DBRS Morningstar Confirms All Classes of Arbor Realty Commercial Real Estate Notes 2019-FL1, Ltd.

DBRS, Inc. (DBRS Morningstar) confirmed the ratings on the following classes of notes issued by Arbor Realty Commercial Real Estate Notes 2019-FL1, Ltd. (the Issuer):

-- Class A Senior Secured Floating Rate Notes at AAA (sf)
-- Class A-S Senior Secured Floating Rate Notes at AAA (sf)
-- Class B Secured Floating Rate Notes at AAA (sf)
-- Class C Secured Floating Rate Notes at A (sf)
-- Class D Secured Floating Rate Notes at BBB (sf)
-- Class E Floating Rate Notes at BBB (low) (sf)
-- Class F Floating Rate Notes at BB (low) (sf)
-- Class G Floating Rate Notes at B (low) (sf)

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction.

The $650.0 million collateralized loan obligation pool consisted of 28 loans, totaling $520.4 million, at issuance. The transaction features a reinvestment period that will expire in May 2022, after which it will pay sequentially. The Issuer, Servicer, Mortgage Loan Seller, and Advancing Agent are related parties and nonrated entities. Arbor Realty SR, Inc. (Arbor) holds the unrated 7.4% equity piece as Preferred Shares in the transaction. Amid the pandemic, DBRS Morningstar has made inquiries to Arbor about potential business plan stoppages or delays, as well as foreseeable debt service payment disruptions. Arbor expects that all borrowers will continue to make debt service payments even if there are operating shortfalls, and all loans are current per the May 2021 remittance report.

Per the May 2021 remittance, the pool consists of 30 floating-rate loans totaling $614.1 million secured by multifamily and commercial properties. There are no loans in special servicing. The Mr. C. Seaport Hotel loan (4.8% of the pool) loan had transferred to special servicing in April 2020 after the borrower requested Coronavirus Disease (COVID-19)-related relief. The loan was returned to the master servicer after the lender agreed to temporarily reduce the interest rate by 1.50%. Furthermore, the borrower made a personal guarantee to replenish the interest reserve every six months until the loan matures in November 2022. This 150 basis point deferral will continue to accrue and be payable at maturity. However, the accrued interest will be waived provided the sponsor makes its four timely interest reserve replenishment payments. The loan is secured by the seven-story, 66-key, luxury Mr. C Seaport Hotel on Peck Slip within the Financial District of Lower Manhattan. The business plan at issuance was to stabilize the hotel following the $21.3 million gut renovation of the former Best Western Seaport hotel. While the property is in the heart of the Seaport district, which is home to a number of museums and restaurants, the property's primary demand driver continues to be business travel given its location in Lower Manhattan. Business and leisure travel will likely take longer to return to prepandemic levels than leisure travel. The appraiser expects the hotel to stabilize by 2023, which could increase the loan's maturity risk should the recovery take longer than expected. The 36-month loan matures in November 2022 and includes one six-month extension option.

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 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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