DBRS Morningstar Confirms All Classes of BSST 2021-SSCP Mortgage Trust

DBRS, Inc. (DBRS Morningstar) confirmed its ratings on all classes of Commercial Mortgage Pass-Through Certificates, Series 2021-SSCP issued by BSST 2021-SSCP Mortgage Trust (BSST 2021-SSCP) as follows:

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

All trends are Stable.

The rating confirmations reflect a deal that is very early in its life cycle with limited reporting and no changes to the underlying performance since issuance.

The collateral consists of a portfolio of 32 industrial/logistics properties and one laboratory property across 11 states recently acquired by a joint venture (JV) between Raith Capital Partners, LLC (Raith) and Equity Industrial Partners (EIP). In addition to $238 million in loan proceeds, the sponsors contributed approximately $79.4 million in cash equity to fund the acquisition, fund upfront reserves, and pay transaction closing costs.

The deal closed in April 2021 and there has been little updated financial reporting since then. As of September 2021, the portfolio was 98.0% occupied, which is up from the issuance occupancy rate of 92.8%. This figure includes two properties in the portfolio that are fully leased but currently dark: 6400 Mississippi Street in Merrillville, Indiana (Schilli Distribution Services, Inc. is the single tenant) and 18501 Northstar Court in Tinley Park, Illinois (Nestle Prepared Foods is the single tenant). The tenants at both properties remain current on their rent. The majority of the portfolio’s scheduled term rollover is concentrated in 2022 and 2023, with leases representing 16% of the NRA (15.5% of base rent) scheduled to expire in each year. The tenant roster is diverse, considering the size of the portfolio, and portfolio occupancy has remained above 94% over the past five years.

The portfolio comprises primarily newer, single-tenant industrial assets located in secondary markets. It has a weighted-average year built of 2005. DBRS Morningstar continues to take a favorable view of the long-term growth and stability of the warehouse and logistics sector, given the sustained reliance on and growing demand for e-commerce and home delivery services, and maintains a positive outlook for the ongoing performance and liquidity available to industrial properties.

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.

DBRS Morningstar provides updated analysis and in-depth commentary in the DBRS Viewpoint platform for this transaction.

The DBRS Morningstar 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 4, 2022), 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 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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