DBRS Morningstar Confirms Ratings on All Classes of CAMB 2021-CX2

DBRS Limited (DBRS Morningstar) confirmed its ratings on all classes of Commercial Mortgage Pass-Through Certificates issued by CAMB 2021-CX2 Mortgage Trust as follows:

-- Class A at AAA (sf)
-- Class X at AAA (sf)
-- Class B at AA (low) (sf)
-- Class C at A (low) (sf)
-- Class D at BBB (low) (sf)
-- Class HRR at BB (high) (sf)

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction, which has remained in line with DBRS Morningstar’s expectations since issuance. The loan is secured by the fee-simple interest in 350 and 450 Water Street, two newly constructed, Class A, LEED Gold certified, life sciences office buildings totalling 916,233 square feet (sf) in Cambridge, Massachusetts. The subject properties are the newest component of the larger, master-planned Cambridge Crossing Development (CX), which is currently being executed by the sponsor, DivcoWest. Upon completion of the master plan, CX will include 17 buildings consisting of more than 2.1 million sf of science and technology space, approximately 2.4 million sf of residential space, and 100,000 sf of retail space. At issuance, the properties were still under construction but were completed in Q2 2022 with the larger development scheduled to be completed by Q3 2022.

The $1.2 billion whole loan consists of $814.0 million of senior debt and $411.0 million of junior debt. The entirety of the junior debt and $285.0 million of the senior debt are secured in the trust. The remaining $529.0 million of senior debt is secured in several commercial mortgage-backed securities transactions, including BANK 2022-BNK39, which is rated by DBRS Morningstar. The fixed rate interest-only (IO) loan features a 10-year term with an anticipated repayment date in November 2031 and final loan maturity date in November 2036.

The sole tenant at the collateral buildings is Aventis, Inc. (Aventis), a subsidiary of the French healthcare conglomerate, Sanofi, which is an investment-grade entity. The subject properties serve as the headquarters for Aventis and its leases are guaranteed by the parent company through the lease terms to 2036. Aventis’ leases had a blended starting rental rate of $71.50 per square foot with 2.5% annual escalations and two 10-year renewal options at fair market value. In its analysis, DBRS Morningstar provided long-term credit tenant benefits to Aventis by straightlining the rent steps over the loan term. As per the loan agreement, the borrower is required to submit financial reports beginning in December 2022. The DBRS Morningstar net cash flow at issuance was $77.6 million, with a DBRS Morningstar debt coverage service ratio of 2.24 times. The transaction benefits from strong, experienced institutional sponsorship in the form of a joint venture partnership between DivcoWest, the California State Teachers Retirement System, and Teacher Retirement System of Texas.

ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS
There were no Environmental/Social/Governance (ESG) factors that had a significant or relevant effect on the credit analysis.

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/396929.

Class X is an IO certificate that references 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 this transaction.

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.

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

The principal methodology is the 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 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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