Rating Action: Moody's assigns definitive ratings to three CMBS classes of BPR Trust 2022-STARGlobal Credit Research - 18 Aug 2022$290.0 million of structured securities affectedNew York, August 18, 2022 -- Moody's Investors Service ("Moody's") has assigned definitive ratings to three classes of CMBS securities, to be issued by BPR Trust 2022-STAR, Commercial Mortgage Pass-Through Certificates, Series 2022-STAR:Cl. A, Definitive Rating Assigned Aaa (sf)Cl. B, Definitive Rating Assigned Aa2 (sf)Cl. HRR, Definitive Rating Assigned A1 (sf)Note: Moody's previously assigned a provisional rating to Class X-CP of (P)Aaa (sf), described in the prior press release, dated August 8, 2022. Subsequent to the release of the provisional ratings for this transaction, the structure was modified. Based on the current structure, Moody's has withdrawn its provisional rating for Class X-CP and will not rate this certificate.RATINGS RATIONALEThe certificates are collateralized by a single floating-rate loan backed by a first-lien mortgage on the borrower's fee simple interest in North Star Mall (the "Property") located in San Antonio, TX. The collateral consists of a 728,314 square foot ("SF") component of a 1.25 million SF super-regional shopping center built on a 54.4-acre parcel of land. Our ratings are based on the credit quality of the loans and the strength of the securitization structure.Moody's approach to rating this transaction involved the application of our Large Loan and Single Asset/Single Borrower Commercial Mortgage-Backed Securitization methodology. The rating approach for securities backed by a single loan compares the credit risk inherent in the underlying collateral with the credit protection offered by the structure. The structure's credit enhancement is quantified by the maximum deterioration in property value that the securities are able to withstand under various stress scenarios without causing an increase in the expected loss for various rating levels. In assigning single borrower ratings, we also consider a range of qualitative issues as well as the transaction's structural and legal aspects.North Star Mall is well located at the intersection of Loop 410 and San Pedro Avenue in the Uptown District of San Antonio, TX. The mall is approximately six miles north of the San Antonio central business district, adjacent to affluent populations in Alamo Heights and the northern San Antonio suburbs. Significant development in the surrounding area includes the South Texas Medical Center and USAA corporate headquarters. San Antonio's economy is underpinned by the U.S. military, which employs 80,000 people in the area. Fort Sam, located 8.5 miles from the Property, is home to the Brooke Army Medical Center and the San Antonio Military Medical Center, which provides high quality care to military personnel, veterans, their families, and civilian emergency patients.North Star Mall contains several anchor tenants. Non-collateral anchors include a Saks Fifth Avenue unit (79,510 SF), Dillard's (203,616 SF) and Macy's (239,000 SF), all of which own their stores. Collateral anchor space consists of JC Penney (173,198 SF) and another Saks Fifth Avenue unit (33,998 SF). Of note, the property contains the only Saks in a nearly 200-mile radius. The sponsor is expected to bring in Round 1 Bowling & Amusement (55,899 SF) as an anchor to North Star Mall, which is a multi-entertainment experiential facility offering bowling, various arcade and table games, as well as dining options, who signed a lease set to begin in 2023 and has begun construction on its space.Collateral in-line area contains a mix of over 100 shops, restaurants and entertainment experiences.  Key retailers include an H&M (23,724 SF, 3.3% of collateral NRA, 4.9% of total rent), The Cheesecake Factory (11,026 SF, 1.5% of collateral NRA, 2.6% of total rent), Apple (6,938 SF, 1.0% of collateral NRA, 1.2% of total rent), and Champ's Sports (7,524 SF, 1.0% of collateral NRA, 2.9% of total rent).Small shop sales performance at the Property is strong. Reported sales for retailers under 10,000 SF ("in-line") as of April 2022 TTM averaged $788 PSF excluding Apple ($1,018 PSF including Apple), which is up 21.6% from pre-pandemic 2019 in-line sales of $648 PSF ($888 PSF including Apple). The property's average occupancy cost ratio has improved during the April 2022 TTM to a healthy 15.8% on average sales of $788 PSF, down from 19.8% for the aforementioned 2019 average sales figure of $648 PSF. The strong tenant performance at North Star Mall is broad based as 38 retailers achieved sales over $900 PSF during the April 2022 TTM.As of May 2022, the collateral component of the mall had an occupancy rate of 92.6%. Total mall occupancy has averaged  96.3% since 2016, while in-line occupancy has averaged 91.4% over the same time period.The Property is majority owned and controlled, directly or indirectly, by Brookfield Properties Retail Holding LLC ("BPR" or "Brookfield"), an entity owned by affiliates of Brookfield Asset Management, Inc. BPR ranks among the largest retail real estate companies in the United States, encompassing much of Brookfield Asset Management's retail portfolio of over 200 retail centers and representing over 155 million SF of retail space.The credit risk of loans is determined primarily by two factors: 1) Moody's assessment of the probability of default, which is largely driven by each loan's DSCR, and 2) Moody's assessment of the severity of loss upon a default, which is largely driven by each loan's loan-to-value ratio, referred to as the Moody's LTV or MLTV.  As described in the CMBS methodology used to rate this transaction, we make various adjustments to the MLTV. We adjust the MLTV for each loan using a value that reflects capitalization (cap) rates that are between our sustainable cap rates and market cap rates. We also use an adjusted loan balance that reflects each loan's amortization profile.The Moody's first mortgage DSCR is 2.09x and Moody's first mortgage stressed DSCR at a 9.25% constant is 1.36x. Moody's DSCR is based on our stabilized net cash flow.Moody's LTV ratio for the first mortgage balance is 63.4% based on our Moody's Value. We did not adjust Moody's value to reflect the current interest rate environment as part of our analysis for this transaction.Moody's also grades properties on a scale of 0 to 5 (best to worst) and considers those grades when assessing the likelihood of debt payment. The factors considered include property age, quality of construction, location, market, and tenancy. The property's quality grade is 1.25.Notable strengths of the transaction include the Property's location, strong tenant sales, dominant position in the market, consistently high NOI margins and occupancy, low leverage loan profile, and institutional sponsorship with retail experience.Notable concerns of the transaction include are the effects of the coronavirus pandemic, tenant rollover, cash out, floating-rate and interest-only mortgage loan profile, lack of collateral diversification, and certain credit negative legal features.The principal methodology used in these ratings was "Large Loan and Single Asset/Single Borrower Commercial Mortgage-Backed Securitizations Methodology" published in July 2022 and available at https://ratings.moodys.com/api/rmc-documents/391055. Alternatively, please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.Moody's approach for single borrower and large loan multi-borrower transactions evaluates credit enhancement levels based on an aggregation of adjusted loan level proceeds derived from our Moody's loan level LTV ratios. Major adjustments to determining proceeds include leverage, loan structure, and property type. These aggregated proceeds are then further adjusted for any pooling benefits associated with loan level diversity, other concentrations and correlations.Factors that would lead to an upgrade or downgrade of the ratings:The performance expectations for a given variable indicate Moody's forward-looking view of the likely range of performance over the medium term. Performance that falls outside the given range may indicate that the collateral's credit quality is stronger or weaker than Moody's had previously anticipated. Factors that may cause an upgrade of the ratings include significant loan pay downs or amortization, an increase in the pool's share of defeasance or overall improved pool performance. Factors that may cause a downgrade of the ratings include a decline in the overall performance of the pool, loan concentration, increased expected losses from specially serviced and troubled loans or interest shortfalls.Today's action has considered how the coronavirus pandemic has reshaped the US economic environment and the way its aftershocks will continue to reverberate and influence the performance of retail properties. We expect the public health situation to improve as vaccinations against COVID-19 increase and societies continue to adapt to new protocols. Still, the exit from the pandemic will likely be bumpy and unpredictable and economic prospects will vary.We regard the coronavirus outbreak as a social risk under our ESG framework, given the substantial implications for public health and safety.REGULATORY DISCLOSURESFor further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found on https://ratings.moodys.com/rating-definitions.Further information on the representations and warranties and enforcement mechanisms available to investors are available on https://ratings.moodys.com/documents/PBS_1338707.The analysis includes an assessment of collateral characteristics and performance to determine the expected collateral loss or a range of expected collateral losses or cash flows to the rated instruments. As a second step, Moody's estimates expected collateral losses or cash flows using a quantitative tool that takes into account credit enhancement, loss allocation and other structural features, to derive the expected loss for each rated instrument.Moody's quantitative analysis entails an evaluation of scenarios that stress factors contributing to sensitivity of ratings and take into account the likelihood of severe collateral losses or impaired cash flows. Moody's weights the impact on the rated instruments based on its assumptions of the likelihood of the events in such scenarios occurring.For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the issuer/deal page for the respective issuer on https://ratings.moodys.com.For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.The ratings have been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.These ratings are solicited. Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website https://ratings.moodys.com.Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://ratings.moodys.com/documents/PBC_1288235.At least one ESG consideration was material to the credit rating action (s) announced and described above.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the EU and is endorsed by Moody's Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that issued the credit rating is available on https://ratings.moodys.com.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the UK and is endorsed by Moody's Investors Service Limited, One Canada Square, Canary Wharf, London E14 5FA under the law applicable to credit rating agencies in the UK. Further information on the UK endorsement status and on the Moody's office that issued the credit rating is available on https://ratings.moodys.com.Please see https://ratings.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.Please see the issuer/deal page on https://ratings.moodys.com for additional regulatory disclosures for each credit rating. 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