Morningstar DBRS Confirms Credit Ratings on All Classes of Citigroup Commercial Mortgage Trust 2021-KEYS, Stable Trends

DBRS, Inc. (Morningstar DBRS) confirmed its credit ratings on all classes of Commercial Mortgage Pass-Through Certificates, Series 2021-KEYS issued by Citigroup Commercial Mortgage Trust 2021-KEYS as follows:

-- Class A at AAA (sf)
-- Class B at AA (sf)
-- Class C at A (high) (sf)
-- Class D at BBB (high) (sf)
-- Class E at BBB (low) (sf)
-- Class F at BB (low) (sf)
-- Class G at B (low) (sf)

All trends are Stable.

The credit rating confirmations reflect the transaction's overall stable performance since Morningstar DBRS' last review as evidenced by the most recent servicer-reported net cash flow (NCF), which remains in line with Morningstar DBRS' expectations. The underlying collateral continues to outperform its competitive set in terms of occupancy rate, average daily revenue (ADR), and revenue per available room (RevPAR), and benefits from experienced sponsorship in EOS Investors LLC.

The loan is secured by the borrower's fee-simple interest in a 199-key full-service hotel, Isla Bella Beach Resort & Spa (Isla Bella), which spans more than 24 acres on Knights Key in Marathon, Florida, with more than a mile of oceanfront exposure. The property was completed in 2019 and benefits from high-quality finishes and a desirable location as much of the resort overlooks the ocean. Given the historically high barriers to entry within the submarket, the property is one of the only luxury hotels that has been developed in the Middle Keys in the past 20 years. Isla Bella is approximately two hours south of Miami, halfway between Islamorada and Key West. Amenities include five swimming pools, a 5,000-square foot (sf) fitness and spa center, a 5,000-sf retail marketplace, and a 24-slip marina. The property also features three food and beverage outlets and offers banquets/catering services in conjunction with its 20,000 sf of meeting space. The sponsor, EOS Investors LLC, is an investment firm primarily operating in the hospitality sector. Its portfolio consists of a number of luxury hotels, including another hotel in the Florida Keys. At issuance, the sponsor was planning to invest an additional $3.1 million in upgrades to the property.

Loan proceeds refinanced existing debt and returned $8.7 million of equity to the sponsor. The floating-rate interest-only loan has a current maturity date of October 2025 with one one-year extension option remaining, for a fully extended maturity date in October 2026. The upcoming third and final extension option includes a performance trigger, subject to a minimum debt yield of 10.0%. The loan is currently on the servicer's watchlist because the debt yield is below the 7.5% threshold and insurance is expiring.

The annualized NCF and debt service coverage ratio (DSCR) were reported at $17.4 million and 0.87x times (x) as of the trailing nine-month period ended September 30, 2024, relatively in line with the YE2023 figures of $16.7 million and 0.88x, respectively, and the Morningstar DBRS NCF of $16.8 million. Metrics remain strong as the property had a running 12-month occupancy rate, ADR, and RevPAR of 81.4%, $525.2, and $427.5, respectively, according to the September 2024 STR report.

For the purposes of this review, Morningstar DBRS maintained the cash flow and valuation assumptions it used to assign the credit ratings. The Morningstar DBRS Value of $197.5 million, which is based on the Morningstar DBRS NCF of $16.8 million and a capitalization rate of 8.5%, represents a loan-to-value ratio of 113.9% on the total secured debt and 93.7% on the Morningstar DBRS-rated debt. Morningstar DBRS also maintained qualitative adjustments totaling 6.00% to represent the property's strong historical occupancy and stable cash flow expectations, high property quality, and irreplaceable beachfront location in a market with high barriers to entry. Morningstar DBRS expects the property to continue to exhibit stable performance.

Morningstar DBRS' credit ratings on the applicable classes address the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. Where applicable, a description of these financial obligations can be found in the transactions' respective press releases at issuance.

Morningstar DBRS' long-term credit ratings provide opinions on risk of default. Morningstar DBRS considers risk of default to be the risk that an issuer will fail to satisfy the financial obligations in accordance with the terms under which a long-term obligation has been issued. The Morningstar DBRS short-term debt rating scale provides an opinion on the risk that an issuer will not meet its short-term financial obligations in a timely manner.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS
There were no Environmental/Social/Governance factor(s) that had a significant or relevant effect on the credit analysis.

A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings (August 13, 2024) at https://dbrs.morningstar.com/research/437781.

All credit ratings are subject to surveillance, which could result in credit ratings being upgraded, downgraded, placed under review, confirmed, or discontinued by Morningstar DBRS.

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

The principal methodology is North American CMBS Surveillance Methodology (February 28, 2025), https://dbrs.morningstar.com/research/448963.

Other methodologies referenced in this transaction are listed at the end of this press release.

The credit rating was initiated at the request of the rated entity.

The rated entity or its related entities did participate in the credit rating process for this credit rating action.

Morningstar DBRS had access to the accounts, management, and other relevant internal documents of the rated entity or its related entities in connection with this credit rating action.

This is a solicited credit rating.

For more information on Morningstar DBRS' policy regarding the solicitation status of credit ratings, please refer to the Credit Ratings Global Policy, which can be found in the Morningstar DBRS Understanding Ratings section of the website: https://dbrs.morningstar.com/understanding-ratings

Please see the related appendix for additional information regarding the sensitivity of assumptions used in the credit rating process.

DBRS, Inc.
22 West Washington Street
Chicago, IL 60602 USA
Tel. +1 312 332-3429

The credit rating methodologies used in the analysis of this transaction can be found at: https://dbrs.morningstar.com/about/methodologies.

-- North American Single-Asset/Single-Borrower Ratings Methodology (February 28, 2025)
https://dbrs.morningstar.com/research/448962
-- Morningstar DBRS North American Commercial Real Estate Property Analysis Criteria (September 19, 2024)
https://dbrs.morningstar.com/research/439702
-- Legal Criteria for U.S. Structured Finance (December 3, 2024)
https://dbrs.morningstar.com/research/444064
-- Interest Rate Stresses for U.S. Structured Finance Transactions (March 27, 2025)
https://dbrs.morningstar.com/research/450750
-- North American Commercial Mortgage Servicer Rankings (August 23, 2024)
https://dbrs.morningstar.com/research/438283

For more information on this credit or on this industry, visit https://dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.