Mortgages on 1,507 income-producing, single-family rental homes will secure a single, floating rate loan that will secure $425.1 million in pass-through certificates being sold through the Tricon Residential 2025-SFR2.
Morgan Stanley Mortgage Capital Holdings originated the mortgage loan, which are supported by mortgage liens granted by the borrower or its wholly owned subsidiary. The deal sponsor bought the properties between 2016 and 2023.
The certificates will repay following a sequential-pay structure, Fitch said, and they all have a rated final maturity of August 2044. Credit support for the A, B, C and D classes notes is 35.31%, 24.12%, 15.31% and 8.27%, respectively, according to Morningstar | DBRS, which also rated the notes.
The loan is also fixed-rate and interest only, so the lack of amortization before maturity raises the possibility of a higher refinance risk, Fitch said.
Morgan Stanley is the lead manager on the deal, according to DBRS, with
On average, the properties in the pool were built in 1994, they have an average monthly rental payment of $2,568, and an average remaining lease term of six months, DBRS and Fitch said. Almost all the homes, 95.2%, are occupied, they said.
Certain provisions in the deal allow for changes in the collateral pool. DBRS points out that the deal allows for discretionary substitutions of up to 2.0% of the number of properties, if the pool conforms to certain restrictions.
The mortgage loan securing the certificates allows for the release of individual properties that are sold to a third party, Fitch said.
The properties, single-family rentals, which secure the underlying loans, are located across 20 states, Fitch Ratings said. Colorado Springs, Colo., is the largest metro statistical area with the largest concentration of mortgaged properties, at 12.3%, the Sandy Springs-Marietta, Ga., area follows, with 11.5%, and the Denver, Aurora, Colo., area rounds out the top three, with 11.3%, Fitch said.
