Morningstar DBRS Confirms Credit Ratings on Morgan Stanley Capital I Trust 2024-BPR2

DBRS, Inc. (Morningstar DBRS) confirmed its credit ratings on the following classes of Commercial Mortgage Pass-Through Certificates, Series 2024-BPR2 issued by Morgan Stanley Capital I Trust 2024-BPR2 (the Issuer):

-- Class A at AAA (sf)
-- Class B at AA (sf)
-- Class C at A (sf)
-- Class D at BBB (high) (sf)
-- Class E at BBB (sf)
-- Class X at BBB (sf)
-- Class HRR at BBB (low) (sf)

All trends are Stable.

The credit rating confirmations and Stable trends reflect the transaction's stable performance since closing in May 2024. The subject transaction is collateralized by the borrower's fee-simple and leasehold interests in a portfolio of three malls: Lynnhaven Mall in Virginia Beach, Virginia; Coronado Center in Albuquerque, New Mexico; and Governor's Square in Tallahassee, Florida. The three properties total 3.3 million square feet (sf), with the subject loan collateral portion of the malls totaling 2.7 million sf.

Lynnhaven Mall (42.0% of the allocated loan amount (ALA)) is in Virginia Beach, the largest city in Virginia. The area benefits from a large military presence, second only to the Pentagon, with locations for each major branch of the U.S. military. The mall totals 1.2 million sf, of which 1.0 million sf is collateral as the sponsor does not own the Macy's box. The mall's anchors are Macy's, Dillard's, and JCPenney, and the junior anchors include an 18-screen AMC Theatres, Dave & Buster's, and Dick's Sporting Goods. At issuance, the mall was 97.4% occupied with an inline occupancy rate of 96.1%. Inline sales for the trailing 12-month period (T-12) ended January 31, 2024, were $702 per square foot (psf), $510 psf excluding Apple. The most recent major renovations at the mall were in 2014 when the food court moved to the front of AMC Theatres from the mezzanine level and the former Lord & Taylor box was redeveloped.

Coronado Center (51.0% of the ALA) is in Albuquerque and totals 1.1 million sf, of which 802,392 sf is collateral. The mall's two non-sponsor-owned anchor boxes are Macy's and JCPenney, and the junior anchor tenants include Furniture City, Round1 Bowling & Arcade, Dick's Sporting Goods, and Barnes & Noble. A third anchor box is leased to Kohl's, but the store closed in September 2023. At issuance, the mall was 81.7% occupied with an inline occupancy rate of 95.6%. Inline sales for the T-12 period ended January 31, 2024, were $626 psf, which is the strongest performance in the portfolio. The most recent major renovations at the mall were in 2014 when the sponsor completed a full cosmetic refresh and in 2016 when the former Sears box was redeveloped.

Governor's Square (7.0% of the ALA) is in Tallahassee, home to Florida State University, which is approximately four miles from the property. The mall opened in 1979 and totals 1.0 million sf, of which 837,721 sf is collateral. The mall's anchors are Dillard's and JCPenney; the former occupies space that the sponsor does not own. A third anchor, Macy's, closed in 2024. At issuance, the mall was 48.1% occupied with an inline occupancy rate of 68.8%. Inline sales for the T-12 period ended January 31, 2024, were $448 psf. The most recent major renovation at the mall was in 2014 when the sponsor completed a cosmetic refresh. There is potential for other major renovations at this mall since there are two vacant anchor spaces with upfront reserves for redevelopment. As of the April 2025 reporting, the servicer reported total reserves of $23.3 million on hand across all accounts.

The Morningstar DBRS NCF derived at issuance in 2024 was $42.1 million, representing a negative variance of -17.6% from the Issuer's NCF of $51.1 million. Morningstar DBRS noted a high concentration of scheduled rollover across the portfolio and applied additional vacancy in the analysis as it expects tenant turnover, particularly at the lowest-performing malls of the three in the collateral portfolio. The Morningstar DBRS NCF analysis also reflected occupancy cost markdowns. Morningstar DBRS also applied a weighted-average qualitative adjustment of -0.50% for cash flow volatility in its analysis.

Morningstar DBRS maintained its analytical approach at issuance for this review as the servicer's reported year-end (YE) 2024 NCF of $51.2 million remains in line with the Issuer's NCF and the reported combined occupancy rate of 86.0% at YE2024 is higher than the physical occupancy rate of 77.2% at issuance. It is unclear if the servicer's reporting reflects increased leasing activity since issuance or if there is dark space reported as occupied; Morningstar DBRS requested an update from the servicer and is awaiting a response. The servicer's reporting included a combined NCF analysis for all three properties, but Morningstar DBRS has not received NCFs by property to date. Morningstar DBRS also requested updated tenant sales figures, but has not received them as of the date of this press release.

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

Class X is an interest-only (IO) certificate that references a single rated tranche or multiple rated tranches. The IO rating mirrors the lowest-rated applicable reference obligation tranche adjusted upward by one notch if senior in the waterfall.

All 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

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.
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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
-- 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.