Morningstar DBRS Upgrades Four Classes of LoanCore 2021-CRE5 Issuer Ltd.

DBRS, Inc. (Morningstar DBRS) upgraded credit ratings on four classes issued by LoanCore 2021-CRE5 Issuer Ltd. as follows:

-- Class B Secured Floating Rate Notes to AAA (sf) from AA (sf)
-- Class C Secured Floating Rate Notes to AA (sf) from A (high) (sf)
-- Class D Secured Floating Rate Notes to A (sf) from BBB (sf)
-- Class E Secured Floating Rate Notes to BBB (high) (sf) from BBB (low) (sf)

In addition, Morningstar DBRS confirmed the following credit ratings:

-- Class A Senior Secured Floating Rate Notes at AAA (sf)
-- Class A-S Secured Floating Rate Notes at AAA (sf)
-- Class F Floating Rate Notes at BB (sf)
-- Class G Floating Rate Notes at B (sf)

All trends are Stable.

The credit rating upgrades are reflective of the increased credit support to the bonds as a result of additional collateral reduction following the previous Morningstar DBRS credit rating action in May 2025. Over the past two reporting periods, the Kimpton Hotel Eventi loan, with a former trust balance of $73.0 million, was paid in full, and the 619 & 701 Ocean Front Walk loan, with a former trust balance of $1.8 million, was repurchased from the trust by the collateral manager. The credit rating upgrades are further supported by Morningstar DBRS' expectation of additional loan repayment in the near term, based on updated performance metrics provided by the collateral manager. This includes the largest loan in the pool, The Paragon at Kierland ($91.0 million) and the Magnolia at Crestview loan ($47.0 million) as the borrowers of both loans have achieved property stabilization prior to their respective loan maturity in June 2025.

The credit rating confirmations reflect the majority of outstanding borrowers continue to progress with the stated business plans as well as the increased credit support to the bonds. While select loans have exhibited performance concerns, Morningstar DBRS expects the lender and the borrowers of these loans to negotiate loan modifications to extend maturity dates, if necessary. Any loan modifications would likely require additional equity infusions from borrowers in the form of principal curtailments, the purchase of new interest rate cap agreements, or deposits into existing reserve accounts. The transaction also benefits from a concentration of loans secured by multifamily collateral, totaling 14 loans and 72.4% of the current trust balance. Multifamily properties have historically exhibited the ability to better maintain property cash flow and asset value. In conjunction with this press release, Morningstar DBRS has published a Surveillance Performance Update report with in-depth analysis and credit metrics for the transaction as well as business plan updates on select loans. For access to this report, please click on the link under Related Documents below or contact us info-DBRS@morningstar.com.

At issuance, the initial collateral consisted of 20 floating-rate mortgages or pari passu participation interests in mortgage loans secured by 45 mostly transitional properties with a cut-off balance of $909.6 million. As of the May 2025 remittance, the pool comprised 20 loans secured by 21 properties, with a cumulative trust balance of $768.0 million, representing collateral reduction of 25.8% since issuance.

Beyond the multifamily concentration noted above, two loans, representing 12.1% of the current trust balance, are secured by mixed-use properties. The transaction benefits from minimal exposure to office assets as only one loan, representing 4.2% of the current trust balance, is secured by an office property. In comparison with the June 2024 reporting, office properties represented 3.8% of the collateral, while multifamily properties represented 65.9% of the collateral, and mixed-use properties represented 13.2% of the collateral.

Leverage across the pool has increased from issuance, with a current weighted-average (WA) as-is appraised loan-to-value ratio (LTV) of 79.4%, up from 72.1% at issuance. Similarly, the WA as-stabilized LTV has also increased to 69.0% from 64.2% at issuance. Morningstar DBRS recognizes that select property values may be inflated as the majority of the individual property appraisals were completed in 2021 and 2022 and may not reflect the current rising interest rate or widening capitalization rate environments. In the analysis for this review, Morningstar DBRS applied upward LTV adjustments across 14 loans, representing 81.5% of the current trust balance, generally reflective of higher cap rate assumptions compared with the implied cap rates based on the appraisals.

Through May 2025, the lender had advanced cumulative loan future funding of $48.3 million to 11 of the outstanding individual borrowers to aid in property stabilization efforts. The largest future funding advances have been made to the borrowers of The Beacon La Costa (Prospectus ID#29; 7.2% of the current pool; $10.0 million), Crown Court Apartments (Prospectus ID#40; 6.8% of the current pool; $9.0 million), and Eaton Canyon Tech Center (Prospectus ID#37; 4.2% of the current pool; $8.2 million) loans. The Beacon La Costa loan is secured by a mixed-use property in Carlsbad, California; the Crown Court Apartments loan is secured by a multifamily property in Scottsdale, Arizona, and the Eaton Canyon Tech Center loan is secured by an office property in Pasadena, California. The borrowers of these loans have used loan future funding for capital improvement projects and to fund leasing costs. An additional $11.1 million of loan future funding allocated to six individual borrowers remains available. The largest portions of the available funds, $4.4 million and $3.4 million, are allocated to the borrowers of the Eaton Canyon Tech Center and The Beacon La Costa loans, respectively.

As of the May 2025 remittance, one loan, representing 2.0% of the current trust balance, is in special servicing. The loan, 1900 West Lawrence Avenue, is secured by a mixed-use property consisting of 59 residential units and 19,000 square feet of retail space in Chicago. The $32.0 million senior loan ($15.5 million trust loan) initially matured in July 2023 but did not transfer to special servicing until December 2023. The loans remain delinquent on monthly debt service payments since May 2024 and according to the Q1 2025 report provided by the collateral manager, a receiver has been appointed with a resolution strategy to sell the asset. As of March 2025, the multifamily portion of the collateral was 94.9% occupied and the commercial component 100% occupied with DeVry University occupied 17,306 sf on a lease expiring in November 2030. The property reported a trailing 12-month (T-12) ended March 31, 2025, amount of $1.8 million. The property has not been appraised since loan closing when it was valued at $41.7 million. In its analysis, Morningstar DBRS applied a stressed cap rate to the T-12, ended March 31, 2025, cash flow to derive an updated property value and liquidated the loan from the pool. Including all outstanding advances and additional projected advances, the resulting implied loss severity on the loan is in excess of 30.0% or $5.0 million.

Seven loans, representing 36.0% of the current trust balance, are on the servicer's watchlist. The loans are flagged for below breakeven operating performance or upcoming/past maturity dates. Through YE2025, 15 loans, representing 79.7% of the cumulative trust loan balance, have scheduled maturity dates. Eleven of these loans (61.3% of the current trust balance) have remaining extension options, which Morningstar DBRS expects will be exercised with or without loan modifications if borrowers cannot successfully execute exit strategies. Regarding the remaining four loans, Morningstar DBRS expects the lender and borrowers will negotiate loan modifications to extend the respective maturity dates. Through Q1 2025, 17 loans, representing 83.9% of the current trust balance, have been modified. The terms of the individual loan modifications vary and have included the waiver of performance-based tests to exercise maturity extensions, the requirement to purchase new interest rate capitalization agreements, changes to interest rate structures and reallocations of loan future funding dollars. Loan modifications have often required additional equity commitments from borrowers in the form of upfront principal curtailments, deposits into reserve accounts and/or increased loan payments guarantees.

Morningstar DBRS' credit ratings on the applicable classes address the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. Where applicable, a description of these financial obligations can be found in the transactions' respective press releases at issuance.

Morningstar DBRS' long-term credit ratings provide opinions on risk of default. Morningstar DBRS considers risk of default to be the risk that an issuer will fail to satisfy the financial obligations in accordance with the terms under which a long-term obligation has been issued. The Morningstar DBRS short-term debt rating scale provides an opinion on the risk that an issuer will not meet its short-term financial obligations in a timely manner.

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 Factors in Credit Ratings (May 16, 2025) at https://dbrs.morningstar.com/research/454196.

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 North American CMBS Surveillance Methodology (February 28, 2025), https://dbrs.morningstar.com/research/448963.

Other methodologies referenced in this transaction are listed at the end of this press release.

The credit ratings assigned to Classes E, F, and G materially deviate from the credit ratings implied by the predictive model. Morningstar DBRS typically expects there to be a substantial likelihood that a reasonable investor or other user of the credit ratings would consider a three-notch or more deviation from the credit rating stress(es) implied by the predictive model to be a significant factor in evaluating the credit ratings. The rationale for the material deviations is sustainability of the loan performance trends were not demonstrated as select borrowers remains behind in the respective business plans to increase property cash flow and asset value.

The credit ratings were initiated at the request of the rated entity.

The rated entity or its related entities did participate in the credit rating process for these credit rating actions.

Morningstar DBRS had access to the accounts, management, and other relevant internal documents of the rated entity or its related entities in connection with these credit rating actions.

These are solicited credit ratings.

For more information on Morningstar DBRS' policy regarding the solicitation status of credit ratings, please refer to the Credit Ratings Global Policy, which can be found in the Morningstar DBRS Understanding Ratings section of the website: https://dbrs.morningstar.com/understanding-ratings

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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The credit rating methodologies used in the analysis of this transaction can be found at: https://dbrs.morningstar.com/about/methodologies.

-- North American CMBS Multi-Borrower Rating Methodology (April 9, 2025)/North American CMBS Insight Model v 1.3.0.0, https://dbrs.morningstar.com/research/451739
-- Morningstar DBRS North American Commercial Real Estate Property Analysis Criteria (September 19, 2024), https://dbrs.morningstar.com/research/439702
-- Legal Criteria for U.S. Structured Finance (December 3, 2024), https://dbrs.morningstar.com/research/444064
-- Interest Rate Stresses for U.S. Structured Finance Transactions (March 27, 2025), https://dbrs.morningstar.com/research/450750
-- North American Commercial Mortgage Servicer Rankings (August 23, 2024), https://dbrs.morningstar.com/research/438283

A description of how Morningstar DBRS analyzes structured finance transactions and how the methodologies are collectively applied can be found at: https://dbrs.morningstar.com/research/417279 (July 17, 2023)

For more information on this credit or on this industry, visit https://dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.