Morningstar DBRS Downgrades Five Classes of COMM 2015-PC1 Mortgage Trust

DBRS, Inc. (Morningstar DBRS) downgraded its credit ratings on five classes of Commercial Mortgage Pass-Through Certificates, Series 2015-PC1 issued by COMM 2015-PC1 Mortgage Trust as follows:

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

In addition, Morningstar DBRS confirmed the following credit ratings:

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

Morningstar DBRS discontinued the credit rating on Class A-5, which repaid with the May 2025 remittance. Morningstar DBRS changed the trends on Classes C and X-B to Negative from Stable. Classes D and X-C have Negative trends. The credit ratings on Classes E, F, and X-D do not typically carry trends in commercial mortgage-backed securities (CMBS) transactions. The trends on Classes A-M, X-A, and B are Stable.

The credit rating downgrades reflect Morningstar DBRS' increased loss projections to the trust stemming from the 13 loans in special servicing, which collectively represent 51.8% of the current pool balance. In its previous credit rating action in June 2024, Morningstar DBRS changed the trends on Classes D, E, X-C, and X-D to Negative from Stable to reflect the potential for increased losses to the trust regarding the resolution of the seven loans in special servicing at that time. One of the former specially serviced loans, DoubleTree South Bend (Prospectus ID#25), was liquidated from the trust in February 2025 with a minimal loss severity of 0.1%, below Morningstar DBRS' expectation. Since June 2024, an additional seven loans, representing 28.6% of the current pool balance, have transferred to special servicing for payment default prior to or at the respective loan maturity dates.

In its current analysis, Morningstar DBRS liquidated 11 of the 13 specially serviced loans, resulting in aggregate liquidated losses of $77.9 million, which erodes the full balance of Classes F and G and partially erodes the balance on Class E. In addition, Morningstar DBRS identified six loans, representing 27.6% of the pool, as having increased risk of maturity default given recent performance challenges, weakening submarket fundamentals, and unfavorable lending conditions for specific property types. For the loans with elevated refinance risk, Morningstar DBRS applied an elevated probability of default penalty and/or a stressed loan-to-value ratio in the analysis for this review. Should these or other loans default, or should performance for the specially serviced loans deteriorate further, Morningstar DBRS' projected losses for the pool could increase, further supporting the credit rating downgrade on Class D and the Negative trends on Classes D and C.

The credit rating confirmations and Stable trends on Classes A-M, B, and X-A reflect the overall stable performance for the non-specially serviced loans in the pool, which have upcoming maturities in June 2025 and which Morningstar DBRS expects to repay at maturity.

As of the May 2025 remittance, 31 of the original 80 loans remain in the pool with an aggregate principal balance of $422.9 million, representing a collateral reduction of 71.1% since issuance as a result of loan repayment, scheduled loan amortization, losses associated with liquidated loans, and principal recoveries on liquidated loans. Pool losses to date total $1.0 million and have been contained to the unrated Class G, which has a current balance of $44.7 million.

The largest loan in special servicing, 760 & 800 Westchester Avenue (Prospectus ID#7, 7.2% of the pool), is secured by two Class A office properties in Rye Brook, New York. The whole loan has pari passu pieces securitized in the WFCM 2015-NXS1 (rated by Morningstar DBRS) and COMM 2015-DC1 CMBS transactions. The loan transferred to special servicing in April 2024 for imminent monetary default. In November 2024, a two-year forbearance agreement was executed with terms including a modification fee of 1% of the unpaid principal balance, accrued special servicing fees, and reimbursement of lender costs and expenses.

As of the December 2024 appraisal, the combined occupancy rate at the property was 80.9% compared with 87.3% in March 2024 and 90.0% at issuance. There is considerable rollover risk through YE2025 with leases comprising 17.4% of the net rentable area (NRA) scheduled to expire. According to a Q1 2025 Reis report, the Harrison/Rye/East office submarket reported vacancy at 24.9%, which is expected to remain elevated in the near term. As of the YE2024 financials, the net cash flow (NCF) and debt service coverage ratio (DSCR) were reported at $6.0 million and 0.96 times (x), respectively, below the YE2023 figures of $6.6 million and 1.06x, respectively. NCF remains well below the $8.1 million figure from issuance.

An updated appraisal dated December 2024 valued the property at $99.0 million, a 34.0% decline from the issuance appraised value of $151.0 million. Given the loan's poor historical operating performance, upcoming tenant rollover risk in a soft submarket, and unfavorable lending conditions for suburban office product, Morningstar DBRS analyzed the loan with a liquidation scenario. In the analysis, Morningstar DBRS applied a 20.0% haircut to the most recent appraised value, which, inclusive of outstanding advances and expected servicer expenses of $2.0 million, results in an implied loan loss severity of over 20.0%, or $6.2 million.

The 100 Pearl Street loan (Prospectus ID#11, 6.4% of the pool) is the loan with the highest Morningstar DBRS-projected losses. The loan is secured by a 273,089-square-foot Class A office property in downtown Hartford, Connecticut. The loan recently transferred to the special servicer for imminent monetary default in March 2025 after the borrower indicated it would be unable to repay the loan at the scheduled April 2025 maturity date. The subject has underperformed historically, with occupancy most recently reported at 60.0% as of the September 2024 rent roll with an associated DSCR of 0.24x for the same period. Besides the largest tenant, Hartford Health (27.6% of the NRA, lease expiry in January 2036), the property has a granular rent roll with no other tenants comprising more than 6.0% of the NRA. There is no significant tenant rollover risk within the next 12 months; however, the Hartford Central Business District submarket continues to report a high vacancy rate at 21.0%, according to Reis Q1 2025 data. While an updated appraisal has not been provided to date, given the considerable declines in occupancy and performance, and a lack of investor demand for the property type, Morningstar DBRS believes the asset's current market value has declined considerably. As such, Morningstar DBRS' analysis included a liquidation scenario, applying a 60.0% haircut to the issuance appraised value of $37.5 million, which, inclusive of outstanding advances and expected servicer expenses (which total nearly $1.7 million), results in a loan loss severity over 50.0%, or approximately $13.8 million.

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 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 (May 16, 2025) at https://dbrs.morningstar.com/research/454196.

Classes X-A, X-B, X-C, and X-D 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 ratings assigned to Classes B and C materially deviate from the credit ratings implied by the predictive model. Morningstar DBRS typically expects there to be a substantial likelihood that a reasonable investor or other user of the credit ratings would consider a three-notch or more deviation from the credit rating stresses implied by the predictive model to be a significant factor in evaluating the credit ratings. The rationale for the material deviations is uncertain loan-level event risk. As previously mentioned, the transaction is in wind-down with a majority of the loans maturing in 2025; Morningstar DBRS considers adverse selection as the specially serviced loans and loans facing challenges refinancing will remain in the pool, supporting the material deviation.

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.