DBRS Morningstar Confirms All Classes of Bear Stearns Commercial Mortgage Securities Trust, Series 2007-TOP26

DBRS Limited (DBRS Morningstar) confirmed all classes of Commercial Mortgage Pass-Through Certificates, Series 2007-TOP26 issued by Bear Stearns Commercial Mortgage Securities Trust, Series 2007-TOP26 (the Trust) as follows:

-- Class AM at AAA (sf)
-- Class A-J at C (sf)
-- Class B at C (sf)
-- Class C at C (sf)

DBRS Morningstar maintained the Interest in Arrears designation for Classes A-J, B, and C. Class AM has a Stable trend and is the only class with a rating that carries a trend.

The rating actions are largely reflective of DBRS Morningstar’s outlook for the second-largest loan remaining in the pool. One AT&T Center (Prospectus ID#2; 40.6% of the pool) is secured by a 1.5 million-square-foot office building in Downtown St. Louis and has been in default since May 2017. The building remains vacant and is real estate owned, with the special servicer working to sell the property via an auction. Servicer commentary notes that an offer was received in July 2020 but the prospective purchaser terminated the contract in November 2020. The property was remarketed in Q1 2021, a buyer was identified, and a purchase and sale agreement is awaiting execution. According to the most recent appraisal from January 2021, the property was valued at $14.1 million, well below the issuance value of $207.3 million. Given the drastic value decline from issuance and the property’s fully vacant status, DBRS Morningstar expects this loan to be disposed from the Trust at a loss severity possibly exceeding 100.0%. Based on the most recent valuation, DBRS Morningstar expects Classes B and C to realize complete losses upon disposition of the property, with additional losses flowing through into Class A-J.

The largest loan in the pool, One Dag Hammarskjöld Plaza (Prospectus ID#1; 56.8% of the pool), was fully defeased as of the April 2019 remittance. This defeased collateral fully covers the outstanding balance on Class AM.

As of the April 2021 remittance, there had been a collateral reduction of 87.5% since issuance because of scheduled loan amortization, repayments, and liquidations. Of the original 237 loans secured at issuance, there are only seven loans remaining in the pool, with an outstanding principal balance of $264.0 million. There were no loans on the servicer’s watchlist, and the One AT&T Center loan is the only one in special servicing.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/373262.

All ratings are subject to surveillance, which could result in ratings being upgraded, downgraded, placed under review, confirmed, or discontinued by DBRS Morningstar.

The DBRS Viewpoint platform provides additional information on this transaction and underlying loans including DBRS Morningstar metrics, commentary, servicer-reported cash flows, and other performance-related data.

For complimentary access to this content, please register for the DBRS Viewpoint platform at www.viewpoint.dbrsmorningstar.com. The platform includes issuer and servicer data for most
outstanding CMBS transactions (including non-DBRS Morningstar-rated), as well as loan-level and transaction-level commentary for most DBRS Morningstar-rated and -monitored transactions.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is North American CMBS Surveillance Methodology (March 26, 2021), which can be found on dbrsmorningstar.com under Methodologies & Criteria. For a list of the structured-finance-related methodologies that may be used during the rating process, please see the DBRS Morningstar Global Structured Finance Related Methodologies document, which can be found on dbrsmorningstar.com in the Commentary tab under Regulatory Affairs. Please note that not every related methodology listed under a principal structured finance asset class methodology may be used to rate or monitor an individual structured finance or debt obligation.

For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/357883.

For more information regarding structured finance rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/358308.

For more information regarding the structured finance rating approach and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/359905.

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@dbrsmorningstar.com.

The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

Please see the related appendix for additional information regarding the sensitivity of assumptions used in the rating process. Please note a sensitivity analysis is not performed for CMBS bonds rated CCC or lower. The DBRS Morningstar long-term rating scale definition indicates that 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.

For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com.

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