DBRS Morningstar Confirms Ratings on Wells Fargo Commercial Mortgage Trust 2015-LC22, Maintains Negative Trends on Four Classes.
ENPNewswire-October 5, 2021--DBRS Morningstar Confirms Ratings on Wells Fargo Commercial Mortgage Trust 2015-LC22, Maintains Negative Trends on Four Classes
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Release date- 04102021 - DBRS Limited (DBRS Morningstar) confirmed the ratings on the Commercial Mortgage Pass-Through Certificates, Series 2015-LC22 issued by Wells Fargo Commercial Mortgage Trust 2015-LC22 as follows.
Class A-3 at AAA (sf)
Class A-4 at AAA (sf)
Class A-SB at AAA (sf)
Class A-S at AAA (sf)
Class X-A at AAA (sf)
Class B at AA (low) (sf)
Class C at A (low) (sf)
Class PEX at A (low) (sf)
Class D at BBB (low) (sf)
Class X-E at BB (sf)
Class E at BB (low) (sf)
Class X-F at B (high) (sf)
Class F at B (sf)
All trends are Stable, with the exception of Classes E, F, X-E, and X-F, which maintained Negative trends as a reflection of the potential for further declines in the outlook for the loans in the pool that are in special servicing and on the servicer's watchlist because of the effects of the Coronavirus Disease (COVID-19) pandemic, as further detailed below. As of the September 2021 remittance, six loans are in special servicing and 22 loans are on the servicer's watchlist, representing 5.8% and 27.8% of the pool, respectively. In addition, the transaction is concentrated by property type as retail and hospitality properties represent 21.9% and 15.1% of the pool, respectively. These property types experienced some of the worst initial effects of the pandemic with forced closures and capacity limitations. While the overall conditions have incrementally improved in the last year, there remain risks as the pandemic's effects linger.
As of the September 2021 remittance, 94 of the original 100 loans remain in the pool, representing a collateral reduction of 14.8% since issuance. Ten loans, representing 13.2% of the current pool balance, are fully defeased.
The largest loan in special servicing is the Clearwater Collection loan (Prospectus ID#17; 1.5% of the current trust balance), which is secured by a 134,00 square foot (sf) retail property in Clearwater, Florida. The loan was transferred to the special servicer in July 2018 because of a payment default. According to the servicer, the sponsor, Gary J. Dragul, was indicted for fraudulent activities unrelated to the subject asset in April 2018 and a receiver was appointed for all assets controlled by the sponsor. However, the court-appointed receiver abandoned the property in April 2020 and, as a result, the special servicer appointed a new receiver. In March 2020, the largest tenant, LA Fitness (33.5% of the net rentable area (NRA)), stopped paying rent and has since defaulted on its lease, which was set to expire in April 2022. Before the pandemic, LA Fitness...
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