Morningstar DBRS assigns A (high) rating to Berkshire Apartments mortgage loan in Washington, D.C.

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Berkshire mortgage rating in D.C.

Highlights

Morningstar DBRS assigned an A (high) rating with Stable trend to a 2.66% mortgage loan for Berkshire Apartments LLC in Washington, D.C.
The $10.5 million loan, due June 2026, reflects a 14.0% loan-to-value ratio, a debt yield of 52.0%, and a debt service coverage ratio of 9.5x.
The 754-unit Berkshire Apartments was 92% occupied as of Jan. 25, 2025, with Morningstar DBRS citing strong operating performance and stable cash flows.

Loan rating and property fundamentals

As reported by Morningstar DBRS, DBRS, Inc. assigned a credit rating of A (high) with a Stable trend to the 2.66% mortgage loan made to Berkshire Apartments LLC.

The loan is secured by the fee-simple interest in The Berkshire at 4201 Massachusetts Avenue NW in Washington, D.C. The 11-story apartment complex sits on a 5.27-acre site and includes about 469,608 square feet of net rentable area along with a multilevel basement parking garage.

The property was constructed in 1950 and underwent renovations in 1990 and 2016. Its 754 apartments include studio, one-bedroom, two-bedroom and one three-bedroom unit, with unit sizes ranging from about 350 square feet to 1,600 square feet and an average size of about 613 square feet.

Common amenities include a fitness center, resident common areas, on-site laundry facilities, controlled access, parking and landscaped outdoor space. Morningstar DBRS said the property was 92% occupied, based on a Jan. 25, 2025 rent roll.

Credit profile and market support

The rating reflects a 14.0% loan-to-value ratio based on Morningstar DBRS' concluded value of $75.4 million, as well as what it described as strong operating performance with stable and predictable cash flows. The agency also cited a debt service coverage ratio of 9.5 times, a current loan balance of $10.5 million as of June 2026, and a debt yield of 52.0%.

Morningstar DBRS also pointed to supportive qualitative adjustments tied to cash flow volatility, property quality and market fundamentals. The surrounding Cathedral Heights area is characterized mainly by multifamily housing, institutional uses and limited neighborhood-serving retail, with proximity to American University and other local demand drivers.

The property also benefits from access along Massachusetts Avenue NW and nearby Wisconsin Avenue NW, which connect it to other parts of the District. Morningstar DBRS said no environmental, social or governance factors had a significant or relevant effect on the credit analysis, and added that all credit ratings remain subject to surveillance.

Our earlier coverage of Morningstar DBRS rating actions on the Hermitage 2023, 2024, and 2025 securitisations explained that most note ratings were confirmed, while the Hermitage 2023 Class D Notes were upgraded to AAA (sf). We noted that the annual review cited stable arrears, measured cumulative defaults, and credit enhancement levels supported by subordination and revolving-period mechanics in the UK equipment finance receivables pools.

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