Fitch Ratings has assigned final ratings and Rating Outlooks to TYSN 2023-CRNR Mortgage Trust commercial mortgage pass-through certificates series 2023-CRNR.

RATING ACTIONS

Entity / Debt

Rating

Prior

TYSN 2023-CRNR

A

LT

AAAsf

New Rating

AAA(EXP)sf

B

LT

AAsf

New Rating

AA(EXP)sf

Class RR

LT

NRsf

New Rating

NR(EXP)sf

RR Interest

LT

NRsf

New Rating

NR(EXP)sf

Page

of 1

VIEW ADDITIONAL RATING DETAILS

Fitch assigns final ratings and Ratings Outlooks as follows:

$415,245,000 class A 'AAAsf'; Outlook Stable;

$2,945,000 class B 'AAsf'; Outlook Stable;

Fitch does not rate the following classes:

$13,206,000a class RR Interest;

$8,804,000a class RR.

(a)	Non-offered vertical risk retention interest representing approximately 5.0% of the estimated fair value of all classes.

Transaction Summary

The TYSN 2023-CRNR commercial mortgage pass-through certificates series 2023-CRNR (TYSN 2023-CRNR) represent the beneficial interest in the trust portion of a $710 million, five-year fixed-rate, interest-only commercial mortgage loan. The mortgage loan is secured by the borrower's fee simple and leasehold interest in Tyson's Corner Center, a 1.8 million-sf, super-regional mall located within the Washington D.C. metro area, in McLean, VA.

The whole loan is evidenced by four senior pari passu promissory notes with an aggregate principal balance of $710 million. Notes A-1-1, A-2-1, A-3-1, and A-4-1 are controlling trust notes with an aggregate original principal balance of $440.2 million. The remaining $269.8 million of non-controlling notes will not be part of the trust, and are expected to be contributed to one or more future securitization transactions.

Whole loan proceeds were used by the sponsor, a joint venture between The Macerich Company and Alaska Permanent Fund, to refinance $666.5 million of existing debt secured by the property, fund approximately $40.2 million of upfront reserves for outstanding tenant obligations, and pay closing costs. The certificates follow a sequential pay structure.

KEY RATING DRIVERS

Low Fitch Leverage: The $710.0 million whole loan has a Fitch Ratings stressed debt service coverage ratio (DSCR) and loan to value ratio (LTV) of 1.47x and 59.7%, respectively, and debt of $396 psf.

Strong Sales Performance, Low Occupancy Costs: Tyson's Corner Center is one of the more dominant malls in the country. The property reports overall sales of about $891.2 million and strong in-line tenant sales (less than 10,000 sf) of $1,202 psf ($1,026 psf excluding Apple) as of the TTM ended in September 2023. In-line sales excluding Apple were $825 psf in 2019, $863 psf in 2021 and $950 psf in 2022.

Given the high sales volumes, the property's occupancy costs have historically remained moderate, with an inline tenant occupancy cost of 16.1% as of the September 2023 TTM (17.9% excluding Apple). Occupancy costs excluding Apple ranged from 19.3% in 2019 to 18.0% as of YE22.

High Quality Retail Asset in Core Location: The property is a 1.8 million-sf, super-regional mall with over 240 retail shops, restaurants and entertainment tenants. It is well located as part of a primary retail corridor within 12.5 miles of Washington D.C. The property's Tyson's neighborhood encompasses a large employment center, and the property itself is surrounded by an extensive transportation hub, allowing it to attract more than 14 million visitors per year. It is adjacent to two major interstates, centrally located between three international airports and directly connected to the Silver Metro commuter rail line, providing access to downtown Washington D.C.

Tyson's Corner is also part of a larger mixed-use development that includes a 22-story office tower, a 429-unit luxury residential building and a 300-key Hyatt Regency hotel.

Significant Sponsor Investment: The Macerich Company has invested approximately $352 million since 2005 to reposition and upgrade tenant spaces, fund tenant improvements and invest in interior and exterior building renovations. Recent upgrades to tenant spaces have included repositioning a large format L.L. Bean space with new tenants that include Lululemon, Kendra Scott, Old Navy and Primark (expected to open in April 2024) and relocating and expanding the existing Apple store. These projects have contributed approximately $3.8 million of incremental rental income to the property coupled with over $7.1 million of additional sales volume.

The sponsor is also planning an additional investment of $16.6 million in leasing costs to reposition the east end of the property, which is expected to feature new restaurant and entertainment tenants that include Level 99, Maggiano's and a large national restaurant operator in the final stages of negotiation.

Macerich has been a long-term owner of the property since acquiring it in 2005. The company has also invested $525 million to develop the 1.3 million sf mixed-use campus adjacent to Tyson's Corner, encompassing each of the major towers that are interconnected along the mall's elevated outdoor plaza.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade

Declining cash flow decreases property value and capacity to meet its debt service obligations. The table below indicates the model implied rating sensitivity to changes in one variable, Fitch net cash flow (NCF):

Original Rating: 'AAAsf'/'AAsf'

10% NCF Decline: 'AAsf'/'AA-sf'

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

Improvement in cash flow increases property value and capacity to meet its debt service obligations. The table below indicates the model implied rating sensitivity to changes to the same one variable, Fitch NCF:

Original Rating: 'AAAsf'/'AAsf'

10% NCF Increase: 'AAAsf'/'AAAsf'

USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10

Fitch was provided with Form ABS Due Diligence-15E (Form 15E) as prepared by Ernst & Young LLP. The third party due diligence described in Form 15E focused on a comparison and re-computation of certain characteristics with respect to the mortgage loan. Fitch considered this information in its analysis and it did not have an effect on Fitch's analysis or conclusions.

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.

REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS

A description of the transaction's representations, warranties and enforcement mechanisms (RW&Es) that are disclosed in the offering document and which relate to the underlying asset pool is available by clicking the link to the Appendix. The appendix also contains a comparison of these RW&Es to those Fitch considers typical for the asset class as detailed in the Special Report titled 'Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions'.

ESG Considerations

The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' 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. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit https://www.fitchratings.com/topics/esg/products#esg-relevance-scores.

Additional information is available on www.fitchratings.com

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