Fitch Ratings has affirmed CSAIL 2019-C17 Commercial Mortgage Trust.

The Rating Outlook for class G-RR remains Negative.

RATING ACTIONS

Entity / Debt

Rating

Prior

CSAIL 2019-C17

A-1 12597BAQ2

LT

AAAsf

Affirmed

AAAsf

A-2 12597BAR0

LT

AAAsf

Affirmed

AAAsf

A-3 12597BAS8

LT

AAAsf

Affirmed

AAAsf

A-4 12597BAT6

LT

AAAsf

Affirmed

AAAsf

A-5 12597BAU3

LT

AAAsf

Affirmed

AAAsf

A-S 12597BAY5

LT

AAAsf

Affirmed

AAAsf

A-SB 12597BAV1

LT

AAAsf

Affirmed

AAAsf

B 12597BAZ2

LT

AA-sf

Affirmed

AA-sf

C 12597BBA6

LT

A-sf

Affirmed

A-sf

Page

of 2

VIEW ADDITIONAL RATING DETAILS

KEY RATING DRIVERS

Stable Performance and Loss Expectations: Overall pool performance and loss expectations remain stable from the prior review. Fitch has identified eight Fitch Loans of Concern ([FLOCs] 20.5% of the pool balance) with no loans in special servicing.

Fitch's current ratings incorporate a base case loss of 5.80%. The Negative Outlook factors performance concerns related to office properties in the pool with declining occupancy and an additional sensitivity applied to the Great Wolf Lodge Southern California loan to account for the unique asset type, operational risk and property performance not having recovered to pre-pandemic levels, reflecting losses that could reach 6.30%.

Fitch Loans of Concern: The largest FLOC and the largest contributor to expected losses is the Selig Office Portfolio (9.5%). This loan is securitized by an urban office portfolio consisting of three properties all located in downtown Seattle, WA. Occupancy continues to trend downward as March 2022 occupancy fell to 77% from 85% at YE 2020 and 95% at issuance. The servicer-reported NOI DSCR has declined to 1.62x as of September 2021, compared with 1.76x at YE 2020 and 1.48x at YE 2019.

The loan's cash trap was previously activated due to Leafly (NRA 7%) vacating in March 2021. Per the subject's rent roll, Leafly paid $51 psf in annual base rent. In addition, New Engen's (NRA 8.9%) lease is scheduled to expire in September 2022. New Engen pays $34.50 psf in annual base rent below the Belltown/Denny Regrade office submarket asking rent of $38.26 psf (Costar). According to the borrower, New Engen had plans to downsize at its initial lease expiration in 2021; however, the borrower extended the in-place lease for an additional year through September 2022 and the tenant has not yet downsized to date.

Fitch's base case loss of 15% reflects a stressed cap rate of 9.75% to account for the office property quality and related underperformance and a 5% stress to the TTM September 2021 NOI due to increased vacancy into 2021.

The next largest contributor to modeled losses is the Marriott Fort Collins (3.3%). The loan is secured by a full-service hotel located in Fort Collins, CO adjacent to the Foothills Mall. The hotel has exhibited a slow recovery out of the pandemic with the most recently reported RevPAR 40% below RevPAR in the same period in 2020. As of TTM March 2022, RevPAR increased to $53 from $38 in 2021, but remains below RevPAR of $83 as of TTM March 2020. Although the hotel has previously led its competitive set with respect to RevPAR, most recently the hotel has been underperforming as it was ranked 7 of 8 with a penetration rate of 64.8%

Fitch's base case loss of 15% reflects a 11.25% cap rate and 15% stress to the YE 2019 NOI to account for the lack of recovery and underperformance against its competitive set, resulting in a stressed value of $96,500 per key

The third largest contributor to modeled losses is the APX Morristown loan (5.0%), which is secured by a 486,742-sf suburban office property located in Morristown, NJ. Occupancy has declined at the property to 63% as of March 2022 from 92% at YE 2021 due to the departure and downsizing of several tenants. The largest tenant, Louis Berger (NRA 22.3%), which was acquired by WSP in late 2018, vacated in January 2022 ahead of its lease expiration in 2026. Additionally, Majesco (6.4%) vacated in Q3-2021 and the second-largest tenant, New York Marine & General Insurance, downsized by 6.8% of the NRA and extended their lease for the remaining space (12.8%) through 2032. According to the borrower, there is interest in a partial backfill of the vacant Majesco space.

Fitch's base case loss of 11% reflects a stressed cap rate of 10% to account for the office property quality and suburban location and a 25% stress to the YE 2021 NOI to account the increased vacancy coupled with high space availability (22.8%) in the submarket.

Minimal Change in Credit Enhancement (CE): The CE has increased slightly since issuance due to amortization, with 1.03% of the original pool balance repaid. No losses have been realized losses to date and 2.8% of the pool is defeased. Interest shortfalls are currently affecting the non-rated class NR-RR. Of the remaining pool balance, 11 loans comprising 34.6% of the pool are full interest-only through the term of the loan.

Alternative Loss Consideration: Fitch performed an additional sensitivity scenario which applied a potential outsized loss of 20% on the Great Wolf Lodge Southern California loan to reflect the unique asset type and operational risk which includes lodging and waterpark components and property performance not having recovered to pre-pandemic levels. The Negative Outlook on class G-RR partially reflects this sensitivity scenario as well as ongoing concerns with office properties facing headwinds due to the hybrid work environment and changes in workspace needs.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to negative rating action/downgrade:

Downgrades would occur with an increase in pool level losses from underperforming or specially serviced loans. Downgrades to the 'AA-sf' and 'AAAsf' categories are not likely due to the position in the capital structure, but may occur should interest shortfalls affect the classes.

Downgrades to the 'BBB-sf' and A-sf' category would occur should overall pool losses increase significantly and/or one or more large loans have an outsized loss, which would erode CE. Downgrades to the 'BB-sf' and 'B-sf' categories would occur should loss expectations increase and if performance of the FLOCs, in particular the office properties, fail to stabilize or loans default and/or transfer to the special servicer.

Fitch has identified both a baseline and a worse-than-expected, adverse stagflation scenario based on fallout from the Russia-Ukraine war whereby growth is sharply lower amid higher inflation and interest rates; even if the adverse scenario should play out, Fitch expects virtually no impact on ratings performance, indicating very few rating or Outlook changes. However, for some transactions with concentrations in underperforming retail exposure, the ratings impact may be mild to modest, indicating some changes on sub-investment grade notes.

Factors that could, individually or collectively, lead to positive rating action/upgrade:

Factors that could lead to upgrades would include stable to improved asset performance coupled with pay down and/or defeasance. Upgrades of the 'A-sf' and 'AA-sf' categories would likely occur with significant improvement in CE and/or defeasance; however, adverse selection, increased concentrations and further underperformance of the FLOCs could cause this trend to reverse.

Upgrades to the 'BBB-sf' category would be limited based on sensitivity to concentrations or the potential for future concentration. Classes would not be upgraded above 'Asf' if there is likelihood for interest shortfalls. Upgrades to 'BB-sf' and 'B-sf' categories are not likely until the later years in a transaction and only if the performance of the remaining pool is stable and there is sufficient CE to the classes.

Best/Worst Case Rating Scenario

International scale credit ratings of Structured Finance transactions have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of seven notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of seven notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit https://www.fitchratings.com/site/re/10111579.

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

Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This 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. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg

Additional information is available on www.fitchratings.com

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