PRESALE REPORT Citigroup Commercial Mortgage Trust 2020 … 2020... · 2020. 2. 7. · Presale...

F E B R U A R Y 2 0 2 0 S T R U C T U R E D F I N A N C E : C M B S

Citigroup Commercial Mortgage Trust 2020-GC46

P R E S A L E R E P O R T

https://viewpoint.dbrs.com/#!/a/deal/CGCMT%202020-GC46?p=0

Table of Contents

Capital Structure 3Transaction Summary 4Rating Considerations 5DBRS Morningstar Credit Characteristics 7Largest Loan Summary 8DBRS Morningstar Sample 9Model Adjustments 12Transaction Concentrations 13Loan Structural Features 14

650 Madison 201633 Broadway 24Southcenter Mall 29Superior Storage 34CBM Portfolio 42Staples Headquarters 48805 3rd Avenue 53Westin Book Cadillac 58The Shoppes at Blackstone Valley 62Brooklyn Multifamily Portfolio 67Whiteland Town Center 72White Oak Crossing 7690 North Campus 81

Transaction Structural Features 85Methodologies 87Operational Risk Reviews 87Surveillance 87Glossary 88Definitions 88

Kevin MammoserManaging Director+1 312 [email protected]

Greg Haddad Senior Vice President+1 646 [email protected]

Erin StaffordManaging Director+1 312 [email protected]

Kyle SteinVice President+1 917 [email protected]

February 2020 3

Presale Report | CGCMT 2020-GC46

Capital Structure

Description Rating Action Balance ($) Subordination (%)DBRS Morningstar

Rating Trend

Class A-1 New Rating - Provisional 19,967,000 30.000 AAA (sf) Stable




Class A-AB New Rating - Provisional 39,232,000 30.000 AAA (sf) Stable

Class A-S New Rating - Provisional 139,420,000 18.125 AAA (sf) Stable

Class X-A New Rating - Provisional 961,261,000 - AAA (sf) Stable

Class B New Rating - Provisional 46,962,000 14.125 AA (high) (sf) Stable

Class X-B New Rating - Provisional 92,457,000 - AA (low) (sf) Stable

Class C New Rating - Provisional 45,495,000 10.250 A (high) (sf) Stable

Class D New Rating - Provisional 30,819,000 7.625 BBB (high) (sf) Stable

Class X-D New Rating - Provisional 52,833,000 - BBB (sf) Stable

Class E New Rating - Provisional 22,014,000 5.750 BBB (low) (sf) Stable

Class X-F New Rating - Provisional 19,078,000 - BBB (low) (sf) Stable

Class F New Rating - Provisional 19,078,000 4.125 BB (high) (sf) Stable

Class G-RR New Rating - Provisional 11,741,000 3.125 BB (low) (sf) Stable

Class J-RR NR 36,689,490 - NR n/a

Notes:1. NR = not rated.2. The Class X-B, Class X-D, Class X-F, Class D, Class E, Class F, Class G-RR, Class J-RR, Class R, and Combined VRR Interest will be privately placed.3. The exact initial certificate balances of the Class A-4 and Class A-5 certificates will be determined based on the final pricing of those classes of certificates. The

aggregate initial certif icate balance of the Class A-4 and Class A-5 certificates is expected to be approximately $681,855,000, subject to a variance of plus or minus 5%.4. The notional amount of each class of the Class X Certificates will be equal to the certificate balance or the aggregate of the certificate balances, as applicable, from

time to time of the class or classes of the Non-Vertically Retained Principal Balance Certificates identified as such class of Class X Certificates. The notional amount of the Class X-A certificates will be equal to the aggregate balance of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-AB, and Class A-S certificates. The notional amount of the Class X-B certificates will be equal to the aggregate balance of the Class B and Class C certificates. The notional amount of the Class X-D certificates will be equal to the aggregate balance of the Class D and Class E certificates. The notional amount of the Class X-S certificates will be equal to the balance of the Class F certificates.

5. The Class X-A, Class X-B, Class X-D and Class X-F balances are interest-only (IO) certificates that reference Class A-1, Class A-2, Class A-4, Class A-5, Class A-AB, Class A-S, Class B, Class C, Class D, Class E, and Class F. The IO rating mirrors the lowest-rated reference tranche adjusted upward by one notch if senior in the waterfall.

February 2020 4


Transaction Summary

POOL CHARACTERISTICS

Trust Amount ($) 1,220,059,491 Wtd. Avg. Interest Rate (%) 3.673

Number of Loans 46 Wtd. Avg. Remaining Term 115

Number of Properties 139 Wtd. Avg. Remaining Amortization 355

Average Loan Size ($) 26,523,032 Total DBRS Morningstar Expected Amortization2 5.3

DBRS Morningstar LTV (%)1 55.7 / 76.7 DBRS Morningstar Balloon LTV (%)1 52.1 / 70.2

Appraised LTV (%)1 54.3 / 75.0 Appraised Balloon LTV (%)1 50.8 / 68.5

Wtd. Avg. DBRS Morningstar DSCR1 2.48 / 2.10 Wtd. Avg. Issuer Term DSCR1 2.83 / 2.45

Top Ten Loan Concentration (%) 0.5 Avg. DBRS Morningstar NCF Variance (%) -12.2

1. The second metric excludes shadow-rated and co-op loans.2. For certain ARD loans, expected amortization may include amortization expected to occur after the ARD but prior to single/major tenant expiry.

PARTICIPANTS

Depositor Citigroup Commercial Mortgage Securities Inc.

Mortgage Loan Sellers Citi Real Estate Funding Inc.

Goldman Sachs Mortgage Company

German American Capital Corporation

Trustee Wilmington Trust

Master Servicer Midland Loan Services, a Division of PNC Bank

Special Servicer CW Capital Asset Management, LLC

Certificate Administrator and Custodian

Citibank, N.A.

Operating Advisor Park Bridge Lender Services LLC

February 2020 5


Rating Considerations

The collateral consists of 46 fixed-rate loans secured by 139 commercial, hospitality, and multifamily properties. The transaction is a sequential-pay pass-through structure. DBRS Morningstar analyzed the conduit pool to determine the provisional ratings, reflecting the long-term probability of loan default within the term and its liquidity at maturity. DBRS Morningstar shadow-rated eight loans, representing 36.2% of the pool, as investment grade. When the cutoff loan balances were measured against the DBRS Morningstar Stabilized NCF and their respective actual constants, five loans, representing 5.1% of the pool, had a DBRS Morningstar Term DSCR below 1.32x, a threshold indicative of a higher likelihood of midterm default. The pool additionally includes 18 loans, representing 28.4% of the pool by allocated loan balance, with issuance LTVs higher than 67.1%, a threshold historically indicative of above-average default frequency. The WA LTV of the pool at issuance was 55.7% and the pool is scheduled to amortize down to a WA LTV of 52.1% at maturity.

STRENGTHS – Investment Grade Component: The collateral features eight loans, representing 36.2% of the initial pool balance, that DBRS Morningstar assessed as investment grade: 1633 Broadway, 650 Madison Avenue, Parkmerced, Bellagio Hotel and Casino, 805 Third Avenue, Southcenter Mall, and CBM Portfolio. DBRS Morningstar views the percentage of investment-grade loans in the pool favorably and the proportion of investment-grade loans is higher than other recent conduit/fusion transactions. For more information on these seven loans, please refer to their respective loan summaries.

– Urban Market Concentration: The pool benefits from a fairly large amount of loans secured by properties in urban, liquid markets. Loans secured by properties in DBRS Market Ranks 7 and 8 represent 32.2% of the pool, which is higher than many recent conduit transactions. In addition, the weighted average DBRS Market Rank of 4.73 is considered relatively high.

– Low Leverage: The pool has a favorable WA DBRS Morningstar LTV of 55.7% at issuance, which amortizes down to a WA DBRS Morningstar Ending LTV of 52.1% at maturity, similar to recent transactions. In addition, the WA DBRS Morningstar DSCR is high at 2.48x, and it remains high at 2.07x when loans that have been shadow-rated investment grade are removed.

– Property Quality: Ten sampled loans, representing 39.7% of the pool balance, had Average (+), Above Average, or Excellent property quality. Additionally, no loan had Below Average property quality. Three of the five largest loans in the pool, representing 23.3% of the pool balance, have Above Average property quality.

CHALLENGES AND CONSIDERATIONS – Leverage Barbelling: The pool exhibits heavy leverage barbelling. While the pool has 15 loans, comprising 48.3% of the pool balance, with an issuance LTV lower than 59.3%, a threshold historically indicative of relatively low-leverage financing and generally associated with below-average default frequency, there are also 18 loans, comprising 28.4% of the pool balance, with an issuance LTV higher than 67.1%, a threshold historically indicative of relatively high-leverage financing and generally associated with above-average default frequency. The WA Expected Loss of the pool’s investment grade component was approximately 0.8% while the WA Expected Loss of the pool’s conduit component was substantially higher at 2.7%, further illustrating the barbelled nature of the transaction.

– The proportion of higher Expected Loss non-shadow rated loans is reflect in the capital structure, as the implied credit enhancement allocated to such loans is quite elevated.

– Loan Purpose and Cash Equity: Only 9% of the pool by initial cutoff balance is for the purpose of acquisition, which is much lower than recent transactions. DBRS Morningstar views acquisition loans as more favorable in the context of recent-vintage conduit/fusion transactions. Cash equity infusions from a sponsor in a transaction typically results in a greater alignment of interests between the lender and borrower, especially compared with a refinancing scenario where the sponsor may be withdrawing equity from the transaction. Several loans that produced higher-than-average expected losses, including The Atrium, Worthington Crossing One, Hanna Business Park, The Westin Book Cadillac, and Manor Shopping Center were all refinance transactions.

February 2020 6


– 16 of the 18 loans identified as high leverage have some form of amortization and the 16 loans collectively amortize down to a WA LTV of 62.1% at maturity and have an average occupancy rate of 94.0%. Additionally, five of the 18 high leverage loans are for the purpose of acquisition.

– IO Concentration: 23 loans, representing a combined 66.4% of the cutoff pool balance, are structured with full term IO periods. An additional 13 loans, representing 25.4% of the pooled cutoff balance, are structured with partial-IO terms ranging from 24 months to 60 months.

– Seven of the loans structured with full-term IO periods are shadow-rated investment grade and represent more than half of the 66.4% full IO concentration. The WA DBRS Morningstar LTV of the full term IO loans is extremely low at 48.8%.

– Secondary/Tertiary Market Concentration: The pool features a relatively high concentration of loans secured by properties located in less favorable suburban, tertiary, and rural market areas. Twenty-five loans, representing 41.6% of the pool’s cutoff balance, are secured by properties predominately located in areas with a DBRS Morningstar Market Rank of one through four.

– Loans in markets with a DBRS Morningstar Market Rank of 1 through 4, on average, produce higher expected losses than similar loans; therefore, the component of the pool that is concentrated in these weaker markets resulted in higher deal-level credit enhancement with the WA expected loss of over 2.7% for the conduit component of the transaction.

February 2020 7


DBRS Morningstar Credit Characteristics

DBRS MORNINGSTAR DSCR DBRS MORNINGSTAR LTV (%)

DSCR% of the Pool

(Trust Balance)% of the Pool

(Trust Balance1) LTV (%)% of the Pool


(Trust Balance1)

0.00-0.90 0.0 0.0 0.0-50.0 36.7 3.2

0.90-1.00 0.0 0.0 50.0-55.0 6.8 12.3

1.00-1.15 2.5 4.6 55.0-60.0 105.6 128.7

1.15-1.30 2.5 2.5 60.0-65.0 11.7 21.3

1.30-1.45 10.0 18.2 65.0-70.0 18.3 33.3

1.45-1.60 15.5 28.2 70.0-75.0 21.0 38.3

1.60-1.75 14.2 14.2 >75.0 0.0 0.0

>1.75 55.3 37.1 Wtd. Avg. (%) 55.7 76.7

Wtd. Avg. (x) 2.48 2.10

DBRS MORNINGSTAR BALLOON LTV (%)

LTV (%)% of the Pool


(Trust Balance1)

0.0-50.0 37.9 5.4

50.0-55.0 108.7 134.5

55.0-60.0 22.2 40.4

60.0-65.0 18.8 34.3

65.0-70.0 9.5 17.4

70.0-75.0 2.9 5.3

>75.0 0.0 0.0

Wtd. Avg. (%) 52.1 70.2

Note: Includes pari passu debt, but excludes subordinate debt. 1. Excludes shadow-rated and co-op loans.

February 2020 8


Largest Loan Summary

LOAN DETAIL

Loan NameTrust Balance

($) % of Pool

DBRS Morningstar

Shadow Rating

DBRS Morningstar LTV

(%)

DBRS Morningstar

Balloon LTV (%)

DBRS Morningstar

DSCR (x)

650 Madison Avenue 115,000,000 9.4 BBB (low) 48.5 48.5 2.45

1633 Broadway 110,000,000 9.0 A (low) 41.7 41.7 3.04

Southcenter Mall 59,000,000 4.8 AAA 28.9 28.9 5.97

Superior Storage Portfolio 55,000,000 4.5 n/a 62.0 62.0 1.88

CBM Portfolio 50,000,000 4.1 AA (low) 33.6 33.6 5.61

Staples Headquarters 50,000,000 4.1 n/a 51.8 51.8 2.72

805 Third Avenue 45,000,000 3.7 BBB (high) 35.4 35.4 2.28

The Westin Book Cadillac 45,000,000 3.7 n/a 65.5 57.1 1.66

The Shoppes at Blackstone Valley 40,000,000 3.3 n/a 68.7 57.6 1.37

Brooklyn Multifamily Portfolio 38,000,000 3.1 n/a 66.8 66.8 1.61

Whiteland Towne Center 36,800,000 3.0 n/a 69.2 59.8 1.48

1025-1075 Brokaw Road 32,500,000 2.7 n/a 51.0 51.0 2.39

White Oak Crossing 32,000,000 2.6 n/a 73.1 64.2 1.70

Manor Shopping Center 31,000,000 2.5 n/a 74.7 67.6 1.37

90 North Campus 30,000,000 2.5 n/a 65.0 65.0 1.54

PROPERTY DETAIL

Loan Name

DBRS Morningstar

Property Type City StateYear Built SF/Units

Loan PSF/

Units ($)

Maturity Balance PSF/

Units ($)

650 Madison Avenue Mixed Use New York New York 1957, 1987 600,415 977 977

1633 Broadway Office New York New York 1972 2,561,512 391 391

Southcenter Mall Retail Tukwila Washington 1968 783,068 278 278

Superior Storage Portfolio Self Storage Various Various 1998 990,859 56 56

CBM Portfolio Limited Service Hotel Various Various 1988 7,677 51,843 51,843

Staples Headquarters Office Framingham Massachusetts 1997 666,088 135 135

805 Third Avenue Office New York New York 1982 596,100 252 252

The Westin Book Cadillac Full Service Hotel Detroit Michigan 1924 453 169,978 148,404

The Shoppes at Blackstone Valley Retail Millbury Massachusetts 2003-2004 787,071 208 175

Brooklyn Multifamily Portfolio Multifamily Brooklyn New York 1910 78 487,179 487,179

Whiteland Towne Center Retail Exton Pennsylvania 1988 217,822 169 146

1025-1075 Brokaw Road Retail San Jose California 2012 96,280 338 338

White Oak Crossing Retail Garner North Carolina 2002, 2003 527,874 120 105

Manor Shopping Center Retail Lancaster Pennsylvania 1970, 1986, 1999, 2007

248,567 125 113

90 North Campus Office Bellevue Washington 1991 262,858 304 304

February 2020 9


DBRS Morningstar Sample

DBRS MORNINGSTAR SAMPLE RESULTS

Prospectus ID Loan Name % of Pool

DBRS Morningstar

NCF ($)

DBRS Morningstar

NCF Variance (%)

DBRS Morningstar Major Variance Drivers

DBRS Morningstar

Property Quality

1 650 Madison Avenue 9.4 50,846,168 -10.4 TILCs $10.62, Vacancy 5%, Mgmt. Fee 4%

Above Average

2 1633 Broadway 9.0 92,393,880 -20.8 TILCs, Rent steps, Vacancy, Reimbursements

Above Average

3 Southcenter Mall 4.8 37,974,345 -8.6 Vacancy at 11.9%, TILCs Above Average

4 Superior Storage Portfolio 4.5 4,380,806 -10.8 Miscellanious Revenue, Vacancy at 20.88%

Average

5 CBM Portfolio 4.1 80,085,196 -5.6 Taxes, Other revenues off TTM avg.

Average

6 Staples Headquarters 4.1 7,712,413 -31.8 TILCs - concluded on $18/$9 for LCs, and $50/$25 for TIs,

Vacancy 10%, CAPEX at 0.25psf

Average +

7 805 Third Avenue 3.7 14,713,894 -13.1 TILCs - 6%/3% LCs/$70/$25 Tis per appraiser

Average +

8 The Westin Book Cadillac 3.7 7,676,017 -6.8 Room revenue - Occupancy 75%, ADR 3 Yr Avg., Actual

taxes, F&B Revenue

Average +

9 The Shoppes at Blackstone Valley 3.3 12,618,489 -10.4 Management fee at 4%; TILCs - LCs 5%/2.5%, Tis Appraisal per tenant category; Vacancy

7.1%

Average

10 Brooklyn Multifamily Portfolio 3.1 2,410,743 -11.0 RE Taxes, Vacancy 5% Average

11 Whiteland Towne Center 3.0 3,113,360 -2.1 Mgmt. fee, capex $0.45/sf Average

12 1025-1075 Brokaw Road 2.7 2,737,285 -7.9 Vacancy 8.1%, TILCs $0.74psf; $1.10psf

Average

13 White Oak Crossing 2.6 5,837,887 -6.3 Vacancy 6.7%, TILCs (0.63 psf), Mgmt. fee 4%

Average

15 90 North Campus 2.5 4,655,865 -37.6 TILCs, Vacancy Average

16 Property Commerce Portfolio 2.3 5,285,003 -10.1 TILCs, Vacancy 13.1% Average

17 Grafton Commons 2.3 2,603,154 -4.7 Vacancy 5.9% blended, LCs 5%/2.5%, Mgmt. Fee 4%

Average

18 Parkmerced 2.3 58,796,395 -1.5 Management fee 1.5% (SASB) Average

19 Midland Atlantic Portfolio 1.9 3,657,272 -8.5 Vacancy at 9.6% (blended), Replacement Reserves 0.24

psf

Average

20 Bellagio Hotel and Casino 1.6 426,559,931 -6.0 RevPAR, FF&E Excellent

21 405 E 4th Avenue 1.6 4,452,730 -10.5 Vacancy (10%) TI 80/20; LCs 4/2 (SASB)

Above Average

23 Crossroads at Tolleson 1.5 1,507,672 -16.9 Vacancy 12.5%, Mgmt fee 4%, MTM

Average

31 510 East 14th Street 1.2 7,708,405 -15.4 Commercial rent, Ground lease, R&M (Retread)

Above Average

February 2020 10


DBRS MORNINGSTAR SAMPLE RESULTS

Prospectus ID Loan Name % of Pool

DBRS Morningstar

NCF ($)

DBRS Morningstar

NCF Variance (%)

DBRS Morningstar Major Variance Drivers

DBRS Morningstar

Property Quality

33 1000 West Washington 1.1 919,843 -15.4 TILCs, Operating Expenses Average

39 Beachcliff Apartments 0.8 705,014 -10.3 Management Fee at 4%, Replacement Reserves

Average -

40 Homewood Suites Novi 0.7 905,817 -12.2 Occupancy 62.5% Average

45 Tru Hotel Sterling Heights 0.5 512,117 -21.4 Rooms revenue Occupancy 51.5%, FF&E reserve 7.5%

Average +

February 2020 11


DBRS MORNINGSTAR SITE INSPECTIONSThe DBRS Morningstar site visits included 60 of 139 properties, representing 65.7% of the pool by allocated loan balance. DBRS Morningstar performed guided management tours on 18 of the 46 loans. The resulting DBRS Morningstar property quality scores are highlighted in the table on page 12.

DBRS MORNINGSTAR CASH FLOW ANALYSISDBRS Morningstar completed a cash flow review as well as a structural review on 26 of the 46 loans, representing 78.2% of the pool by allocated loan balance. DBRS Morningstar generally adjusted cash flows to current in-place rent and, in some instances, applied an additional vacancy or concession adjustment to account for deteriorating market conditions or tenants with above-market rents. In certain instances, DBRS Morningstar accepted contractual rent steps if they were within market levels. Most expenses were generally recognized based on the higher of historical figures or the borrower’s budgeted figures. Real estate taxes and insurance premiums were inflated if a current tax bill was not provided. Capex was deducted based on the higher of the engineer’s inflated estimate and the DBRS Morningstar standard, according to property type. Finally, leasing costs were deducted to arrive at the DBRS Morningstar NCF. If a significant upfront leasing reserve was established at closing, DBRS Morningstar reduced its recognized costs. DBRS Morningstar gave credit to tenants not yet in occupancy if a lease was signed and the loan was adequately structured with a reserve, LOC, or holdback earn-out. The DBRS Morningstar sample had an average NCF variance of -12.4% and ranged from -1.5% (Parkmerced) to -37.6% (90 North Campus). For loans not subject to an NCF review, DBRS Morningstar applied the average NCF variance of the sampled loans.

DBRS Morningstar Sampled Property Type

Excellent Above Average Average (+) Average Average (-) Below Average Poor Pool

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Full ServiceHotel

Industrial LimitedService Hotel

Multifamily Office Self Storage Retail UnanchoredRetail

Mixed Use Other ManufacturedHousing

DBRS Morningstar Sampled Property Quality

# of Loans

% of Sample

Excellent 1 2.1 Above Average 5 33.4 Average + 4 15.3 Average 15 48.2 Average - 1 1.0 Below Average 0 0.0 Poor 0 0.0

February 2020 12


Model Adjustments

DBRS Morningstar applied POD and LGD assumptions to certain loans, including Southcenter Mall, 805 Third Avenue, Seaman Avenue Multifamily Portfolio, 333 Ovington Avenue, Staples Headquarters, Westin Book Cadillac, and Manor Shopping Center. Identified model adjustments are as follows:

– DBRS Morningstar adjusted the POD and LGD assumptions for Southcenter Mall to reflect an upward cap-rate adjustment to the DBRS Morningstar adjusted cap rate of 5.5% from the Issuer’s implied cap rate of 4.2%. This resulted in adjusted DBRS Morningstar Issuance and Maturity LTVs of 28.8%, which DBRS Morningstar then applied to its POD and LGD calculations. DBRS Morningstar made the cap-rate adjustment for this loan to bring the cap rate to a level that is more consistent with other regional malls.

– DBRS Morningstar adjusted the POD and LGD assumptions for 805 Third Avenue to reflect an upward cap-rate adjustment from the Issuer’s implied cap rate of 3.68% to the DBRS Morningstar adjusted cap rate of 4.0%. This change resulted in an adjusted DBRS Morningstar Issuance and Maturity LTV of 35.4%, which DBRS Morningstar then applied to its POD and LGD calculations. The cap-rate adjustment for 805 Third Avenue brings the cap rate more in line with DBRS Morningstar’s view of the market.

– DBRS Morningstar adjusted the POD and LGD assumptions for Seaman Avenue Multifamily to reflect an upward cap-rate adjustment from the Issuer’s implied cap rate of 4.38% to the DBRS Morningstar adjusted cap rate of 5.0%. This change resulted in an adjusted DBRS Morningstar Issuance and Maturity LTV of 73.83%, which DBRS Morningstar then applied to its POD and LGD calculations. The cap-rate adjustment for Seaman Avenue Multifamily brings the cap rate more in line with DBRS Morningstar’s view of the market.

– DBRS Morningstar adjusted the POD and LGD assumptions for Staples Headquarters to reflect an upward cap-rate adjustment from the from the Issuer’s implied cap rate of 5.71% to the DBRS Morningstar adjusted cap rate of 6.50%. This change resulted in an adjusted DBRS Morningstar Issuance and Maturity LTV of 51.76%, which DBRS Morningstar then applied to its POD and LGD calculations. The cap-rate adjustment for Staples Headquarters brings the cap rate more in line with DBRS Morningstar’s view of the market.

– DBRS Morningstar adjusted the POD and LGD assumptions for Westin Book Cadillac to reflect an upward cap-rate adjustment from the from the Issuer’s implied cap rate of 6.1% to the DBRS Morningstar adjusted cap rate of 7.0%. This change resulted in an adjusted DBRS Morningstar Issuance at 65.5% and Maturity LTV of 57.1%, which DBRS Morningstar then applied to its POD and LGD calculations. The cap-rate adjustment for the Westin Book Cadillac brings the cap rate more in line with DBRS Morningstar’s view of the market.

– DBRS Morningstar adjusted the POD and LGD assumptions for Manor Shopping Center to reflect an upward cap-rate adjustment from the from the Issuer’s implied cap rate of 5.94% to the DBRS Morningstar adjusted cap rate of 6.50%. This change resulted in an adjusted DBRS Morningstar Issuance LTV of 74.66% and Maturity LTV of 67.64%, which DBRS Morningstar then applied to its POD and LGD calculations. The cap-rate adjustment for Staples Headquarters brings the cap rate more in line with DBRS Morningstar’s view of the market.

February 2020 13


Loan Size

Loan Size# of

Loans% of Pool

Very Large (>$20.0 million)

19 71.7

Large ($10.0-$20.0 million)

18 23.1

Medium ($5.0-$10.0 million)

8 5.0

Small ($2.0-$5.0 million)

1 0.3

Very Small (<$2.0 million)

0 0.0

DBRS Morningstar Market Types

Market Type# of

Properties% of Pool

1 2 1.1 2 6 13.7 3 9 12.7 4 8 14.1 5 5 12.0 6 5 6.7 7 3 8.1 8 5 24.2

DBRS Morningstar Property Type

Property Type# of

Loans% of Pool

Office 6 21.8 Retail 9 23.6 Multifamily 10 13.9 Mixed Use 5 13.8 Industrial 3 3.4 Full Service Hotel 3 6.2 Self Storage 2 4.8 Unanchored Retail 4 6.3 Limited Service Hotel 3 5.7 Manufactured Housing 0 0.0 Other 1 0.7

Transaction Concentrations

Geography

State# of

Properties% of Pool

NY 16 31.6 CA 14 9.9 MA 3 7.5 WA 3 7.4 TX 21 6.5 MI 6 6.5 All Others 76 30.7

Largest Property Location

Property Name City State 650 Madison Avenue New York New York 1633 Broadway New York New York Southcenter Mall Tukwila Washington Superior Storage Portfolio Various Arkansas CBM Portfolio Various California Staples Headquarters Framingham Massachusetts 805 Third Avenue New York New York The Westin Book Cadillac Detroit Michigan The Shoppes at Blackstone Valley Millbury Massachusetts Brooklyn Multifamily Portfolio Brooklyn New York Whiteland Towne Center Exton Pennsylvania 1025-1075 Brokaw Road San Jose California White Oak Crossing Garner North Carolina Manor Shopping Center Lancaster Pennsylvania 90 North Campus Bellevue Washington

February 2020 14


Loan Structural Features

Pari Passu Notes: Sixteen loans, representing 57.1% of the pool by allocated loan balance, have pari passu debt and are identified below.

PARI PASSU NOTES

Loan Balance ($)% of Pool Deal ID

% of Total Pari Passu Loan

Controlling Piece (Y/N)

650 Madison Avenue $50,000,000 9.4% CGCMT 2019-C7 6.3% N

$40,000,000 Not Identified 5.00% N

$50,000,000 Benchmark 2020-B1 6.25% N

$115,000,000 Not Identified 14.38% N

$45,000,000 Benchmark 2020-IG1 5.63% N


$37,900,000 BBCMS 2020-C6 4.74% N


$60,000,000 BBCMS 2020-C6 7.50% N


$40,000,000 WFCM 2020-C55 5.00% N

$1,000,000 Mad 2019-650M 0.13% N

$213,200,000 Mad 2019-650M 26.7% Y

$800,000,000 n/a n/a 100.0% n/a

1633 Broadway $60,000,000 9.0% GSMS 2020 GC-45 4.8% N

$45,000,000 Benchmark 2020-B16 3.6% N

$64,650,000 Benchmark 2020-IG1 5.2% N

$100,000,000 BANK 2020-BNK25 8.0% N

$70,000,000 WFCM 2020-C55 5.6% N

$110,000,000 CGCMT 2020-GC46 8.8% N





$1,000,000 BWAY 2019-1633 0.1% N

$249,000,000 BWAY 2019-1633 19.9% Y

$1,250,000,000 n/a n/a 100.0% n/a

February 2020 15


PARI PASSU NOTES




Southcenter Mall $60,000,000 4.8% GSMS 2020 GC-45 27.5% Y

$50,000,000 Benchmark 2020-IG1 22.9% N

$39,000,000 CGCMT 2020-GC46 17.9% N


$20,000,000 CGCMT 2020-GC46 9.2% N


$218,000,000 n/a 100.0%

CBM Portfolio $298,000,000 4.1% COMM 2020-CBM 43.6% N


$50,000,000 CGCMT 2020-GC46 7.3% N

$286,000,000 COMM 2020-CBM 41.8% Y

$684,000,000 n/a 100.0%

Staples Headquarters $50,000,000 3.1% CGCMT 2020-GC46 55.6% Y



$90,000,000 n/a 100.0%

805 Third Avenue $50,000,000 3.7% CGCMT 2019-C7 18.2% N

$50,000,000 Benchmark 2020-IG1 18.2% N

$40,000,000 CGCMT 2020-GC46 14.5% N

$5,000,000 Benchmark 2020-IG1 1.8% N

$5,000,000 CGCMT 2020-GC46 1.8% N

$125,000,000 CGCMT 2019-C7 45.5% Y

$275,000,000 n/a 100.0%

The Westin Book Cadillac $45,000,000 3.7% CGCMT 2020-GC46 58.4% Y


$77,000,000 n/a 100.0%

The Shoppes at Blackstone Valley $55,000,000 3.3% COMM 2019-GC44 33.5% Y

$50,000,000 GSMS 2020-GC45 30.5% N

$40,000,000 CGCMT 2020-GC46 24.4% N


$164,000,000 n/a 100.0%

White Oak Crossing $32,000,000 2.6% CGCMT 2020-GC46 50.5% Y


$63,375,000 100.0%

February 2020 16


PARI PASSU NOTES




90 North Campus $50,000,000 2.5% GSMS 2020-GC45 62.5% Y

$30,000,000 CGCMT 2020-GC46 37.5% N

$80,000,000 100.0%

Property Commerce Portfolio $30,000,000 2.3% GSMS 2020-GC45 52.1% Y

$27,620,000 CGCMT 2020-GC46 47.9% Y

$57,620,000 100.0%

Parkmerced $247,000,000 2.3% MRCD 2019-PARK 16.5% N


$45,000,000 Benchmark 2020-IG1 3.0% N

$27,500,000 CGCMT 2020-GC46 1.8% N


$37,500,000 GSMS 2020-GC45 2.5% N

$708,000,000 MRCD 2019-PARK 47.2% N

$122,500,000 MRCD 2019-PRKC 8.2% Y

$122,500,000 MRCD 2019-PRKC 8.2% N

$1,500,000,000 100.0%

Midland Atlantic Portfolio $23,000,000 1.9% CGCMT 2020-GC46 51.1% Y


$45,000,000

The Bellagio Hotel and Casino $716,000,000 1.6% BX 2019-OC11 24.2% Y

$360,200,000 Third Party investor 12.2% N

$100,000,000 BANK 2020-BNK25 3.4% N

$60,000,000 GSMS 2020-GC45 2.0% N



$60,000,000 Benchmark 2020-B16 2.0% N

$5,500,000 Benchmark 2020-IG1 0.2% N

$20,000,000 CGCMT 2020-GC46 0.7% N

$43,750,000 BBCMS 2020-C6 1.5% N

$510,700,000 BX 2019-OC11 17.3% N

$139,800,000 Third Party investor 4.7% N

$683,300,000 BX 2019-OC11 23.1% N

$2,960,500,000 100.0%

February 2020 17


PARI PASSU NOTES




405 E 4th Avenue $42,500,000 1.6% CGCMT 2019-C7 68.0% Y

$20,000,000 CGCMT 2020-GC46 32.0% N

$62,500,000 100.0%

510 East 14th Street $15,000,000 1.2% CGCMT 2020-GC46 17.6% N

$35,000,000 Benchmark 2020-B16 41.2% N

$35,000,000 GSMS 2020-GC45 41.2% Y

$85,000,000

Additional Debt: Eight loans, representing 35.8% of the pool, have some form of existing subordinate debt. Four loans, representing 16.6% of the pool, have subordinate B notes. An additional two loans, representing 5.7% of the pool, have existing mezzanine debt, including Parkmerced, which has both an existing B note and existing mezzanine debt.

Subordinate Debt: SUBORDINATE DEBT

Loan NameTrust Balance

($)Pari Passu Balance ($)

B Note Balance ($)

Mezz/Unsecured

Debt Balance ($)

Future Mezz/Unsecured Debt

(Y/N)Total Debt Balance ($)

650 Madison Avenue $115,000,000 $471,800,000 $0 $213,200,000 N $800,000,000

1633 Broadway $110,000,000 $891,000,000 $249,000,000 $0 Y $1,250,000,000

Southcenter Mall $59,000,000 $159,000,000 $0 $0 N $218,000,000

Superior Storage Portfolio $55,000,000 $0 $0 $11,500,000 Y $66,500,000

CBM Portfolio $50,000,000 $348,000,000 $0 $286,000,000 N $684,000,000

Staples Headquarters $50,000,000 $40,000,000 $0 $0 N $90,000,000

805 Third Avenue $45,000,000 $105,000,000 $125,000,000 $0 N $275,000,000

The Westin Book Cadillac $45,000,000 $32,000,000 $0 $0 N $77,000,000

The Shoppes at Blackstone Valley $40,000,000 $124,000,000 $0 $0 Y $164,000,000

White Oak Crossing $32,000,000 $31,375,000 $0 $0 N $63,375,000

90 North Campus $30,000,000 $50,000,000 $0 $0 N $80,000,000

Property Commerce Portfolio $27,620,000 $30,000,000 $0 $0 N $57,620,000

Parkmerced $27,500,000 $519,500,000 $245,000,000 $275,000,000 N $1,067,000,000

Midland Atlantic Portfolio $23,000,000 $22,000,000 $0 $0 N $45,000,000

Bellagio Hotel and Casino $20,000,000 $1,656,200,000 $1,333,800,000 $0 Y $3,010,000,000

405 E 4th Avenue $20,000,000 $42,500,000 $0 $0 N $62,500,000

510 East 14th Street $15,000,000 $70,000,000 $0 $75,000,000 N $160,000,000

February 2020 18


Leasehold: – CBM Portfolio, representing 4.1% of the pool balance, has seven hotels of 52 assets that are subject to leasehold interest. For more information please see page 38.

– 510 East 14th Street, representing 2.6% of the pool by allocated loan balance, is fully secured by the borrower’s leasehold interest in the property. The ground lease has a scheduled expiry of November 27, 2111, and the ground-rent payment of $2.6 million at issuance represents 23.1% of the DBRS Morningstar NCF of over $8.6 million. During the loan term, the ground rent will be no more than 25.5% of the DBRS Morningstar NCF. The ground lease has an expiration date far enough beyond loan amortization to be considered traditionally financeable; however, the appraiser concluded a 2041 ground-rent reset of $11.2 million, which will fall at the end of the subsequent loan term and may affect this loan’s refinancability. DBRS Morningstar reflected this reality in its high 7.42% cap rate when assigning a shadow rating to the loan.

– Manor Shopping Center, representing 2.5% of the pool balance, has a small portion of the property subject to a ground lease through 2031 with the owner of a neighboring parcel. The ground leased portion contains parking for 31 cars, and isn’t necessary to comply with zoning or access. These parking spaces are considered excess.

RESERVE REQUIREMENT BORROWER STRUCTURE

Type # of Loans % of Pool Type Loans % of Pool

Tax Ongoing 36 61.5 SPE with Independent Director and Non-Consolidation Opinion

22 74.7

Insurance Ongoing 14 22.4 SPE with Independent Director Only 2 2.3

Capex Ongoing 36 59.1 SPE with Non-Consolidation Opinion Only 1 3.1

Leasing Costs Ongoing1 12 30.2 SPE Only 21 19.9

1. Percent of office, retail, industrial, and mixed-use assets based on DBRS Morningstar property types.

Interest Only

# of Loans

% of Pool

Full IO 23 66.4 Partial IO 13 25.4 Amortizing 10 8.2

DBRS Morningstar Expected Amoritization

# of Loans

% of Pool

0.0% 22 62.3 0.0%-5.0% 0 4.1 5.0%-10.0% 2 4.0 10.0%-15.0% 7 12.2 15.0%-20.0% 8 12.9 20.0%-25.0% 3 2.8 >25.0% 3 1.7

Note: For certain ARD loans, expected amortization may include amortization expected to occur after the ARD, but prior to single/major tenant expiry.

Sponsor: DBRS Morningstar identified three loans, representing 5.3% of the pool by allocated loan balance, with a prior voluntary bankruptcy, inadequate CRE experience, and/or negative credit events. DBRS Morningstar applied POD penalties to mitigate this risk. DBRS Morningstar also identified seven loans, representing 25.2% of the pool by allocated loan balance, with Strong sponsorship because of the sponsor(s)’s extensive experience in the CRE sector and significant wherewithal.

DBRS Morningstar Sponsor Strength

# of Loans

% of Pool

Strong 7 25.2 Average 36 69.5 Weak 1 3.7 Bad/Litigious 2 1.6

February 2020 19


The sponsor on Seaman Avenue Multifamily Portfolio is the defendant in a lawsuit with plaintiffs seeking injunctive relief and damages based on alleged violations of rent stabilization laws. The allegation is that the guarantor inappropriately increased rents for rent stabilized tenants upon completion of individual apartment improvements. In total, 22 entities including the related borrower and affiliated entities that are subject to the lawsuit including four units at 133-139 Seaman Avenue and eight units at 30 Seaman Avenue. Approximately 9.8% of the total units in the mortgaged property are subject to the lawsuit. DBRS Morningstar adjusted the POD and LGD assumptions on the property to account for this risk and our view of the market which is referenced in the Model Adjustments section.

Property Release: Twelve loans, representing 46.6% of the pool, allow for the release or defeasance of one or more properties, condominium units, or a portion of the mortgaged property, subject to release prices in an amount at least equal to 110.0% of the allocated loan amounts of the respective properties and/or certain leverage, DSCR, or debt yield tests prescribed in the individual loan agreements.

Property Substitution: No loans in the pool allow for the substitution of properties.

Terrorism Insurance: Terrorism insurance is required and in place for all 46 loans except for 333 Ovington Avenue, which accounts for 1.3% of the pool balance.

February 2020 20


COLLATERAL SUMMARY

DBRS Morningstar Property Type Mixed Use Year Built/Renovated 1957/2015

City, State New York, NY Physical Occupancy (%) 97.9

Units/SF 600,415 Physical Occupancy Date October 2019

This loan is secured by the borrower’s fee-simple interest in a 27-story (604,096 sf ) mixed-use office and retail property in New York City, on Madison Avenue between 59th and 60th streets in the Plaza District. The loan will total $800 million and is structured as a fixed-rate loan with a 10-year, interest-only term. Loan proceeds will be used to refinance existing debt of $800 million and fund upfront reserves and cover closing costs. The JV Sponsor acquired the asset from The Carlyle Group in 2013 for approximately $1.3 billion.

The $586.8 million senior note ($50 million of which is being securitized in this transaction) sizes to BBB (low) based on DBRS Morningstar’s analysis of the loan on a stand-alone basis.

PROPERTY OVERVIEWThe property was constructed in 1957 as an eight-story building, and a heavy expansion in 1987 added 19 stories of office space. The property is 97.9% leased and located in the largest office submarket in the country. The property features a wide range of diverse and highly rated tenants that comprise 63.6% of the NRA. The office space is the global headquarters for Ralph Lauren, occupying 46.1% of the property’s NRA. The ground-floor retail spaces are occupied by Celine, Moncler, and Tod’s. The property is easily accessible by public transportation (MTA subway lines F, M, N, Q, R, W, 4, 5, 6, and Metro North), near both major and local thoroughfares (FDR drive, Queensboro Bridge, and Park Ave) and close to some of the most popular areas in Midtown Manhattan such as Central Park, Rockefeller Center, Museum of Modern Art, and the luxury retail corridors on 5th Ave and Madison Ave.

New York, NY

650 Madison

Loan SnapshotSellerCREFI, GSMC

Ownership InterestFee Simple

Trust Balance ($ million)115.0

Loan PSF/Unit ($)977.32

Percentage of the Pool (%)9.4%

Loan Maturity/ARDDecember 2029

AmortizationInterest Only

DBRS Morningstar Issuance DSCR (x)2.5

DBRS Morningstar Issuance LTV (%)48.5

DBRS Morningstar Balloon LTV (%)48.5

DBRS Morningstar Property TypeMixed Use

DBRS Morningstar Property QualityAbove Average

Debt Stack ($ million)Trust 115.0

Pari Passu

471.8 B-Note213.2

Mezz0.0

Total Debt800.0

Loan PurposeRefinance

Equity Contribution/ (Distribution) ($ million)9.5

February 2020 21


650 MADISON – NEW YORK, NY

TENANT SUMMARY

Tenant SF% of Total

NRADBRS Morningstar Base Rent PSF ($)

% of Total DBRS Morningstar Base Rent

Lease Expiry

Investment Grade? (Y/N)

Ralph Lauren Corp 277,016 46.1 89.40 32.8 12/31/2024 Y

Memorial Sloan Center 100,700 16.8 92.97 12.4 7/31/2023 Y

Willet Advisors LLC 25,732 4.3 155.00 5.3 12/31/2024 N

Sotheby's 37,772 6.3 91.60 4.6 11/30/2035 N

BC Partners Inc. 19,380 3.2 118.58 3.0 1/31/2027 N

Subtotal/Wtd. Avg. 460,600 76.7 95.25 58.2 n/a n/a

Other Tenants 124,062 20.7 254.41 41.8 Various Various

Vacant Space 15,753 2.6 n/a n/a n/a n/a

Total/Wtd. Avg. 600,415 100.0 125.64 100.0 n/a n/a

SPONSORSHIPThe borrower for this transaction is Vornado and Oxford Properties, which owns and operates Class A office/retail assets. Vornado is one of the largest owners of commercial real estate in the United States, with a portfolio of $17.2 billion in assets under management. Oxford Properties is a global real estate investor with about $50 billion worth of assets under management. This joint venture will also include investors such as JP Morgan Asset Management, Crown Acquisitions, and Highgate Hotels.

DBRS MORNINGSTAR ANALYSISSITE INSPECTION SUMMARYBased on the site inspection and management tour conducted on the morning of Thursday, November 21, 2019, DBRS Morningstar found the property quality to be Average (+).

The property is at the corner of Madison Avenue and 59th Street in midtown Manhattan, with significant high-street retail frontage along Madison Avenue. The property is about half a block from the southern end of Central Park, which provides the middle and upper floors of the building with relatively unobstructed views of the park. The area is dominated by high-end ground floor retailers including Stuart Weitzman, Canali, Eton, Tom Ford, and Lalique. Nearby subway service includes the N-R-W at 5th Avenue Station and 4-5-6 service about two blocks west at the 59th Street-Lexington Avenue station.

February 2020 22



The lobby is modern and typical of Class A Midtown office buildings but not particularly striking. The sponsors repositioned some of the mezzanine space formerly occupied by Crate & Barrel and leased the space to Sotheby’s. The Sotheby’s space was recently completed and was nicely built out, with marble and glass throughout. The floor also includes some outdoor space in the form of a wraparound balcony.

The Memorial Sloan Kettering (MSK) space was well-kept but understandably more typical of a medical office, with waiting, exam, and diagnostic rooms across various portions of the space. The building also serves as the headquarters for Ralph Lauren, whose space is laden with custom wood paneling and includes a large open wood staircase that spans multiple floors. The Ralph Lauren space was busy at the time of the tour but in need of light updating (carpet in certain areas, for example). DBRS Morningstar also toured various prebuild spaces throughout the building, some of which had sought-after views of Central Park. The prebuild space was modern and thoughtfully designed, with high-end kitchen spaces and glass offices along the exterior. The prebuild space could easily be taken as-is by a tenant.

The retail component at the property includes high-end retailers Celine, Moncler, and Tod’s. DBRS Morningstar toured both the Celine and the Moncler spaces on the ground floor. Both were typical of luxury fashion retailers, though Celine’s space clearly benefited from the approximately $15 million TI package. The Moncler store uses customer-recognition technology to help monitor foot traffic and sales conversion ratios.

Overall, the building was typical of Class A Manhattan office space, with the added benefit of ultraluxury retail anchors on the ground floor along Madison Avenue.

DBRS MORNINGSTAR NCF SUMMARYNCF ANALYSIS

2017 ($) 2018 ($)T-12 September

2019 ($) Issuer NCF ($) DBRS Morningstar

NCF ($)NCF Variance

(%)

GPR 65,301,770 65,936,214 68,490,075 79,521,977 79,506,595 0.0

Recoveries 7,750,394 8,784,226 9,361,042 10,762,016 10,762,016 0.0

Other Income 265,640 319,055 362,098 371,407 362,097 -2.5

Vacancy (829,105) 75,003 (3,327,410) (4,392,778) 32.0

EGI 72,488,699 75,039,495 78,288,218 87,327,989 86,237,930 -1.2

Expenses 25,947,321 26,481,999 27,326,681 28,901,495 29,035,497 0.5

NOI 46,541,378 48,557,496 50,961,537 58,426,495 57,202,433 -2.1

Capex 150,104 148,512 -1.1

TI/LC 1,500,000 6,207,753 313.9

NCF 46,541,378 48,557,496 50,961,537 56,776,391 50,846,168 -10.4

The DBRS Morningstar NCF is based on the DBRS Morningstar North American Commercial Real Estate Property Analysis Criteria. The resulting DBRS Morningstar NCF for the subject was $50,846,168, representing a -10.45% variance from the issuer’s underwritten figure of $56,776,391. The primary drivers of the variance were vacancy, management fee, and TI/LCs. DBRS Morningstar concluded a vacancy of 5.5%, a management fee of 4% of EGI capped at $1 million, and substantially higher TI/LC assumptions. DBRS Morningstar concluded a total TI/LC cost of over $6.2 million, or just under $11/PSF normalized, whereas the issuer underwrote $1.5 million.

February 2020 23



DBRS MORNINGSTAR VIEWPOINTThe 650 Madison Avenue building offers high-quality Class A office space with views of Central Park and high-street ground floor retail in an excellent location. Ralph Lauren has been headquartered at the building since 1989 and has expanded several times, and MSK is a high-investment-grade tenant with a substantial presence at the property as well.

The sponsor has been successful in repositioning the retail component formerly occupied by Crate & Barrel, adding significant value in the process. The Crate & Barrel store consumed a large amount of space and did not mesh as well with the other high-end retail in the immediate area. The mezzanine space was successfully leased to Sotheby’s, and the sponsors were able to entice luxury fashion retailers Celine and Moncler to sign leases for the ground-floor space. The $15 million TI package for Celine was substantial and among the highest in the retail comps that DBRS Morningstar was provided, but we believe it was necessary in order to elevate the retail component from middle-market to ultraluxury.

The biggest risk at the property is likely the midloan term expiration of the Ralph Lauren lease, which, if allowed to expire, would leave approximately 250,000 sf of vacant space. While Ralph Lauren has been headquartered at the property for more than 20 years, it is one of the few fashion brands based in the Plaza District submarket.

Overall, DBRS Morningstar views the property favorably for its strong long-term occupancy history (averaging 94.5% since 1996) with the two investment-grade anchor office tenants and a successful repositioning of the Crate & Barrel space to ultraluxury retail with long-term tenants. Additionally, the Central Park views from above the 15th floor and outdoor space are highly sought-after amenities for any office tenant.

DOWNSIDE RISKS – The property’s two anchor tenants, representing over 60% of the NRA, have leases that expire during the loan term. Furthermore, approximately 95% of the property’s cumulative gross rent is scheduled to expire through the loan’s maturity.

– The loan’s recourse carveout guaranty is capped at 10% of the loan amount.

– The Plaza District submarket continues to face stiff competition for tenants from newer buildings in the Hudson Yards and Downtown Manhattan submarkets.

STABILIZING FACTORS – Both anchor office tenants have a significant operational presence at the property, and both spaces benefit from somewhat specialized build-outs. For example, in the case of MSK, there is a substantial amount of medical imaging infrastructure in the space.

– The loan is a cash-neutral refinancing, with proceeds being used only to repay existing debt and cover closing costs.

– The sponsor has successfully repositioned the retail component, which is now responsible for approximately a fourth of the building’s gross rent.

February 2020 24


COLLATERAL SUMMARY

DBRS Morningstar Property Type Office Year Built/Renovated 1971/1989 & 1994

City, State New York, New York Physical Occupancy (%) 98.4

Units/SF 2,561,512 Physical Occupancy Date October 31, 2019

The $1.25 billion loan is secured by the borrower’s fee interest in a Class A office building at 1633 Broadway in midtown Manhattan. The loan proceeds are being used to refinance an existing $1.05 billion loan, fund upfront reserves of $36.4 million, cover closing costs of $20.8 million, and return $139.9 million of cash equity to the sponsor. The whole loan is split into $1.00 billion of senior notes, of which the trust has a $60 million pari passu piece, and $250 million of junior notes. All the junior notes and $1 million of the senior notes are included in the BWAY Trust 2019-1633 transaction. The remaining ~$550 million in senior notes is not securitized.

The property houses major financial, communications, and entertainment companies on long-term leases typically from 10 years to more than 20 years. The property serves as the headquarters or a major presence for tenants such as Allianz Global Investors, Warner Music Group, Morgan Stanley, Showtime Networks Inc., New Mountain Capital, Paramount Group Inc., Charter Communications, Inc., and law firms. Office tenants compose 88% of the rentable area, and retail space comprises 9%. The lease expiration schedule indicates only 50.6% of the leased NRA, and 47% of the total rent expires during the 10-year loan term.

Retail tenants include two restaurants and TD Bank on the ground floor. Equinox has a facility below the main lobby that fronts onto an open, below-street-level courtyard that has an entrance to several subway lines. A similar, but smaller below-street-level retail space known as The Cube is on the northeast corner of the site. Its entry from the main plaza is via a descending stairway, and it has hosted a recent pop-up fashion attraction. This space is now vacant.

New York, NY

1633 Broadway

Loan SnapshotSellerGSMC, GACC










DBRS Morningstar Property TypeOffice


Debt Stack ($ million)Trust Balance110.0

Pari Passu891.0

B-Note249.0

Mezz0.0

Total Debt1,250.0


Equity Contribution/(Distribution) ($ million)(139.9)

February 2020 25


1633 BROADWAY – NEW YORK, NY

TENANT SUMMARY

Tenant SF% of Total

NRA

DBRS Morningstar

Base Rent PSF ($)

% of Total DBRS Morningstar Base Rent Lease Expiry


Allianz Asset Mgmt 320,911 12.5 89.96 16.2 1/31/2031 Y

Morgan Stanley & Co 260,829 10.2 75.15 11.0 3/31/2032 Y

WMG Acquisition Corp 293,888 11.5 64.64 10.7 7/31/2029 N

Showtime Networks Inc 261,196 10.2 62.86 9.2 1/31/2026 Y

Kasowitz Benson Torres 203,394 7.9 72.52 8.3 3/31/2037 n/a

Subtotal/Wtd. Avg. 1,340,218 52.3 73.60 55.3 Various n/a

Other Tenants 1,172,051 45.8 68.00 44.7 Various n/a

Vacant Space 49,243 1.9 n/a n/a n/a n/a

Total/Wtd. Avg. 2,561,512 100.0 69.62 100.0 Various n/a

The building also is home to the Circle in the Square Theatre and the Circle in the Square Theatre School, with entry on 50th Street. In addition, part of the collateral is a building adjacent to the main office tower containing a 250-space valet parking garage with a ground-floor entrance and the 1,933-seat Gershwin Theatre above the garage. The Gershwin Theatre is the largest Broadway theater based on seating capacity and has hosted Wicked since 2003.

The property competes with numerous other Class A office buildings of similar vintage in the Westside office submarket as defined by the appraiser. Reis identifies 10 properties built in the 1970s in the Midtown West submarket that make up its competitive set and another 11 office buildings of newer vintage that are direct competitors. The office vacancy rate for the Westside submarket for Q3 2019 was 5.4%, per the appraiser. For the same time period, Reis estimated vacancy was 7.8% for the Midtown West submarket, with 7.2% vacancy for Class A office properties. However, approximately 21.9 million sf of development is scheduled for completion in Manhattan by 2023, and another 12.6 million sf is in the planning stages. DBRS Morningstar believes the new supply in midtown Manhattan, the bulk of which is the midtown Manhattan, particularly in Hudson Yards, could significantly affect the marketability and occupancy of existing buildings in the submarket. Similarly, Reis projects the submarket’s vacancy to increase to 9.4% in 2023.

SPONSORSHIP The loan benefits from experienced and high-quality sponsor Paramount Group, a fully integrated REIT, which has its headquarters in the building in four offices on the 18th totaling approximately 37,000 sf. Established in 1978, Paramount Group, from which the building’s name of Paramount Plaza comes from, has a 10.4 million sf portfolio of Class A office buildings, retail, and debt and equity investments in New York, San Francisco, and Washington, D.C. Paramount Group is listed on the New York Stock Exchange and has a market capitalization of $3.14 billion as of December 31, 2019.

The property manager is an affiliate of Paramount Group. It manages Paramount Group’s entire real estate portfolio.

February 2020 26



DBRS MORNINGSTAR ANALYSISSITE INSPECTION SUMMARY

DBRS Morningstar toured the interior and exterior of the property on October 22, 2019, at 10:00 a.m. Based on the site inspection, DBRS Morningstar found the property quality to be Average (+).

The collateral comprises a 48-story, 2,500,000-plus sf Class A office tower with a 250-space parking garage. The property, which has received the LEED Gold status, has large floorplates ranging from 37,000 sf to 54,000 sf.

At 1633 Broadway, the property is well located between 50th Street and 51st Street in the northern section of Manhattan’s theater district, which is centrally located within the midtown office market. The property has excellent access to public transportation, as eight subway lines run directly under the property and there are several public bus services in the area. The property is near numerous iconic restaurants and retail sites augmenting the many tourist attractions in Times Square, which is immediately south.

The site tour leaders were members of the property management company and executives of the sponsor. The property manager is an affiliate of the sponsor. DBRS Morningstar toured several tenants’ spaces in the building, which showed the diversity of its tenancy. Several tenants are established companies such as Morgan Stanley, Warner Brothers Music, MongoDB, and New Mountain Capital.

The primary entrance is from Broadway, where the building is set back about 100 feet from the street. The lobby was very active on the day of the site inspection. The front lobby entrance is impressive, with porcelain/marble floors and ceilings approximately 30 feet high. The lobby has revolving and swinging doors that lead to a central 24-hour security desk. Employees use the 38 passenger elevators serving the office tower. Warner Music Group has a dedicated entrance on 50th Street to its offices on six floors totaling nearly 300,000 sf.

Management began the tour on the top two floors, which were being built out for the newly signed lease to a private equity firm. The proposed fit and finishes were on par for Class A properties. The floor design of the space included a spiral staircase connecting the two floors and outdoor space on both floors. In addition, DBRS Morningstar observed the building’s unobstructed views of midtown Manhattan from the top floors. Furthermore, management showed the building’s large and open floorplates of approximately 50,000 sf per floor on all but the lower five floors.

February 2020 27



DBRS Morningstar visited tenant spaces on several floors. All tenant spaces were well designed and varied from traditional office spaces with cubicle layouts to several with an open floor design similar to those in many new technology companies.


2016 ($) 2017 ($) 2018 ($)

T-12 September 2019

($)Issuer

NCF ($)

DBRS Morningstar NCF

($)

NCF Variance

(%)

GPR 155,999,546 159,464,803 179,219,236 182,760,348 198,756,496 190,573,539 -4.1

Vacancy & Concessions -8,170,549 -11,736,482 43.6

EGI 155,689,790 159,464,803 179,219,236 182,760,348 190,585,947 178,837,056 -6.2

Expenses 61,868,404 65,274,796 70,120,786 71,951,033 71,435,784 73,118,340 0.0

NOI 93,821,386 94,190,007 109,098,450 110,809,315 119,150,163 105,718,717 -11.3

Capex 0 2,472,436 13,324,836 0.0

NCF 93,821,386 94,190,007 109,098,450 110,809,315 116,677,727 92,393,880 -20.8

The DBRS Morningstar NCF is based on the DBRS Morningstar North American Commercial Real Estate Property Analysis Criteria. The resulting DBRS Morningstar Stabilized NCF was $92,393,880, – down 20.0% from the Issuer’s NCF. The main drivers of the variance are tenant leasing costs, rent steps, management fees, and assumed vacancy.

According to CBRE, the office property is in the Times Square/Westside submarket, which shows a tight vacancy rate of 5.5% for Class A space. Reis shows the Midtown West submarket vacancy at 7.8% for Q3 2019 for all office space in the submarket and 5.5% vacancy for office properties of similar vintage and quality. The property has averaged 5.4% vacancy for the past seven years. Only two years in the past 17 years have had average occupancy dip below 90%. DBRS Morningstar used 6.2% of the gross revenue as its vacancy estimate. This is lower than DBRS Morningstar’s standard 10% for office properties because of the property’s excellent location, historically strong submarket, consistently strong property occupancy, and current physical vacancy of 1.9%. The Issuer assumed a 4.2% vacancy on gross revenue.

DBRS Morningstar did not accept rent steps beyond the first 12 months because none of the investment-grade tenants’ leases extended more than three years beyond the loan term. In addition, DBRS Morningstar’s calculation of TI/LCs exceeded that of the Issuer. DBRS Morningstar concluded to an average of $75 psf for new leases and $38 psf for renewal leases and a 65% renewal percentage on a normalized basis.

DBRS Morningstar concluded to operating expenses that closely tracked the in-place amount and the T-12 ended September 2019 amount except for management fees. DBRS Morningstar assumed the management fee was 1.5% of the EGI as opposed to the Issuer capping fees at $1.0 million, or 0.5% of the EGI.

DBRS MORNINGSTAR VIEWPOINTDBRS Morningstar believes that the office building will perform well given its desirable location in midtown Manhattan a few blocks north of Times Square and midway between Grand Central Terminal and Columbus Circle. Regardless of its age of nearly 50 years, the property has kept high institutional standards comparable to other Class A space within the submarket thanks to its most recent renovation in 1989 and more recent tenant fit-outs. The quality tenant list includes seven credit rated tenants, representing 56.8% of the NRA and 60.9% of the total projected rent. Four tenants, representing 37% of the total space, have investment-grade ratings. Most leases are long term, resulting in consistently high occupancy and low turnover during the loan term.

February 2020 28



The area is densely developed with office buildings of similar and lesser quality. Local commercial offerings on the nearby avenues and cross streets provide desirable entertainment and shopping venues and numerous eating establishments including several highly rated restaurants. The property is easily assessible by subway and surface transportation. For all these reasons plus the strong sponsorship, DBRS Morningstar believes the loan will perform up to its expectation and pay as agreed during the loan term and is capable of a refinance takeout at the end of the loan term.

Because of the low DBRS Morningstar LTV of 68.2% based on a 6.50% capitalization rate and 41.7% appraisal LTV, the property’s excellent location in a gateway market, and the long-term owner, DBRS Morningstar considers the credit qualities associated with the senior notes to be A (low).

DOWNSIDE RISKS – The office property, built in 1971 and renovated in 1989 (30 years ago), is competing with recently constructed and under construction office properties with substantial modern amenities and features.

– The loan has a 10-year, full-term, IO debt payment structure, which increases the risk of maturity loan default because there is no amortization.

– The lease expiration schedule indicates that 64.4% of the leased NRA expires before and just after loan maturity with Allianz, representing 15.5% of NRA, expiring in 2031. The loan does not provide for any tenant specific springing re-leasing reserve.

STABILIZING FACTORS – DBRS Morningstar noted no deferred maintenance at the time of the site visit, and the property condition report confirmed minimal immediate repairs with future needs amounting to $0.20 psf per year on an inflated basis. In addition, new properties are commanding substantial rent premiums over the 1633 Broadway, which means they are not directly competitive.

– The tower’s floors, capable of an open, unobstructed floorplan, belie the dark and tired main lobby, which could be a deterrent to future competitive leasing.

– The senior notes have a low LTV of 41.7% based on the as-is appraised value, and the trust exposure at $391 psf is extremely attractive.

– DBRS Morningstar considers the tenant rent roll to be relatively granular as Allianz is the largest tenant at just 15.5% of NRA. There is an ongoing TI/LC reserve capped at $5.1 million. DBRS Morningstar views the property’s overall rent as below current market rates for similar properties.

February 2020 29


COLLATERAL SUMMARY

DBRS Morningstar Property Type Anchored Retail Year Built/Renovated 1968/2008

City, State Seattle, WA Physical Occupancy (%) 92.6

Units/SF 783,068 Physical Occupancy Date November 2019

*All figures are inclusive of space where the tenant owns the improvements/space is subject to ground leases.

The loan is secured by the borrower’s fee simple interest in Southcenter Mall, a 1.68 million-sf (783,068 sf collateral) regional mall located in Seattle, Washington. Built in in 1968 and renovated between 2008 and 2010, the property was 92.6% occupied as of the November 2019 rent roll. The subject is anchored by Macy’s, JC Penney, Nordstrom, and Sears, all of whom own their improvements and, in the case of Macy’s, the underlying land. Key Bank and Olive Garden are also subject to ground leases. Loan proceeds of approximately $218.0 million are being used to refinance $217.7 million of existing debt and cover estimated closing costs of $1.1 million. The 10-year loan is structured as IO for the entire term. The loan has six pari passu notes, of which a $39 million non-controlling A-3 note and a $20 million non-controlling A-5 note will be securitized as part of the CGCMT 2020-GC46 transaction. The remaining pari passu notes will be securitized in one or more future transactions. As a result of the loan’s low exposure of $278 psf, low DBRS Morningstar LTV of 28.9% and the property’s high quality and excellent location, DBRS Morningstar considers the credit quality associated with the Southcenter Mall loan to be AAA.

Southcenter Mall is located in Seattle, approximately 14 miles south of the CBD. Located at the junction of I-405 and I-5, the property benefits from excellent accessibility from the Seattle CBD and its southern suburban neighborhoods. The subject contains primarily national tenants with several regional tenants occupying some of the in-line space. The property underwent a $260 million renovation in 2008, which added 400,000 sf to the NRA, including a 16-screen AMC theater, an 11,300-sf food terrace, new specialty stores, feature restaurants, and new parking structures. In addition, four outparcel pads were added totaling 40,000 sf. In 2010, a 44,413-sf specialty grocery store, Seafood City, was added to the rent roll. The four anchors at the property generated aggregate sales

Seattle, WA

Southcenter Mall

Loan SnapshotSellerGACC

Ownership InterestFee Simple/Leasehold




Loan Maturity/ARDJanuary 2030





DBRS Morningstar Property TypeRetail



Pari Passu 159.0

B-Note0.0

Mezz0.0

Total Debt218.0


Equity Contribution/(Distribution) ($ million)0.82

February 2020 30


SOUTHCENTER MALL – SEATTLE, WA

of $141.9 million in the T-12 period ending October 2019 ($162.8 psf ), of which only Sears had sales of less than $100 psf. The Seafood City posted $35.0 million ($787 psf ) and the AMC theater posted $13.6 million ($850,081 per screen) in sales for the T-12 period. Furthermore, the in-line space generated more than $757 psf in sales ($600 psf excluding the Apple Store). Three of the four anchor leases will expire within the loan term. For more information on the rent roll and tenants at the property, please refer to the table below.

TENANT SUMMARY

TenantCollateral

(Y/N) SF

% of Total Collateral

NRA

DBRS Morningstar Base Rent

PSF ($)

% of Total DBRS

Morningstar Base Rent

Lease Expiry

T-12 October 2019

Sales ($)Sales

PSF ($)

DBRS Morningstar Occupancy

Cost (%)

JC Penney N 272,267 n/a n/a n/a 7/2028 35,248,953 129.46 1.2

Macy's N 258,944 n/a n/a n/a n/a 63,330,678 244.57 1.4

Sears N 174,630 n/a n/a n/a 7/2023 13,938,589 79.82 6.9

Nordstrom N 165,900 n/a n/a n/a 9/2028 29,359,154 176.97 3.5

American Multi-Cinema Y 70,000 8.9 41.72 8.6 7/2023 13,601,289 194.30 21.5

Round One Y 40,576 5.2 27.88 3.0 7/2025 6,451,137 158.99 17.5

Seafood City Y 44,413 5.7 31.52 4.1 7/2025 34,955,535 787.06 4.2

The Container Store Y 25,452 3.3 27.64 2.1 2/2027 4,000,029 157.16 17.6

H&M Y 24,506 3.1 48.50 3.5 1/2020 9,992,231 407.75 13.8

Subtotal/Wtd. Avg. Various 204,947 26.2 34.73 21.3 Various 69,000,222 336.67 15.5

Other Tenants Various 453,441 57.9 55.86 78.7 Various n.a n.a n.a

Vacant Space Various 124,680 15.9 n/a n/a Various n.a n.a n.a

Total/Wtd. Avg. Various 783,068 100.0 43.41 100.0 Various n.a n.a n.a

The property, reportedly the largest retail center in the state of Washington, is considered the premier shopping center in the South Seattle submarket and its 30-mile trade area has a population of more than 1.3 million people. The owned space operated at an occupancy of approximately 84.1%, which is lower than the Q3 2019 submarket retail occupancy rate of 90.2%, according to Reis. The appraisal outlined five properties that directly compete with the Southcenter Mall. For more information on the properties’ competitive set, please refer to the table below.

COMPETITIVE SET

Property LocationDistance from Subject

(miles) SF Year BuiltOccupancy

(%)

The Commons at Federal Way Federal Way, WA 11.5 771,000 1975 74.1

Pacific Place Seattle, WA 12.3 330,000 1998 75.0

Bellevue Square Bellevue, WA 14.0 1,578,000 1946 98.2

Northgate Mall Seattle, WA 19.1 1,046,000 1950 98.2

Tacoma Mall Tacoma, WA 23.5 1,188,607 1964 98.6

Westfield Southcenter1 Seattle, WA n/a 783,068 1968 92.6

Source: Appraisal.1. The area for Southcenter mall includes non-collateral sf. Total collateral sf is 783,068 and occupancy for owned space is 84.1%.

February 2020 31



SPONSORSHIPThe loan is sponsored by a joint venture between Unibail-Rodamco-Westfield (URW; 55%) and Canada Pension Plan Investment Board (CIPB; 45%). The non-recourse carveout guarantor is URW WEA LLC, an affiliate of URW. URW is a global developer and operator of flagship shopping destinations in cities across Europe and the United States and office buildings and major convention and exhibition venues in the Paris region. As of June 30, 2019, URW had a total portfolio value of approximately EUR 65.0 billion, of which 86% is retail, 7% is office, 5% is convention, and exhibition venues and 2% is services. URW owns and operates 92 shopping centers, 55 of which are flagships in cities in Europe and the United States.

CPPIB is a Canadian Crown corporation established by way of the 1997 Canada Pension Plan Investment Board Act to oversee and invest the funds contributed to and held by the Canada Pension Plan. As of June 30, 2019, CPPIB managed over CAD 400.6 billion in investment assets for the Canada Pension Plan on behalf of 20 million Canadians. CPPIB invests across geographies and asset classes, including public equities (33%), private equities (24%), real estate (12%), government bonds (10%), credit investments (9%), infrastructure (9%), and others. If CPPIB succeeds to URW’s interest in the borrower, CPPIB, or an affiliate having a net worth and liquidity reasonably acceptable to the lender, is permitted to act as replacement guarantor.

The property is managed by Westfield Property Management LLC (Westfield), which is an affiliate of the borrower. Given the institutional nature of the joint venture between URW and CPPIB, the sponsorship for this loan is considered strong.


Based on the DBRS Morningstar site inspection and management meeting conducted at 1:00 p.m. on December 16, 2019, DBRS Morningstar found the property quality to be Above Average. The subject property is located about 14 miles south of the Seattle CBD. The property benefits from its location at the junction of the two most populated highways in Seattle, the I-5 and I-405, both which offer easy access to the greater Seattle area. The property also benefits from its close proximity to Seattle-Tacoma International Airport. The immediate surrounding area consists of an array of hotels, shopping centers, and restaurants. The property was very busy at the time of inspection, which was surprising given the Monday afternoon visit. Per management, the mall was busier than normal because of the holiday season; however, because of the large number of restaurants and food court options at the property, it is very popular with area businesses and offices as a lunch destination.

February 2020 32



Building exteriors were in good condition and are made up of red brick and glass. Landscaping was well maintained consisting of small trees, bushes, flower pots, and grass-covered areas, giving the property a spacious feel and making it inviting for foot traffic. The parking lot and paved surfaces were all in fair condition with freshly painted traffic lines. Signage throughout the property was highly visible and vacant spaces appeared to be marketable. Macy’s owns its portion of the land and parking lot and Westfield rents it from them. According to management, the mall has 360-degree visibility from I-5 and I-405, and the signage for the mall and for individual stores was very prominent. The property also had very good curb appeal, especially at the primary entrances near the restaurants, the AMC theater, and the Seafood City grocery store.

According to the property manager, Southcenter mall was 90% occupied at the time of inspection. It was initially built in 1968; however, a $250 million renovation was undertaken in 2008 in which a second floor was added along with a food terrace, new specialty stores, feature restaurants, and new parking structures. In addition, four outparcel pads were added totaling 40,000 sf. The entire subject contains about 20% local brands while 80% are regional or national tenants. The overall layout was practical with the entertainment and restaurant tenants supplying foot traffic to retail tenants offering easy access to exterior roadways. In addition to the Seafood City grocery store, there are neighboring Filipino fast food restaurants exclusive to the mall, such as Jollibee’s and Chow King. The AMC theater is visually appealing and is located in the center of the mall. With all of the food options provided, Southcenter reportedly has the second highest food sales of all Westfield-operated malls nationwide. The mall also has a Round 1, which is an entertainment/arcade with a bowling alley, arcade games, and a karaoke room. The second-floor food court, added in the 2008 redevelopment, includes a Chipotle and Johnny Rockets along with other well-known chains. Other major retail demand drivers include an H&M, Uniqlo Morphe, and Apple Store. Recent renovations to the property included a $1.0 million remodel of the northern entrance which added restaurants. The property manager mentioned that the eastern and southern entrances were also looking to be remodeled in similar fashion. Other recent renovations included lights, signage, and monuments around the property. The management has submitted 17 capex recommendations for 2020 including a remodel to the LensCrafters and new space for the Apple Store, as well as bringing in a new Amazon store. Overall, DBRS Morningstar found the property to be well located and containing various demand drivers and in good condition at the time of inspection.


2017 ($) 2018 ($)T-12

September 2019 ($) Issuer NCF ($)DBRS

Morningstar NCF ($)NCF

Variance (%)

GPR 36,892,000 35,907,000 35,027,282 39,504,023 41,268,514 4.5

Recoveries 19,036,000 20,891,000 20,515,715 20,415,041 20,416,765 0.0

Other Income 5,974,000 6,391,000 5,156,489 5,248,489 5,114,602 -2.6

Vacancy -5,434,991 -7,947,669 0.0

EGI 61,902,000 63,189,000 60,699,486 59,732,561 58,852,212 -1.5

Expenses 18,294,887 19,089,312 18,573,816 16,952,585 17,946,031 5.9

NOI 43,607,113 44,099,688 42,125,670 42,779,976 40,906,181 -4.4

Capex 1,120,596 2,931,836 0.0

NCF 43,607,113 44,099,688 42,125,670 41,659,380 37,974,345 -8.8

The DBRS Morningstar NCF is based on the DBRS Morningstar North American Commercial Real Estate Property Analysis Criteria. The resulting DBRS Morningstar NCF was $37,974,345, representing a -8.8% variance from the Issuer’s NCF of $41,659,380. The primary drivers of the variance include tenant improvements, vacancy, and occupancy cost adjustments. DBRS Morningstar used $25 psf for new tenant improvements on major and anchor tenants, and $35 psf for all other

February 2020 33



new tenant improvements. Additionally, DBRS Morningstar assumed a 12.9% vacancy, based on the average in-place economic vacancy. DBRS Morningstar made occupancy cost adjustments for eight in-line tenants based on an occupancy cost threshold of 18.5%. The largest adjustment was for Abercrombie and Fitch, which accounted for 58.0% of the total occupancy cost adjustment.

DBRS MORNINGSTAR VIEWPOINTThe collateral is well-located near major demand drivers in the West Seattle/Tukwila submarket. These include the ease to major highway access through the I-5 and I-405. In addition to the roadways, the property offers a variety of space types and majors demand drivers through retail, entertainment, restaurants, and groceries. Southcenter Mall is considered to be an elite-performing Westfield mall with total annual sales productivity of over $524 million ($311 psf ), including the non-collateral anchors and $382 million ($488 psf ) for the collateral NRA. The in-line vacancy and the overall economic vacancy at the property is relatively high at nearly 16.0% and 12.9%, respectively. However, the vacancy includes a 26,611 sf Forever 21 store, which was open for business during the site inspection and per management and was not slated for. The second floor of the mall seemed to have significantly lesser traffic during the site inspection and, given the number of restaurants and food options elsewhere in the mall, the traditional food court area seemed deserted. However, the property clearly attracts visitors based on the crowds on the first floor and the packed parking lots.

The Sears anchor space is another potential area of concern. Per management, there are contingency plans in place for Sears possibly going dark but no specifics were provided. However, Sears has maintained sales in the $80 psf range for the last two years the property manager was not aware of any plans for the store closing. The loan is only 22.2% LTV based on an appraised value of $980.0 million and 28.9% DBRS Morningstar LTV. Based on the low leverage and the low loan proceeds of $278 psf based on the collateral NRA, DBRS Morningstar considers the credit quality associated with the Southcenter Mall loan to be AAA.

DOWNSIDE RISKS – The ten-year loan is interest only over the full term which may increase refinance risk.

– The DBRS Morningstar economic vacancy was high at 12.9%.

STABILIZING FACTORS – The loan has strong credit metrics and a DSCR of 6.13x based on the DBRS Morningstar NCF.

– The subject benefits from a good mix of shops and restaurants generating over $382 million in annual sales. In addition, the DBRS Morningstar concluded vacancy includes Forever 21, which has not added this store to its closure list.

February 2020 34


COLLATERAL SUMMARY

DBRS Morningstar Property Type Self Storage Year Built/Renovated Various

City, State Various, Wisconsin and Arkansas Physical Occupancy (%) 79.1

SF 5,904 units/990,859 sf Physical Occupancy Date January 2020

SUPERIOR STORAGE PORTFOLIOThis loan is secured by the borrower’s fee-simple interest in the Superior Storage Portfolio, a 5,904-unit self-storage portfolio of 13 properties in Wisconsin and Arkansas. Built between 1987 and 2008 and renovated between 2013 and 2019, the portfolio was 79.1% occupied as of January 2020. The $66.5 million of debt is divided into a $55.0 million senior loan and an $11.5 million mezzanine piece provided by a third-party lender. The loan was used to refinance approximately $49.4 million of debt, cash out $15.3 million of sponsor equity, cover closing costs of $1.4 million, fund upfront reserves of $260,000, and cover mezzanine origination fees of $289,000. The 10-year loan is IO for the full term and matures in February 2030. The loan is structured with a release provision, allowing the borrower to release a property or properties from the loan after the expiration of the defeasance lockout period.

Various

Superior Storage

Loan SnapshotSellerGSMC





Loan Maturity/ARDFebruary 2030





DBRS Morningstar Property TypeSelf Storage

DBRS Morningstar Property QualityAverage

Debt Stack ($ million)Trust Balance

55.0 Pari Passu

0.0 B-Note0.0

Mezz11.5

Total Debt66.5



February 2020 35


SUPERIOR STORAGE – VARIOUS

PORTFOLIO SUMMARY

Property

Cutoff Date Loan Amount $

% of Loan Amount City, State Property Type SF

% of NRA

Year Built/Renovated

Occupancy (%)

Kenosha Storage 9,087,000 16.5 Kenosha, WI Self Storage 112,755 11.4 1999 85.6

Point Storage 7,788,800 14.2 Middleton, WI Self Storage 85,181 8.6 1988 95.1

Hoerth Storage 7,310,600 13.3 Fond du Lac, WI

Self Storage 135,051 13.6 1987/2013 84.2

Trafalgar Road 4,748,400 8.6 Bella Vista, AR Self Storage 103,340 10.4 2001 70.3

Robinson Avenue 4,372,700 8.0 Springdale, AR Self Storage 97,025 9.8 2005/2017 61.6

Subtotal/WA 33,307,500 60.6 Various Self Storage 533,352 53.8 Various 79.4

Other Properties 21,692,500 39.4 Various Self Storage 457,507 46.2 Various 78.6

Total/WA 55,000,000 100.0 Various Self Storage 990,859 100.0 Various 79.1

The sponsor purchased the properties between May 2014 and December 2018 for a total purchase price of $59.3 million. Since the acquisition, the value of the portfolio has risen to $88.7 million, which is the current appraised value. The properties are in five different submarkets in Wisconsin and Arkansas, providing geographic diversity. Additionally, no individual property in the portfolio accounts for more than 17.0% of the portfolio value. Across the portfolio, the sponsor has invested more than $530,000 in capital expenditures to add/improve security features, landscaping, property appearance, and miscellaneous other improvements.

SPONSORSHIP The borrower for this transaction is NWA Storage Holdings, LLC, and the carveout guarantor is Stephen Juiris. Stephen Juiris has been a value-add investor in commercial real estate for more than 10 years, focused primarily on self-storage properties. He manages the Superior Storage brand and is in the process of rebranding each property in the portfolio to be Superior Storage. Stephen Juiris has a net worth and liquidity of $2.3 million and $1.2 million, respectively. The portfolio is managed by an affiliate of the borrower, for a management fee of 6.0%.

DBRS MORNINGSTAR ANALYSISSITE INSPECTION SUMMARYDBRS Morningstar, along with management representatives, toured the interiors and exteriors of 12 of the 13 properties in the portfolio on January 13 and January 14, 2020. The properties varied in their occupancy and marketability. The properties’ quality ranged from Average (-) to Average (+), for an overall concluded property quality of Average.

February 2020 36



PROPERTIES IN WISCONSIN (Three of four properties) were toured with site management on January 14, 2020.

HOERTH STORAGE – FOND DU LAC, WI – JANUARY 14, 2020, 1:00PM (13.6% OF ALLOCATED BALANCE)

The Hoerth Storage property is immediately adjacent to Hwy. 41 in Fond du Lac, Wisconsin. The South Military Road exit on Hwy. 41 provides access to the property by a small side street. Signage for the self-storage property is easily visible from the highway. The subject lies approximately 2.5 miles southwest of downtown Fond du Lac, also accessible by South Military Road. The property was surrounded by similarly styled industrial properties and a Holiday Inn Express to the west.

The property appeared to be in good condition, with no visible deferred maintenance on the exterior. The main access point led to a large management office with clear signage and parking. Multiple self-storage buildings of varying sizes were scattered around the property. The buildings featured a blue metallic trim with large white garage doors for the units. By comparison to the other properties in the portfolio, the exterior of the units appeared to be very large. Based on the site inspections and management meeting, DBRS Morningstar found the property quality to be Average (+).

February 2020 37



KENOSHA STORAGE – KENOSHA, WI – JANUARY 14, 2020, 10:30AM (11.4% OF ALLOCATED BALANCE)

Kenosha Storage is a self-storage property just off 75th Street, a major thoroughfare in the area. While the property is easily accessible by 75th Street, Neither the signage nor the property is easily visible from the road. The subject lies on 77th Avenue, a small road that extends north of 75th Street and spans less than one mile. The property is on the west side of the street, a few hundred feet south of the dead end. The subject sits approximately five miles west of downtown Kenosha and three miles southeast of the Kenosha Airport. A food manufacturing center neighbors the property to the east, with a large railyard just beyond the manufacturing center. A small lake resides directly west of the subject across the railroad tracks. The Kenosha suburban submarket is composed of mostly single-family homes and large retail centers. Scattered between these homes and retail centers are large parcels of undeveloped land.

A large billboard in the southern corner of the property was visible while approaching the property, which was surrounded by a green chain-link fence. Several different buildings on the property offered a variety of sizes for the self-storage units. The single-story buildings spread across the property were constructed with grey stone. The trim, unit doors, and roofing are all painted dark green. Lighting fixtures are situated above the doors of half the units, providing light to the 24-hour accessible units. Based on the site inspections and management meeting, DBRS Morningstar found the property quality to be Average.

February 2020 38



PROPERTIES IN ARKANSAS (Nine of nine properties toured with site management) on January 13, 2020, from mid-morning to early afternoon.

The portfolio of nine properties was acquired in one transaction from a small operator who lacked the management and financial ability to significantly improve the performance of the properties. All of the Superior Storage properties in Arkansas are within one to five miles of I-49 running from Fayetteville, Arkansas, north to Bentonville, Arkansas.

The sponsor has been upgrading the properties and rebranding them, removing the bad tenants and raising rents. This led to a temporary decline in occupancy, which has been turned around with better revenue performance. The properties benefit from the demographics of their respective area. Some of the properties’ areas have mostly a senior, or older age demographic with price sensitivity, and some are in or near expensive neighborhoods such as Bella Vista, an affluent recreational community. The properties focus mainly on the private consumer and their storage and vehicle parking needs; however, each has an element of commercial usage typically for material storage by small companies. U-Haul rentals provide added revenue at several locations. All properties except one have been rebranded with new signage and capital improvements. DBRS Morningstar found the property qualities to be Average (-) to Average (+).

OAK STREET, BETHEL HEIGHTS, AR (11.5% OF ALLOCATED BALANCE)

February 2020 39



The manager, at the property for nine months and new to the storage business, is assisted by the general maintenance man who has responsibility for all nine properties in Arkansas. He was retained with the transfer from the former owner. The Oak Street property, less than 10 years old, is a well-maintained facility of masonry block buildings with metal rollup doors. The drive areas are paved with two-year old blacktop. The central climate-controlled building and others have eight foot clear heights and taller. A few U-Haul rentals are available. Customers vary from the local individuals and families involved in relocation to contractors and local businesses using the units for inventory and material storage.

The property is visible from the street with good signage. It is fenced with a keypad-operated security gate. The manager lives on-site in an apartment behind the main office, both constructed out of the original house on the site. Bethel Heights and Springdale are to the south. The immediate area has a small amount of home and commercial development, but is largely open farmland. Several construction sites are in the subject’s vicinity. Based on the site inspections and management meeting, DBRS Morningstar found the property quality to be Average.

TRAFALGAR ROAD, BENTON, AR (10.5% OF ALLOCATED BALANCE)

The storage facility, built in 2002, is positioned on an actively traveled local road. The site benefits from its location in the center of a semirural area of town. The property appears to be well maintained and in good condition. It is fenced and gated with keypad entry. The former owner decorated the property with very old farm equipment displayed at the entrance. Front parking is good with four to five available places.

February 2020 40



The multiroom front office in a brick and vinyl-sided building with a flat roof is connected to one of the two climate-controlled buildings with about eight foot ceiling heights. A large building with about 12 foot ceiling height is used for parking of recreational vehicles, trucks, and boat trailers. It is about 50 feet deep and two thirds occupied. The non-climate-controlled units are of various sizes and up to 40 feet deep. The driveways are not paved but instead covered with limestone chips. Managements states that the renters are mostly private with few commercial users. The sponsor owns a large vacant parcel across the street from the facility. No use has been planned for that site at this time. Based on the site inspections and management meeting, DBRS Morningstar found the property quality to be Average (+).


T-12 December 2019 ($) Issuer NCF ($)DBRS Morningstar NCF

($) NCF Variance (%)

GPR 6,596,741 8,369,928 8,338,044 -0.4

Other Income 81,128 347,517 81,128 -76.7

Vacancy & Concessions 0 -1,556,670 -1,741,303 11.9

EGI 6,677,869 7,160,775 6,677,869 -6.7

Expenses 1,970,979 2,149,084 2,148,434 0.0

NOI 4,706,890 5,011,691 4,529,435 -9.6

Capex 0 99,086 148,629 50.0

NCF 4,706,890 4,912,605 4,380,806 -10.8

The DBRS Morningstar Stabilized NCF is based on the DBRS Morningstar North American Commercial Real Estate Property Analysis Criteria. The resulting DBRS Morningstar Stabilized NCF was $4,380,806, a variance of -10.8% from the issuer’s stabilized NCF of $4,912,605. The primary drivers of the variance are miscellaneous revenue, vacancy loss, and replacement reserves. DBRS Morningstar used the T-12, or full-year 2019, amount of miscellaneous revenue, while the issuer used an in-place number that closely approximated the appraisal yearly estimate. DBRS Morningstar estimated the vacancy at an amount that would yield the same effective rental revenue as reported in the T-12 as of year-end 2019. The percentage vacancy of 20.9% closely approximates the weighted-average sf vacancy of 20.9% as of January 2020. DBRS Morningstar assigned its standard annual replacement reserve of $0.15 psf to the portfolio compared with the Issuer at $0.10 psf per year. The engineering reports generally estimated the replacement cost at less than $0.10 psf including for the Walton Boulevard property considered by DBRS Morningstar to be the property in most need of physical repair and improvement.

DBRS MORNINGSTAR VIEWPOINTThe loan is secured by a portfolio of 13 storage facilities, four in Wisconsin and nine in northwest Arkansas. (See schedule.) The properties feature various sizes of storage units with percentages of climate control from none to 54% of the units. The non-climate-controlled units offer various sizes and ceiling heights. Uncovered and enclosed parking for trucks, RVs, boats, and trailers can be found at different properties. The Arkansas properties are situated within one to five miles of I-49 extending from Benton, Arkansas south to Fayetteville, Arkansas. The Wisconsin properties center around Milwaukee from Fond du Lac to the north, Madison to the west, and Kenosha to the south. The settings vary from near open farmland to small cities. All the properties have been established in their respective markets for years. The acquisition and rebranding under one umbrella organization should provide a consistent quality of product and operation with a marketable reputation.

The general market for storage properties has seen much competition from new construction and national operators. By acquiring existing properties, upgrading their quality, and rebranding them with new management, the properties should jump-start the normally slow lease-up period and provide a more predictable and steady return.

February 2020 41



The appraiser’s as-is LTV of 62% implies low-to-moderate default risk for this $55.0 million loan. However, a mezzanine loan of $11.5 million raises the LTV to 75%, still acceptable by traditional lending standards. The diversity among 13 separate properties reduces the dependency on performance of a dominant single property or market. Roughly $500,000 has been spent by the sponsor since acquisition in 2018 on new lighting, asphalt paving, painting, selected fencing, doors and gates, and one property with a new roof.

DOWNSIDE RISKS – The properties are in small city and semirural locations that could limit market growth opportunities.

– Self-storage facilities have attracted new investment and construction in all markets across the country, leading to a general decline in occupancy but an increase in rental rates.

– The average occupancy of the Arkansas portfolio has declined since acquisition at the end of 2018. However, the Wisconsin storage centers, acquired a couple years earlier, have maintained strong occupancies that averaged over 90%.

STABILIZING FACTORS – The sponsor has been successful for the past decade in these markets with the strategy of buying solid storage facilities from mom and pop operators as value add opportunities. Furthermore, DBRS Morningstar incorporates POD penalties depending on the properties’ MSA and market rank.

– Existing properties that are well located with an established reputation in their markets are better able to continue their performance and withstand competition from similar new properties and a long lease-up period. The Wisconsin properties are near interstate or U.S. highways. The Arkansas properties are convenient to I-49. All are visible and easily accessible from local roadways. The markets are stable with numerous markets benefiting from the economic strength provided by the Walmart headquarters in Benton, Arkansas.

– New marketing and management systems, clean-up and targeted capital investment, and a larger visible presence in the market through rebranding will strengthen the product reputation. The Arkansas portfolio experienced an initial decline in occupancy as the sponsor drove out bad customers and raised prices to broadcast improvements in the properties and a place with safe, clean, and reliable storage.

February 2020 42


COLLATERAL SUMMARY

DBRS Morningstar Property Type

Limited-Service Hotel Year Built/Renovated Various

City, State Various T-12 RevPAR ($) 93.08

Rooms 7,677 T-12 RevPAR Date September 2019

This loan is secured by the borrower’s fee and leasehold interests in a portfolio of 52 select-service hotel properties totaling 7,677 rooms located across 25 states. The properties were constructed between 1985 and 1990, and range in size from 140 rooms to 155 rooms. Six of the hotels have fee simple ownership structures while seven are leasehold interest, and 39 are affiliated fee simple and leasehold interest. The leasehold-interest hotels are subject to third-party ground leases with expiration dates ranging from 2038 to 2095. Six of the seven leasehold-interest hotels have ground leases that expire on or beyond 2049 except for Courtyard by Marriott Philadelphia Devon, which expires on 2038; while DBRS Morningstar accounts for this property’s income, no loan amount was allocated to it. The total annual ground rent as of the T-12 period ended September 2019 was $14.4 million, which represents approximately 5.0% of the total revenue for the portfolio.

DBR Investments Co. Limited originated the $684.0 million, five-year, 3.537% fixed-rate, IO mortgage loan. The whole loan consists of 11 promissory notes, including 10 pari passu senior notes with an aggregate cutoff balance of $398.0 million and one junior note with a cutoff principal balance of $286.0 million. The trust loan consists of four senior notes and a junior note totaling $484.0 million. The remaining portion of the whole loan comprises six senior companion notes totaling $200.0 million. The refinancing will pay off the existing debt of $576.4 million, pay closing costs of $9.2 million, and fund a PIP reserve of $99.0 million.

The sponsor acquired the portfolio in 2005 and has invested more than $370.4 million, or $48,253 per room, in capital improvements since the acquisition, primarily in to upgrade common areas, guest rooms, and hotel amenities. The sponsor plans to invest

Various

CBM Portfolio


Ownership InterestVarious


Loan PSF/Room ($)51,843




DBRS Morningstar Issuance DSCR (x) 5.6



DBRS Morningstar Property TypeLimited Service Hotel



50.0 Pari Passu

348.0 B-Note286.0

Mezz0.0

Total Debt684.0



February 2020 43


CBM PORTFOLIO – VARIOUS

an additional $221.7 million, or $28,876 per room, of capital work through 2023. An upfront renovation reserve of $99.0 million will be held back at closing and an additional $78.0 million will be reserved over the first four years of the loan term for this planned renovation.

Courtyard Management Corporation has managed the portfolio since it was acquired in 2005. The company is a wholly owned subsidiary of Marriott International, Inc. The management agreement has an initial term ending December 31, 2025, with two successive 10-year renewal options.

PORTFOLIO SUMMARYThe top five states, led by California, represent 42.3% of the total room count, 51.1% of the total NCF as of the T-12 period ended September 2019, and 51.1% by allocated loan amount. (See Exhibit 1 below.)

The portfolio is granular with no single asset contributing more than 2.0% of the total rooms or 5.5% of the NCF as of the T-12 period ended September 2019. The portfolio has outperformed its competitive sets with occupancy, RevPAR, and ADR penetrations over 100.0% since 2016. Although occupancy penetration was down slightly to 101.4%, this is largely because of renovations beginning in 2019 on 13 hotels, resulting in 65,880 displaced rooms, or 2.4% of total room nights, as well as a slight downturn in occupancy among the competitive set. However, the overall portfolio is performing well above the competition with ADR penetration averaging 113.3% and RevPAR penetration averaging 117.9%. With ongoing planned renovations, the portfolio should continue to maintain its competitive edge.

Exhibit 1: Portfolio Geography

State# of

Properties

% of Pool

(ALA)* CA 8 25.2 FL 4 7.6 IL 4 7.1 CO 3 6.6 GA 3 4.6 All Others 30 48.9

Total 52 100.0

February 2020 44



State# of

Properties Rooms% of Total

RoomsTTM September

2019 NCF ($)

% of TTM September 2019

NCFAllocated Loan

Amount ($)% of Total

ALA

California 8 1,182 15.4 22,906,788 27.6 172,410,000 25.2

Florida 4 592 7.7 5,162,001 6.2 52,100,000 7.6

Illinois 4 591 7.7 5,400,731 6.5 48,540,000 7.1

Colorado 3 450 5.9 4,794,396 5.8 45,260,000 6.6

Georgia 3 435 5.7 4,196,779 5.1 31,270,000 4.6

Texas 3 447 5.8 2,070,552 2.5 29,180,000 4.3

Michigan 2 295 3.8 2,984,798 3.6 27,990,000 4.1

Missouri 2 303 3.9 2,979,499 3.6 24,120,000 3.5

Tennessee 2 290 3.8 3,220,844 3.9 24,120,000 3.5

Connecticut 2 294 3.8 2,680,349 3.2 22,930,000 3.4

Maryland 2 295 3.8 1,730,880 2.1 22,630,000 3.3

New York 2 294 3.8 2,771,916 3.3 22,040,000 3.2

Arizona 2 295 3.8 2,154,557 2.6 21,740,000 3.2

Washington 1 149 1.9 2,611,254 3.1 19,950,000 2.9

Oregon 1 149 1.9 1,647,205 2.0 14,600,000 2.1

New Jersey 1 146 1.9 2,024,369 2.4 14,290,000 2.1

Massachusetts 1 146 1.9 1,933,239 2.3 13,700,000 2.0

Virginia 1 150 2.0 1,108,849 1.3 13,100,000 1.9

Kansas City 1 149 1.9 1,040,242 1.3 11,610,000 1.7

North Carolina 2 298 3.9 2,997,595 3.6 11,320,000 1.7

South Carolina 1 146 1.9 1,378,212 1.7 11,020,000 1.6

Indiana 1 146 1.9 953,395 1.1 11,020,000 1.6

Minnesota 1 146 1.9 1,153,664 1.4 10,720,000 1.6

Alabama 1 140 1.8 1,378,697 1.7 8,340,000 1.2

Pennsylvania 1 149 1.9 1,797,213 2.2 0 0.0

Totals 52 7,677 100.0 83,078,023 100.0 684,000,000 100.0

February 2020 45



On a market level, the aggregate historical performances in occupancy, ADR, and RevPAR for the portfolio’s competitive sets over the past four years since 2016 are summarized below.

COMPETITIVE SETS PERFORMANCE

YearCompetitive Set Occupancy (%)

Competitive Set ADR ($)

Competitive Set RevPAR ($)

Portfolio RevPAR ($)

RevPAR Penetration Index (%)

2016 71.3 111,76 79.72 95.04 119.2

2017 70.7 114.10 80.65 96.13 119.2

2018 70.4 116.37 81.89 94.99 116.0

TTM September 2019 69.8 115.97 80.99 93.08 114.9

Source: LW Hospitality Advisors Appraisals.

PARTIAL RELEASES Borrowers may obtain release(s) of individual property(ies) subject to certain conditions in the loan documents, including payment of applicable release amounts as described in the loan documents.

SPONSORSHIPThe sponsor is Clarion Partners, LLC (Clarion) and the nonrecourse carveout guarantor is CBM Joint Venture Limited Partnership. Clarion offers a broad range of real estate strategies across the risk/return spectrum to more than 300 domestic and international investors with over $50.0 billion of assets under management (AUM).

DBRS MORNINGSTAR SITE INSPECTION SUMMARIESDBRS Morningstar visited 20 of the 52 properties in the portfolio across seven states, representing 38.5% of the total rooms and 46.5% of the of the allocated loan balance in the whole portfolio. The DBRS Morningstar sample included properties located in the Greater Los Angeles Area, Greater San Francisco, and San Jose Area, in California; Florida; Illinois; Colorado; Georgia; Arizona; and New Jersey. Based on the DBRS Morningstar site inspections and management meetings held between January 2, 2020, and January 10, 2020, DBRS Morningstar found the portfolio’s property quality to be Average. For summaries of the site visit comments for each state, please see the COMM 2020-CBM presale on DBRS Morningstar’s website.

February 2020 46




2016 ($) 2017 ($) 2018 ($)

T-12 September

2019 ($)Issuer NCF

($)

DBRS Morningstar

NCF ($)

NCF Variance

(%)

Occupancy 73.0% 73.5% 72.6% 70.8% 71.9% 71.6% -0.5

ADR 130.16 130.83 130.76 131.42 131.36 131.42 0.0

RevPAR 95.04 96.13 94.99 93.08 94.45 94.03 -0.4

Total Departmental Revenue 292,248,611 294,612,633 292,674,812 287,996,255 291,830,198 289,836,250 -0.7

Total Deparmental Expense 72,730,114 74,392,277 77,301,379 73,867,366 73,867,366 74,556,396 0.9

Total Departmental Profit 219,518,497 220,220,356 215,373,432 214,128,889 217,962,832 215,279,853 -1.2

Total Undistributed Expense 71,861,799 72,614,793 73,174,956 76,751,889 76,751,889 77,242,253 0.6

Total Fixed Expense 42,352,359 43,373,426 43,935,330 43,487,824 41,786,374 43,460,592 4.0

NOI 105,304,339 104,232,137 98,263,146 93,889,176 99,424,570 94,577,008 -4.9

FF&E 14,612,431 14,730,632 14,633,741 14,399,813 14,591,510 14,491,812 -0.7

NCF 90,691,908 89,501,505 83,629,406 79,489,364 84,833,060 80,085,196 -5.6

The DBRS Morningstar NCF is based on the DBRS Morningstar North American Commercial Real Estate Property Analysis Criteria. The resulting DBRS Morningstar NCF was $80,085,196, a variance of -5.6% from the Issuer’s NCF. The main drivers of the variance are room revenue and total expenses. DBRS Morningstar estimated occupancy and ADR to be 71.6% and $131.42, respectively, resulting in a RevPAR of $94.03. DBRS Morningstar considered various factors, such as historical performance, competitive sets, new supply, and capex, to arrive at this conclusion.

DBRS MORNINGSTAR VIEWPOINTThe portfolio is geographically diverse and spread across 25 U.S. states, including both urban and suburban properties with a diversified mix of demand drivers in some of the largest and strongest hospitality markets in the country, including California, which lessens the impact of an economic downturn in any single market. The portfolio has outperformed its competitive sets with occupancy, RevPAR, and ADR penetrations well over 100.0% since 2016. The portfolio received $370.4 million, or $48,253 per room, in capex since acquisition in 2005. With an additional $221.7 million, or $28,878 per room, of capital work through 2023, the portfolio should continue to perform well against its competitive sets.

The granularity of the portfolio adds to its diversification benefit as no single hotel in the portfolio contributes more than 2.02% of the total rooms, or 5.7% of the NCF, as of T-12 period ending September 2019, reducing the risk of cash flow disruption and default caused by any single hotel in the pool underperforming.

DBRS Morningstar is concerned that, while the sponsor has invested a significant amount of capital to date and properties continue to perform well against their competitive sets, the renovations are more defensive and have not generally improved overall performance. Since 2017, NCF has declined by about 11.2% to $79.5 million. The increased capital investment should improve overall performance; however, DBRS Morningstar has not included any of this potential upside in its NCF estimate. DBRS Morningstar applied a capitalization rate of 9.0% to its estimated NCF, which led to a valuation of $889.8 million, or $115,909 per room, for the portfolio. Although the loan is structured as IO and there is no amortization over the loan term, refinance risk is less concerning given the resulting LTV of 76.9%, which represents a value deviance of 24.9% from the appraiser’s $1.2 billion as-complete valuation. DBRS Morningstar considers the credit qualities of the senior notes to be AA (low).

February 2020 47



DOWNSIDE RISKS – In the portfolio, 47 properties, or 90.4% of the total rooms, were built in 1989 or earlier. Older properties tend to have higher operating costs and may lack certain features that newer hotels in the market offer.

– The loan is IO for the entire term. The lack of principal amortization during the loan term increases refinance risk at maturity. DBRS Morningstar’s opinion of the property’s stabilized value is 24.9% lower than the appraised value and considers a decline prior to applying DBRS Morningstar’s LTV rating thresholds.

– Cash flow from hospitality properties tends to be volatile because they don’t include long-term tenant leases, a feature common to other types of commercial real estate. A hotel’s guests pay prevailing market rents or daily rates that can change quickly based on a variety of external factors.

STABILIZING FACTORS – The portfolio comprises upscale, select-service hotels operating under the Marriott’s Courtyard by Marriott brand.

– The loan is structured with a $99.0 million upfront renovation reserve, combined with about $78.0 million reserved over the first four years of the loan, for a total reserve of about $177.0 million. The increased capital investment will help the portfolio maintain its competitive position and improve overall financial performance.

– Clarion offers a broad range of real estate strategies across the risk/return spectrum to more than 300 domestic and international investors with over $50.0 billion of AUM. Clarion is an independent affiliate of Legg Mason, Inc.

– Courtyard Management Corporation, a wholly owned subsidiary of Marriott International, Inc., has managed the properties since acquisition in 2005 with an initial term ending on December 31, 2025, and two 10-year extensions at the manager’s option.

February 2020 48


COLLATERAL SUMMARY

DBRS Morningstar Property Type Office Year Built/Renovated 1997

City, State Framingham, MA Physical Occupancy 100.0%

SF 660,088 Physical Occupancy Date February 2020

The $90.0 million loan is secured by the borrower’s fee simple interest in Staples Headquarters, a single-tenant 660,088 sf office building located in Framingham, Massachusetts, approximately 25.0 miles west of the Boston CBD. Built in 1997, the property is 100.0% leased to Staples Inc. and serves as the corporation’s headquarters. Loan proceeds of $90.0 million, in addition to cash equity of $79.7 million, will fund the acquisition of the property in a sale-leaseback transaction for for $165.0 million and cover closing costs of $4.7 million. The 10-year fixed-rate loan is structured as IO for the entire term. Of the $90.0 million loan, $50.0 million will be securitized in the CGCMT 2020-GC46 transaction and the remaining $40.0 million is anticipated be securitized as part of a future transaction.

The single-tenant office building is 100.0% leased to Staples Inc., which has been a tenant at the property since its construction in 1997. Staples Inc. recently invested more than $4.1 million into the property, which included renovations to the main lobby and client meeting space. Sycamore Partners, whose affiliate is a sponsor of the transaction, is a private equity firm that acquired Staples Inc. in 2017 for $6.9 billion. This transaction is part of a sale-leaseback where Staples Inc. is selling the collateral to a partnership between Sycamore Partners and LCN Capital Partners. Upon loan closing, Staples will execute a new 25-year lease that will expire in March 2045, which has three 10-year extension options and has no termination options.

Framingham, MA

Staples Headquarters












DBRS Morningstar Property QualityAverage +


50.0 Pari Passu

40.0 B-Note0.0

Mezz0.0

Total Debt90.0

Loan PurposeAcquisition


February 2020 49


STAPLES HEADQUARTERS – FRAMINGHAM, MA

TENANT SUMMARY

Tenant SF % of Total NRADBRS Base Rent PSF

% of Total DBRS Base Rent Lease Expiry


Staples, Inc. 660,088 100% $18.85 100% 3/31/2045 N

Subtotal/Wtd. Avg. 660,088 100% $18.85 100% 3/31/2045 N

Vacant Space 0 0% n/a n/a n/a N

Total/Wtd. Avg. 660,088 100% $18.85 100% 3/31/2045 N

The property is part of the larger 9/90 Corporate Center, a 1.3 million sf office park, and corporate neighbors include Sanofi Genzyme, a Boston-based biotechnology company, and Computershare Limited, an Australian-based financial services firm. The 9/90 Corporate Center is within the Framingham/Natick submarket, which is popular for corporate headquarters and other large employers due to its easy accessibility to the entire Boston area via I-90, also known as the Massachusetts Turnpike. Although the property is easily accessible via I-90 and I-495, the property is not easily accessible via public transportation, and the nearest train station connecting the area to the Boston CBD is 5.7 miles north of the property. Within the Framingham/Natick submarket, Reis reported an average submarket rental rate of $25.68 for properties of similar age. The property is currently operating at a significantly higher occupancy than the rest of the submarket, as Reis estimates 21.2% and 24.6% for the submarket average vacancy and submarket by construction vintage cohort, respectively.

SPONSORSHIPThe sponsor for this loan is a joint venture comprising LCN Capital Partners and Sycamore Partners. LCN Capital Partners specializes in sale-leaseback transactions and manages six portfolios totaling more than $3.0 billion in real estate assets. In addition to Staples Inc., Sycamore Partners has investment interests in Pure Fishing, Aeropostale, EMP, and Hot Topic. The property is self-managed by Staples Inc. DBRS MORNINGSTAR ANALYSISSITE INSPECTION SUMMARYDBRS Morningstar toured the interior and exterior of the property on January 21, 2020, at approximately 4:30 p.m. Based on the site inspection and management tour, DBRS Morningstar found the property quality to be Average (+).

The Staples Inc. headquarters office campus is readily accessible from Boston via I-90/Massachusetts Turnpike, a major east-west corridor for the metro area. Located at the intersection of State Route 9, also known as the Boston Worcester Turnpike, the area is heavily developed with similar office properties and other commercial uses. a Residence Inn by

February 2020 50



Marriott is adjacent to the property, and a child-care facility is located at the entrance to the Staples Inc. Campus via Staples Drive. Situated on a high point within the 9/90 Corporate Center, the Staples facility is visible from I-90, and the three adjoining buildings comprising the headquarters facility allow for an impressive corporate presence. Surface parking surrounds the three adjoining buildings that comprise the headquarters office, and a separate four-story parking garage is adjacent to the eastern wing of the development providing covered parking.

DBRS Morningstar toured the property with Staples Inc.’ Senior Director of Facilities and Corporate Services, who explained that the property was built for Staples Inc. in 1997. The campus was designed with a three-story center building known as The Link and contains the tenant amenities, flanked by two rectangular six-story office buildings. DBRS Morningstar’s tour commenced in the main lobby of Staples Headquarters located in the center building, which features a large open atrium with plentiful natural light and open seating. The entrance is secured, controlled by sets of security gates accessing the entrances to the office buildings on either side of The Link. DBRS Morningstar’s tour guide pointed out recent upgrades to the lobby area that were part of a $1.4 million renovation of the lobby and amenities areas of The Link connector building to give them a more open, light, and modern appearance.

The first floor of The Link building is centered on a very large meeting space that can seat up to 2,000 people and is divisible into multiple smaller meeting rooms. The front section of the meeting space is equipped with high-technology audiovisual equipment that allows for live sharing to offices around the world. The first-floor periphery of The Link also has a number of new client and vendor meeting and presentation rooms, also equipped with the latest in communications technology. A center staircase leads to the cafeteria on the second floor, which has multiple hot and cold food options. There is also a coffee shop and a convenience store on the second level that offers a large expanse of open seating area with different sections offering various options for lunchtime entertainment, including a section with a small stage with multiple instruments available. The on-site employee fitness center is located in the lower level of the eastern office building and is adjacent to the parking garage. The fitness center was recently renovated and features an extensive array of exercise equipment and several classrooms. Men’s and women’s locker rooms, with showers, are located within the fitness center. DBRS Morningstar did not tour the one-story day-care facility located in a separate building at the entrance to Staples Drive.

DBRS Morningstar’s site visit tour continued on multiple floors of both east and west office buildings. Several floors were recently renovated and older high-walled cubicles were replaced with lighter-colored newer cubicles that allowed for more light across the entire floor. Some glass-walled private offices and conference rooms were located in the building’s center, and each floor had break-out areas for small groups and private conversations. There are also a number of breakrooms scattered within the office buildings with televisions and vending machines in addition to typical refrigerator/microwave amenities. The Staples Inc. facilities director said that currently more than half of the office floors have been renovated with the remainder expected to be renovated over the next few years, although he is waiting for budget approval and the funds have not been allocated to date.

Overall, DBRS Morningstar found the property to be in very good condition with regard to the renovated areas. The nonrenovated areas were clean and appeared to be well maintained but would benefit from the replacement of cubicles and opening of floor space to allow in more light. The configuration of the buildings, while built for the current single-tenant use, does demonstrate flexibility to be converted to multitenant use in the future, if the current tenant were to vacate.

February 2020 51




Issuer NCF ($) DBRS Morningstar NCF ($) NCF Variance (%)

GPR 12,556,250 12,556,250 0.0

Recoveries 358,381 7,193,777 1,907.3

Other Income 0 0 0.0

Vacancy -968,597 -1,957,463 102.1

EGI 11,946,034 17,792,564 48.9

Expenses 358,381 7,193,777 1,907.3

NOI 11,587,653 10,598,787 -8.5

Capex 119,340 166,500 39.5

TI/LC 166,500 2,719,874 1,533.6

NCF 11,301,813 7,712,413 -31.8

The DBRS Morningstar NCF is based on the DBRS Morningstar North American Commercial Real Estate Property Analysis Criteria. The resulting DBRS Morningstar NCF was $7,712,413, representing a variance of -31.8% from the Issuer’s NCF of $11,301,813. The main drivers of the variance are vacancy at 10.0% due to the noncredit nature of the single tenant and TI/LCs. DBRS Morningstar generally based TI/LCs on the appraiser’s market assumption of $50.00 psf for new space and $25.00 psf for renewals.

DBRS MORNINGSTAR VIEWPOINTDespite its suburban location, the Staples Headquarters property is well positioned within an established office submarket with a solid representation of national and international corporations. The property’s appraisal by Newmark Knight Frank (NKF) identifies the Staples Headquarters in Framingham as being in the I-495/Massachusetts Turnpike West submarket and reports over 19.0 million sf of office space, of which 8.0 million is considered Class A, like the subject. Class A market rents in the I-485/Massachusetts Pike West are reported to be $22.32 gross plus electric, and the Q3 2019 vacancy rate was 12.1%, according to the appraisal. NKF reports there is no new office inventory under construction in the submarket, with none planned for the near term, although large blocks of office space are becoming harder to find.

Constructed for Staples Inc. in 1997 and used since that time as its headquarters, the property is being acquired in a sale-leaseback transaction by a partnership comprising LCN Capital Partners, an investor in sale-leaseback transactions, which works directly with corporate users of mission-critical real estate, and Sycamore Partners, a New York–based private equity firm that acquired Staples Inc. in 2017 for $6.9 billion. Sycamore Partners specializes in retail and consumer investments and partners with their management teams while providing capital to improve operating profitability. The partners are contributing $79.7 million of cash equity into the acquisition, or 45.0% of the property’s $165.0 million purchase price. Sycamore Partners has also invested $4.1 million of additional capital in the headquarters since its acquisition of Staples, and the facilities manager reports that more funds are expected to be invested as Staples continues renovation of all of the office areas at the campus.

The Staples Headquarters campus is a modern Class A property, attractive with an extensive amenities package and visibility along I-90, making it an ideal headquarters location for any large corporate user. However, DBRS Morningstar noted that the building could easily be reconfigured for multitenant use in the event that Staples Inc. was to vacate, and market rents support the ability to re-lease the property at a rent comparable with Staples Inc.’s NNN rent of $18.39 psf ($29.39 psf gross). Because of Staples Inc.’s lack of an investment-grade credit rating, DBRS Morningstar has assumed a

February 2020 52



10.0% vacancy rate and high leasing costs in the future, which would be necessary to maintain the property’s position as a desirable corporate location.

DOWNSIDE RISKS – The loan is IO throughout its 10-year term.

– The property is 100.0% leased and occupied by a single tenant, representing concentration risk. This transaction is part of a sale-leaseback where Staples Inc., owned by the private equity firm Sycamore Partners, is selling the collateral to a partnership between Sycamore Partners and LCN Capital Partners.

STABILIZING FACTORS – The sponsor is contributing approximately $75.9 million of cash equity into the acquisition, representing 45.0% of the property’s purchase price.

– The property’s convenient location proximate to I-90/Massachusetts Turnpike, extensive amenities available on campus, and above-average quality and condition support strong demand for the property for either a single tenant or reconfiguration into multitenant use if Staples Inc. were to vacate.

– The purchase price of $250 psf appears to be an arm’s-length transaction. It is supported by the appraiser’s concluded sales comparison of $297 psf based on five sales between 2019 and 2016 and six suburban office property sales in 2019 and 2020, as reported by Real Capital Analytics (RCA), with an average sales price of $288 psf. The RCA data includes a comparable sale, located less than a mile from the subject, that occurred in September 2019 for $267 psf.

February 2020 53


COLLATERAL SUMMARY

DBRS Morningstar Property Type Office Year Built/Renovated 1982

City, State New York, NY Physical Occupancy (%) 91.9

Units/SF 596,100 Physical Occupancy Date October 2019

This loan is secured by the borrower’s fee-simple interest in 805 Third Avenue, a 596,100 sf, Class A office building located in the Midtown neighborhood of New York City. The collateral consists of a 565,000 sf office tower and a 31,000 sf, three-story retail pavilion. The loan has a 10-year term and is IO during the entire period. Loan proceeds of $275 million will be used to refinance $162 million of existing debt, fund a 1% loan prepayment fee, repatriate $101 million in equity to the sponsor and cover $6.8 million in closing costs and fund $5.2 million in reserves. Ongoing reserves will be allocated to a real estate tax reserve, an insurance reserve, capex reserve and TI/LC reserve. The $45 million trust asset consists of two non-controlling notes out of a $1500 million A-Note. The whole loan also includes a $125. million B-Note

The sponsor, Cohen Brothers Realty Corp., developed the building in 1982 and has owned the property since then. The sponsor initially had a ground lease for the subject until June 1998, when the sponsor acquired fee-simple interest in the collateral.

New York, NY

805 3rd Avenue

Loan SnapshotSellerCREFI


Trust Balance ($ Millions)50.0

Loan psf/Unit251.64

% of the Pool3.7


Amortizationn/a





DBRS Morningstar Property QualityAverage (+)

Debt Stack ($ Millions)Trust Balance50.0

Pari Passu

100.0B Note125.0

Mezz0.0

Total Debt275.0


Equity Contribution/ (Distribution) ($ Millions)(100.8)

February 2020 54


805 3RD AVENUE – NEW YORK, NY

TENANT SUMMARY

Tenant SF % of Total NRADBRS Base Rent PSF ($)

% of Total DBRS Base

Rent Lease Expiry


Meredith Corporation 212,594 35.7 41.05 29.7 12/2026 N

KBRA1 95,200.00 16.0 n/a n/a 8/2010

Gen II Fund1 70,094.00 11.8 n/a n/a 12/2026

NewMax1 23,800.00 4.0 n/a n/a 12/2026

Poten & Partners Inc. 29696.00 5.0 79.30 8.0 8/2010 Y

Toyota Tsusho America, Inc. 41,322 6.9 56.87 8.0 11/2022 Y

Extell 27,289 4.6 57.79 5.4 3/2028

YES Network, LLC 23,800.00 4.0 53.00 4.3 5/2022

Subtotal/WA 334,701 56.2 48.61 55.4 Various

Other Tenants 213,384 35.8 61.45 44.6 Various

Vacant Space 48,015 8.1 n/a n/a n/a

Total/WA 596,100 100.0 49.29 100.0 Various

1. Subtenants of Meredith Corporation. Upon termination of Meredith Corporation's lease, each subtenant is able, at the landlord's option, to directly lease from the landlord.

The 29-story property is currently 91.9% occupied by 62 tenants. The rent roll consists of 57 office tenants and five retail tenants. The largest tenant is Meredith Corporation, an Ohio-based media conglomerate that owns a series of television and radio stations in addition to a variety of publications. In 2018, Meredith Corporation merged with Time Inc. Following the merger, Meredith Corporation vacated its space while still maintaining its lease at the subject property. Since Meredith Corporation’s move, the media company has subleased 190,000 sf of its space to three subtenants: (1) Kroll Bond Rating Agency, Inc., a credit rating agency, (2) Gen II Fund Services, LLC, the largest U.S. independent private equity fund administrator, and (3) NewsMax, a political news outlet. Considering Meredith Corporation’s subtenants, the subject property has a diverse and granular rent roll from a wide array of industries. No tenant occupies more than 16% of the NRA. Furthermore, with the subtenants, there is no rollover greater than 24.4% of NRA within a given year. Effective January 2024, Meredith Corporation has a one-time termination option subject to a fee of $8 million within nine months of termination. Subtenants will then be able to negotiate directly with the sponsor for a direct lease.

SPONSORSHIPThe transaction benefits from experienced and qualified sponsorship. The sponsor is Cohen Brothers Realty Corp., a New York City-based private real estate development firm that has over 50 years of experience in the industry. The firm’s portfolio consists of 12 million sf of commercial real estate located throughout the United States with a large presence in Manhattan. The firm has a focus in developing Class A, luxury high-rise office buildings. The loan’s Guarantor is Charles S. Cohen, the president and CEO of Cohen Brothers Realty Corp. As of October 2019, Cohen’s net worth was $3.5 billion.

February 2020 55



SITE INSPECTION SUMMARYDBRS Morningstar toured the interior and exterior of the property on November 19, 2019, at 11 a.m. with a representative of the sponsor. Based on the site inspection, DBRS Morningstar found the property quality to be Above Average.

The 805 Third Avenue asset is a glass tower located on the southeast corner of 3rd Avenue and 49th Street in the heart of Midtown East. The property is two blocks from the 6 train that serves the east side of Manhattan and is one train stop from Grand Central station, which offers access to the 4, 5, 6, 7 trains, Metro North Railroad, and the 42nd Street shuttle to Times Square. The subject’s surrounding area comprises mostly mixed-use office and retail buildings, while residential properties are more typical on mid-block side streets. There is a heavy concentration of nearby restaurants, both high end and fast food, to serve the large corporate presence in the vicinity. Located in the Plaza District submarket, major financial companies such as The Blackstone Group and JPMorgan Chase are nearby as well as high-end street retail located on Madison Avenue and Fifth Avenue.

The property was built by the sponsor in 1982 and features efficient floorplates in excess of 20,000 sf that work well for both full-floor and multiple tenants. The first three floors feature an atrium layout with several food tenants and eating areas with tables that serve employees in the surrounding area. DBRS Morningstar viewed a vacant space on the 16th floor that is currently asking $66.00 psf. The sponsor anticipates striking a deal around $63.00 psf, which is approximately 17% higher than WA in-place office base rents of $52.33 psf. The upper floors have excellent views of the East River that further enhance the desirability of the building. Recent capital improvements include the elevator cabs which were fully re-done approximately three years ago, according to the sponsor.

February 2020 56




2016 ($) 2017 ($) 2018 ($)T-12 September

2019 ($) Issuer NCF ($)

DBRS Morningstar

NCF ($)NCF Variance

(%)

GPR 26,699,624 26,537,453 28,121,265 27,948,556 32,466,131 32,300,444 -0.5

Recoveries 2,739,547 2,224,059 2,540,371 2,662,936 2,568,104 2,568,104 0.0

Other Income 1,214,172 1,189,407 1,215,336 1,247,675 1,303,791 1,247,675 -4.3

Vacancy 0 0 0 0 (3,062,830) (3,502,130) 14.3

EGI 30,653,344 29,950,919 31,876,971 31,859,168 33,275,196 32,614,094 -2.0

Expenses 14,898,290 15,081,158 15,290,213 15,087,482 15,020,787 15,033,074 0.1

NOI 15,755,054 14,869,761 16,586,758 16,771,686 18,254,409 17,581,020 -3.7

Capex 0 0 0 0 119,220 149,025 25.0

TI/LC 0 0 0 0 1,200,000 2,718,101 126.5

NCF 15,755,054 14,869,761 16,586,758 16,771,686 16,935,189 14,713,894 -13.1

The DBRS Morningstar NCF is based on the DBRS Morningstar North American Commercial Real Estate Property Analysis Criteria. The resulting DBRS Morningstar NCF was $14,713,894, a -13.1% variance from the issuer’s NCF figure of $16,935,189. The primary drivers of the variance were vacancy and TI/LC. DBRS Morningstar assumed a 10% vacancy compared with the issuer’s 8.7%. DBRS Morningstar calculated TIs at $70 psf and $25 psf for new tenants and renewals, respectively, on spaces above 15,000 sf and $40 psf and $20 psf on new tenants and renewals, respectively, on spaces below 15,000 sf. Historically, smaller tenants in the building have received much smaller TI packages than larger tenants. Overall, TI/LC was assumed to $4.56 psf compared with the issuer’s underwriting of $2.01 psf.

DBRS MORNINGSTAR VIEWPOINTDBRS Morningstar expects the loan to perform over the term given the building’s quality, granular lease rollover, excellent location and high-quality sponsor. However, DBRS Morningstar is concerned with weak loan metrics of 5.4% debt yield and a going-in DBRS Morningstar DSCR of 1.3x (based on IO payments). This should be mitigated by the potential for upside by rolling tenants that are paying below-market rents. Specifically, larger office tenants over 15,000 sf are below market with an occupied base rent of $48.52 psf compared with recent lease executions in the low $60 psf range. DBRS Morningstar believes the sponsor will be able to successfully roll tenants to higher rents in line with the market. Another concern is that a major law firm will be vacating approximately 400,000 sf two blocks from the subject in 2020. The sponsor, however, is not concerned because the other building’s asking rent is approximately $20 psf higher than 805 Third Avenue. DBRS Morningstar considers the credit qualities associated with this note to be BBB (high).

DOWNSIDE RISKS – Loan metrics are weak with a going-in DBRS Morningstar Debt Yield of 5.4% and a DBRS Morningstar DSCR of 1.3x interest only.

– The loan is full-term IO, providing no reduction to the loan basis over the loan term.

– A major law firm is vacating over 400,000 sf two blocks from the subject, which could compete with the property and give leverage to prospective, new and existing tenants.

STABILIZING FACTORS – Meredith Corporation, the largest tenant at the property, has a lease in place that is considerably under market with an in

February 2020 57



place base rent of $41.05 compared to recent leases getting signed above $60 per square foot. Furthermore, the sponsor and Meredith Corporation share in the sublease profits 50/50. Approximately $7 million is anticipated to be split between Meredith and the sponsor through the end of Meredith’s lease term. Rolling the subtenants at market should result in a net cash flow at loan maturity that is substantially higher than current cash flow.

– The property has a granular lease rollover in which no more than 31.3% of the gross rents expire annually during the loan term (in 2026). Further enhancing the lease roll exposure, Meredith Corporation subleased approximately 190,000 sf to three separate tenants.

– The subject’s office rents are at a lower price point than a nearby property with over 400,000 sf anticipated to vacate next year, thus is not expected to compete directly.

February 2020 58


COLLATERAL SUMMARY

DBRS Morningstar Property Type Full Service Hotel Year Built/Renovated 1924 / 2008

City, State Detroit, MI T-12 RevPAR ($) $158.43

Keys 453 T-12 RevPAR Date December 2019

This loan is secured by the borrower’s fee interest in The Westin Book Cadillac, a 453-key hotel in Detroit, Michigan. Loan proceeds of $77.0 million, along with $12.4 million of transferred reserves and approximately $100,000 of sponsor equity, refinanced an $87.4 million bridge loan and covered closing costs of $2.0 million.

The 32-story building was originally constructed in 1924 and is considered a historic landmark in the city of Detroit. At the time of construction, it was the tallest hotel in the world. Originally, the hotel had 1,136 rooms and operated through October 1984, at which time it closed as a result of disrepair. In 2006, the sponsor purchased the collateral. In 2008, the sponsor completed a total restoration and renovation and converted the property to a Westin for an estimated cost of $178.0 million ($393,000 per key). A complete rebuild was necessary because of the deterioration the property experienced from sitting abandoned for more than 20 years. It was reported that the 53-foot deep basement contained 40 feet of water, which took nearly a year to pump out. The property currently offers 453 rooms, 67 luxury residential condominiums (not part of the collateral), and more than 36,000 sf of ballroom and meeting space across 20 different rooms for events. The property also includes two third-party leased restaurants (Michael Symon’s Roast restaurant and Spa 1924 Grille), a Starbucks outlet, a heated indoor pool, a full-service business center, a sundries retail shop, a lobby bar, a gym, 24-hour in-room dining, valet, and the Westin Kids Club.

The property operates under a Marriott brand management agreement, which runs through October 2028 but will be extended through 2033 as part of the loan closing. A condition of the new management agreement is that the sponsor must perform an estimated $13.5 million ($29,777 per key) capital improvement plan. The costs will

Detroit, MI

Westin Book Cadillac




Loan PSF/Unit ($)169,978



Amortization360




DBRS Morningstar Property TypeFull Service Hotel

DBRS Morningstar Property QualityAverage +


Pari Passu 32.0

B-Note0.0

Mezz0.0

Total Debt77.0



February 2020 59


THE WESTIN BOOK CADILLAC – DETROIT, MI

mainly cover improvements to the guest rooms, corridors, ballrooms, and common areas of the property. Because Marriott manages the hotel, the renovation does not constitute a PIP. The sponsor anticipates completing the work over a three-year period. The PIP reserve was not funded at closing. The loan is subject to a cash flow sweep until the balance of the PIP reserve account reaches $14.8 million. Marriott will also contibute $1.5 million to the funding for the PIP.

SPONSORSHIPThe sponsor for this transaction is The Ferchill Group, a real estate development and management company in Cleveland. Founded in 1978 by John J. Ferchill, the company has completed, or placed under development, more than $1.3 billion in real estate projects. The company focuses on historic restoration, luxury housing, and other Class A properties. John Ferchill serves as the carve-out guarantor for this transaction and has a net worth and liquidity of $40.0 million and $2.0 million, respectively.

SITE INSPECTIONDBRS Morningstar toured the hotel on Tuesday, January 14, 2020, at 1:00 p.m. Based on the site inspection and management meeting, DBRS Morningstar found the overall property quality to be Average (+).

The subject is centrally located in the Detroit CBD, on the northeast corner of Washington Boulevard and Michigan Avenue. The area is densely developed with a mixture of older office buildings, residential buildings, and hotels. There are many demand generators nearby, including Ford Field (Detroit Lions), Comerica Park (Detroit Tigers), Little Caesars Arena (Pistons and Red Wings), General Motors’ world headquarters, Quicken Loans, DTE Energy, and Wayne State University. Furthermore, the hotel is only a few blocks north of the convention center.

The building has a classic limestone façade with ornamental details, fluted columns, arched windows on the second to third floors and large iron canopies over both entrances. The hotel’s main lobby has a more modern appearance including polished marble tile floors and brown wood-encased beams, and wood-colored furniture and planters.

Meeting rooms on the second floor were almost all in use. The second floor features the Motor Bar, which has a large comfortable seating area and is a popular spot for informal small groups. There is more meeting space on third and fourth floors, including two large iconic rooms that were renovated with some modifications during the hotel’s restoration, but still retains a number of classic architectural details. Much of this space is due for renovation as part of the current product improvement plan. There is ample pre-function space on all three meeting floors. Michael Symon’s restaurant Roast is prominently featured on the ground floor. The space is built out with light-colored two-tone carpeting and large brown tile flooring around the bar area, dark wood paneling, and ceilings with wood tray effect and recessed soft lighting.

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The hotel’s guest rooms are large and well appointed. The soft goods, walls, and carpet reflected an array of beige and brown toned surfaces while case goods were composed of dark wood finishes. DBRS Morningstar observed four different levels of accommodations, including an executive suite with a living room and a bathroom with a tub and a stall shower. The rooms all appeared comfortable and inviting across all price points. Although all of the rooms are no more than 12 years old, and still appear presentable, ownership plans to spend $14.8 million on further renovations including room updates.

The hotel shows well in all of its public areas, with clean, well-lit lobby and meeting space areas, and a nicely furnished bar and restaurant space. The guest rooms are comfortable, spacious, and in good repair. That said, the property will benefit from a necessary refresh after 12 years of operations.

DBRS MORNINGSTAR NCF ANALYSISNCF ANALYSIS

2017 2018T-12 December

2019 Issuer NCF ($)

DBRS Morningstar

NCF ($) NCF Variance

Occupancy 83% 79% 78% 78% 75% -3.4

ADR 192.26 205.00 204.17 204.17 200.48 -1.8

RevPAR 159.34 162.21 158.43 158.43 150.36 -5.1

Total Departmental Revenue 39,463,892 39,440,190 38,738,364 38,738,364 36,764,841 -5.1

Total Deparmental Expense 14,871,118 14,874,467 14,909,685 14,909,685 14,150,113 -5.1

Total Departmental Profit 24,592,774 24,565,723 23,828,678 23,828,678 22,614,728 -5.1

Total Undistributed Expense 11,630,407 12,091,017 12,035,875 12,035,875 11,422,709 -5.1

Total Fixed Expense 1,849,783 1,843,422 1,944,382 2,008,590 2,045,409 1.8

NOI 11,112,583 10,631,284 9,848,421 9,784,213 9,146,611 -6.5

FF&E 1,578,556 1,577,608 1,549,535 1,549,535 1,470,594 -5.1

NCF 9,534,028 9,053,676 8,298,886 8,234,678 7,676,017 -6.8

The DBRS Morningstar NCF is based on the DBRS Morningstar North American Commercial Real Estate Property Analysis Criteria. The resulting DBRS Morningstar NCF was $7,676,017, representing a -6.8% variance from the Issuer’s NCF of $8,234,678. The primary driver of the variance was RevPAR. DBRS Morningstar concluded to a RevPAR of $150.36. This amount is below the 2017 RevPAR of $159.34 and contemplates additional supply that will be added to the market.

DBRS MORNINGSTAR VIEWPOINTDBRS Morningstar believes that Westin Book Cadillac will perform well given its extensive renovations and modernization, and its good location in downtown Detroit. Though it sat abandoned for more than 20 years, the hotel was completely rebuilt and reopened in 2008 as an upscale hotel with some luxury attributes. The cost to restore the hotel and bring it to Westin standards was reported to be $178 million. The hotel is brand managed by Marriott rather than franchised and is the flagship Marriott-branded hotel in downtown Detroit, so it will be certain to receive the brand standard in terms of updating and refreshing in every aspect. Its bars and restaurants are attractive and well operated and include Roast by Michael Symon, a nationally renowned restauranteur, and 1924 Grille. Amenities include an indoor pool, gym, whirlpool and spa, club room, business center, and gift shop.

The hotel’s performance consistently outpaces its competitive set; for the 12 months through October 2019, RevPAR penetration was 138.4%, with double-digit advantages in both ADR and occupancy. Planned renovations in 2020 and 2021

February 2020 61



could depress occupancy penetration somewhat, however, DBRS Morningstar conservatively concluded revenue that is 6.5% below the 2020 budgeted figures.

The area is densely developed with a mixture of older office buildings, residential buildings, and hotels. All the Detroit professional sports teams play in stadiums and arenas near the hotel. Some visiting teams stay at the hotel, which competes with other local hotels for that business. The auto industry is an important source of demand, with all three major U.S. auto makers having a large presence in Detroit. The North American International Auto Show has been a fixture in Detroit for decades, and in recent years has been in January. This has been a driver for high demand and high room rates throughout the market in January, despite the winter weather. In 2020, the show is moving to June. This will have a large negative impact on January performance across the hotel market in Detroit but will produce a significant pickup in June. Employers with a substantial presence in the local area include General Motors, Ford Motor Company, Deloitte, Quicken Loans, the Detroit Medical Center, and Henry Ford Health Systems.

Furthermore, the hotel has more meeting space than any other hotel in downtown Detroit apart from the DoubleTree by Hilton Guest Suites and Detroit Marriott at the Renaissance Center, which makes group business an important component at 40% of total bookings. Most of the group business is from Fortune 500 companies across industries. It was also emphasized that the size of the rooms and range of amenities makes the hotel attractive to business travelers staying three or more days during a work week.

DOWNSIDE RISKS – The loan is interest-only for the first three years of its 10-year term, which limits amortization and increases refinance risk. The loan is also subject to term risk when the loan payments increase to include principal and interest.

– The appraisal indicates that two new competitive hotels entered the market in 2019 and four additional hotels are under development and are anticipated to enter the market in 2020 and 2021. In total, 876 rooms have or will be added and will on average compete with the subject at a rate of 75%.

STABILIZING FACTORS – There is less debt on the property now than there has been at any time since the reopening in 2008. The LTV based on the appraised value is 56.6%, which DBRS Morningstar considers to be lower leverage.

– The ownership has spent $8.4 million on renovations and updates since 2009. Current plans call for additional spending of $13.5 million over the next two years. The sponsor has a 40-plus year track record as a developer and redeveloper.

February 2020 62


COLLATERAL SUMMARY

DBRS Morningstar Property Type Anchored Retail Year Built/Renovated 2003

City, State Millbury, MA Physical Occupancy (%) 96.3

SF 787,071 Physical Occupancy Date November 2019

The loan is secured by the borrower’s fee simple interest in The Shoppes at Blackstone Valley, a 787,071 sf anchored retail center located in Millbury, Massachusetts. Built in 2003, the property was 96.3% occupied to 54 tenants as of the November 2019 rent roll. The subject primarily contains national tenants with several regional tenants occupying some of the in-line space. The property is anchored by Target, Kohl’s, Dick’s Sporting Goods, and Cinema de Lux; however, of the anchor tenants, Kohl’s is the only tenant not operating on a ground lease. Junior anchor tenants include Best Buy, Raymour and Flanigan (ground lease), Nordstrom Rack, Michaels, PetSmart, Marshalls, and Barnes & Noble. Loan proceeds of approximately $164.0 million, in addition to borrower cash equity of $21.5 million, are being used to refinance $183.6 million of existing debt, fund reserves of $806,129, and cover closing costs of $1.1 million. The ten-year loan is structured with an initial two-year IO period. A $54.0 million pari passu note will be securitized as part of the GSMS 2020-GC45 transaction, with the remainder to be securitized at a later date.

Millbury, MA

The Shoppes at Blackstone Valley






Loan Maturity/ARDNovember 2029

Amortization360







Pari Passu 124.0

B-Note0.0

Mezz0.0

Total Debt164.0



February 2020 63


SHOPPES AT BLACKSTONE VALLEY – MILLBURY, MA

TENANT SUMMARY

Tenant SF% of Total

NRA

DBRS Morningstar Base Rent

PSF ($)

% of Total DBRS

Morningstar Base Rent

Lease Expiry

T-12 June 2019 Sales

($)Sales

PSF ($)

DBRS Morningstar Occupancy

Cost

Target 127,000 16.1 5.87 4.6 1/2029 0 0.00 0.0

Kohl's 87,141 11.1 11.25 6.0 2/2024 19,604,026 224.97 7.2

Cinema de Lux 72,000 9.1 15.10 6.7 6/2024 10,874,890 151.04 20.7

Dick's Sporting Goods 54,159 6.9 13.41 4.4 1/2024 9,378,102 173.16 7.7

Marshalls 42,000 5.3 20.75 5.3 5/2024 19,419,840 462.38 4.5

Best Buy 32,906 4.2 19.00 3.8 1/2021 0 0.00 0.0

Nordstrom Rack 32,778 4.2 23.45 4.7 9/2023 0 0.00 0.0

Raymour & Flanigan 30,606 3.9 13.58 2.5 1/2024 0 0.00 0.0

Subtotal/Wtd. Avg. 478,590 60.8 13.00 38.1 Various 59,276,858 123.86 13.2

Other Tenants 279,374 35.5 $36.22 61.9 Various 88,616,980 317.20 11.8

Vacant Space 29,072 3.7 n/a n/a Various n/a n/a n/a

Total/Wtd. Avg. 787,071 100.0 20.76 100.0 Various 147,893,838 187.91 12.4

The Shoppes at Blackstone Valley is located along MA-146, known as the Worcester-Providence Turnpike, and runs north-south between Worcester, Massachusetts and Providence, Rhode Island. The property benefits from close proximity to Worcester, the second largest city in Massachusetts. Furthermore, the property is approximately 1.0 mile from I-90, which runs east-west from Boston to Albany and allows access from Boston and its suburban areas.

Since 2014, the property has exhibited strong occupancy figures, averaging 98.2% over that time. However, the property is currently operating at 96.3% occupancy, the lowest since 2014. There is significant rollover risk, as leases on approximately 69.5% of sf will expire by the end of 2024, and more than 94.5% will expire during the loan term. This risk is mitigated by the strong sales the property’s tenants have experienced over the past few years. The T-12 sales figures are 7.3% higher than they were in 2016 and totaled more than $146.9 million. There are also a significant number of credit tenants at the property and they lease more than 46.1% of the NRA. The property is considered to be the dominant shopping center in the region because of accessibility via I-90 and MA-146, as well as its proximity to Worcester. The appraisal identified several properties that compete directly with the Shoppes at Blackstone Valley. For more information, please refer to the table below.

COMPETITIVE SET

Property LocationDistance from Subject

(miles) SF Year Built/Renovated Occupancy (%)

Northborough Crossing Northborough, MA 10.5 645,785 2011 98.2

Highland Commons Hudson & Berlin, MA 22.8 653,635 2009 96.0

White City Shopping Center Shrewsbury, MA 7.8 257,775 1962/2012 87.6

Auburn Mall Auburn, MA 3.9 583,739 1971 98.0

Greendale Mall Worcester, MA 8.0 431,266 1987 81.7

The Shoppes at Blackstone n/a 787,071 2003 96.3

Source: Appraisal.

February 2020 64



SPONSORSHIPThe loan is sponsored by WS Development and RK Centers. WS Development holds a portfolio of more than 23 million sf of retail space and is one of the largest privately owned retail development firms in the country. RK Centers is also a privately held real estate development firm and owns more than 8 million sf of commercial real estate. RK Centers has acquired and developed regional shopping centers for more than 30 years and has significant experience in the New England and South Florida markets.


DBRS Morningstar toured the interior and exterior of the property on December 16, 2019, between approximately 1:30 pm and 4:30 p.m. Based on the site inspection and management meeting, DBRS Morningstar found the property quality to be Average.

The subject property is 45 miles west of the Boston CBD and is easily accessible to the entire metro area via nearby I-90, which has an interchange less than two miles from the property. The property is located at the southwest corner of the signalized intersection of Worcester-Providence Turnpike (SR 146) and North Main Street (SR 122A). The four-lane North Main Street runs the entire length of the 87.6 acre retail site before terminating at the Target, which is at the south end of the development. The sloping topography of the site allows for good visibility for all of the retailers. Controlled by a number of four-way stops along the single access route, traffic flow was efficient despite the heavy volume of holiday shoppers. The surrounding neighborhood consists of a mixture of commercial and residential development. There is some light industrial development to the north of the property along the Worcester-Providence Turnpike, while residential development and an elementary school surround the property on other sides. There is some vacant land in the area, although the steep topography would make future development difficult and costly. Because of the topography of the area, The Shoppes at Blackstone Valley are not visible from SR 146, although the property has signage located along its perimeters that is visible.

DBRS Morningstar toured the shopping center with the property manager and leasing broker on a Monday afternoon when all the stores, restaurants, and the movie theater were open. Traffic was moderately heavy, particularly at the on-site eateries, and the leasing broker reported that the center’s Longhorn Steaks ranks among the top five in the U.S. in terms of sales while the Cold Stone Creamery is number one in New England with sales of $830 psf. DBRS Morningstar toured the interior of several retailers and restaurants, including Barnes & Noble, the Paper Store, Old Navy, Sephora, Feng Restaurant, the Cinema de Luxe, GAP, Talbot’s, and Marshalls. Overall, the spaces were clean, well-stocked, and showed quite well, although it was pointed out that Marshalls will be refreshing its interior in the next year. Each tenant had its own signage

February 2020 65



affixed to the exterior wall above its respective entrance. Stores have typical build-outs with most spaces having tile or stone flooring, wide aisles, and racks for goods sold. DBRS Morningstar also inspected a 5,030 sf vacant suite that was previously occupied by a ladies clothing retailer. Although this vacant space was fully built out with the previous tenant’s design and layout, it would require additional TIs to reconfigure the space for a future tenant’s use. According to the leasing broker, the property currently has multiple leasing proposals out for the space, as well as for portions of the GAP space, which is expected to contract in the near term because of declining sales. Tenant improvement allowances vary by space and use but generally run $40 psf for new tenants and $0 on renewals. Free rents are not generally offered at the property. Overall, the Shoppes at Blackstone Valley appears to be the dominant retail center in the greater Worcester area with its nearest competitor, Auburn Mall, less than four miles away, anchored by a Macy’s and Sears, the latter of which is scheduled to close in February 2020. The Reliant Medical Group, one of the area’s major employers, also leases a large space at the Auburn Mall at the location of the former Macy’s Home Store, which has been converted to medical office use.


2017 ($) 2018 ($)T-12 September 2019

($) Issuer NCF ($)DBRS

Morningstar NCF ($)NCF Variance

(%)

GPR 14,512,759 14,333,987 14,318,367 14,756,324 14,409,726 -2.3

Recoveries 3,777,832 3,823,831 3,545,438 3,551,135 2,320,672 -34.6

Other Income 185,057 81,783 60,820 60,820 60,820 0.0

Vacancy 0 0 0 (1,006,511) (1,414,847) 0.0

EGI 19,150,138 18,936,797 18,578,998 19,047,577 18,403,416 -3.4

Expenses 4,783,415 4,833,324 4,518,587 4,228,958 4,393,668 3.9

NOI 14,366,723 14,103,473 14,060,411 14,818,619 14,009,748 -5.5

Capex 0 0 0 68,703 98,140 0.0

TI/LC 0 0 0 666,997 1,293,120 0.0

NCF 14,366,723 14,103,473 14,060,411 14,082,919 12,618,489 -10.4

The DBRS Morningstar NCF is based on the DBRS Morningstar North American Commercial Real Estate Property Analysis Criteria. The resulting DBRS Morningstar NCF was $12,618,489, representing a variance of -10.4% from the Issuer’s NCF. The main drivers of the variance are vacancy, leasing costs, and a 4% minimum management fee. Leasing commissions and tenant improvements were concluded to a combined total of $1.64 psf. DBRS Morningstar generally relied on the appraiser’s TI estimates including $20.00 psf for new and $10.00 psf for renewal in-line and restaurant space, and $40.00 psf for new in-line and $20.00 psf for new pad space with $10.00 for tenant renewals. No TIs were applied to the four ground lease tenants. New and renewal LCs were set to 5.0% and 2.5%, respectively, consistent with the appraiser’s estimates and the leasing broker. Replacement reserves were set to a minimum of $0.20 psf, or $98,140, and higher than the engineer’s total inflated recommendation of $0.16 psf.

DBRS MORNINGSTAR VIEWPOINTThe collateral is well located with good access from I-90, approximately 45 miles west of the Boston CBD and convenient to the greater metro area. Although not visible from SR 146, the Worcester-Providence Turnpike, the property has high visibility signage from that major thoroughfare that connects with I-90. The shopping center’s location is highly conducive to retail and other commercial activity, as much of the surrounding area comprises residential development. Most residents in this market commute to and from the Boston CBD on a daily basis, adding suburban characteristics to the neighborhood. Since the center’s development by the sponsor in 2003, it has been quite successful at attracting national retailers and maintaining favorable occupancy, ranging between 96.3% and 98.1% since 2014. Much of this sustained success is attributable

February 2020 66



to the subject’s location as an affordable commuter neighborhood for the Boston and Cambridge office markets, although as the second largest city in Massachusetts, nearby Worcester also supports a solid employment base with six of the metro Worcester employers concentrated in the growing health care industry. Demographic data from the property’s recent appraisal shows 0.5% annual population growth within a 15-mile radius of the property since 2010 and the 2018 average reported household income was $104,190. Notably, college graduates constitute 41.1% of the 15-mile populace, with 16.8% of residents having completed a graduate/professional degree.

The property is being refinanced by an experienced local sponsor with significant real estate experience in the New England market. The sponsor is contributing fresh equity of $21.5 million to the transaction, 11.6% of the total uses, which includes loan payoff of $183.6 million, closing costs of $1.1 million and over $800,000 of reserves for outstanding leasing costs for existing tenants. This equity investment, coupled with the sponsor’s experience both in the market and with retail properties, bodes well for the property’s continued performance for the duration of the loan term. Additionally, the loan exhibits a low DBRS Morningstar Balloon LTV of 57.6% even without any amortization during the initial two years of the ten-year term.

DOWNSIDE RISKS – The property has a large concentration of rollover during the first five years of the loan when 64.2% of the total NRA rolls, including Cinema de Lux in June 2024, which accounts for 9.1% of the total NRA as 12.6% of base rent.

STABILIZING FACTORS – The property has had stable historical occupancy with vacancy of 5.0% or less over the past six years in a growing suburban market with no direct retail competition currently identified.

– Cinema de Lux’s 14 screens averaged sales of $785,000 per screen in 2019 and it is reported to be the eighth strongest theater in Massachusetts in terms of revenue.

– The sponsor is contribution $21.5 million of fresh equity to the transaction.

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COLLATERAL SUMMARY

DBRS Morningstar Property Type Multifamily Year Built/Renovated 1910–2017/2014–17

City, State Brooklyn, New York Physical Occupancy (%) 100.0

Units 78 Physical Occupancy Date November 2019

This loan is secured by the borrower’s fee-simple interest in a cross-collateralized portfolio of five Class A multifamily properties, totaling 78 units, in Brooklyn, New York. The portfolio is composed of four four-story walk up apartment buildings in the Williamsburg neighborhood and one six-story elevator apartment building in the Bedford Stuyvesant neighborhood, all of which were all acquired by the sponsor in 2014-16. The four Williamsburg properties were originally built in 1910 and completely redeveloped by the sponsor in phases between 2014 and 2017. The sponsor developed the Bedford Stuyvesant property in 2017 on a parcel of land originally purchased as a vacant. The sponsor has a total cost basis of $41.7 million in the portfolio. As of the November 2019 and December 2019 rent rolls, all properties in the portfolio were 100% occupied. Loan proceeds of $38.0 million were used to refinance $35.8 million of existing debt, return $1.9 million in equity to the sponsor., and secure approximately $300,000 in closing costs. The loan term is 10 years and is interest only throughout.

The portfolio’s 78 units are composed of six one-bedroom units (8% of unit mix), 51 two-bedroom units (65%), 17 three-bedroom units (22%), and four four-bedroom units (5%). With respect to the Stuyvesant property, 832 Lexington Avenue, the building is subject to a 15-year, 421a tax abatement that expires beyond the loan term. As such, 100% of the units are rent-controlled until the abatement has fully burned off. In contrast, all four of the Williamsburg properties are garnering market rate rents. According to the portfolio rent rolls, average monthly rental rates across the portfolio range from $2,893 to $4,744 per unit, with a weighted-average rental rate of $3,420. The four Williamsburg properties contain similar communal amenities such as controlled-entrance systems and on-site, communal laundry facilities. The Bedford Stuyvesant

Brooklyn, NY

Brooklyn Multifamily Portfolio











DBRS Morningstar Property TypeMultifamily



Pari Passu 0.0

B-Note0.0

Mezz0.0

Total Debt38.0



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BROOKLYN MULTIFAMILY PORTFOLIO – BROOKLYN, NY

offers a more robust amenity package, including a tenant lounge with a pool table, two fitness rooms, an onsite laundry room, a rooftop deck, and private parking. All of the portfolio properties feature similar high-quality unit amenities and finishes, including stainless steel appliances, modern kitchens, hardwood floors, and Formica countertops.

PORTFOLIO SUMMARY

Property

Cutoff Date Loan Amount

($)% of Loan Amount Units % of NRA

Year Built/Renovated Occupancy (%)

235 S 4th Street 4,400,000 11.6 8 10.3 1910/2017 100.00

77 Berry Street 5,650,000 14.9 8 10.3 1910/2014 100.00

854 Metropolitan Avenue 4,650,000 12.2 8 10.3 1910/2015 100.00

852 Metropolitan Avenue 4,600,000 12.1 8 10.3 1910/2015 100.00

832 Lexington Avenue 18,700,000 49.2 46 59 2017 100.00

Total/WA 38,000,000 100 78 100 100.00

SPONSORSHIPThe borrower and guarantor for the transaction is Shaindy Schwartz, a real estate developer specializing in developing and managing multifamily properties in Brooklyn. Schwartz, along with her husband Joel, have invested in, and managed, Brooklyn multifamily assets since the early 2000s. The Schwartzes have a combined portfolio of 40 multifamily buildings encompassing 632 units in Brooklyn. Joel and Shaindy Schwartz have a combined net worth of $220.0 million and liquidity of $5.0 million, as of June 30, 2019.

SITE INSPECTIONS832 LEXINGTONDBRS Morningstar toured the interior and exterior of 832 Lexington Ave on January 14, 2020, at 9:30 am. Based on the site inspections and management meeting, DBRS Morningstar found the property quality to be Above Average.

The multifamily property is on Lexington Avenue between Broadway Avenue and Patchen Avenue in the Bedford Stuyvesant neighborhood of Brooklyn, New York, a mixed-use community consisting of retail and commercial improvements. The neighborhood is renowned for its historic brownstone buildings and tree-lined streets. The property’s immediate surroundings are rather quiet with less traffic than most New York City streets. Neighboring improvements include a

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church, yoga studio, performing arts studio, and grocery store. The collateral benefits from its proximity to multiple public transportation lines. It is 0.2 miles away from Gates Station (J, M, Z lines) and two miles away from Broadway Junction (A, C, and L trains). All the subway lines provide access to Manhattan within 15-30 minutes.

The collateral is a six-story elevator apartment building with an entrance is on the south side of Lexington Avenue. At the rear of the property, there is an 11-space parking lot. As the property was built in 2017, its interior and exterior appeared newly developed with modern, industrial finishes. The building’s exterior consists of grey, industrial fashioned brick. On the entrance side, the tenants’ windows and outdoor balconies are visible. The building has a wood finish surrounding the entrance and white, stone finish surrounding many of the windows. Matte black, metal fencing lines the outdoor terraces and the perimeter of the building’s roof. The ground floor of the building—which encompasses the lobby, fitness room, and recreational room—showed well and appeared newly updated. The lobby features hardwood floors, white walls with orange trimming, and midcentury style light fixtures. The rec room, which is directly to the right of the entrance, has a grey and yellow color scheme and features a pool table and cushions for seating. The fitness room is directly to the right of the elevator, has a large window that peers into the rec room, and features standard fitness equipment such as treadmills and ellipticals. DBRS Morningstar toured two occupied tenant rooms. The rooms appeared updated and well amenities. The living room and bedrooms are spacious with grey walls and hardwood flooring throughout. The kitchen features stainless steels appliances, wood cabinets, and solid surface counters. The bathrooms have ceramic tile walls, porcelain sinks with wood vanities, and include a shower/bath combination. Tenants have access to a rooftop lounge that features artificial grass surrounded by artificial plant arrangements. At the time of the tour, there was no seating; however, management indicated that in warmer months seating is available. There is a laundry site in the basement of the building with updated machines.

77 BERRY STREET DBRS Morningstar toured the exterior and interior of 77 Berry Street on January 14, 2020, at approximately 10:45am. Based on the site inspection and management meeting, DBRS Morningstar found the property quality to be Above Average.

The collateral is well located on Berry Street, a thoroughfare avenue, in the northern portion of Brooklyn’s Williamsburg neighborhood. The subject is neighbored by many shops, eateries, and public transportation sources such as the Nassau Avenue Station (G Train) and the Bedford Avenue Station (L Train), which are nine and two blocks away from the subject, respectively.

The collateral consists of a five-story walk up multifamily property. The building’s exterior seemed newly developed and showed well. The building consists of grey stone and wood paneling. The tenants’ outdoor balconies are visible from the entrance. Matte black metal lines the building’s windows and the outdoor balconies. The building’s entrance floor appeared clean, aesthetically pleasing, and newly updated. The ground floor consists of a long hallway that leads to the buildings’ staircase. The floor has a gray color scheme featuring grey and white floor tiling and grey and white walls. DBRS Morningstar toured an occupied tenant room. The room appeared modern in design and showed well. The bedrooms and living rooms seemed spacious and feature large, airy windows in addition to hardwood flooring throughout. The kitchens appeared newly renovated with stainless steel appliances, wood cabinetry, and counter surfaces. The bathrooms feature tile flooring and a shower bath combination. A laundry room is in the building’s basement and includes white, updated laundry machines.

235 SOUTH 4TH STREET DBRS Morningstar toured the exterior and interior of 235 South Fourth Street on January 14, 2020, at approximately 11:00am. Based on the site inspection and management meeting, DBRS Morningstar found the property quality to be Above Average.

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The subject is well located at 235 South 4th Street in the Williamsburg neighborhood of Brooklyn. La Guardia Playground, a public park, is directly across from the subject. The subject benefits from its proximity to multiple transportation systems, such as Major Highway I-278 and The Marcy Avenue Station (M, J, and Z Trains), which are within 0.2 miles of the collateral.

The collateral is a four-story, eight-unit walkup multifamily. The subject’s exterior appeared dated and in need of a refresh. The building consists of red brick with grey trim surrounding the windows and dark wood surrounding the entrance. The brick seemed aged and the wood seemed weathered. From the entrance, a fire escape, composed of black, rusting metal, is exposed. The ground floor appears updated and well maintained and consists of a long hallway that leads to the building’s sole staircase. The ground floor has cement flooring and decorative black and white wall paneling. DBRS Morningstar toured a tenant room that was occupied. The room appeared updated and showed well. The living room and bedroom seemed spacious with hardwood flooring throughout. The kitchen featured stainless steel appliances, white countertops, and an electric generated stove. The bathrooms have stone floors, white countertops, and a bath/shower combination. The building also has a laundry onsite and includes machines that appeared updated.

854 AND 852 METROPOLITAN AVENUEDBRS Morningstar toured the exterior and interior of 854 and 852 Metropolitan Avenue on January 14, 2020, at approximately 10:30am. Based on the site inspection and management meeting, DBRS Morningstar found the property quality to be Above Average.

The two buildings are on Metropolitan Avenue, a primary thoroughfare avenue, in the Williamsburg neighborhood of Brooklyn. The subjects are immediately surrounded by other multifamily buildings in addition to shops and restaurants, and Orient Grove, a public park, is directly across the street. The properties have easy access to several public transportation systems such as the Graham Avenue Station (L Train) and the Metropolitan Avenue Station (G Train), which are within four and seven blocks of the properties, respectively.

The subjects are two conjoined four-story walkup multifamily buildings. The properties were both built in 1910 and renovated in 2015. The exterior appeared newly developed, modern in design, and showed well. The conjoined building consists of grey stone with wood paneling down the center. Tenants’ outdoor balconies are visible from the entrance. Black, matte metal lines the building’s roof, the building’s windows, and the outdoor balconies. In the interior, the subjects have very similar layouts and floor plans with little difference in design. 852 Metropolitan’s ground floor has concrete floors and decorative wall panels, consisting of orange geometric designs. 854 Metropolitan’s ground floor has decorative black-and-white floor tiling with grey stone walls. At both subjects, DBRS Morningstar toured an occupied tenant rooms. The rooms had similar layouts and amenities packages. The living rooms and bedrooms appeared spacious with hardwood flooring throughout. The kitchens featured modern, stainless steel appliances and counter surfaces. The bathrooms had floor tiling and a bath/shower combination. Property management indicated that all tenants have private balconies and access to the roof. Overall the rooms appeared newly developed and showed well. Moreover, both properties have a laundry room on site, with machines that appeared new.

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DBRS MORNINGSTAR NCF ANALYSISNCF ANALYSIS

T-12 September 2019 ($) Issuer NCF ($)

DBRS Morningstar NCF ($) NCF Variance

GPR 3,163,495 3,201,060 3,201,060 0.0

Other Income 7,720 53,040 46,300 -12.7

Vacancy & Concessions 0 (96,032) (160,053) 66.7

EGI 3,171,215 3,158,068 3,087,307 -2.2

Expenses 364,498 429,505 657,064 53.0

NOI 2,806,717 2,728,563 2,430,243 -10.9

Capex 0 19,500 19,500 0.0

NCF 2,806,717 2,709,063 2,410,743 -11.0

The DBRS Morningstar NCF is based on the DBRS Morningstar North American Commercial Real Estate Property Analysis Criteria. The resulting DBRS Morningstar NCF was $2,410,743, representing a -14.1%% variance from the Issuer’s NCF of $ $2,719,421. The primary drivers of the variance are real estate taxes and vacancy. DBRS Morningstar concluded 3.0% of total EGI for the management, which falls within the DBRS Morningstar standard for multifamily properties within high rent markets.

DBRS MORNINGSTAR VIEWPOINTDBRS Morningstar believes the Brooklyn Multifamily Portfolio will perform well over the loan term given the experienced sponsorship and good location within a strong submarket, in addition to the property’s high-quality, modern interior finishes. The loan benefits from sponsorship that has almost 20 years of experience managing and developing multifamily properties in Brooklyn. Since acquiring the properties in 2014-16, the sponsor has succeeded in implementing modern, quality finishes through renovating or completely developing the subjects. All properties showed well with interior units that appeared new in condition. As of the November and December 2019 rent rolls, all five properties are 100% leased. The properties are likely to stay well leased thanks to their location in the Williamsburg and Bedford Stuyvesant neighborhoods, which are within the Kings County submarket. According to Reis, Kings County has a low multifamily vacancy rate of 4.0% and average monthly rental rates of $2,448.00. The submarket’s rental rates for multifamily apartments can be expected to increase as gentrification and development in the area continues for years to come.

RISKS – The loan is full term and interest only.

– 235 South 4th Street, 77 Berry Street, and 854 Metropolitan Avenue were all constructed in 1910 and are 110 years old.

STABILIZING FACTORS – The loan benefits from sponsorship that has experience managing and developing multifamily properties in the Brooklyn area.

– According to the appraiser, Cushman & Wakefield, the portfolio has an as-is value of $56.9 million ($729,000 per unit) and the $38 million loan amount equates to a 66.8% as-is LTV.

– As dictated in the loan structure, all five subjects are cross-collateralized and cross-defaulted, and may be released subject to release prices equal to the greater of (a) 120% of the allocated loan amount of the individual property, and (b) the net sales proceeds applicable to an individual property sale.

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COLLATERAL SUMMARY

DBRS Morningstar Property Type Anchored Retail Year Built/Renovated 1988/2017

City, State Exton, PA Physical Occupancy 91.8%

SF 217,822 Physical Occupancy Date Dec-19

The loan is secured by the borrower’s fee simple interest in Whiteland Town Center, a 217,822-sf anchored retail center in Exton, Pennsylvania. Built in 1988 and renovated in 2017, the property is 91.8% occupied by 44 tenants as of the December 1, 2019, rent roll. The tenant mix is primarily national anchors and regional in-line tenants. The property is anchored by Gabe’s, Big Lots, Petco, Party City, and CVS, the latter of which sits on a pad site. Kohl’s and Hobby Lobby are shadow anchors and are not part of the collateral. The borrower used loan proceeds of $36,800,000 plus cash equity of $53,830 to refinance $35.4 million of existing debt, cover $1.5 million in closing costs and reserves. The 10-year loan is structured with an initial 36-month IO period.

SPONSORSHIPThe Sponsors for this transaction will be Jim Gorman and Chris Knauer of Gorman & Company and Peter Abrams of Abrams Realty & Development. Gorman & Company is a real estate investment, development, and management company led by Jim Gorman and Chris Knauer who have developed over 2.5 million sf in the region. Gorman and Knauer have more than 60 years of experience. Abrams Realty & Development is a local real estate investment firm that specializes in ground up and value-add retail projects in the greater Delaware Valley region. The company currently owns nine retail centers in the area totaling 1.7 million sf. Abrams also offers third-party property, management, and leasing services. Peter Abrams has led the firm for more than 25 years.

Exton, PA

Whiteland Town Center







Amortization360







Pari Passu 0.0

B-Note0.0

Mezz0.0

Total Debt36.8



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WHITELAND TOWN CENTER – EXTON, PA

TENANT SUMMARY

Tenant SF% of Total

NRADBRS Base Rent PSF

% of Total DBRS Base

RentLease Expiry

YEXX/T-12 Mon YY

SalesSales PSF

DBRS Occupancy

Cost

BJ's Wholesale Club 115,396 21.9% $10.48 18.3% 8/31/2023

Kohl's 86,584 16.4% $8.65 8.8% 1/31/2024

Best Buy 45,000 8.5% $15.50 9.9% 1/31/2024

Dick's Sporting Goods 45,624 8.6% $12.82 8.6% 1/31/2024 $8,214,896 180 8.9%

Ross Dress for Less 30,187 5.7% $11.63 5.2% 1/31/2024

TJ Maxx 30,000 5.7% $9.40 4.4% 9/30/2023 $11,533,588 384 3.3%

Michaels 23,885 4.5% $11.50 4.1% 8/31/2023 $5,331,581 223 6.6%

Ulta 15,365 2.9% $17.35 3.7% 5/31/2021

PetSmart 19,140 3.6% $13.45 3.7% 1/31/2024

Pier 1 Imports 10,800 2.0% $20.00 2.9% 8/31/2023

Subtotal/Wtd. Avg. 421,981 79.9% $11.58 69.7%

Other Tenants 90,028 17.1% $24.90 30.3% Various

Vacant Space 15,865 3.0% n/a n/a Various n/a n/a n/a

Total/Wtd. Avg. 527,874 100.0% $13.93 100.0%

SITE INSPECTION SUMMARYDBRS Morningstar toured the interior and exterior on January 14, 2020, at 10:00 a.m. Based on the site inspection, DBRS Morningstar found the property quality to be Average.

The collateral is located in Exton, about 30 miles northwest of Philadelphia’s CBD. The subject is located at the intersection of U.S. Route 100 (Pottstown Pike) and U.S. Route 30 (or Lincoln Highway), a major commercial thoroughfare for Exton. The property is located in a suburban corridor with other primarily retail uses filling the immediate area and residential neighborhoods nearby. The property is one of four large retail centers in the immediate vicinity of the heavily travelled Route 100 and Route 30.

This 217,822-sf retail center consists of a small L-shaped single-story strip across from a larger L-shaped single-story retail strip. The property is well maintained and neatly manicured. There were no visible signs of trash or litter. The property has excellent accessibility and ample parking. The parking lot showed some signs of deferred maintenance with surface cracks throughout, but no major defects. Modern updates to the facade are noticeable throughout. The property is a mix of national tenants, including Hand and Stone, Famous Footwear, Rally House, Plato’s Closet, Petco, and local tenants including Towne Cleaners, Music & Arts Center, Definitely Dance and Impact Chiropractic. The new stand-alone CVS at the Route 100 entrance was open and very busy. A quiet, steady flow of customers filtered throughout the property with Kohl’s and Hobby Lobby drawing the most attention. Inside, Kohl’s and Big Lots were both well lit and stocked. While a few in-line spaces were dark, two of the tenants, Plato’s Closet and Sterling Optical, relocated to updated spaces within the center and their initial spaces remain vacant. Although the property was not as congested as other larger retail centers in the immediate vicinity, all open tenants had a consistent flow of customers.

There is high development in the area, including a large multifamily property across the street from CVS as well and new residential neighborhoods and parks nearby. The Exton Mall is directly across Route 100 with a newly built Whole Foods. Main Street at Exton (south of the subject across Route 30) is another relatively open-air lifestyle with a multifamily

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component. Main Street at Exton is more walkable with an urban feel and has national tenants, such as Bed Bath & Beyond, Sephora, Barnes and Noble, Old Navy, and Movie Tavern. Fairfield Plaza, just north on Route 100, is a Giant Foods grocery-anchored shopping center that recently backfilled a vacant Toys “R” Us with a Raymour & Flanigan Outlet furniture store. Other tenants include Ulta, Rack Room Shoes, HomeSense, Ross Dress for Less, TJ Maxx, and Panera Bread.


2016 ($) 2018 ($)T-12 November

2019 Issuer NCF ($)

DBRS Morningstar

NCF ($)NCF Variance

(%)

GPR 2,775,119 3,019,912 3,369,873 4,157,467 4,152,348 -0.1

Recoveries 939,324 991,665 1,234,395 1,314,418 1,314,418 0.0

Other Income 25,652 0 1,456 0 0 0.0

Vacancy (43,224) 0 (19,507) (557,571) (552,452) -0.9

EGI 3,696,872 4,011,577 4,586,217 4,914,314 4,914,314 0.0

Expenses 1,481,045 1,209,747 1,277,417 1,423,375 1,483,554 4.2

NOI 2,215,826 2,801,829 3,308,800 3,490,938 3,430,759 -1.7

Capex 0 0 0 82,772 98,020 18.4

TI/LC 0 0 0 227,317 218,775 -3.8

NCF 2,215,826 2,801,829 3,308,800 3,180,849 3,113,965 -2.1

The DBRS Morningstar NCF is based on the DBRS Morningstar North American Commercial Real Estate Property Analysis Criteria. The resulting DBRS Morningstar NCF was $3,113,360, representing a variance of -2.1% from the Issuer’s NCF of $3,180,849. The main drivers of the variance are management fee, capex, and non-reimbursable expenses. DBRS Morningstar concluded the management fee to the minimum of 4.0% while the Issuer concluded to the actual management fee of 4%. DBRS Morningstar concluded capex at the engineer’s inflated recommendation while the Issuer concluded to the uninflated recommendation. DBRS Morningstar concluded non-reimbursable expenses at the budgeted amount, which was greater than the T-12 period ending November 2019, while the Issuer concluded non-reimbursable expenses at $0.40 psf, which is the T-12 amount.

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DBRS MORNINGSTAR VIEWPOINTDBRS Morningstar believes that the property will perform over the loan term, considering the collateral’s diverse tenant rent roll. No tenant constitutes more than 9.8% of base rent or 13.1% of NRA. Furthermore, the tenant roster includes varied tenants, such as Party City, Big Lots, and Petco. The collateral is further strengthened by its location in a strong retail corridor in Philadelphia’s western suburbs. The property is along U.S. Route 30 with Main Street Exton immediately south and Exton Square Mall across U.S. Route 100 east of the property. Exton Square Mall is a one million sf regional mall that features a Whole Foods store on an outparcel with a 300-unit multifamily property currently under development on the site, while Main Street Exton is an open-air lifestyle center anchored by Movie Tavern and Walmart. Both properties have established the area as a retail destination in Chester County and will continue to drive demand.. Despite these strengths, tenant rollover is a concern as over 80% of leases expire prior to loan maturity; however, the sponsors invested $4.7 million ($21.00 psf ) in capital improvement at the center since its acquisition in 2016 and successfully signed Gabe’s Stores and CVS since that time. There is also an upfront TI/LC reserve of $450,000 tied to Big Lots’ upcoming 2021 lease expiration. A cash flow sweep would take effect if Kohl’s closes its store, triggering Gabe’s co-tenancy clause, which allows it to pay half of the contract rent. The Issuer provided a sales estimate of $260.00 psf for Kohl’s, which is above the company’s average of $231.00 psf as of 2018. In both cases, DBRS Morningstar believes that the strength of the local market as well as the structure may encourage these tenants to renew their leases.

DOWNSIDE RISKS – There is significant rollover risk at this property. Leases on more than half of the space will expire within the first five years of the loan.

– The 10-year loan is structured with an initial three-year IO period. Partial-IO loans have tended to exhibit higher default rates over time.

STABILIZING FACTORS – Several tenants have long-term occupancy at the property with Big Lots in occupancy since 2010, Petco since 2006, and Party City since 1998. It is also structured with upfront and ongoing reserves to address the rollover.

– The loan will amortize to a DBRS Morningstar Ending LTV of 60.6%, which reduces the refinance risk at maturity.

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COLLATERAL SUMMARY

DBRS Morningstar Property Type Anchored Retail Year Built/Renovated 2002

City, State Garner, NC Physical Occupancy 97.0%

SF 527,874 Physical Occupancy Date Aug-19

The loan is secured by the borrower’s fee simple interest in White Oak Crossing, a 527,874 anchored retail center located in Garner, North Carolina. Built in 2002, the property is 97.0% occupied by 30 tenants as of the August 2019 rent roll. The subject primarily contains national tenants with several regional tenants occupying some of the in-line space. The property is primarily anchored by BJ’s Wholesale Club (115,396 sf ) and Kohl’s (86,584 sf ). Additional large tenants (all below 50,000 sf ) include Dick’s Sporting Goods, Best Buy, Ross Dress for Less, TJ Maxx, Michaels, and PetSmart. Loan proceeds of $63,375,000 were used to purchase the collateral; provide a $1,000,000 TI/LC reserve; and cover $300,000 in closing costs. The 10-year loan is structured with an initial four-year IO period.

Garner, NC

White Oak Crossing







Amortization360







Pari Passu 31.4

B-Note0.0

Mezz0.0

Total Debt63.4



February 2020 77


WHITE OAK CROSSING – GARNER, NC

TENANT SUMMARY

Tenant SF % of NRA

DBRS Morningstar

Base Rent PSF

% of DBRS Morningstar

UW Base Rent Lease Expiry

Long Term Credit Tenancy

(Y/N)

BJ's Wholesale Club 115,396 21.9% $10.48 17.0% 8/31/2023 N

Kohl's 86,584 16.4% $8.65 10.5% 1/31/2024 N

Dick's Sporting Goods 45,624 8.6% $12.82 8.2% 1/31/2024 N

Best Buy 45,000 8.5% $15.50 9.8% 1/31/2024 N

Ross Dress for Less 30,187 5.7% $11.63 4.9% 1/31/2024 N

TJ Maxx 30,000 5.7% $9.40 4.0% 9/30/2023 N

Building Total / Weighted Average 527,874 100.0% $13.93 100.0% N/A N/A

The property offers stable in-place cash flow from 38 tenants with no tenant accounting for more than 18.3% of the total rent (BJ’s Wholesale Club). The collateral was 97.0% occupied at issuance and includes a strong line up of national tenants. Of the 10 largest tenants, nine have been in occupancy since 2003. Several anchor tenants at the property have ongoing cotenancy provisions in their leases, including but not limited to Best Buy, Dick’s Sporting Goods, Michaels, Ross Dress for Less, and TJ Maxx.

SPONSORSHIPThe sponsors for this transaction are Jonathan S. Gaines and Stanley Werb. They are the two main principals of Rivercrest Realty Associates, LLC (Rivercrest Realty), which was founded in 1967 and is based in Raleigh, North Carolina. It is a family-owned commercial real estate company that invests in retail centers, office buildings, and multifamily complexes in the Eastern United States. Rivercrest Realty has ownership interests in approximately 75 properties, the vast majority (66 properties; in excess of 4.0 million sf ) being retail centers, including 44 Walmart shadow-anchored retail centers.

Rivercrest Realty is a borrower-affiliated property management company. The contractual management fee is 3.0% of EGI.

DBRS MORNINGSTAR SITE INSPECTION SUMMARYDBRS Morningstar toured the interior and exterior of the property on January 12, 2020, at 11:30 a.m. Based on the site inspection, DBRS Morningstar found the property quality to be Average.

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The collateral is a 527,874 sf anchored retail center in Garner completed in 2002. White Oak Crossing is at the intersection of White Oak Road and Hwy. 70, just off I-40. Hwy. 70 is a major thoroughfare. The property has multiple access points along White Oak Road, a single access point along Timber Drive East at the south side of the property, and one access point along Hwy. 70 at the north side. There is a separate Target center, with Burlington Coat and Regal Cinemas on the opposite side of Timber Drive, and there is a Cabela’s and additional retail and restaurants opposite Hwy. 70. The center is situated on more than 70 acres.

The largest tenant is BJ’s Wholesale Club along the southeast side of the center, with an attached PetSmart. The buildings are concrete tilt-up with brick veneer. There is a BJ’s Wholesale Club gas facility as well as a couple smaller tenants along the north side of BJ’s Wholesale Club. Along the northeast section of the center is Kohl’s and Dick’s Sporting Goods, along with Rack Room Shoes, Ulta Beauty, Five Below, Game Stop, and a couple smaller tenants. There is also a small vacant space next to Game Stop. The center is split by Shenstone Boulevard that runs the entire length of the center. On the opposite northwest side of the center is Best Buy, along with several spaces, including GNC, The Original Mattress Factory, Subway, and Buffalo Wild Wings. Just south are two separate buildings. One includes an AT&T, MyEyeDr., and Mattress Firm, and the other includes several eating outlets, including Moe’s Southwest Grill, Cold Stone Creamery, and Teriyaki Madness, along with a Sprint and Great Clips. Just south of these are three outparcels that are not a part of the collateral, including Chili’s Grill & Bar, McDonald’s, and Chick-fil-A. Just south of these outparcels along the southwest corner section of the center are several junior anchors: Pier 1 Imports, TJ Maxx, Shoe Carnival, Ross Dress for Less, Michaels, and Party City. The property has good visibility from Hwy. 70 along the northern end and along White Oak Road.

Garner is located about 6.0 miles south of Raleigh and 15.0 miles southeast of Cary, North Carolina. The surrounding areas are primarily residential and retail, and the nearest major shopping areas are Crossroads Plaza 11.0 miles northwest, Crabtree Valley Mall 16.0 miles northwest, and Triangle Town Center 16.0 miles to north.

DBRS Morningstar inspected the interior of BJ’s Wholesale Club and Dick’s Sporting Goods. The quality of the interior improvements is very good, and the buildings had good functional space.

Overall, the property showed well during the inspection. Exteriors were well maintained and the landscaping nicely landscaped with plenty of available parking. White Oak Crossing was also very busy with shoppers. There was no evidence of any observed deferred maintenance.

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2017 ($) 2018 ($)T-12 September

2019 ($) Issuer NCF ($)

DBRS Morningstar

NCF ($) NCF Variance

GPR 7,004,586 7,053,813 7,162,895 7,454,500 7,395,274 -0.8

Recoveries 1,377,015 1,474,574 1,476,325 1,390,744 1,390,744 0.0

Other Income 0 0 0 0 0 -

Vacancy 0 0 0 -415,822 -612,556 47.3

EGI 8,381,601 8,528,387 8,639,220 8,429,421 8,173,461 -3.0

Expenses 1,662,835 1,741,540 1,625,210 1,710,437 1,823,348 6.6

NOI 6,718,766 6,786,847 7,014,010 6,718,984 6,350,113 -5.5

Capex 0 0 0 163,641 179,477 9.7

TI/LC 0 0 0 199,148 332,748 67.1

NCF 6,718,766 6,786,847 7,014,010 6,356,196 5,837,887 -8.2

The DBRS Morningstar NCF is based on the DBRS Morningstar North American Commercial Real Estate Property Analysis Criteria. The resulting DBRS Morningstar NCF was $5,837,887, representing a variance of -6.3% from the Issuer’s NCF of $6,232,816. The main drivers of the variance are vacancy and TI/LCs. Vacancy was concluded to the DBRS Morningstar minimum of 10.0% for in-line spaces and 5.0% for anchor and major tenants compared with the Issuer’s vacancy rate of 5.0%. DBRS Morningstar based TI/LC assumptions on the appraisal estimates, which ranged between $2.00 psf for anchor tenants and junior anchor tenants and $25.00 psf for small in-line tenants compared with the Issuer’s assumption of $0.25 psf for junior anchor and anchor tenants and $0.50 psf for in-line tenants.

DBRS MORNINGSTAR VIEWPOINTDBRS Morningstar expects stable performance of the collateral. The property has maintained strong occupancy of over 98% since 2016. This, plus the fact that 19 tenants, representing over 75.0% of the base rent, have been in occupancy since 2004, provides some comfort from the high lease rollover expected over the loan term. However, Pier 1 Imports announced the closure of the store at this location in early 2020; nonetheless, DBRS Morningstar assigned a 10.0% vacancy assumption to the junior anchor category, which was 100.0% occupied. Therefore, the risk of this tenant has been captured in that assumption. In addition, the borrower has provided an upfront reserve of $1.0 million that may be used to backfill the space. The Raleigh area has continued to grow steadily with 1.6% population growth within a 5.0-mile radius, which suggests ongoing demand for retail uses in the area. The DBRS Morningstar LTV is 73.1%; however, the borrower invested $22.4 million in cash equity, which DBRS Morningstar considers to be positive.

DOWNSIDE RISKS – Rollover is significant in this property. In the first five years of the loan, 93.1% of the NRA rolls. This equates to $6,667,521 in base rent, which is 93.5% of the total base rent.

– The Issuer LTV is 73.1%, which suggests elevated default risk.

– There are 13 tenants with cotenancy requirements. These 13 tenants are tied to BJ’s Wholesale Club, Kohl’s, Dick’s Sporting Goods, Best Buy, Ross Dress for Less, and TJ Maxx.

STABILIZING FACTORS – The property has had stable occupancy (over 98.0%) since 2016, and 19 of the tenants have been in occupancy since 2004.

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– The borrower contributed $22.4 million of equity to the transaction, equating to 26.1% of the capital stack. The loan will amortize after the IO period and will pay down to an ending LTV of 64.2%.

– Of the six tenants associated with the cotenancy, three have renewed leases since coming to the property: Dick’s Sporting Goods, Best Buy, and Ross Dress for Less. Each of these tenants took occupancy in 2003.

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COLLATERAL SUMMARY

DBRS Morningstar Property Type Office Year Built/Renovated 1983–91/2017–19

City, State Bellevue, WA Physical Occupancy (%) 100.0

Units/SF 262,858 Physical Occupancy Date December 2019

The loan is secured by the borrower’s fee simple interest in 90 North Campus, a four-building office complex located in Bellevue, Washington, with a total of 262,858 sf of NRA. The ten-year fixed-rate loan is IO for its entire term. Mortgage loan proceeds of $80.0 million, along with $42.1 million of sponsor equity, will be used to cover the $117.0 million purchase price and fund $5.1 million in closing costs.

Originally developed in 1983 and 1991 as a built-to-suit facility by the Boeing Company (Boeing), the property was acquired as vacant by the seller in 2017 for $36.0 million when Boeing vacated the premises. The seller reportedly invested an additional $40.0 million in capital improvements to reposition the property for multi-tenant use.

The property is 100.0% leased to two tenants, T-Mobile USA, Inc. (T-Mobile) and Mindtree Limited (Mindtree). T-Mobile will reportedly occupy its space in two phases in January 2020 and March 2020, while Mindtree is presently in occupancy. T-Mobile and Mindtree received $90.00 psf and $72.50 psf, respectively, in landlord TIs and reportedly invested an additional $70.00 psf and $25.00 psf, respectively, in their space build-outs.

Bellevue, WA

90 North Campus














Pari Passu 50.0

B-Note0.0

Mezz0.0

Total Debt80.0



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90 NORTH CAMPUS – BELLEVUE, WA

TENANT SUMMARY

Tenant SF% of Total

NRADBRS Base Rent PSF

% of Total DBRS Base Rent Lease Expiry


T-Mobile 169,018 64.3% $41.43 64.3% Nov-29 N

Mindtree 93,840 35.7% $41.80 35.7% Aug-29 Y

Subtotal/Wtd. Avg. 262,858 100.0% $41.56 100.0% Various N

Other Tenants 0 0.0% $0.00 0.0% Various N

Vacant Space 0 0.0% n/a n/a n/a n/a

Total/Wtd. Avg. 262,858 100.0% $41.56 100.0% Various N

SPONSORSHIPThe loan sponsor is Preylock Real Estate Holdings (Preylock), a real estate acquisition and management company with over $1.8 billion of assets under management. Founded in 2016, Preylock focuses on the acquisition of value-add and core-plus office buildings located in major West Coast markets and leased to technology tenants. The guarantors of the loan are the principals of Preylock: Farshid Shokouhi and Brett Michael Lipman. Preylock includes investors ranging from wealthy families to institutions and corporations. Qatar First Bank is an Islamic bank that provides alternative investment, private banking and wealth management, corporate and institutional banking, and treasury and investment management products and services to individuals and corporates in Qatar and internationally. Property management is provided by an affiliate of the sponsor with a contractual management fee of 3.0% of EGI.


DBRS Morningstar toured the interior and exterior of 90 North Campus on December 16, 2019, at 2:30 p.m. Based on the site inspection, DBRS Morningstar found the property quality to be Average.

The property is located in the Eastgate I-90 Business Corridor, about five miles southeast of downtown Bellevue, and 10.5 miles east of downtown Seattle. The Seattle-Tacoma International Airport is located about 16 miles south of the property. Primary access to the property is from I-90, which is less than a mile away, and from I-405, which has an interchange with I-90 two miles west of the property.

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Originally built in 1983 and 1991 by Boeing, the campus comprises four buildings, three of which are leased to T-Mobile and one is leased to Mindtree. The campus has average visibility and curb appeal. Although there is good signage on one of the property’s buildings, the other buildings do not have distinctive signage and the management representative accompanying DBRS Morningstar on the site inspection was unable to confirm if new signage was planned for the other buildings. At the time of the inspection, the T-Mobile space was being built out. Management indicated that the first phase of occupancy was expected in January 2020 and the other two T-Mobile buildings were expected to be occupied by March 2020. A skybridge connecting two of the T-Mobile buildings is expected to be built by November 2020. DBRS Morningstar toured the T-Mobile and the Mindtree spaces. Both office fit-outs are in keeping with contemporary design aesthetics and feature open-plan work areas with height-adjustable desks, perimeter conference rooms, phone-booth-style conference rooms for private conversations, a cafeteria/kitchen area on each floor, a fitness center, and locker facilities. The Mindtree office also had a lounge/social area with a ping-pong table and games. While the T-Mobile and Mindtree spaces were reportedly built out at significant cost (approximately $160 psf for T-Mobile and nearly $100 psf for Mindtree), the look and feel of both tenant spaces seemed very utilitarian, with exposed ceilings and concrete floors in the common areas and drop ceilings and carpet in the personnel areas.


Budget ($) Issuer NCF ($)DBRS Morningstar NCF

($) NCF Variance (%)

GPR 7,645,500 7,764,136 7,501,277 -3.4

Recoveries 2,800,666 3,067,669 3,170,770 3.4

Vacancy 0 -466,702 -1,323,449 0.0

EGI 10,446,166 10,976,492 9,705,296 -11.6

Expenses 2,954,116 3,260,584 3,344,498 2.6

NOI 7,492,050 7,715,908 6,360,798 -17.6

Capex 65,676 21,695 39,434 0.0

NCF 7,426,374 7,459,212 4,655,865 -37.6

The DBRS Morningstar Stabilized NCF is based on the DBRS Morningstar North American Commercial Real Estate Property Analysis Criteria. The resulting DBRS Morningstar NCF was $4,655,865, a variance of -37.6% from the Issuer’s NCF of $7,459,212. The main driver of the variance were DBRS Morningstar’s estimate of TI and LC costs, vacancy assumption, and straight-line rent credit for the tenants in place. DBRS Morningstar’s TIs were based on the appraiser’s TI conclusion of $60 psf for new tenants and $30 psf for renewing tenants, with seven-year lease terms and 65% renewal probability. Although both tenants received significant TIs from the previous owner and also made their own investments in their spaces, the appraiser’s TI assumptions are in line with the market and the competitive set. DBRS Morningstar assumed a vacancy factor of 12.0%, in line with the average submarket vacancy over the last five years, according to Reis. Finally, since T-Mobile is not investment grade rate and Mindtree’s lease expires within the loan term, DBRS Morningstar only gave rent step credit for 12 months. In comparison, the Issuer of included the present value of the Mindtree’s rent increases in its revenue.

DBRS MORNINGSTAR VIEWPOINTThe property benefits from its location in a tech corridor and proximity to two highway interchanges that connect it to downtown Seattle as well as to Kirkland, Redmond, and Renton. T-Mobile’s corporate headquarters is located less than three miles from the property making it a strategic location for the tenant. Similarly, Microsoft Advanta, which is reportedly one of Mindtree’s main clients, is located across the street from the Mindtree space. Although both tenants are going through a period of internal flux (T-Mobile because of its merger with Sprint and the departure of its CEO and Mindtree because of

February 2020 84



a recent hostile acquisition by an Indian conglomerate) they have long term NNN leases with no termination options and with significant investments in their spaces. Although the loan is IO for its entire ten-year term, it is moderately leveraged at 65.0% LTV based on an appraised value of $123.0 million and includes $42.0 million of new cash equity. Further the loan is 96.9% LTV based on the appraiser’s “dark value” of $82.6 million. In addition, $1.2 million of outstanding TI obligations and $3.1 million for the construction of the skybridge were credited from the seller’s purchase price and reserved in an escrow account.

DOWNSIDE RISKS – Tenant Concentration: The property is leased to only two tenants and both leases expire in 2029, potentially resulting in a dark building at loan maturity. In addition, both tenants have had recent internal turmoil. Further, Mindtree chose this location because of its proximity to Microsoft Advanta, making it heavily reliant on one client.

STABILIZING FACTORS AND UPSIDE POTENTIAL – The loan is structured with a lease sweep if either tenant does not exercise its renewal options, goes dark, or, in the case of T-Mobile, if its long-term credit rating drops by six notches or more.

– Since 2017, Amazon.com has leased close to 1 million sf in Bellevue and will reportedly house nearly 5,000 employees in its locations there by the end of 2020. Facebook, Microsoft, and Google have also reportedly expanded in the Eastside markets, including Redmond and Kirkland. As a result, backfilling space at the property in the event of either tenant vacating should not pose unsurmountable problems.

– Both tenants have made significant investments in their spaces: T-Mobile has invested $70 psf in addition to the $90 psf of landlord TIs, and Mindtree has invested $25 psf in addition to the landlord TIs of $72.50 psf, indicating their commitment to the location.

February 2020 85


Transaction Structural Features

Credit Risk Retention: This transaction is required to satisfy the risk retention requirements of Section 15G of the Securities Exchange Act of 1934. This transaction features an L-shaped risk retention structure. Citi Real Estate Funding Inc. is acting as the retaining sponsor (the risk retention consultation party) under the credit risk retention rules. On the closing date, the retaining sponsor is expected to purchase an eligible vertical interest (the VRR Interest) with an expected initial certificate balance of $46,000,000, representing approximately 3.7% of the aggregate initial balance of all the certificates. Citi Real Estate Funding Inc. will be permitted to offset the amount of its required risk retention by the portions of the VRR Interest acquired by Goldman Sachs & Co. LLC. and Deutsche Bank AG, New York Branch as originators of one or more of the securitized assets. The eligible horizontal residual interest will comprise the G-RR and Class J-RR Certificates (collectively, the HRR Certificates). Eightfold Real Estate Capital Fund V, L.P. or its affiliate is expected to be the third-party purchaser of the HRR Certificates and, per credit risk retention rules, is required to retain such classes for a minimum of five years after the closing date of the securitization, subject to certain permitted exceptions under such rules.

Operating Advisor: This transaction has an operating advisor, Park Bridge Lender Services LLC, that will have consultation rights with the special servicer on major decisions when a control termination event has occurred and is continuing. The operating advisor will also be required to review certain operational activities related to specially serviced loans in general and on a platform-level basis. Furthermore, during these periods, the operating advisor will be required to complete an annual report assessing the special servicer’s performance. The report will be delivered to the rating agencies, the trustee, and the certificate administrator, who will be required to make the report available through its website. After the occurrence and continuance of a consultation termination event, if the operating advisor determines that the special servicer is not performing its duties as required under the Pooling and Servicing Agreement or is otherwise not acting in accordance with the servicing standard, the operating advisor may recommend the replacement of the special servicer. The operating advisor is entitled to a fee of 0.00116% per annum. The operating advisor is also entitled to a $10,000 fee with respect to each major decision on which it is required to consult, which is only payable to the extent that it is paid by the related borrower. Other expenses incurred by the operating advisor will be payable from funds on deposit in the collection account out of amounts otherwise available to make distributions on the certificates.

Appraisal Reduction/Realized Loss: Any interest that is not advanced on as a part of the appraisal-reduction mechanism will not be recovered as part of the loan waterfall upon realization of the collateral. Interest not advanced on because of an appraisal reduction will likely be permanent interest impairment if the net proceeds of the loan in question do not exceed the outstanding principal (plus fees) at the time of liquidation. The special servicer shall attempt to obtain the appraisal for appraisal-reduction purposes promptly upon the occurrence of an appraisal-reduction event. The time frame for an appraisal to be used for appraisal-reduction purposes is at least nine months.

Pari Passu Loan Combinations: The Westin Book Cadillac, White Oak Crossing, Property North, Midland Atlantic Portfolio, and Staples Headquarters, will be serviced pursuant to the PSA for this transaction. 805 Third Avenue and 405 East 4th Street will be serviced pursuant to the PSA for Citigroup Commercial Mortgage Trust 2019-C7. Property Commerce, Southcenter Mall, 90 North Campus, and 510 East 14th Street will be serviced pursuant to the PSA for GSMS 2020-GC45 multi-borrower transaction. The 1633 Broadway whole loan will be serviced according to the Trust and Servicing Agreement for the BWAY 2019-1633 single-borrower transaction. The Bellagio Hotel and Casino whole loan will be serviced according to the TSA for the BX 2019-OC11 single borrower transaction. The 650 Madison Avenue whole loan will be serviced according to the TSA for the MAD 2019-650M single-borrower transaction. The CBM Portfolio will be serviced pursuant to the PSA for COMM 2020-CBM single-borrower transaction. The Parkmerced whole loan combination will be serviced according to the TSA for the MRCD 2019-PARK single-borrower transaction. The Shoppes at Blackstone Valley will all be serviced according to the PSA for the COMM 2019-GC44 multi-borrower transaction.

February 2020 86


Directing Certificateholder/Controlling-Class Rights: The transaction’s most subordinate bonds are controlled by the most subordinate bondholders. The directing holder for serviced loans will be the controlling-class certificateholder selected by more than 50.0% of the voting rights for the controlling class. The controlling class is the most subordinate of the Class J-RR and Class K-RR certificates (the Control Eligible Certificates) outstanding with a principal amount (net of appraisal-reduction amounts) that is at least 25.0% of the initial certificate amount of such class. So long as at least the Class J-RR and Class K-RR certificates have a principal amount (net of appraised-reduction amounts) that is at least 25.0% of the initial certificate amount of the respective certificates, the directing holder may terminate the special servicer without cause (provided that so long as Midland Loan Services, a division of PNC Bank, National Association or an affiliate owns at least 25.0% of the controlling-class certificates, their affiliated special servicer may not be removed without cause). A control termination event exists when no class of the control eligible certificates has a principal amount (net of appraisal reduction amounts) that is at least 25.0% of the initial certificate amount. A consultation termination event will occur when no class of control eligible certificates has an outstanding principal balance that is at least 25.0% of its initial principal balance (ignoring any appraisal-reduction amounts). Prior to a consultation termination event but after a control termination event, the special servicer cannot be replaced, except for cause, and is subject to a vote by all bondholders.

Excluded Special Servicer Loan: If the special servicer becomes a borrower party with respect to any mortgage loan, it will be required to resign. The directing holder (prior to the occurrence and continuance of a control termination event) will be entitled to appoint a special servicer that is not a borrower party with respect to such loan. However, if the controlling-class representative or any majority controlling-class certificateholder is a borrower party of such loan, the largest controlling-class certificateholder by certificate balance that is not a borrower party will be entitled to appoint the special servicer for such loan. This mechanism is in place to mitigate conflicts of interest that can arise between the special servicer and/or controlling-class representative in their respective roles within the trust and their roles as borrower parties.

Special Servicing Fees: The liquidation or workout fee is 1.0% subject to a cap of $1.0 million and to a minimum of $25,000 in the aggregate, less any fees collected by the special servicer in connection with a workout. The special servicer fee is 0.25% per year, subject to a minimum of $3,500 for the month. The special servicer for each non-serviced loan combination will accrue a comparable special servicing fee with respect to each non-serviced loan combination, pursuant to their respective PSAs.

Disclosable Special Servicing Fees: During each collection period, the special servicer, CW Capital Asset Management, LLC, is required to provide the certificate administrator with an itemized report of all disclosable special servicing fees. These fees are defined as any compensation or remuneration (including, but not limited to, commissions, brokerage fees, rebates, and any fee-sharing arrangement) received or retained by the special servicer or any of its affiliates that is paid in connection with the disposition or workout of the trust mortgage loan or REO property (except for any interest in REO Property acquired with respect to any non-serviced mortgage), in the EOD and foreclosure on the subject property.

Rating Agency Confirmations (RACs): This transaction contemplates waivers of RACs. It is DBRS Morningstar’s intent to waive loan-level RACs, yet to receive notice upon their occurrence. DBRS Morningstar will review relevant loan-level changes as part of its surveillance. DBRS Morningstar will not waive RACs that affect any party involved in the operational risk of the transaction (i.e., replacement of special servicer, master servicer, etc.).

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Methodologies

The following are the methodologies DBRS Morningstar applied to assign ratings to this transaction. These methodologies can be found on www.dbrs.com under the heading Methodologies & Criteria. Alternatively, please contact [email protected] or contact the primary analysts whose information is listed in this report.

– North American CMBS Multi-borrower Rating Methodology

– DBRS Morningstar North American Commercial Real Estate Property Analysis Criteria

– Rating North American CMBS Interest-Only Certificates

– North American CMBS Surveillance Methodology

– North American Single-Asset/Single-Borrower Methodology

Operational Risk Reviews

DBRS Morningstar reviews loan originators, servicers, and operating advisors apart from transaction analytics and determines whether they are acceptable parties.

Surveillance

DBRS Morningstar will perform surveillance subject to DBRS Morningstar’s North American CMBS Surveillance Methodology.

Notes:All figures are in U.S. dollars unless otherwise noted.

This report is based on information as of February 7, 2020. Subsequent information may result in material changes to the rating assigned herein and/or the contents of this report.

The DBRS group of companies consists of DBRS, Inc. (Delaware, U.S.)(NRSRO, DRO affiliate); DBRS Limited (Ontario, Canada)(DRO, NRSRO affiliate); DBRS Ratings GmbH (Frankfurt, Germany)(CRA, NRSRO affiliate, DRO affiliate); and DBRS Ratings Limited (England and Wales)(CRA, NRSRO affiliate, DRO affiliate). Morningstar Credit Ratings, LLC is a NRSRO affiliate of DBRS, Inc.

For more information on regulatory registrations, recognitions and approvals of the DBRS group of companies and Morningstar Credit Ratings, LLC, please see: http://www.dbrs.com/research/highlights.pdf.

The DBRS group and Morningstar Credit Ratings, LLC are wholly-owned subsidiaries of Morningstar, Inc.

© 2020 Morningstar. All rights reserved. The information upon which DBRS ratings and other types of credit opinions and reports are based is obtained by DBRS from sources DBRS believes to be reliable. DBRS does not audit the information it receives in connection with the analytical process, and it does not and cannot independently verify that information in every instance. The extent of any factual investigation or independent verification depends on facts and circumstances. DBRS ratings, other types of credit opinions, reports and any other information provided by DBRS are provided “as is” and without representation or warranty of any kind. DBRS hereby disclaims any representation or warranty, express or implied, as to the accuracy, timeliness, completeness, merchantability, fitness for any particular purpose or non-infringement of any of such information. In no event shall DBRS or its directors, officers, employees, independent contractors, agents and representatives (collectively, DBRS Representatives) be liable (1) for any inaccuracy, delay, loss of data, interruption in service, error or omission or for any damages resulting therefrom, or (2) for any direct, indirect, incidental, special, compensatory or consequential damages arising from any use of ratings and rating reports or arising from any error (negligent or otherwise) or other circumstance or contingency within or outside the control of DBRS or any DBRS Representative, in connection with or related to obtaining, collecting, compiling, analyzing, interpreting, communicating, publishing or delivering any such information. No DBRS entity is an investment advisor. DBRS does not provide investment, financial or other advice. Ratings, other types of credit opinions, other analysis and research issued or published by DBRS are, and must be construed solely as, statements of opinion and not statements of fact as to credit worthiness, investment, financial or other advice or recommendations to purchase, sell or hold any securities. A report with respect to a DBRS rating or other credit opinion is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. DBRS may receive compensation for its ratings and other credit opinions from, among others, issuers, insurers, guarantors and/or underwriters of debt securities. DBRS is not responsible for the content or operation of third party websites accessed through hypertext or other computer links and DBRS shall have no liability to any person or entity for the use of such third party websites. This publication may not be reproduced, retransmitted or distributed in any form without the prior written consent of DBRS. ALL DBRS RATINGS AND OTHER TYPES OF CREDIT OPINIONS ARE SUBJECT TO DISCLAIMERS AND CERTAIN LIMITATIONS. PLEASE READ THESE DISCLAIMERS AND LIMITATIONS AT http://www.dbrs.com/about/disclaimer. ADDITIONAL INFORMATION REGARDING DBRS RATINGS AND OTHER TYPES OF CREDIT OPINIONS, INCLUDING DEFINITIONS, POLICIES AND METHODOLOGIES, ARE AVAILABLE ON http://www.dbrs.com.

http://www.dbrs.com

ADR average daily rate

ARA appraisal-reduction amount

ASER appraisal subordinate entitlement reduction

BOV broker’s opinion of value

CAM common area maintenance

capex capital expenditures

CBD central business district

CBRE CB Richard Ellis

CMBS commercial mortgage-backed securities

CoStar CoStar Group, Inc.

CREFC CRE Finance Council

DPO discounted payoff

DSCR debt service coverage ratio

EGI effective gross income

EOD event of default

F&B food & beverage

FF&E furniture, fixtures and equipment

FS Hotel full-service hotel

G&A general and administrative

GLA gross leasable area

GPR gross potential rent

HVAC heating, ventilation and air conditioning

IO interest only

LC leasing commission

LGD loss severity given default

LOC letter of credit

LOI letter of intent

LS Hotel limited-service hotel

LTC loan-to-cost

LTCT long-term credit tenant

LTV loan-to-value

MHC manufactured housing community

MTM month to month

MSA metropolitan statistical area

n.a. not available

n/a not applicable

NCF net cash flow

NNN triple net

NOI net operating income

NRA net rentable area

NRI net rental income

NR – PIF not rated – paid in full

OSAR operating statement analysis report

PCR property condition report

P&I principal and interest

POD probability of default

PIP property improvement plan

PILOT property in lieu of taxes

PSA pooling and servicing agreement

psf per square foot

R&M repairs and maintenance

REIT real estate investment trust

REO real estate owned

RevPAR revenue per available room

sf square foot/square feet

STR Smith Travel Research

SPE special-purpose entity

TI tenant improvement

TIC tenants in common

T-12 trailing 12 months

UW underwriting

WA weighted average

WAC weighted-average coupon

x times

YE year end

YTD year to date

Definitions

Glossary

Capital Expenditure (Capex)Costs incurred in the improvement of a property that will have a life of more than one year.

DBRS Morningstar Refi DSCRA measure that divides the DBRS Morningstar stabilized NCF by the product of the loan’s maturity balance and a stressed refinance debt constant.

DBRS Morningstar Term DSCRA measure that divides the DBRS Morningstar stabilized NCF by the actual debt service payment

Debt Service Coverage Ratio (DSCR)A measure of a mortgaged property’s ability to cover monthly debt service payments, defined as the ratio of net operating income or net cash flow to the debt service payments.

Effective Gross Income (EGI)Rental revenue minus vacancies plus miscellaneous income.

Issuer UWIssuer underwritten from Annex A or servicer reports.

Loan-to-Value (LTV)The ratio between the principal amount of the mortgage balance, at origination or thereafter, and the most recent appraised value of the underlying real estate collateral, generally from origination.

Net Cash Flow (NCF)The revenues earned by a property’s ongoing operations less the expenses associated with such operations and the capital costs of tenant improvements, leasing commissions and capital expenditures (or reserves). Moreover, NCF is net operating income less tenant improvements, leasing commissions and capital expenditures.

NNN (Triple Net)A lease that requires the tenant to pay operating expenses such as property taxes, insurance and maintenance, in addition to the rent.

Net Operating Income (NOI)The revenues earned by a property’s ongoing operations less the expenses associated with such operations but before mortgage payments, tenant improvements, replacement reserves and leasing commissions.

Net Rentable Area (NRA)The area (sf) for which rent can be charged. NRA includes the tenant’s premises plus an allocation of the common area directly benefiting the tenant, such as common corridors and restrooms.

Revenue Per Available Room (RevPAR)A measure that divides revenue by the number of available rooms, not the number of occupied rooms. It is a measure of how well the hotel has been able to fill rooms in the off-season, when demand is low even if rates are also low, and how well it fills the rooms and maximizes the rate in the high season, when there is high demand for hotel rooms.

Tenant Improvements (TIs)The expense to physically improve the property or space, such as new improvements or remodelling, paid by the borrower.

Weighted Average (WA)Calculation is weighted by the size of each mortgage in the pool.

Weighted-Average Coupon (WAC)The average coupon or interest payment on a set of mortgages, weighted by the size of each mortgage in the pool.

PRESALE REPORT Citigroup Commercial Mortgage Trust 2020 … 2020... · 2020. 2. 7. · Presale...

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