DBRS Morningstar Confirms Rating on 51710411 JH Deerfield Fox Meadow Capital Relief

DBRS, Inc. (DBRS Morningstar) confirmed its rating of A (high) (sf) with a Stable trend on the 6.58% average rate Mortgage Loan Due September 1, 2032 (the Mortgage Loan) made to 51710411 JH Deerfield Fox Meadow Capital Relief. The rating confirmation generally reflects the overall stable performance of the loan, which remains in line with DBRS Morningstar’s expectations at issuance. The loan was made by John Hancock Life Insurance Company, a subsidiary of Manulife Financial Corporation.

The Mortgage Loan is secured by Fox Meadow Apartments and Townhomes, a garden-style multifamily property at 101 Fox Meadow Drive, Maple Shade, New Jersey. Good highway access is available to downtown Philadelphia and the suburban office and industrial markets in southern New Jersey. The property was constructed in 1972 and renovated in 2009 following an increase in the loan amount to $80.0 million and a term extension. The property consists of 1,492 units in 78 buildings on a 90-acre site. The initial configuration included 668 one-bedroom units and 824 two-bedroom units; however, recent rent rolls indicate that a small number of three-bedroom units were formed by combining some units.

The wood-framed buildings have wood, vinyl, and brick siding. Extensive common amenities include 24-hour maintenance, a courtesy patrol/officer, an outdoor pool, basketball and tennis courts, a fitness center/health club, an outdoor barbecue and picnic area, a hiking/nature trail, a pet park and dog run, and on-site parking, among other offerings. The units feature central heating and air conditioning, Internet and cable service, washer/dryer hookups with machine availability, a patio or balcony, and a full package of kitchen appliances.

The A (high) (sf) rating reflects (1) the expected stability of debt payments, given the strong operating history and consistent high occupancy of the submarket; (2) a moderate loan-to-value ratio; (3) the property’s convenient location in a fully built-out suburban Greater Philadelphia submarket; and (4) loan amortization that has reduced the loan balance to $51.6 million as of the December 2022 loan payment from the initial loan amount of $80.0 million. According to the most recent financial statement available dated December 31, 2021, property performance remains in line with the initial DBRS Morningstar rating analysis. John Hancock Life Insurance Company has disclosed that the loan is current and there are no delinquencies.

ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS
There were no Environmental/Social/Governance 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/dbrs-morningstar-criteria-approach-to-environmental-social-and-governance-risk-factors-in-credit-ratings (May 17, 2022).

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 (October 3, 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.

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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