Fitch Ratings has affirmed 13 classes of UBS Commercial Mortgage Trust 2018-C10 (UBS 2018-C10) and 13 classes and of UBS Commercial Mortgage Trust 2018-C15 (UBS 2018-C15).

Fitch has revised the Rating Outlooks for class F-RR in UBS 2018-C10 and classes E-RR and F-RR in UBS 2018-C15 to Negative from Stable. The Rating Outlook for class G-RR in UBS 2018-C15 remains Negative.

RATING ACTIONS

Entity / Debt

Rating

Prior

UBS 2018-C10

A-2 90276FAT1

LT

PIFsf

Paid In Full

AAAsf

A-3 90276FAV6

LT

AAAsf

Affirmed

AAAsf

A-4 90276FAW4

LT

AAAsf

Affirmed

AAAsf

A-S 90276FAZ7

LT

AAAsf

Affirmed

AAAsf

A-SB 90276FAU8

LT

AAAsf

Affirmed

AAAsf

B 90276FBA1

LT

AAsf

Affirmed

AAsf

C 90276FBB9

LT

A-sf

Affirmed

A-sf

D 90276FAC8

LT

BBB-sf

Affirmed

BBB-sf

D-RR 90276FAE4

LT

BBB-sf

Affirmed

BBB-sf

Page

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VIEW ADDITIONAL RATING DETAILS

KEY RATING DRIVERS

Performance and 'B' Loss Expectations: Deal-level 'Bsf' rating case losses are 5.1% for UBS 2018-C10 and 5.5% for UBS 2018-C15. There are nine Fitch Loans of Concerns (FLOCs; 23.9% of the pool) in UBS 2018-C10, including three specially serviced loans (1.6%), and three FLOCs (20.2%) in UBS 2018-C15, where no loans in the pool are currently in special servicing.

The affirmations reflect generally stable pool performance and overall loss expectations since Fitch's prior rating action. The affirmations for UBS 2018-C10 also incorporate an additional sensitivity scenario that assumed an increased probability of default on the Eastmont Town Center loan, secured by a 527,588-sf suburban office property located in Oakland, CA., due to significant upcoming rollover, which includes 31.5% in 2024, 1.7% in 2025 and 11.2% in 2026.

The Rating Outlook revision to Negative from Stable for class F-RR in UBS 2018-C10 reflects the high concentration of office (30%) and FLOCs, which includes five loans (21.6%) in the top 15 such as 175 Park Avenue and Westpark Hudson. The Rating Outlook revisions to Negative from Stable for classes E-RR and F-RR in UBS 2018- C15 reflect the high FLOC concentration, including performance concerns on 435 Tasso Street and 16300 Roscoe Blvd Parkway Center.

FLOCs; Largest Loss Contributors: The largest contributor to overall pool loss expectations and the largest increase in loss since the prior rating action in UBS 2018-C10, is the Port Atwater Parking loan (3.1%), secured by a parking structure located in downtown Detroit, MI. It was flagged as a FLOC due to low DSCR and continued post-pandemic performance declines. The servicer-reported NOI DSCR has remained below 1.0x since YE 2020, and it has declined consistently between YE 2021 and YE 2023. Fitch's 'Bsf' rating case loss of 44.2% (prior to concentration add-ons) is based on the YE 2023 NOI, an 11% cap rate and an increased probability of default.

The largest increase in loss since the prior rating action in UBS 2018-C15 is the 435 Tasso Street loan (6.6%), secured by a 32,128-sf office property located in Palo Alto, CA. The three largest tenants are East West Bank (29.6% NRA; lease expiry on Dec. 31, 2025), CSAA Insurance Exchange (10%; Sept. 30, 2026) and Lazard Group II C (8.7%; June 30, 2024).

In 2022, East West Bank took over the space previously occupied by Science Exchange at rental rate 6% below the prior tenant. This FLOC was flagged due to a decline in occupancy and upcoming rollover concerns. Although there has been leasing progress, occupancy has declined to 58% as of YE 2023 from 79% the prior year after two tenants, Qlik and Vulcan (combined, 20% of NRA) vacated at their 2023 lease expirations in October and November.

Upcoming rollover includes 13.8% of the NRA (25.9% rent) in 2024, 29.6% (50.1%) in 2025 and 10% (15.1%) in 2026. The servicer-reported NOI DSCR was 1.98x at YE 2023 compared 2.11x the prior year. Fitch's 'Bsf' rating case loss of 8.8% (prior to concentration add-ons) reflects a 25% stress to the YE 2023 NOI for rollover concerns and a 9.5% cap rate.

The largest FLOC in the UBS 2018-C10 transaction, 175 Park Avenue (5.9%), is secured by a 270,000-sf office building located in Madison, NJ. It was flagged as a FLOC due to the single tenant subleasing a significant portion of its space. The non-investment grade tenant, Anywhere Real Estate (fka Realogy), has a lease expiration in 2029. Fitch's 'Bsf' rating case loss of 8.9% (prior to concentration add-ons) reflects a 10% stress to the YE 2022 NOI and a 10% cap rate.

The largest FLOC and largest contributor to overall pool loss expectations in the UBS 2018-C15 transaction, Saint Louis Galleria (9.9%), is secured by a Brookfield-sponsored, super-regional mall located in St. Louis, MO. It was flagged as FLOC due to lagging post-pandemic performance and upcoming rollover concerns. The mall is anchored by Dillard's, Macy's and Nordstrom, which are non-collateral tenants.

Property-level NOI has declined since issuance, with the most recent full-year reported YE 2022 NOI remaining approximately 29% below the issuer's underwritten NOI and 12% below YE 2020 NOI. The NOI declines are mainly attributed to the lower revenue since the pandemic, where YE 2022 revenue is 20% below YE 2019. As of September 2023, the YTD servicer-reported NOI DSCR was 1.60x, compared with 1.68x at YE 2021. The loan began to amortize in November 2023.

Collateral occupancy declined to 90.5% as of September 2023 from 96% at YE 2021 as a result of several tenants vacating at or ahead of their lease expirations. Total mall occupancy was 96.6% as of the September 2023 rent roll. As of September 2022, reported TTM in line comparable tenant sales were $536 psf ($419 psf excluding Apple), compared with $523 psf ($401 psf excluding Apple) as of TTM September 2021 and $364 psf ($294 psf excluding Apple) at YE 2020. Fitch requested an updated tenant sales report, but it was not provided. Fitch's 'Bsf' rating case loss of 15.4% (prior to concentration add-ons) reflects a 7.5% stress to the YE 2022 NOI for rollover concerns and an 11.50% cap rate.

Increased Credit Enhancement (CE): As of the March 2024 remittance report, the aggregate pool balances of UBS 2018- C10 and UBS 2018-C15 have been paid down by 7% and 30.2%, respectively, since issuance. The UBS 2018-C10 transaction has five defeased loans (5.7% of the pool) and the UBS 2018-C15 transaction has three defeased loans (5.5% of the pool). Cumulative interest shortfalls of $1.2 million are affecting the non-rated class NR-RR in UBS 2018-C10 and $77,000 are affecting the non-rated NR-RR class in UBS 2018-C15.

Loan maturities are concentrated in 2028, with 53 loans comprising 99.7% of the pool in UBS 2018-C10 and 31 loans comprising 89.8% of the pool in UBS 2018-C15.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade

Downgrades to 'AAAsf' rated classes are not expected due to the position in the capital structure and expected continued amortization and loan repayments, but may occur if deal-level losses increase significantly and/or interest shortfalls occur. Downgrades to junior 'AAAsf' rated classes are possible with continued performance deterioration of the specially serviced loans or significant increases in exposure, limited to no improvement in class CE, or if interest shortfalls occur.

Downgrades to classes rated in the 'AAsf' and 'Asf' categories could occur if deal-level losses increase significantly from outsized losses on larger FLOCs and/or more loans than expected experience performance deterioration and/or default at or prior to maturity.

Downgrades to classes rated in the 'BBBsf' category are possible with higher than expected losses from continued underperformance of the FLOCs, in particular office loans with deteriorating performance, and/or with greater certainty of losses on the specially serviced loans and/or FLOCs. Elevated risk office loans include 175 Park Avenue and Westpark Hudson in UBS 2018-C10 and 435 Tasso Street and 16300 Roscoe Blvd Parkway Center in UBS 2018-C15.

Downgrades to classes rated in the 'BBsf' and 'Bsf' categories would occur with greater certainty of losses on the specially serviced loans or FLOCs, should additional loans transfer to special servicing or default and as losses are realized or become more certain.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

Upgrades to classes rated in the 'AAsf' and 'Asf' category may be possible with significantly increased CE, coupled with stable-to-improved pool-level loss expectations and improved performance on the FLOCs, including 175 Park Avenue and Westpark Hudson in UBS 2018-C10 and 435 Tasso Street and 16300 Roscoe Blvd Parkway Center in UBS 2018-C15.

Upgrades to classes rated in the 'BBBsf' category would be limited based on sensitivity to concentrations or the potential for future concentration. Classes would not be upgraded above 'AA+sf' if there is likelihood for interest shortfalls.

Upgrades to 'BBsf' and 'Bsf' category rated classes are not likely until the later years in a transaction and only if the performance of the remaining pool is stable, recoveries on the FLOCs and specially serviced loans are better than expected and there is sufficient CE to the classes.

USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10

Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

ESG Considerations

The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit https://www.fitchratings.com/topics/esg/products#esg-relevance-scores.

Additional information is available on www.fitchratings.com

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