the 16.7 million-square-foot mixed-use development known as
Predictably, performance at the Aria and Vdara properties has suffered over the last 18 months as the ongoing coronavirus pandemic besieged the economy, crippled domestic and international travel, and resulted in mandated closures and other operating restrictions. However, the properties experienced a robust rebound in performance as vaccinations rolled out and as Americans emerged from months of quarantine. In 2021, combined monthly EBITDAR during the months of May, June, July, and August exceeded the same periods in 2019. Additionally, the combined financials for both properties for the trailing-12-month (T-12) period ended
The transaction benefits from a guaranty provided by
The ongoing coronavirus pandemic continues to pose challenges and risks to virtually all major commercial real estate property types, creating a substantial element of uncertainty around the recovery of demand in the hospitality sectors, even in stronger markets that have historically been highly liquid. Both properties were closed from
DBRS Morningstar's net cash flow and value reflects normalized occupancy assumptions of 90.2% for Aria and 90.8% for Vdara, which are above the 55.5% and 56.0% occupancy rates for the properties, respectively, as of the T-12 period ended
A substantial component of revenue across the properties is derived from non-room revenue, including gaming revenue (27.3% of DBRS Morningstar Revenue) and revenue from food and beverage outlets (29.5%). These revenue sources are generally more volatile than room revenue; however, the proportion of gaming revenue across both properties is consistent with most other properties on the Las Vegas Strip, which generally derive around 30% of revenue from casino operations. Gaming revenue is also disproportionately dependent on the trends and habits of high-end international gamblers, who have been slower to return to
The borrowers have entered into a master lease agreement with
A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/373262.
Classes X-CP and X-EXT are 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 ratings are subject to surveillance, which could result in ratings being upgraded, downgraded, placed under review, confirmed, or discontinued by DBRS Morningstar.
For supporting data and more information on this transaction, please log into www.viewpoint.dbrsmorningstar.com. DBRS Morningstar provides analysis and in-depth commentary in the DBRS Viewpoint platform.
Notes:
All figures are in
With regard to due diligence services, DBRS Morningstar 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 DBRS Morningstar's methodology, DBRS Morningstar used the data file outlined in the independent accountant's report in its analysis to determine the ratings referenced herein.
The principal methodology is North American Single-Asset/Single-Borrower Ratings Methodology (
The DBRS
The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.
Please see the related appendix for additional information regarding the sensitivity of assumptions used in the rating process.
The full report providing additional analytical detail is available by clicking on the link under Related Documents below or by contacting us at info@dbrsmorningstar.com.
For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com.
Tel. +1 212 806-3277
Ratings
Date Issued Debt Rated Action Rating Trend Attributesi
US = Lead Analyst based in USA
CA = Lead Analyst based in
EU = Lead Analyst based in EU
E = EU endorsed
U =
Unsolicited Participating With Access
Unsolicited Participating Without Access
Unsolicited Non-participating
07-Oct-21 Commercial Mortgage Pass-Through Certificates, Class A Provis.-NewAAA (sf) Stb US
07-Oct-21 Commercial Mortgage Pass-Through Certificates, Class A-1 Provis.-NewAAA (sf) Stb US
07-Oct-21 Commercial Mortgage Pass-Through Certificates, Class B Provis.-NewAAA (sf) Stb US
07-Oct-21 Commercial Mortgage Pass-Through Certificates, Class X-CP Provis.-NewAAA (sf) Stb US
07-Oct-21 Commercial Mortgage Pass-Through Certificates, Class X-EXT Provis.-NewAAA (sf) Stb US
07-Oct-21 Commercial Mortgage Pass-Through Certificates, Class C Provis.-New AA (high) (sf) Stb US
07-Oct-21 Commercial Mortgage Pass-Through Certificates, Class D Provis.-New AA (low) (sf) Stb US
07-Oct-21 Commercial Mortgage Pass-Through Certificates, Class E Provis.-New A (low) (sf) Stb US
07-Oct-21 Commercial Mortgage Pass-Through Certificates, Class F Provis.-New BBB (low) (sf) Stb US
07-Oct-21 Commercial Mortgage Pass-Through Certificates, Class G Provis.-New BB (sf) Stb US
07-Oct-21 Commercial Mortgage Pass-Through Certificates, Class HRR Provis.-New BB (low) (sf) Stb US
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