DBRS, Inc. (Morningstar DBRS) confirmed the credit ratings on 39 mortgage loan transactions comprising 43 loans, as discussed in greater detail below.
The credit rating confirmations generally reflect the overall stable performance of each loan since the last credit rating action. All trends are Stable. All loans were made by John Hancock Life Insurance Company (the Lender), a subsidiary of Manulife Financial Corporation (rated A (high) with a Stable trend by Morningstar DBRS). All outstanding loans are reported current and paid as agreed according to the Lender.
Thirty-three transactions comprising 37 loans are secured by 25 co-operative apartment properties in New York; New Jersey; Connecticut; and Washington, D.C. Morningstar DBRS notes that two mortgages (Park Royal Owners, Inc. and Scarborough Manor Owners Corp.) each have an additional loan, which is pari passu to the existing loan, placed on the property. These add-on loans were not included in this annual review; however, Morningstar DBRS' analysis concluded that the additional loans do not have a material impact on the credit quality of the respective existing loans because of the still low loan-to-value (LTV) ratios on a consolidated basis. The AA (sf) credit ratings on these 33 transactions reflect (1) the stability of debt payments provided by the co-operative structure of ownership, in which shareowners are highly incentivized to meet their share of the loan payments to protect their ownership interest in their co-operative; (2) the low loan-to-value ratios (LTVs); and (3) each property's strong location within a major metropolitan area.
Two transactions (John Hancock Trails West MHC and John Hancock Colony Cove MHC Ellenton FL) are secured by two manufactured housing communities (MHCs) in Arizona and Florida, respectively. The A (high) (sf) credit ratings on these two transactions reflect (1) the expected stability of debt payments, given the strong operating history and institutional sponsorship; (2) moderate LTVs; (3) the strong locations of these properties in well-established communities with demand for MHCs with lots of amenities; and (4) the expected partial amortization that will take place over the remaining term of each loan.
One transaction (51710411 JH Deerfield Fox Meadow Capital Relief) is secured by Fox Meadow Apartments and Townhomes in Maple Shade, New Jersey. The A (high) (sf) credit rating reflects (1) the expected stability of debt payments, given the strong operating history and consistent high occupancy of the submarket; (2) a moderate LTV; (3) the property's convenient location in a fully built-out suburban Greater Philadelphia submarket; and (4) a substantial loan reduction through amortization, with 40.0% of the loan balance reduced from the initial loan amount.
One transaction (Capital Relief East Side 11th and 28th Ground Lease Loan) is secured by a ground lease on two adjoining parcels accommodating two Class A multifamily buildings at 282 11th Avenue and 525 West 28th Street in New York. The A (high) (sf) credit rating reflects (1) the expected stability of debt payments; (2) a low LTV; (3) the property's location in a well-established New York residential submarket; and (4) the ground rent structure, which places the ground rent mortgage in an attractive position in the capital stack.
Two transactions (John Hancock El Segundo California Capital Relief and 527727:11 John Hancock 1111 Pennsylvania Avenue, Washington, D.C. Capital Relief) are secured by office properties or ground leases underlying office properties. In the analysis of these transactions where applicable, Morningstar DBRS applied stressed capitalization rates and/or updated market volatility adjustments to reflect an approach consistent with that of other single-asset/single-borrower transactions secured by office properties that Morningstar DBRS rates. The outcome of these stresses resulted in minor increases to the Morningstar DBRS LTV and did not affect the current credit ratings on these loans.
John Hancock El Segundo California Capital Relief is secured by an office building in El Segundo, California. The A (high) (sf) credit rating reflects (1) the expected stability of debt payments, given the strong operating history and institutional-quality sponsorship; (2) a moderate LTV; and (3) the expected partial amortization that will take place over the remaining term of the loan.
527727:11 John Hancock 1111 Pennsylvania Avenue, Washington, D.C. Capital Relief is secured by the ground lease on a land parcel accommodating an office building at 1111 Pennsylvania Avenue in Washington, D.C. The A (sf) credit rating reflects (1) the expected stability of debt payment, given the strong operating history and institutional-quality sponsorship; (2) a moderate LTV; (3) the property's strong location between the White House and the United States Capitol Building; and (4) its historic occupancy by a global law firm, ranked the 10th-largest in the United States, with approximately eight years remaining on the lease term.
The result of the LTV Sizing Benchmark is higher by three or more notches than the credit rating assigned to the notes backing three transactions (John Hancock Trails West MHC, John Hancock Colony Cove MHC Ellenton FL, and 51710411 JH Deerfield Fox Meadow Capital Relief). The rationale for the material variance is due to structural features (loan or transaction) and/or provisions in other relevant methodologies that outweigh the LTV Sizing Benchmarks as well as uncertain loan-level event risk.
ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS
There were no Environmental/Social/Governance factor(s) that had a significant or relevant effect on the credit analysis.
A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at (January 23, 2024) https://dbrs.morningstar.com/research/427030.
All credit ratings are subject to surveillance, which could result in credit ratings being upgraded, downgraded, placed under review, confirmed, or discontinued by Morningstar DBRS.
Notes:
All figures are in U.S. dollars unless otherwise noted.
The principal methodology is the North American CMBS Surveillance Methodology (March 1, 2024), https://dbrs.morningstar.com/research/428798.
Other methodologies referenced in this transaction are listed at the end of this press release.
The credit rating was not initiated at the request of the rated entity. The credit rating was initiated at the request of a third party.
The rated entity or its related entities did participate in the credit rating process for this credit rating action.
Morningstar DBRS had access to the accounts, management, and other relevant internal documents of the rated entity or its related entities in connection with this credit rating action.
This is a solicited credit rating.
Please see the related appendix for additional information regarding the sensitivity of assumptions used in the credit rating process.
DBRS, Inc.
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Chicago, IL 60602 USA
Tel. +1 312 332-3429
The credit rating methodologies used in the analysis of this transaction can be found at: https://dbrs.morningstar.com/about/methodologies.
North American Single-Asset/Single-Borrower Ratings Methodology (March 1, 2024), https://dbrs.morningstar.com/research/428799
DBRS Morningstar North American Commercial Real Estate Property Analysis Criteria (September 22, 2023), https://dbrs.morningstar.com/research/420982
North American Commercial Mortgage Servicer Rankings (August 23, 2023), https://dbrs.morningstar.com/research/419592
Legal Criteria for U.S. Structured Finance (December 7, 2023), https://dbrs.morningstar.com/research/425081
For more information on this credit or on this industry, visit dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.
MANULIFE FINANCIAL CORPORATION 
