DBRS Morningstar Confirms All Classes of BANK 2018-BNK10

DBRS Limited (DBRS Morningstar) confirmed the ratings on the following classes of Commercial Mortgage Pass-Through Certificates, Series 2018-BNK10 issued by BANK 2018-BNK10:

-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class A-3 at AAA (sf)
-- Class A-4 at AAA (sf)
-- Class A-5 at AAA (sf)
-- Class A-S at AAA (sf)
-- Class A-SB at AAA (sf)
-- Class X-A at AAA (sf)
-- Class B at AA (high) (sf)
-- Class X-B at A (high) (sf)
-- Class C at A (sf)
-- Class X-D at BBB (sf)
-- Class D at BBB (low) (sf)
-- Class X-E at BB (sf)
-- Class E at BB (low) (sf)
-- Class X-F at B (sf)
-- Class F at B (low) (sf)

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction since issuance. As of the November 2021 remittance, 67 of the original 68 loans remain in the trust, with loan repayments and scheduled amortization resulting in a collateral reduction of 2.5% since issuance. Two loans, representing 7.3% of the current pool balance, are fully defeased. As of the November 2021 remittance, three loans, representing 1.0% of the current pool balance, are in special servicing and seven loans, representing 23.0% of the current pool balance, are on the servicer’s watchlist.

The largest loan on the servicer’s watchlist is Wisconsin Hotel Portfolio (Prospectus ID#4, 5.5% of the pool balance), secured by the borrower's fee-simple interests in a portfolio of 11 hotel properties with a combined 1,255 keys located across five submarkets in Wisconsin. The loan was added to the servicer’s watchlist in November 2020 for a low debt service coverage ratio (DSCR), reported at -0.24 times (x) at YE2020, which improved slightly to 0.47x at June 2021; however, the DSCR was ultimately down from the DBRS Morningstar DSCR of 1.28x. Although the collateral had been hard hit by the Coronavirus Disease (COVID-19) pandemic, none of the hotels closed, no relief request was made, and the loan was kept current throughout. Of the 10 properties for which June 2021 STR, Inc. reports were provided, six reported trailing three-month (T-3) and trailing 12-month (T-12) revenue per available room (RevPAR) penetration index figures well above 100%.

Courtyard Los Angeles Sherman Oaks (Prospectus ID#14, 2.2% of the current pool balance) is a 213-key full-service hotel in Sherman Oaks, California. The loan transferred to special servicing in July 2020 because of payment default. As of the November 2021 remittance, the loan had returned to the master servicer following a loan modification. The T-3 ended September 30, 2021, RevPAR of $128 improved significantly over the T-12 figure, but RevPAR penetration was still low at 87%. The sponsor’s significant cash infusion to bring the loan current and to fund the interest reserve required by the loan modification are noteworthy mitigating factors, and suggest that the overall commitments to the property and loan are strong.

At issuance, DBRS Morningstar shadow-rated two loans, Apple Campus 3 (Prospectus ID#1, 7.5% of the pool balance) and Moffett Towers II (Prospectus ID#10, 3.3% of the pool balance) as investment grade at issuance. With this review, DBRS Morningstar maintained the shadow ratings of the loans as they continue to perform in line with the investment-grade characteristics.

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.

Classes X-A, X-B, X-D, X-E, and X-F 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 ratings are subject to surveillance, which could result in ratings being upgraded, downgraded, placed under review, confirmed, or discontinued by DBRS Morningstar.

DBRS Morningstar provides updated analysis and in-depth commentary in the DBRS Viewpoint platform for the following loans in the transaction:

-- Prospectus ID#4 – Wisconsin Hotel Portfolio (5.5% of the pool)
-- Prospectus ID#14 – Courtyard Los Angeles Sherman Oaks (2.2% of the pool)

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.

The DBRS Morningstar Sovereign group releases baseline macroeconomic scenarios for rated sovereigns. DBRS Morningstar analysis considered impacts consistent with the baseline scenarios as set forth in the following report: https://www.dbrsmorningstar.com/research/384482.

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.

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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