DBRS Morningstar Downgrades One Class and Confirms Remaining Classes of Bear Stearns Commercial Mortgage Securities Trust 2007-PWR18.
ENPNewswire-January 12, 2022--DBRS Morningstar Downgrades One Class and Confirms Remaining Classes of Bear Stearns Commercial Mortgage Securities Trust 2007-PWR18
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Release date- 11012022 - DBRS Limited (DBRS Morningstar) downgraded the rating on the Commercial Mortgage Pass-Through Certificates, Series 2007-PWR18 issued by Bear Stearns Commercial Mortgage Securities Trust 2007-PWR18 as follows.
Class B to C (sf) from BB (sf)
DBRS Morningstar also confirmed the ratings on the remaining classes as follows:
Class C at C (sf)
Class D at C (sf)
All rated classes have ratings that do not carry trends. The Interest in Arrears designation was added to Class B with this review, while Classes C and D continue to carry an Interest in Arrears designation, as interest shortfalls remain outstanding with the December 2021 remittance.
The rating downgrade reflects the elevated loss projection and increased likelihood of continued performance challenges amid the Coronavirus Disease (COVID-19) pandemic for the remaining loan in the pool, Prospectus ID#6 - Marriott Houston Westchase. The pool composition has remained unchanged in the past 12 months with a collateral reduction of 97.2% since issuance. To date, the pool has incurred losses above $200.0 million, with the unrated Class E certificate now the first-loss piece, which has already taken losses with previous liquidations.
This remaining loan is secured by a 600-room full-service hotel located in Houston, Texas. The loan transferred to special servicing in March 2019 for a loan modification, which closed December 2019, and the terms included extension of the maturity date to June 2023 and the establishment of a new capital improvement reserve for brand-mandated upgrades. In April 2020, the borrower reached out to the servicer to request relief, citing coronavirus-related hardship. According to the servicer's commentary, the borrower requested a short-term forbearance and access to cash balances and reserve funds controlled by the servicer while negotiations continued regarding a more permanent third modification to the original loan documents. According to the December 2021 servicer commentary, the borrower has not yet made a comprehensive workout proposal or contributed fresh equity, and the servicer is continuing to evaluate the exercise of remedies.
The hotel's performance has been down for several years since the downturn in the energy markets...
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