BLOG VIEW: These days, mortgage brokers, lenders, and lenders can find tools to meet virtually any need. Whether the priority is commercial real estate lead generation, sales and marketing automation, or loan origination, commercial loan broker software has it all.

With industry-specific CRM software for commercial mortgage brokers, it becomes easier to automate marketing tasks, calculations, tracking, processing, risk management, credit reports, intensification of loan operations and follow-up with each individual.

Commercial Mortgage Broker CRM software is a productivity powerhouse with many benefits, including:

Attract more borrowers

A commercial mortgage CRM helps turn contacts into customers and create a healthy pipeline for the business. It helps with the following:

• It helps control lead sources: The best commercial mortgage broker software is one that increases lead traffic with powerful integrated marketing tools.
• It prevents cold calls: you can apply different filters (address, zip code, location) and get the contacts you need. In this case, the broker does not call each person but makes personalized phone calls.
• It automates marketing wins: With customer-focused campaigns and drip templates, a CRM system attracts new leads with just a few clicks. Each contact in the database receives personalized newsletters with information on financial options at the right time.

Help close more deals

Borrowers and lenders expect a quick response from their mortgage brokers. Here are a few points on how commercial mortgage brokerage software helps to pick up the pace and close more deals:

• This reduces lead distribution speed: CRM systems for mortgage brokers automatically distribute inquiries to the right specialist so your team is always ready to handle a steady stream of incoming inquiries.
• It enables smart lead scoring and prioritization: Advanced CRMs have built-in lead scoring and prioritization features that help a broker allocate the commercial mortgage leads they need to focus on. As a result, one can increase the chances of converting prospects into customers.
• It ensures continuous communication across all channels: with all messages, emails, marketing campaigns and phone interactions stored in a central location, mortgage professionals can easily pick up any conversation and analyze it.

Increases productivity

Preparing financial documents, qualifying borrowers or reviewing loan agreements takes time. Here are a few points on how a well-optimized commercial mortgage broker CRM boosts productivity within the team:

• It provides intelligent automation: a CRM system is a broker’s assistant to automate most repetitive and mundane tasks so that the broker can focus on generating new leads and interacting with existing customers and networks reference.
• It integrates with third-party tools: The best software for mortgage brokers can be integrated with the tools you need in your mortgage business. This integration avoids endless switching between screens or getting lost in its data jungle.
• It Generates Reports: Mortgage activity is data-driven, so having real-time activity reports with just a few clicks is a big plus. Any report can be created – from performance analysis to quarterly summaries.

Bring more references

Word of mouth is one of the best sources of new customers. Below are points on how commercial mortgage broker software can help a lender gain more peer referrals:

• It allows a broker to keep in touch with his old clients: using a CRM system, a broker can stay in constant contact with all his clients during and after the loan process, thus leaving them even more satisfied with the service of their broker and allowing them to talk about your brand.
• It automates communication with investors, lenders, borrowers: everyone appreciates speed, efficiency and authenticity. If a broker responds quickly and efficiently, his partners eagerly refer clients.
• This helps match clients with capital market providers.

Finding the most suitable commercial loan brokerage software depends on the granular needs of a broker. What works for one broker and their business may not work for another.

Wes Snow is CEO, Co-Founder and President of Ascendix, a provider of CRM tools and CRM consulting. He has worked in commercial real estate for over 15 years and is a frequent podcast guest, speaker and author of articles on technology and commercial mortgage topics.

What is a commercial mortgage and how do I get one?

Which mortgage is right for you?

If you are looking to expand your business premises, you may want to consider taking out a commercial mortgage. It will also set you firmly on the commercial property ladder, which is an essential step if you are serious about growing your business.

Before you start thinking about a commercial mortgage, there are a few things you need to understand to make sure you know exactly what you’re signing up for. This will help you avoid future problems.

First you need to consult a local broker like Myles Robinson at Loan Corp to see if you qualify. If you are, then you can concentrate on your application.

If you’re ready to learn more about a commercial mortgage, this article has you covered.

What is a Commercial Mortgage?

A business mortgage, or business mortgage, allows business owners to borrow the money needed to purchase property or land for their business from a major bank or specialty lender. .

It usually lasts between three and 25 years. And, like other types of mortgageit is repaid in monthly instalments, plus interest.

Although commercial mortgages are most often used by business owners wishing to take formal ownership of their business premises, they can also be used by specific investors wishing to purchase a property to lease it to another business, for example.

Key Features of a Commercial Mortgage

A commercial mortgage plan differs from a typical mortgage in the following ways:

• It usually does not come with fixed rates.
• You will likely pay a much higher interest rate compared to a regular mortgage, as they are generally considered higher risk for lenders.
• They offer better interest rates than typical business loans that require you to put up personal assets as collateral.

How to Get a Commercial Mortgage

How to qualify

Commercial lenders prefer borrowers who have experience in real estate investing. Indeed, operating a commercial or mixed-use property can be quite a difficult thing to do.

If you want to increase your chances of getting a mortgage, we suggest checking off the following factors:

• A deposit ranging from 20% to 30%
• Being owner
• Own a few rental properties for a minimum of 24 months
• Have considerable savings in the bank
• Provide proof of your income (rent, self-employment or salary)

If you don’t meet all of the above criteria, don’t panic! You will probably still find a lender, but your rates could be much higher.

The steps

As with a regular mortgage, the application process will vary depending on which lender you choose to go with. Still, there are a few steps that will remain the same. We have described them below.

1. Complete an online commercial mortgage application called the Asset and Liability Form and submit it to the relevant broker.
2. When prompted, you will then be required to submit relevant information about your business. This may include (but is not limited to) the following:

• Proof of identity and address
• Bank statements (last 3 months)
• Commercial figures (the last 3 years)
• Rental agreement
• Rental agreement
• A business plan outlining financial projections (this will allow the lender to determine the likelihood of you repaying the loan within the agreed time frame)

3. You will then need to arrange a property valuation on the places you want to buy. Be sure to keep track of this.

4. The next step is usually to wait for the lender or broker to complete all required legal checks and necessary documentation.

5. If your commercial mortgage application has passed all checks and been officially approved, then you will receive an official mortgage offer from the bank of your choice.

Other things to consider

Before you start considering a commercial mortgage, you must have the deposit ready with your bank. These can be quite hefty, so you need to make sure you can afford to repay this in addition to monthly repayments.

Remember that you can still apply for a commercial mortgage with a bad credit rating. However, you should expect to pay much higher interest to compensate for the risk the broker is taking.

Summary

I hope you now understand what a commercial mortgage is and how to get one. The process may sound easy in theory, but never underestimate the hard work you’ll need!

It’s your job to make sure you have all the relevant information and documents to get your application approved.

What is a commercial mortgage and how do I get one?

Which mortgage is right for you?

DBRS Limited (DBRS Morningstar) has affirmed all ratings of the Commercial Mortgage Transfer Certificates (the Certificates) out of five BX Commercial Mortgage Trust operations as follows.

BX Commercial Mortgage Trust 2020-VIV:

Class D to BBB (sf)

Class E to BBB (low) (sf)

BX Commercial Mortgage Trust 2020-VIV2:

Class C to A (sf)

BX Commercial Mortgage Trust 2020-VIV3:

Class B to AA (low) (sf)

BX Commercial Mortgage Trust 2020-VIV4 (BX 2020-VIV4):

Class A to AAA (fs)

Class X to AAA (fs)

BX Commercial Mortgage Trust 2021-VIV5 (BX 2021-VIV5):

Class A to AAA (fs)

Class X to AAA (fs)

All trends are stable.

The guarantee for these transactions, whose closing dates were between May 2020 and October 2021are some components of a $3.0 billion first mortgage loan encumbering both MGM Grand and Mandalay Bay (MGM/Mandalay) properties to Vegas. The issuer elected to issue components of the entire loan on these five transactions due to market volatility caused by the coronavirus disease (COVID-19) pandemic. For a description of receivables by transaction, please see the press release of the October 18, 2021for the BX 2021-VIV5 transaction on the DBRS Morningstar website at www.dbrsmorningstar.com.

Rating confirmations reflect stable overall performance since DBRS Morningstar’s previous review. The loan is interest only (IO) for the first 10 years of its 12-year term. The godfathers, Blackstone Real Estate Income Trust and MGP operating partnershipwith certain other parties, have formed a joint venture (JV) to acquire the MGM/Mandalay Properties for an aggregate purchase price of $4.6 billion ($471,892 per room). borrowers, Mandalay PropCo, LLC and MGM Grand PropCo, LLC (which are subsidiaries of the JV), then signed a 30-year triple net head lease with two 10-year renewal options with the MGM/Mandalay Tenant, a wholly owned subsidiary of MGM Resorts.

Upon DBRS Morningstar’s preliminary review of the transaction, operating cash flow and occupancy rates for MGM/Mandalay properties had remained significantly below their 2019 levels due to the continued effect of the coronavirus pandemic, which led to the activation of a cash trap. Since then, the hotel market in Vegas saw a strong recovery according to the LVCVA summary report, showing a 5.7% year-over-year increase in total visitor volume for July 2022. While visitor volume remains approximately 5.3% below pre-pandemic levels, the average daily rate and revenue per available room come in at the end of the 12-month period (T-12) July 31, 2022exceeded the level of 2019. According to the completed T-12 March 31, 2022finance, the MGM/The Mandalay properties recorded a consolidated occupancy rate and net cash flow (NCF) of 80.2% and $173.3 million (reflecting a debt service coverage ratio (DSCR) of 1.60 times (x)), respectively a substantial improvement in YE2020 figures of 54.2% and –$354.1 million (reflecting a DSCR of -3.26x). Although cash flow remains depressed relative to DBRS Morningstar’s NCF of $440.5 million (reflecting a DSCR of 4.38x), properties show a recovery with the end of the T-12 March 31, 2022with consolidated chamber revenues showing a 129.8% increase over their YE2020 figure, and other departmental revenues showing a 118.7% increase over their YE2020 figure.

According to a February 17, 2022site inspection, the properties, in total, have approximately $40.5 million investments in progress and about $55.0 million expected in the next 12 months.

DBRS Morningstar believes that the mortgage that serves as collateral for the certificates benefits from unique structural features that provide additional protection for bondholders. In particular, the structure of the master agreement protects the mortgage loan from direct exposure to the volatility of the operating cash flows of the properties. The terms of the head lease require that MGM/The Mandalay tenant will make an initial head lease payment of $292 million per year, with these payments to increase by 2.0% until the anniversary date of the 15th anniversary of the lease. Lease payments increase by the greater of 2.0% and CPI (with CPI capped at 3.0%) for the remainder of the lease term. The transaction also benefits from a guarantee provided by MGM Resortswhich covers the payment and execution of MGM/Mandalay Monetary obligations of the tenant and certain other obligations under the head lease agreement. In addition to the payment and performance guarantee, MGM Resorts also executed a loss of profit guarantee.

DBRS Morningstar’s LTV of 65.97%, based on a cap rate of 9.69% and a concluded valuation of $4.54 billion, represents a prudent leverage point with the ability to withstand a substantial realized decline in market value prior to mortgage write-down. In addition, the sponsors contributed a combined sum $1.6 million in cash to secure the properties, suggesting that there is massive incentive to continue to support the loan through what should be a temporary decline in the performance of the underlying hotel properties.

ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS

No environmental/social/governance factor had a significant or relevant effect on the credit analysis.

A description of how DBRS Morningstar considers ESG factors in the DBRS Morningstar Analytical Framework is available in DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/396929> (May 172022).

Class X in transaction BX 2020-VIV4 and class X in transaction BX 2021-VIV5 are IO certificates that reference a single scored slice or multiple scored slices. The IO rating reflects the lowest rated applicable benchmark obligation tranche adjusted up one notch if senior in the cascade.

All ratings are subject to monitoring, which could result in ratings being upgraded, downgraded, revised, confirmed or discontinued by DBRS Morningstar.

DBRS Morningstar provides updated analysis and in-depth commentary on the DBRS Viewpoint platform for this transaction.

The DBRS Viewpoint platform provides additional information about this transaction and the underlying loans, including DBRS Morningstar metrics, commentary, servicing agent reported cash flow, and other performance-related data. For free access to this content, please register with the DBRS Viewpoint platform at www.viewpoint.dbrsmorningstar.com.

Remarks:

All figures are in WE dollars unless otherwise specified.

The primary methodology is the North American CMBS Monitoring Methodology (October 3, 2022), which can be found on dbrsmorningstar.com under Methodologies and Criteria. For a list of structured finance related methodologies that may be used during the rating process, please see the DBRS Morningstar Global Structured Finance Related Methodologies document, which can be found on dbrsmorningstar.com in the Commentary tab under Regulatory Affairs. Please note that not all related methodologies listed in a Principal Structured Finance Asset Class Methodology can be used to rate or monitor an individual Structured Finance or Debt Security.

DBRS Sovereign Morningstar group publishes reference macroeconomic scenarios for rated sovereigns. DBRS Morningstar’s analysis considered impacts consistent with baseline scenarios as set out in the following report: https://www.dbrsmorningstar.com/research/384482>.

Related regulatory information pursuant to National Instrument 25-101 Designated Rating Organizations is incorporated by reference and can be found by clicking the link under Related Documents or by contacting us at info@dbrsmorningstar.com’ >info@dbrsmorningstar. com.

The rated entity or its related entities participated in the rating process for this rating metric. DBRS Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

Please see the relevant appendix for more information on the sensitivity of the assumptions used in the rating process.

For more information about this credit or this industry, visit www.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com’ >info@dbrsmorningstar.com.

DBRS Limited

DBRS tower, 181 University Avenueoffice 700

Toronto, ON M5H 3M7 Canada

Such. +1 416 593-5577

(Bloomberg) – The Federal Reserve’s tightening campaign has slowed trading activity in commercial real estate markets, leading Wall Street unions to forecast lower sales of bonds that securitize underlying mortgages.

Analysts were expecting a busy year for real estate players. And early on, it did: Acquisitions in the first half of 2022 outpaced those in the first half of 2021, driven in part by private equity firms with plenty of dry powder to deploy ahead of the crunch, according to JPMorgan Securities. LLC. But rising interest rates have since dampened that enthusiasm, leading the bulging bank to lower its CMBS issuance forecast for the full year by 7%, to $312 billion from $337 billion.

The decline in bond sales will most likely come from a pocket of the private label CMBS market: securities backed by a single asset and a single borrower, or bonds that recondition a mortgage tied to a single property or group of buildings belonging to the same firm. JPMorgan has cut its SASB forecast twice this year, cutting it to $60 billion from $75 billion in its latest revision on Sept. 9.

“Much of the activity has been concentrated this year before rates rose,” said Chong Sin, executive director and head of CMBS research at the bank and one of the authors of the Sept. 9 report. “Buyers were often under contract on properties before the macro environment changed and then they had to impose closures. SASB helped fund some of the larger deals.

SASB’s sales topped 2021 numbers in the first half of the year, hitting $31.85 billion in May, compared to just $19.54 billion at the same time last year, according to data from Bloomberg. The increase in issuance paralleled underlying M&A real estate activity. Private equity firms were sitting on a heap of $245.2 billion in capital for real estate purposes in North America at the end of 2021, according to financial data firm Preqin. This money was supposed to be used to buy and sell properties, mainly in the United States, in turn feeding SASB’s issuance.

Unlike conduit agreements, which include a variety of loans, SASBs are easier to analyze and have over time become a favorite for investors looking for more yield. SASBs also tend to be variable rate, a feature sought by investors as the central bank entered its up cycle.

Among those deals was a more than $3 billion SASB transaction – the largest of the year – issued to fund the acquisition of The Cosmopolitan of Las Vegas. Stonepeak Partners, Blackstone Real Estate Income Trust and the Cherng Family Trust purchased the property in May and blocked funding shortly thereafter.

Read more: Banks raise prices for CMBS Cosmopolitan Vegas deal by $3 billion

But over the summer, M&A activity faltered as mortgage rates soared and the cost of operating the CMBS market rose. For example, Blackstone priced an over $2.7 billion SASB deal in August with a 260 basis point discount margin on the largest tranche, while a similarly sized deal with The company’s different guarantees in February had a discount margin of 110 basis points on the equivalent. slice.

As a result, the flurry of SASB issuance activity seen in the first half of the year slowed over the summer to match 2021 figures. In August, year-over-year issuances s were $38.47 billion, up from $37.3 billion a year earlier, according to Bloomberg data. The rush to finance properties has come to an abrupt halt.

“Higher rates affect issue volumes in many ways,” said Darrell Wheeler, researcher at Moody’s Analytics. “The most obvious impact is a decrease in existing prepayments and an increase in extensions, which will reduce volumes.”

Read more: Fed trumps longer after US inflation surprise

But the pause is not necessarily bad news for the sector, according to market participants, who say it has been overloaded with supply for months.

“It was one of the few sub-sectors to beat the trend in the first half of the year, and the market was just saturated with CMBS supply, so the pullback in issuance expectations was a good thing,” David Goodson, head of securitized credit at Voya Investment Management, said in an interview.

The smaller pipeline could also be positive for spreads. “The slowdown in supply should help hold spreads towards the end of the year,” Sin said. “And the story of the spread can get even more positive if we start to see the macro story turn into a better place.”

Meanwhile, analysts at BofA Securities Inc. said they “remained neutral” on CMBS in a Sept. 9 note, noting that it would be difficult for spreads to recover in the current macro environment.

Relative value: AAA

• BofA analysts believe yields on AAA securitized products are “very attractive,” according to a Sept. 9 report. The market has already largely priced in about 150 basis points of the Fed’s rate hikes expected over the next five months, making the ICE AAA ABS Index yield of 4.26% attractive.
• Floating-rate AAA CLOs offering yields around 5.2% are also attractive, as are CRE CLOs and SASB CMBS, they said.
• Meanwhile, agency MBS yields are also attractive, hovering around 10-year highs, but are less attractive than other securitized products due to Fed balance sheet uncertainty.

Quotable

“Fixed income today offers reasonably attractive opportunities for the first time since 2018,” Bob Miller, head of Americas fixed income fundamentals at BlackRock Inc., told Bloomberg Television’s Surveillance on Monday. “You can build a high quality portfolio that has a 4% to 5% yield, including treasuries, high quality credit, even add high quality high yield, especially in fixed income Americans.”

And after

ABS offers in the queue include Ford (Prime Auto Loan ABS), Nissan (Prime Auto Loan ABS), and New Hampshire (Private Student Loan ABS).

©2022 Bloomberg LP

DBRS, Inc. (DBRS Morningstar) assigned a special MOR CS1 Commercial Mortgage Manager ranking to NRL Partners, LLC (NRL or the Company).

The ranking trend is Stable.

LNR is a wholly owned subsidiary of Starwood Property Trust, Inc.which is a subsidiary of a private equity investment firm Starwood Capital Group Global, LP

The assigned ranking reflects the following considerations:

LNR’s decades-long experience as an accomplished asset manager and special duty agent for commercial mortgage-backed securities (CMBS) transactions. The Company also has strong asset experience in secured loan obligation (CLO) transactions. DBRS Morningstar also recognizes NRL’s success since the onset of the coronavirus disease (COVID-19) pandemic in resolving a high volume of distressed loans, many of which are being processed as non-transfer consent requests. in collaboration with main repairers.

The company’s solid professional depth of highly experienced managers and employees, many of whom have exceptionally long tenures with the company. Despite the difficult labor market for employers, NRL has experienced relatively moderate turnover over the past two years. Internal redeployments of managers and staff to and from special asset management roles during the pandemic accounted for much of this turnover. The Company also shows reasonable workload ratios for asset managers, especially as the volume of the portfolio has decreased over the past year.

A well-designed organizational structure that covers all essential functions, including teams for borrower consent applications, monitoring, loan administration support, asset accounting and investor reporting. The operation includes dedicated in-house legal and compliance staff as well as an asset management team specifically for hotel assets.

The company’s comprehensive and proactive procedures, which reflect its deep expertise in CMBS transactional compliance and its understanding of best practices.

LNR’s excellent computing environment, mainly cloud-based. The technology suite includes a proprietary asset management application integrated with a purchased and customized workflow tracking application and data repository/business analytics tools, which collectively provide in-depth data management and scheduled mechanisms to monitor loan level and compliance with pooling and service agreements. Data backup, security, and recovery protocols are robust and based on recent audits and assessments, routine testing, and upgraded software. LNR also has strict data security requirements for its suppliers.

Strong CMBS-centric audit and compliance practices, which include comprehensive annual operational audits, AB rules certificates and formal procedures for the qualification and monitoring of suppliers. LNR also regularly audits property managers for real estate assets (REO).

Of the June 30, 2022LNR was the named special duty officer on 166 CMBS transactions containing 5,884 loans with a total outstanding principal balance (UPB) of $98.74 billion. He was also the special repairman on nine Freddie Mac– sponsored securitisations (four series K transactions and five low value transactions) containing 631 loans with a total UPB of $5.90 billion. Additionally, LNR was the special servicer on seven CLO transactions containing 127 loans with a total UPB of $3.80 billion. It was affiliated with the controlling holder (CCH) in 24% of these CMBS and CLO transactions. However, LNR holds minority B-coin investments in numerous CMBS transactions with third-party CCHs in which it is the named special provider.

Of the June 30, 2022the total active special services portfolio (all in securitized transactions) contained 134 loan positions and 188 REO assets (101 consolidated by asset relationships) with a combined UPB of $6.10 billion. Since the creation of LNR in 1993 until June 30, 2022the Company resolved 7,133 specially managed assets with a total UPB of approximately $86.20 billionincluding 418 specially equipped assets with a cumulative UPB of $8.10 billion resolved since early 2020.

All ratings are subject to monitoring, which may result in ratings being increased, decreased, revised, confirmed or discontinued by DBRS Morningstar.

DBRS Morningstar North American Commercial Mortgage Manager Ratings are not credit ratings. Instead, they are designed to assess the quality of the parties that service commercial mortgages. Although the financial condition of the Servicer Agent contributes to the applicable rating, its relative importance is such that a Servicer’s rating should never be considered an indicator of its creditworthiness.

Remarks:

All figures are in WE dollars unless otherwise specified.

The primary methodology is North American Commercial Mortgage Servicer Rankings (September 3, 2021), which can be found on dbrsmorningstar.com under Methodologies and Criteria.

For more information about this industry, visit www.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com >info@dbrsmorningstar.com.

DBRS, Inc.

140 Broadway43rd floor

New York, NY 10005 United States

Such. +1 212 806-3277

POPULAR ARTICLES ON: Real Estate and Construction in Canada

Aeon Investments is investing an initial £200m (€236m) in commercial mortgages in the UK through a funding deal with SME finance platform Assetz Capital.

Over the next three years, London-based, credit-focused investment firm Aeon is set to inject an initial investment of £200m into SME loans arranged by Assetz, enabling the firm to provide commercial mortgages of up to £10 million on commercial investment properties.

Assetz said the partnership allows it to further diversify its commercial mortgage lending and “expand its ability to lend across the widest range” of commercial properties used by UK SMEs.

Stuart Law, CEO of Assetz Capital, said: “We are delighted to enter into a new relationship with a like-minded company equally committed to supporting the SME sector.

“The need for SME financing has never been more evident, as an increasing number of traditional lenders do not offer financing solutions to SMEs. Together, through innovative and alternative financing, we can enable UK businesses to grow and grow.

Oumar Diallo, CEO of Aeon Investments, said: “Our agreement with Assetz Capital is the latest example of our commitment to the commercial real estate sector.

“If you have a strong risk management focus and have conservative LTVs and conservative debt coverage, we believe commercial real estate lending is a very attractive asset class, especially in the current environment with a depressed fixed income market and declining equity prices.”

To read the latest edition of the latest IPE Real Assets magazine, click here.

DBRS Limited (DBRS Morningstar) confirmed its ratings on the following categories of Commercial Mortgage Transfer Certificates, Series 2016-C2 issued by Citigroup Commercial Mortgage Trust 2016-C2.

Class A-1 to AAA (fs)

Class A-2 to AAA (fs)

Class A-3 to AAA (fs)

Class A-4 to AAA (fs)

Class A-AB at AAA (fs)

Class AS to AAA (fs)

Class XA to AAA (fs)

Class B to AA (sf)

Class XB to A (high) (sf)

Class C to A (sf)

Class D to BBB (sf)

Class XD to BBB (sf)

Class E-1 to BB (high) (sf)

Class E-2 to BB (sf)

Class E to BB (sf)

Class F-1 to BB (low) (sf)

Class F-2 to B (high) (sf)

Class F to B (high) (sf)

Class EF to B (high) (sf)

Class G-1 to B (sf)

Class G-2 to B (low) (sf)

Class EFG at B (weak) (sf)

Class G to B (low) (sf)

All trends are stable.

The rating confirmations and stable trends reflect the transaction’s generally stable performance since DBRS Morningstar’s last rating action, although some loans are showing signs of heightened stress from issuance, as detailed below.

Since the June 2022 disbursement report, all 44 original loans remain in the pool, which has seen a nominal collateral reduction of 4.2% due to scheduled amortization. Additionally, there has been $2.3 million realized losses that were contained in the unrated Class H2. Five loans, representing 8.7% of the current pool balance, have been canceled and two loans, representing 6.4% of the current pool balance, are currently under special management. Thirteen loans, representing 22.8% of the current pool balance, are being watched on the manager’s watchlist for a variety of reasons, including stressed occupancy rates and low debt service coverage ratios (DSCRs).

The largest special services loan, Welcome Hospitality Portfolio (Prospectus ID#8; 3.9% of the pool), is guaranteed by a Hilton hotel in Scranton, Pennsylvaniaand one Hampton Inn in West Springfield, Massachusetts. The loan was initially transferred to a special service in May 2020 in the event of an imminent monetary default, due to cash constraints caused primarily by the coronavirus disease (COVID-19) pandemic. The borrower benefited from a six-month forbearance in September 2020which expired in January 2021. According to the administrator, the loan has been in arrears since the March 2022 “updated” payment date. The borrower would have requested an extension and is currently negotiating a second forbearance. According to the 2021 Year End (YE) financial reports, consolidated occupancy, average daily rate (ADR) and revenue per available room (RevPAR) figures of 71.1%, $111and $79, respectively, are comparable to emission metrics, suggesting an overall improvement in portfolio performance compared to the previous year. As of YE2021, the Hilton property’s cash flow had rebounded to pre-pandemic levels, with a net operating income (NOI) of $3.2 million; However, the Hampton Inn published property YE2021 NOI of $1.3 million, a difference of -46.1% compared to the issue. The portfolio had a combined land value of $34.1 million on issue; however, an evaluation conducted in August 2020 reported a combined value of $25.3 million. The decline in value is explained by a 44% drop in the Hampton Inn’s as is the value of the property.

The biggest loan on the servicer’s watch list, Staybridge Suites Times Square (Prospectus ID#6; 4.9% of the pool), is secured by a long-stay hotel in from manhattan Times Square district. The loan was added to the server agent’s watch list in May 2020 due to non-compliance with covenants related to a drop in DSCR. The loan was last modified in March 2021, date on which the reserve deposits for furniture, fittings and equipment were deferred for three months. Since the June 2022 discount report, the loan remains outstanding. According to YE2021 financial reports, the DSCR of the loan was -0.55x (x) compared to -1.34x in YE2020 and 2.09x at issuance. Additionally, the subject property had an average occupancy rate of 35.8% as of YE2021, with ADR and RevPAR figures of $117.67 and $42.17, respectively. In comparison, the competitive set reported occupancy, ADR and RevPAR figures of 67%, $149.46and $100.13. Given recent declines in collateral yields and general challenges facing the extended-stay hotel asset class, DBRS Morningstar’s outlook for this loan has deteriorated since issuance and, as a result, a penalty probability of default was applied in the analysis to reflect the increased risk profile.

Upon issuance, DBRS Morningstar assigned a fictitious investment grade rating to the loan from Vertex Pharmaceuticals HQ (Prospectus ID#1; 10.3% of the pool). The loan is secured by the borrower’s interest on Vertex Pharmaceuticals’ headquarters, a 1,133,723 square foot Class A office building consisting of two Jetty of fans development within from boston Seaport district. The loan continues to perform well, with a YE2021 occupancy rate of 98.9% and a DSCR of 6.4x. Additionally, gross revenue and free cash flow have increased by approximately 11.2% and 1.5%, respectively, since issuance. With this review, DBRS Morningstar confirms that the performance of this loan remains consistent with the characteristics of higher quality loans.

ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS

No environmental/social/governance factor had a significant or relevant effect on the credit analysis.

A description of how DBRS Morningstar considers ESG factors in the DBRS Morningstar analytical framework is available in DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/396929/dbrs-morningstar-criteria-approach-to-environmental-social-and-governance-risk-factors-in-credit-ratings.

Classes XA, XB, and XD are certificates of interest only (IO) that refer to a single rated tranche or multiple rated tranches. The IO rating reflects the lowest rated applicable benchmark obligation tranche adjusted up one notch if senior in the cascade.

All ratings are subject to monitoring, which could result in ratings being upgraded, downgraded, revised, confirmed or discontinued by DBRS Morningstar.

DBRS Morningstar provides updated analysis and in-depth commentary on the DBRS Viewpoint platform for this transaction.

The DBRS Viewpoint platform provides additional information about this transaction and the underlying loan, including DBRS Morningstar metrics, commentary, servicing agent reported cash flow, and other performance-related data. For free access to this content, please register with the DBRS Viewpoint platform at www.viewpoint.dbrsmorningstar.com.

Remarks:

All figures are in WE dollars unless otherwise specified.

The primary methodology is the North American CMBS Monitoring Methodology (March 4, 2022), which can be found on dbrsmorningstar.com under Methodologies and Criteria. For a list of structured finance related methodologies that may be used during the rating process, please see the DBRS Morningstar Global Structured Finance Related Methodologies document, which can be found on dbrsmorningstar.com in the Commentary tab under Regulatory Affairs. Please note that not all associated methodologies listed in a Principal Structured Finance Asset Class Methodology can be used to assess or monitor an individual structured finance or debt security.

DBRS Sovereign Morningstar group publishes reference macroeconomic scenarios for rated sovereigns. DBRS Morningstar’s analysis considered impacts consistent with baseline scenarios as set out in the following report: https://www.dbrsmorningstar.com/research/384482.

Related regulatory information pursuant to National Instrument 25-101 Designated Rating Organizations is incorporated by reference and may be viewed by clicking the link under Related Documents or by contacting us at info@dbrsmorningstar.com.

The rated entity or its related entities participated in the rating process for this rating metric. DBRS Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

Please see the relevant appendix for more information on the sensitivity of the assumptions used in the rating process.

For more information about this credit or this industry, visit www.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com.

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Ratings

Date Issued	Debt Rated	Rating	Trend	Action	Attributesi

US = Lead Analyst based in the USA

CA = Lead Analyst based in Canada

EU = Lead Analyst based in EU

UK = Lead Analyst based in UK

E= EU approved

U = UK approved

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Unsolicited participation without access

Unsolicited Non Participating

06-Jul-22	Commercial Mortgage Pass-Through Certificates, Series 2016-C2, Class A-1	AAA (sf)	Stb	Confirmed	CA

06-Jul-22	Commercial Mortgage Pass-Through Certificates, Series 2016-C2, Class A-2	AAA (sf)	Stb	Confirmed	CA

06-Jul-22	Commercial Mortgage Pass-Through Certificates, Series 2016-C2, Class A-3	AAA (sf)	Stb	Confirmed	CA

06-Jul-22	Commercial Mortgage Pass-Through Certificates, Series 2016-C2, Class A-4	AAA (sf)	Stb	Confirmed	CA

06-Jul-22	Commercial Mortgage Pass-Through Certificates, Series 2016-C2, Class A-AB	AAA (sf)	Stb	Confirmed	CA

06-Jul-22	Commercial Mortgage Pass-Through Certificates, Series 2016-C2, Class A-S	AAA (sf)	Stb	Confirmed	CA

06-Jul-22	Commercial Mortgage Pass-Through Certificates, Series 2016-C2, Class X-A	AAA (sf)	Stb	Confirmed	CA

06-Jul-22	Commercial Mortgage Pass-Through Certificates, Series 2016-C2, Class B	AA (sf)	Stb	Confirmed	CA

06-Jul-22	Commercial Mortgage Pass-Through Certificates, Series 2016-C2, Class X-B	A (high) (sf)	Stb	Confirmed	CA

06-Jul-22	Commercial Mortgage Pass-Through Certificates, Series 2016-C2, Class C	A (sf)	Stb	Confirmed	CA

06-Jul-22	Commercial Mortgage Pass-Through Certificates, Series 2016-C2, Class D	BBB (sf)	Stb	Confirmed	CA

06-Jul-22	Commercial Mortgage Pass-Through Certificates, Series 2016-C2, Class X-D	BBB (sf)	Stb	Confirmed	CA

06-Jul-22	Commercial Mortgage Pass-Through Certificates, Series 2016-C2, Class E-1	BB (high) (sf)	Stb	Confirmed	CA

06-Jul-22	Commercial Mortgage Pass-Through Certificates, Series 2016-C2, Class E	BB (sf)	Stb	Confirmed	CA

06-Jul-22	Commercial Mortgage Pass-Through Certificates, Series 2016-C2, Class E-2	BB (sf)	Stb	Confirmed	CA

06-Jul-22	Commercial Mortgage Pass-Through Certificates, Series 2016-C2, Class F-1	BB (low) (sf)	Stb	Confirmed	CA

06-Jul-22	Commercial Mortgage Pass-Through Certificates, Series 2016-C2, Class EF	B (high) (sf)	Stb	Confirmed	CA

06-Jul-22	Commercial Mortgage Pass-Through Certificates, Series 2016-C2, Class F	B (high) (sf)	Stb	Confirmed	CA

06-Jul-22	Commercial Mortgage Pass-Through Certificates, Series 2016-C2, Class F-2	B (high) (sf)	Stb	Confirmed	CA

06-Jul-22	Commercial Mortgage Pass-Through Certificates, Series 2016-C2, Class G-1	B (sf)	Stb	Confirmed	CA

06-Jul-22	Commercial Mortgage Pass-Through Certificates, Series 2016-C2, Class EFG	B (low) (sf)	Stb	Confirmed	CA

06-Jul-22	Commercial Mortgage Pass-Through Certificates, Series 2016-C2, Class G	B (low) (sf)	Stb	Confirmed	CA

06-Jul-22	Commercial Mortgage Pass-Through Certificates, Series 2016-C2, Class G-2	B (low) (sf)	Stb	Confirmed	CA

A single loan initially backed by a portfolio of 36 hotel properties is one of the main collateral elements of the HIT Trust 2022-HI32 issue which has been provisionally rated by Moody’s Investor Services.

The transaction’s sponsor, Hospitality Investors Trust, is an unlisted real estate investment trust. Crestline Hotels & Resorts, Hilton Worldwide Holdings and McKibbon Hotel manage the properties, which have 4,669 rooms in 18 states.

The capital structure includes a P-6 grade note backed by a large commercial mortgage-backed securities transaction of $465 million and $123 million of Aaa (sf) rated (P) grade A notes with a actual debt service coverage ratio of 4.11X, and 28.2% return on debt. Analysts have provided preliminary ratings only for Class A to D tickets.

Moody’s used stabilized free cash flow and an expected variable interest rate of an estimated one-month guaranteed overnight rate of 1.50%, plus an expected lending spread of 5.35% and the cumulative product of the certificates in each category to calculate the actual debt service coverage ratio

The certificates “will not be registered under the Securities Act of 1933” and the issuance permits resale under SEC Rule 144A, according to a report by Moody’s Vice President and Chief Credit Officer Blair Coulson; Gregory Ingaglio, vice president and principal analyst; and Joseph Baksic, Associate Managing Director.

The borrowers are under contract to sell four of the properties to be released from collateral after the closing date, but no allocated loan amount has been allocated to these properties which are excluded from the portfolio calculations.

Analysts see credit strength as the key feature of this transaction fueled by portfolio diversity, pooling of multiple properties, brand recognition and strong management. However, such benefits are partially offset by the pandemic, “high leverage, non-sequential payment arrangements, deficient release arrangements, performance volatility inherent in the hotel industry, age of ownership and negative legal characteristics in terms of credit”.

The Herfindahl loan ownership score is 21.7 based on the loan amount allocated. Washington is the state with the highest concentration with two properties accounting for approximately 13.3% of the loan amount allocated.

The largest hotel, Hilton Garden Inn Monterey, accounts for 10.2% of the allocated loan amount. All hotels operate under a global hotel franchise and benefit from their national marketing efforts.

The portfolio received nearly $79.8 million in investments between 2015 and 2021.

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