Morningstar DBRS Upgrades Credit Ratings on Four Classes of Real Estate Asset Liquidity Trust, Series 2015-1

DBRS Limited (Morningstar DBRS) upgraded its credit ratings on four classes of Commercial Mortgage Pass-Through Certificates, Series 2015-1 issued by Real Estate Asset Liquidity Trust, Series 2015-1 as follows:

-- Class B to AAA (sf) from AA (high) (sf)
-- Class C to AAA (sf) from AA (sf)
-- Class X to AAA (sf) from AA (sf)
-- Class D to AA (low) (sf) from A (low)

Morningstar DBRS also confirmed its credit ratings on the following classes:

-- Class A-2 at AAA (sf)
-- Class E at BBB (low) (sf)
-- Class F at BB (sf)
-- Class G at B (sf)

All trends are Stable.

The credit rating upgrades reflect the significant deleveraging since issuance and the overall stable-to-improving performance of the remaining collateral, as evidenced by a healthy weighted-average (WA) debt service coverage ratio (DSCR) of 2.2 times (x), based on the most recent financial reporting. Since Morningstar DBRS' prior credit rating action, 17 loans were repaid in full, bringing the pool's total collateral reduction to 85.6% since issuance, 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 that the majority of the remaining 13 loans are generally well positioned to successfully repay at their respective maturity dates. The three largest loans (84.3% of the current pool balance) continue to exhibit strong credit characteristics and are scheduled to mature within the next 90 days.

There are no delinquent or specially serviced loans; however, three loans representing 84.3% of the current pool balance, are being monitored on the servicer's watchlist for upcoming maturities, as noted above. The three largest loans are secured by industrial, office, and retail collateral, respectively, with the remaining 10 loans secured by self-storage properties.

The largest loan in the pool, LaSalle Industrial Portfolio (Prospectus ID #4, 32.4% of the pool), is secured by 10 industrial properties, totaling 802,367 square feet, in LaSalle, Québec, a suburb of Montréal that is 11.0 kilometers southwest of the downtown core. Based on the most recent financial reporting available, as of YE2023, the collateral generated net cash flow (NCF) of $4.1 million, resulting in a DSCR of 3.01 x, in line with the YE2022 figure of $4.0 million (DSCR of 2.98x) and above Morningstar DBRS' issuance figure of $3.4 million (DSCR of 2.53x). According to the most recent servicer commentary, the borrower was granted a one-month maturity extension to allow for additional time to close on refinancing. Morningstar DBRS expects this loan to repay in full following the end of the extension period in July 2025, given the underlying collateral's historically stable performance.

The second largest loan in the pool, Place D'Armes Office Kingston (Prospectus ID #5, 31.6% of the pool), is secured by an office property in Kingston, Ontario. The property is 100% occupied by the Ministry of the Attorney General and the Ministry of Health and Long-Term Care, which are both branches of the Ontario provincial government (rated AA with a Stable trend by Morningstar DBRS as of December 2024). The tenants have been in occupancy since the property was constructed and are signed to a lease scheduled to expire in September 2025, with three five-year extension options remaining. Morningstar DBRS has requested an update regarding the status of the tenants' lease extension from the servicer and is awaiting a response as of the date of this press release. Although the upcoming lease expirations are noteworthy, mitigating factors include the presence of a full-recourse guarantor and the historically stable performance of the underlying collateral.

At issuance, Morningstar DBRS shadow-rated the U-Haul SAC 3 Portfolio loan as investment grade. The loan is secured by a portfolio of 10 individual loans backed by self-storage properties across Ontario. With this review, Morningstar DBRS has confirmed that the performance of the loan remains consistent with investment-grade loan characteristics.

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.

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 Canadian 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 related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at info-DBRS@morningstar.com.

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 Limited
DBRS Tower, 181 University Avenue, Suite 600
Toronto, ON M5H 3M7 Canada
Tel. +1 416 593-5577

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 and Derivatives Criteria for Canadian Structured Finance (August 12, 2024):
https://dbrs.morningstar.com/research/437761.
-- North American Commercial Mortgage Servicer Rankings (August 23, 2024):
https://dbrs.morningstar.com/research/438283.

A description of how Morningstar DBRS analyzes structured finance transactions and how the methodologies are collectively applied can be found at (July17, 2023): https://dbrs.morningstar.com/research/410863.

For more information on this credit or on this industry, visit https://dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.