Morningstar DBRS Confirms Credit Ratings on All Classes of Wells Fargo Commercial Mortgage Trust 2018-C47

DBRS, Inc. (Morningstar DBRS) confirmed the credit ratings on all classes of Commercial Mortgage Pass-Through Certificates, Series 2018-C47 issued by Wells Fargo Commercial Mortgage Trust 2018-C47 as follows:

-- Class A-3 at AAA (sf)
-- Class A-4 at AAA (sf)
-- Class A-SB at AAA (sf)
-- Class A-S at AAA (sf)
-- Class X-A at AAA (sf)
-- Class B at AA (sf)
-- Class X-B at A (high) (sf)
-- Class C at A (sf)
-- Class X-D at A (sf)
-- Class D at A (low) (sf)
-- Class E-RR at BBB (sf)
-- Class F-RR at BBB (low) (sf)
-- Class G-RR at BB (sf)
-- Class H-RR at B (high) (sf)

Morningstar DBRS maintained the Negative trends on Classes F-RR, G-RR, and H-RR. All other trends are Stable.

The Negative trends reflect the outstanding interest shortfalls to Classes F-RR, G-RR, and H-RR despite the improved outlook for the largest loan in special servicing, Holiday Inn Fidi (Prospectus ID#6; 4.0% of the pool balance). Interest shortfalls to the bonds were first reported in May 2025 and were categorized as interest on advances related to the subject loan, which is paid through December 2024. While Morningstar DBRS expects the outstanding loan balance as well as all associated fees and expenses to be paid in full, the uncertainty surrounding the timing of loan resolution supports the Negative trends. The loan and the resolution strategy are highlighted in greater detail below.

The credit rating confirmations reflect the overall stable performance of the nonspecially serviced loans in the transaction and the favorable property type concentration across the pool, which includes 20 loans (35.9% of the current pool balance) secured by retail properties, and 12 loans (12.1% of the current pool balance) secured by multifamily properties. Additionally, loan collateral secured by office properties has decreased to 10.6% of the current pool balance since the previous credit rating action in July 2024 following the defeasance of three loans (totaling 4.5% of the current pool balance).

As of the May 2025 remittance, 71 of the original 74 loans remained in the trust, with an aggregate balance of $879.0 million, representing a collateral reduction of 7.6% since issuance. The pool benefits from defeasance collateral as 17 loans, representing 14.4% of the current pool balance, have been defeased. There are 11 loans, representing 17.8% of the pool balance, on the servicer's watchlist that are being monitored for performance concerns, deferred maintenance items, and the occurrence of trigger events. An additional four loans, representing 5.2% of the current pool balance, are delinquent and specially serviced. With this review, Morningstar DBRS analyzed three of these loans, representing 1.2% of the current pool balance with liquidation scenarios. The analysis resulted in cumulative implied losses of approximately $2.5 million, contained to the unrated Class J-RR, which has a current balance of $39.3 million.

The Holiday Inn Fidi loan is secured by a full-service hotel in the financial district of downtown Manhattan, New York. The whole loan includes $87.3 million of senior debt securitized across three commercial mortgage-backed security (CMBS) transactions and an unsecuritized $50.0 million B-note. The loan transferred to the special servicer in May 2020 because of monetary default. In January 2023, while in bankruptcy, the borrower entered into an agreement with New York City Health and Hospitals Corporation to operate the hotel as a migrant family shelter. The agreement ultimately ended in March 2025. The loan is paid through December 2024, and the property is currently closed as the resolution strategy focuses on a potential property sale. According to a May 2025 update from the special servicer, the borrower has entered into an agreement with a third party for a loan assumption and subsequent asset sale. Servicer commentary notes the associated transaction documents are being reviewed by all parties with closing expected to occur in Q2 2025.

Morningstar DBRS was unable to confirm the potential sale price of the property; however, the property was most recently appraised in May 2024 at $190.0 million, which represented a 29.3% increase from the August 2021 appraised value of $146.9 million and an 18.5% decline from the issuance appraised value of $233.0 million. In its previous analysis of the loan, Morningstar DBRS applied an increased probability of default (POD) penalty to the loan to reflect the uncertainty surrounding the asset's use as a migrant shelter and the future prospects of the property following the expiration of the agreement. Given the positive developments regarding the pending loan repayment, Morningstar DBRS has removed the adjustment in its current analysis, with a resulting loan expected loss (EL) below the overall EL for the pool.

The loan of most concern, Meridian at North (2.8% of the pool balance), is secured by a two-building office property in downtown Indianapolis. The loan was added to the servicer's watchlist in March 2025 after the former second largest tenant, Centene Management Company, LLC (26.7% of the net rentable area (NRA)), vacated at lease expiration in January 2025, bringing the occupancy rate to 73.3% from 100.0%. The tenant was the sole occupant at the 550 North Meridan Street property and contributed $1.7 million in annual rental revenue. Additional tenant rollover risk includes the third largest tenant, Indiana Department of Child Services (24.5% of the NRA), which has an upcoming lease expiration in May 2025. The servicer has confirmed, however, the tenant executed a short-term, six-month extension through November 2025 as long-term lease renewal negotiations remain ongoing. The tenant contributes $1.3 million in annual rental revenue.

The largest tenant at the property remains Hall Render (31.0% of the NRA), which has a lease expiry in March 2031 and uses the subject as its headquarters. Morningstar DBRS previously noted a portion of this space (6.2% of the NRA) was currently dark with an additional 4.1% of NRA subleased. In its analysis for this review, Morningstar DBRS was unable to receive confirmation on the current utilization of the space; however, Hall Render continues to pay rent as agreed on all leased space with total annual rental revenue of $1.7 million. According to YE2024 financial reporting, the property generated net cash flow (NCF) of $3.3 million, resulting in a debt service coverage ratio (DSCR) of 1.96 times (x). The figures compare similarly with the YE2023 metrics of $3.2 million and 1.90x, respectively; however, performance is expected to decrease given the increased vacancy rate.

According to May 2025 servicer reporting, there is $1.5 million in the leasing reserve, equating to approximately $16.00 per square foot (psf) of available funds for the currently vacant space. Given necessary tenant buildout costs to execute new leases are likely greater than $16.00 psf, the borrower may be required to fund additional leasing costs out of pocket or from free cash flow to back fill vacancy. Morningstar DBRS also notes the increased vacancy risk in the submarket as a potential impediment for the borrower, as according to Reis Q1 2025 data, the vacancy rate for office properties in the Central Indianapolis submarket was elevated at 23.2%, and the vacancy rate is expected to remain above 22.0% through loan maturity in 2028. While Morningstar DBRS expects the loan to remain current, given the increased vacancy rate and lower projected cash flow, Morningstar DBRS applied an elevated POD adjustment to the loan, resulting in a loan EL approximately three times greater than the EL for the pool.

At issuance, Morningstar DBRS assigned investment-grade shadow ratings to the Aventura Mall (Prospectus ID#2; 5.7% of the pool balance), Christiana Mall (Prospectus ID#3; 5.7% of the pool balance), and 2747 Park Boulevard (Prospectus ID#8; 2.9% of the pool balance) loans. With this review, Morningstar DBRS confirms the performance of these loans remains in line with the investment-grade shadow ratings.

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, or 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): https://dbrs.morningstar.com/research/454196.

Classes X-A, X-B, 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 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.

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.