DBRS Morningstar Confirms Ratings on All Classes of Sutherland Commercial Mortgage Trust 2019-SBC8

DBRS Limited (DBRS Morningstar) confirmed the ratings on the Commercial Mortgage Pass-Through Certificates, Series 2019-SBC8 issued by Sutherland Commercial Mortgage Trust 2019-SBC8 as follows:

-- Class A at AAA (sf)
-- Class B at AA (sf)
-- Class C at A (low) (sf)
-- Class D at BBB (low) (sf)
-- Class E at BB (high) (sf)
-- Class F at BB (sf)
-- Class G at B (sf)

All trends are Stable.

The transaction is composed of individual fixed- and floating-rate small-balance loans secured by commercial and multifamily properties with an average loan balance of approximately $234,000. As of the November 2021 remittance, 830 of the original 1,223 loans remained in the pool with an aggregate principal balance of $187.1 million, representing a collateral reduction of 38.5% since issuance. Most of the loans that have been repaid were paid in advance of their respective maturity dates. There are currently 34 loans, representing 4.3% of the current pool balance, that are 30+ days delinquent. This represents a decline from 9.8% in November 2020 and when delinquency peaked to 26.0% in June 2020.

The pool has a high concentration of properties in the states of New York (42.9% of the current pool balance), California (18.9% of the current pool balance), and Massachusetts (8.7% of the current pool balance); however, the pool is otherwise geographically diverse with an average DBRS Morningstar Market Rank of 4.9. By property type, the pool has concentrations of loans secured by mixed-use (41.1% of the current pool balance), multifamily (29.7% of the current pool balance), and unanchored retail (16.6% of the current pool balance) properties. The pool benefits from a high percentage of well-located properties as well as loans that initially had low leverage and were fully amortizing; however, DBRS Morningstar received limited borrower and property-level information at issuance and considered the property qualities to be Average –/Below Average for 35.3% of the sampled pool at issuance. DBRS Morningstar modelled any uninspected loans as Average –, which has a slightly increased probability of default level.

The transaction is configured with a modified pro rata pay pass-through structure.

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.

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/baseline-macroeconomic-scenarios-application-to-credit-ratings.

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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