Morningstar DBRS Downgrades Six Classes of CSAIL 2015-C1 Commercial Mortgage Trust

DBRS, Inc. (Morningstar DBRS) downgraded its credit ratings on six classes of Commercial Mortgage Pass-Through Certificates, Series 2015-C1 issued by CSAIL 2015-C1 Commercial Mortgage Trust as follows:

-- Class D to CCC (sf) from BBB (low) (sf)
-- Class E to C (sf) from BB (low) (sf)
-- Class F to C (sf) from B (low) (sf)
-- Class X-D to CCC (sf) from BBB (sf)
-- Class X-E to C (sf) from BB (sf)
-- Class X-F to C (sf) from B (sf)

In addition, Morningstar DBRS confirmed the following credit ratings:

-- Class A-S at AAA (sf)
-- Class B at AA (low) (sf)
-- Class C at A (low) (sf)
-- Class X-A at AAA (sf)
-- Class X-B at AA (sf)

Morningstar DBRS changed the trend on Class C to Negative from Stable. Classes D, E, F, X-D, X-E, and X-F no longer carry a trend given their CCC (sf) or lower credit ratings. The trends on all remaining classes are Stable.

The credit rating downgrades and the Negative trend reflect Morningstar DBRS' recoverability expectations for the remaining loans in the pool. Since the last credit rating action in June 2024, 64 loans have repaid from the pool, leaving eight loans, of which seven, representing 98.4% of the pool, are in special servicing as of the April 2025 remittance. As the pool continues to wind down, Morningstar DBRS looked to a recoverability analysis, the results of which suggest that losses could erode into the Class D certificate. The Negative trend on Class C reflects the further potential deterioration of credit support as a result of the increased loss projections. Of the eight remaining loans, four are backed by retail properties (54.8% of the pool), one by an office property (33.5% of the pool), one by a multifamily property (9.3% of the pool), one by a lodging property (1.6% of the pool), and one by a manufactured housing property (0.9% of the pool).

The largest remaining loan in the pool, 500 Fifth Avenue (Prospectus ID#2, 33.2% of the current pool balance), is secured by a 59-story historic office property in the Grand Central submarket of Manhattan. The loan is pari passu with the notes securitized in the JPMBB Commercial Mortgage Securities Trust 2014-C26 transaction, which is also rated by Morningstar DBRS. The loan transferred to special servicing in June 2024 for imminent monetary default, and a forbearance agreement was finalized on November 6, 2024, giving the borrower until June 6, 2025, to seek replacement financing, subject to equity infusion thresholds and the implementation of cash management. The trailing 12-month (T-12) period ended June 30, 2024, reported a net cash flow (NCF) of $19.6 million, with a 2.70 times (x) debt service coverage ratio (DSCR), a decrease from the YE2023 figures of $24.8 million and 3.41x, respectively. The property was 80.5% occupied as of November 2024, compared with 92.3% at issuance. This compares with the Q4 2024 submarket vacancy rate of 12.3%, according to Reis. The subject was appraised in August 2024 for $273.8 million, a 54.5% decline from the issuance appraised value of $600.0 million but above the $200.0 million whole loan balance. Given the August 2024 value can sustain up to a 25% decline before the trust realizes a loss in Morningstar DBRS' analyzed liquidation scenario, the loan is not a primary contributor to the realized loss projections considered with this review. However, Morningstar DBRS notes the significant value decline since issuance presents increased risks that contributed to the rationale for the credit rating downgrades.

Morningstar DBRS' primary concern is the Westfield Trumbull (Prospectus ID#4, 26.0% of the current pool balance), secured by 462,869 sf of a 1.1 million-sf regional mall in Trumbull, Connecticut. This loan is pari passu with notes securitized in the CSAIL 2015-C2 Commercial Mortgage Trust and CSAIL 2015-C3 Commercial Mortgage Trust transactions, which are also rated by Morningstar DBRS. The loan transferred to special servicing in March 2025 for imminent monetary default and is currently cash managed. The borrower has requested a loan modification, and discussions are currently underway. According to the September 2024 financials, the property generated an annualized NCF of $10.8 million resulting in a DSCR of 1.83x, a significant decline from the issuance DSCR of 2.73x. Rollover concerns are slightly elevated as approximately 13.7% of the net rentable area (NRA) includes leases scheduled to expire in the next 12 months. Tenant sales have also been decreasing year over year as the YE2024 figure, which excludes Apple and anchor tenants, totaled $37.3 million, compared to $102.5 million as of YE2023 and $164.4 million as of YE2022. The subject property was last appraised at issuance in November 2014 for $262.0 million. Given the dated appraisal, declining cash flows, and weakened tenant sales, Morningstar DBRS expects the property to trade at a much lower figure. As such, Morningstar DBRS considered a 65% haircut to the November 2014 appraisal, resulting in a $36.8 million loss and a loss severity approaching 50.0%.

The third-largest loan in the pool, Westfield Wheaton (Prospectus ID#5, 14.4% of the current pool balance), transferred to special servicing in March 2025 for maturity default. The loan is secured by a 1.6 million-sf super-regional mall in Wheaton, Maryland. This loan is also pari passu, with the notes securitized in the CSAIL 2015-C2 Commercial Mortgage Trust and CSAIL 2015-C3 Commercial Mortgage Trust transactions. As of the YE2024 financials, the property was 99.0% occupied, a notable increase from the YE2023 figure of 93.0%. The DSCR figures during the same periods were 2.22x and 2.02x, respectively, below the issuance DSCR of 2.43x. The subject benefits from strong anchors, including Target, JC Penney, Macy's, and Costco Wholesale. Macy's (10.6% of the NRA; lease expiry in January 2026) and an additional 10.2% of the NRA have leases scheduled to expire in the next 12 months, totaling 20.8% tenant rollover. The subject property was last appraised in November 2014 for $402.0 million. While the property has maintained stable performance to date, Morningstar DBRS is concerned with the borrower's ability to obtain take-out financing and estimates the as-is value has declined from issuance. In its analysis for this review, Morningstar DBRS liquidated the loan with a 50% haircut to its issuance value, resulting in a loss severity in excess of 20.0%.

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): https://dbrs.morningstar.com/research/437781.

Classes X-A, X-B, X-D, X-E, and X-F are interest-only (IO) certificates that reference a single rated tranche or multiple rated tranches. The IO rating mirrors the lowest-rated applicable reference obligation tranche adjusted upward by one notch if senior in the waterfall.

All 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. Please note a sensitivity analysis is not performed for CMBS bonds rated CCC or lower. The Morningstar DBRS Long-Term Obligation Rating Scale definition indicates that credit ratings of CCC or lower are assigned when the bond is highly likely to default or default is imminent, thereby prevailing over a sensitivity analysis.

The conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. Morningstar DBRS' outlooks and credit ratings are monitored.

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 CMBS Multi-Borrower Rating Methodology (April 9, 2025)/North American CMBS Insight Model v 1.3.0.0: https://dbrs.morningstar.com/research/451739
-- 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.