Fitch Affirms MSBAM 2012-C6
KEY RATING DRIVERS
The affirmation of MSBAM 2012-C6 is based on the stable performance of the underlying collateral pool. As of the July 2015 distribution date, the pool's aggregate principal balance has been reduced by 6.4% to $1.05 billion from $1.12 billion at issuance. There are no loans in special servicing. Fitch has designated one loan (2%) as a Fitch Loans of Concern. Per the servicer reporting, two loans (4.8% of the pool) are defeased.
There were four variances from criteria related to classes B, C, D and E. The surveillance criteria indicated that rating upgrades were possible for these classes. However, Fitch has determined that rating upgrades are not warranted at this time as there has been no material improvement to the performance of the pool since issuance and no significant increase in credit enhancement.
The Fitch Loan of Concern is The Ramada Plaza Beach Resort (2.0%), a 335-room full service beachfront hotel located in Fort Walton Beach, Fl, along the Gulf of Mexico. The property is located immediately south of the Eglin Air Force Base, nine miles west of Destin, FL, and approximately 40 miles east of Pensacola. The servicer reported net operating income (NOI) debt service coverage ratio (DSCR) was -0.43x as of first quarter 2016 and 1.25x as of year-end 2015. According to the servicer, the property produced $1.7 million in revenues for the first quarter 2016 which was greater than the $1.1 million for first quarter 2015. Additionally, according to the March 2016 STAR Report the running 12 month occupancy, ADR, and RevPAR are 52%, $158, and $82 which compares to the competitive set at 74%, $161, and $119 respectively. Fitch will continue to monitor this loan.
The largest loan of the pool (11.9%) is collateralized by 1880 Broadway/15 Central Park West Retail, a 84,240 square foot (sf) retail condominium unit located on the eastern side of Broadway between West 61st Street and West 62nd Street in Manhattan's Upper West Side neighborhood. The property is 100% occupied and the major tenants that occupy the space are Best Buy (54.4% of net rentable area [NRA]), West Elm (30.3% of NRA), and JP Morgan Chase (12.9% of NRA). Above the ground floor retail collateral are luxury residential units that are not part of the collateral. As of year-end 2015, the servicer reported NOI DSCR was 2.14x.
The second largest loan in the pool (7.1%) is collateralized by the Chelsea Terminal Building, a 1,054,442 sf series of contiguous mixed-use buildings located in Manhattan's Chelsea neighborhood. The property is located two blocks west of the elevated Highline Park and two blocks south of the Javits Convention Center and Hudson Yards redevelopment project. The building was mainly being used as mini-storage for many years before being redeveloped to a mixed-use office and retail product in recent years. The loan remains on the watchlist because Chelsea Mini Storage, the sponsor's company, occupies 50.3% of the NRA and remains on a month-to-month lease. As of year-end 2014 the DSCR is 3.68x with an occupancy of 94% at February 2016.
RATING SENSITIVITIES
Rating Outlooks on classes A-2 through H are Stable due to overall stable pool performance. Future upgrades are possible should loans pay off at their scheduled maturities; 2017 maturities represent 20.5% of the pool. Fitch does not foresee negative ratings migration unless a material economic and/or asset level event changes the transaction's portfolio-level metrics.
DUE DILIGENCE USAGE
No third-party due diligence was provided or reviewed in relation to this rating action.
Fitch has affirmed the following classes as indicated:
--$230.7 million class A-2 at 'AAAsf'; Outlook Stable;
--$72 million class A-3 at 'AAAsf'; Outlook Stable;
--$411.4 million class A-4 at 'AAAsf'; Outlook Stable;
--$98.3 million class A-S at 'AAAsf'; Outlook Stable;
--$50.6 million class B at 'AAsf'; Outlook Stable;
--$43.5 million class C at 'Asf'; Outlook Stable;
--$0 class PST (Exchangeable) at 'Asf'; Outlook Stable;
--$21.1 million class D at 'BBB+sf'; Outlook Stable;
--$40.7 million class E at 'BBB-sf'; Outlook Stable;
--$9.8 million class F at 'BBB-sf'; Outlook Stable;
--$19.7 million class G at 'BBsf'; Outlook Stable;
--$12.6 million class H at 'Bsf'; Outlook Stable;
--$811.2 million class X-A at 'AAAsf'; Outlook Stable;
--$94.1 million class X-B at 'Asf'; Outlook Stable.
The class PST certificates are exchangeable for the class A-S, class B, and class C certificates.
Class A-1 has paid in full. Fitch does not rate the class J and X-C certificates.
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