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Citigroup Commercial Mortgage Trust 2019-C7

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Citigroup Commercial Mortgage Trust 2019-C7 PRESALE REPORT Citigroup Commercial Mortgage Trust 2019-C7 DECEMBER 2019 STRUCTURED FINANCE: CMBS Table of Contents Capital Structure 3 Transaction Summary 4 Rating Considerations 5 DBRS Morningstar Credit Characteristics 7 Largest Loan Summary 8 DBRS Morningstar Sample 10 Transaction Concentrations 13 Loan Structural Features 14 490-504 Myrtle Avenue 18 650 Madison Avenue 23 805 3rd Avenue 27 East Village Multifamily Portfolio Pool 2 32 405 E 4th Avenue 36 Gartner Campus South 40 Harvey Building Products 44 Marriott Phoenix Airport 50 Austin Landing Mixed-Use 55 Giant Anchored Portfolio 60 East Village Multifamily Portfolio Pool 1 66 Park Central Tower 70 Shoppes at Parma 76 Transaction Structural Features 81 Methodologies 83 Surveillance 83 Glossary 84 Definitions 84 Walter Johnston Greg Haddad Vice President Senior Vice President +1 646 560-4589 +1 646 560-4590 [email protected] [email protected] Kevin Mammoser Erin Stafford Managing Director Managing Director +1 312 332-0136 +1 312 332-3291 [email protected] [email protected] Presale Report | CGCMT 2019-C7 Capital Structure Description Rating Action Balance ($) Subordination (%) DBRS Morningstar Trend Rating Class A-1 New Rating – Provisional 23,936,000 30.000 AAA (sf) Stable Class A-2 New Rating – Provisional 43,000,000 30.000 AAA (sf) Stable Class A-3 New Rating – Provisional 306,000,000 30.000 AAA (sf) Stable Class A-4 New Rating – Provisional 348,619,000 30.000 AAA (sf) Stable Class A-AB New Rating – Provisional 45,958,000 30.000 AAA (sf) Stable Class A-S New Rating – Provisional 69,898,000 23.625 AAA (sf) Stable Class X-A New Rating – Provisional 837,411,000 - AAA (sf) Stable Class B New Rating – Provisional 50,711,000 19.000 AAA (sf) Stable Class C New Rating – Provisional 53,452,000 14.125 A (high) (sf) Stable Class X-B New Rating – Provisional 104,163,000 - AA (low) (sf) Stable Class D New Rating – Provisional 34,264,000 11.000 BBB (high) (sf) Stable Class E New Rating – Provisional 28,782,000 8.375 BBB (low) (sf) Stable Class X-D New Rating – Provisional 63,046,000 BBB (sf) Stable Class F New Rating – Provisional 15,076,000 7.000 BB (high) (sf) Stable Class X-F New Rating – Provisional 15,076,000 - BBB (low) (sf) Stable Class G New Rating – Provisional 13,705,000 5.750 BB (high) (sf) Stable Class X-G New Rating – Provisional 13,705,000 - BBB (low) (sf) Stable Class H New Rating – Provisional 12,335,000 4.625 B (high) (sf) Stable Class X-H New Rating – Provisional 12,335,000 - BB (low) (sf) Stable Class J-RR New Rating – Provisional 17,818,000 3.000 B (low) (sf) Stable Class K-RR NR - - NR n/a Class VRR NR - - NR n/a Class S NR - - NR n/a Class R NR - - NR n/a Notes: 1. NR = Not Rated. 2. The Class X-B, X-D, D, E, F, G, H, J-RR, K-RR, VRR, S, and R Interest will be privately placed. 3. The exact initial certificate balances of the Class A-3 and A-4 certificates will be determined based on the final pricing of those classes of certificates. The aggregate initial certificate balance of the Class A-3 and A-4 certificates is expected to be approximately $654,619,000, subject to a variance of plus or minus 5%. 4. The notional amount of each class of the Class X Certificates will be equal to the certificate balance or the aggregate of the certificate balances, as applicable, from time to time of the class or classes of the Nonvertically Retained Principal Balance Certificates identified as such class of the Class X Certificates. The notional amount of the Class X-A certificates will be equal to the aggregate balance of the Class A-1, A-2, A-3, A-4, A-AB, and A-S certificates. The notional amount of the Class X-B certificates will be equal to the aggregate balance of the Class B and C certificates. The notional amount of the Class X-D certificates will be equal to the aggregate balance of the Class D and E certificates. 5. The Class X-A, X-B, X-D, X-F, X-G, and X-H balances are IO certificates that reference a single rated tranche or multiple rated tranches. The IO rating mirrors the lowest- rated reference tranche adjusted upward by one notch if senior in the waterfall. All Class X Certificates are paid at the top of the waterfall along with the Class A-1, A-2, A-3, A-4, and A-AB certificates. December 2019 3 Presale Report | CGCMT 2019-C7 Transaction Summary POOL CHARACTERISTICS Trust Amount $1,139,147,570 Wtd. Avg. Interest Rate 3.925% Number of Loans 55 Wtd. Avg. Remaining Term 117 Number of Properties 113 Wtd. Avg. Remaining Amortization 375 Average Loan Size $20,711,774 Total DBRS Morningstar Expected -6.6% Amortization1 DBRS Morningstar Issuance LTV 63.3% DBRS Morningstar Balloon LTV 58.9% Appraised Issuance LTV 61.8% Average Appraised Balloon LTV 57.6% Wtd. Avg. DBRS Morningstar DSCR 1.77 Wtd. Avg. Issuer Term DSCR 2.00x Top Ten Loan Concentration 34.8% Avg. DBRS Morningstar NCF Variance -11.6% 1. For certain ARD loans, expected amortization may include amortization expected to occur after the ARD but prior to single/major tenant expiry. PARTICIPANTS Depositor Citigroup Commercial Mortgage Securities Inc. Mortgage Loan Sellers Citi Real Estate Funding Inc. Ladder Capital Finance, LLC Starwood Mortgage Capital LLC Rialto Mortgage Finance, LLC Master Servicer Wells Fargo Bank, National Association Special Servicer LNR Partners, LLC Certficate Administrator Citibank, N.A. Trustee Wilmington Trust, National Association Operating Advisor Pentalpha Surveillance, LLC December 2019 4 Presale Report | CGCMT 2019-C7 Rating Considerations The collateral consists of 55 fixed-rate loans secured by 113 commercial and multifamily properties. The transaction is a sequential-pay pass-through structure. DBRS Morningstar analyzed the conduit pool to determine the provisional ratings, reflecting the long-term probability of loan default within the term and its liquidity at maturity. Two loans represent- ing approximately a combined 8.8% of the pool have investment-grade shadow ratings from DBRS Morningstar. Based on the cutoff loan balances against the DBRS Morningstar Stabilized NCF and their respective actual constants, five loans, representing a combined 5.1% of the pool, had a DBRS Morningstar Term DSCR below 1.32x, a threshold indicative of a higher likelihood of midterm default. The pool additionally includes 16 loans (representing a combined 27.9% of the pool by allocated loan balance) with issuance LTVs exceeding 67.1%, a threshold historically indicative of above-average default frequency. The WA LTV of the pool at issuance is 61.8%, and the pool will amortize down to a WA LTV of 57.6% at maturity. STRENGTHS – The collateral features two loans, representing a combined 8.8% of the pool, that have investment-grade shadow ratings from DBRS Morningstar: 650 Madison and 805 3rd Avenue. The 650 Madison loan exhibits credit characteristics consistent with a BBB (low) shadow rating, and 805 3rd Avenue exhibits credit characteristics consistent with a BBB shadow rating. For more information on these two loans, please see pages 23 and 27, respectively. – Of the loans sampled, 12, representing 55.2% of the sample, have either Average (+) or Above Average property quality. Additionally, only four loans, representing 13.5% of the sampled loans, have Average (-) or Below Average property quality. The properties securing the three largest loans in the pool, all with identical balances representing 4.4% of the pool balance each, are Average (+). – Term default risk is relatively low, as evidenced by a relatively strong WA DBRS Morningstar Amortizing DSCR of 1.77x. Across the pool, the DBRS Morningstar DSCRs range from 1.15x to 2.53x, and only five loans, representing 5.1% of the pool by allocated loan balance, exhibit a DBRS Morningstar DSCR below 1.32x, a threshold generally associated with above- average default frequency. Additionally, 25 loans, representing 46.7% of the pool balance, have a DBRS Morningstar DSCR above 1.69x, a threshold generally associated with below-average default frequency. – The pool is relatively granular and does not exhibit significant loan size concentration. No loan represents more than 4.4% of the pool cutoff balance, and the top 10 loans represent only 38.2% of the loan balance. The balances of the 55 loans are more evenly distributed than average, which is evidenced by the effective loan count of 36.0. Additionally, no property type comprises more than 30% of the pool by cutoff balance. CHALLENGES AND CONSIDERATIONS – The pool exhibits some leverage barbelling. While the pool has six loans, representing 13.1% of the pool balance, which have an issuance LTV below 59.3%, a threshold historically indicative of relatively low-leverage financing and generally associated with below-average default frequency, there are also 16 loans, representing 27.9% of the pool balance, which have an issuance LTV above 67.1%, a threshold historically indicative of relatively high-leverage financing and generally associated with above-average default frequency. – Only two of the identified high-leverage loans exhibit a DBRS Morningstar DSCR of less than 1.32x, a threshold generally associated with above-average default frequency. These loans exhibited a WA expected loss of 6.8%, which is considerably higher than the WA expected loss of the overall pool. As a result, DBRS Morningstar reflects the risk of these loans in the credit enhancement levels of the pool. – The pool features a relatively high concentration of loans secured by properties in less favorable suburban market areas.
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