Morningstar DBRS assigns A rating to Castlewood Associates mortgage loan in Ohio

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Morningstar DBRS assigns A rating

Highlights

Morningstar DBRS assigns an A rating with a Stable trend to Castlewood Associates LLC's 2.87% mortgage loan due April 1, 2031, secured by a 156-unit property in Lakewood, Ohio.
The loan exhibits a 69.8% loan-to-value ratio, $14.4 million concluded value, debt service coverage ratio of 2.2 times, and a debt yield of 11.1%.
Occupancy as of January 1, 2025 rent roll is 94.2%, with a $10.1 million current balance and no significant ESG factors affecting credit analysis.

Loan rating and property fundamentals

As reported by Morningstar DBRS, the agency assigns an A credit rating with a Stable trend to the 2.87% mortgage loan due April 1, 2031, made to Castlewood Associates LLC. The loan is secured by the fee-simple interest in a 156-unit high-rise multifamily property at 17600 Detroit Avenue in Lakewood, Ohio.

The property sits on a 1.93-acre site and includes a residential building constructed in phases in 1975. Its unit mix includes 152 two-bedroom apartments and four three-bedroom apartments, with an average unit size of about 1,036 square feet. As of the January 1, 2025 rent roll, occupancy stands at 94.2%.

Amenities include a newly renovated penthouse party room with billiards, a newly renovated lobby, a business center, garage parking, a fitness center with sauna, on-site management and maintenance, and controlled electronic access. Units include central heating and cooling, in-unit washers and dryers, while some also feature private balconies and upgraded kitchen packages.

Credit metrics and regional market context

The rating reflects several credit factors, including a 69.8% loan-to-value ratio based on Morningstar DBRS' concluded value of $14.4 million, a debt service coverage ratio of 2.2 times, and a debt yield of 11.1%. Morningstar DBRS also cites stable and predictable cash flows, an amortizing loan structure, and a current balance of $10.1 million as of June 2026.

The agency says qualitative support also comes from property quality, cash flow volatility, and local market fundamentals. The building's location along Detroit Avenue, with access through Larchmont Avenue and W Clifton Boulevard, connects it to surrounding neighborhoods and transport routes across the Cleveland area.

Morningstar DBRS says no Environmental, Social, or Governance factors have a significant or relevant effect on the credit analysis. The agency adds that all credit ratings remain subject to surveillance and may later be upgraded, downgraded, placed under review, confirmed, or discontinued.

Morningstar DBRS rating actions on the Hermitage 2023, 2024, and 2025 securitisations focused on annual performance reviews of UK equipment finance receivables originated by Haydock Finance Limited, with most note ratings confirmed and the Hermitage 2023 Class D Notes upgraded. Our publication previously noted that the review cited stable arrears, measured cumulative defaults, and credit enhancement dynamics (including revolving and amortisation features) as key drivers of the rating outcomes.

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