Morningstar DBRS Downgrades Credit Ratings on Three Classes of GS Mortgage Securities Trust 2015-GC28

DBRS, Inc. (Morningstar DBRS) downgraded its credit ratings on three classes of Commercial Mortgage Pass-Through Certificates, Series 2015-GC28 issued by GS Mortgage Securities Trust 2015-GC28 as follows:

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

In addition, Morningstar DBRS confirmed the following credit ratings:

-- Class F at CCC (sf)

The trend on Class D is Negative. Classes E, F, and X-C no longer carry a trend given the CCC (sf) or lower credit ratings.

The credit rating downgrades reflect ongoing interest shortfalls that have exceeded Morningstar DBRS' tolerance for timely interest to the rated bonds. As of the May 2025 remittance, cumulative unpaid interest totaled approximately $1.9 million, up from $0.7 million at the last credit rating action in May 2024. Class D was shorted the full interest in May 2025 and did not receive full interest between November 2024 and January 2025, although that was repaid with the February 2025 remittance. Further, Classes E and F have been accruing interest since November 2024 and have surpassed the Morningstar DBRS shortfall tolerance ceiling of six months for the BB (sf) and B (sf) credit rating category, supporting the credit rating downgrades for those classes with this review.

Since Morningstar DBRS' previous credit rating action in May 2024, 53 loans have repaid from the pool, leaving five loans, all of which are in special servicing as of the May 2025 remittance. As the pool continues to wind down, Morningstar DBRS looked to a recoverability analysis, the results of which suggest losses would be contained to the nonrated Class G certificate.

The largest remaining loan, The Avenue at Lubbock in Lubbock (43.75% of the pool balance), is secured by a 788-unit student housing property in Lubbock, Texas. The loan transferred to special servicing in November 2024 for imminent monetary default ahead of the loan's December 2024 loan maturity. According to the most recent servicing commentary, the special servicer has initiated foreclosure. The property experienced a sharp decline in occupancy having decreased to 73% as of YE2024 from 94% as of YE2023. Additionally, net cash flow (NCF) decreased during this period to $2.4 million as of YE2024 from $2.7 million as of YE2023, resulting in a debt service coverage ratio (DSCR) of 1.01 times. An updated appraisal completed in March 2025 valued the property at $29.5 million, which reflects a 43.6% decrease when compared with the issuance appraisal of $52.3 million. Given the depressed value along with the special servicer's decision to initiate foreclosure, Morningstar DBRS analysed the loan with a liquidation scenario, resulting in a loss severity of nearly 30%.

The second-largest loan, 411 Seventh Avenue (22.11% of the pool), is secured by a 301,000-square-foot Class B office property in Pittsburgh, Pennsylvania. The loan transferred to special servicing in April 2025 for maturity default after the loan matured in January 2025. The property has experienced precipitous declines in occupancy in recent years having decreased to 67% as of YE2023 and most recently to 59% as of September 2024 from 83% at issuance. The property's three largest tenants are Duquesne Light Company (35.54% of net rentable area (NRA), lease expiration October 2029), Office of Comptroller (15.78% of NRA, lease expiration April 2030), and Literacy Pittsburgh (4.85% of NRA, lease expiration October 2029). The appraisal at issuance valued the property at $32.1 million. While an updated appraisal has yet to be received, Morningstar DBRS believes the value of the property has declined and applied a 65% haircut to the issuance appraisal as part of its liquidation scenario, which resulted in a loss severity in excess of 40%.

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 credit 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 factors 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

Class X-C 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

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 Obligations 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.
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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 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.