Fitch Upgrades 1 Class JPMCC 2003-CIBC6
KEY RATING DRIVERS
The upgrade is due to increased credit enhancement as a result of additional loan amortization. The affirmations are based on sufficient credit enhancement to support the current ratings. Fitch modeled losses of 21.6% of the remaining pool; expected losses on the original pool balance total 3.4%, including \$13 million (1.2% of the original pool balance) in realized losses to date. There are 20 loans remaining in the pool; Fitch has designated nine (57.7%) Fitch Loans of Concern, which includes two specially serviced assets (12.5%).
The largest contributor to expected losses is the Amazon Distribution Center loan (9.6% of the pool), which is secured by a 588,560 square foot (sf) industrial warehouse built in 1996 and located along I-80 in Fernley, Nevada (30 miles east of Reno). The sole tenant, Amazon.com vacated at its May 31, 2015 lease expiration. Per the master servicer, there has been interest in the space; however, there are no prospects at this time.
The next largest contributor to expected losses is the specially-serviced Advance Office Building loan (5.9%), which is secured by a 231,000 sf, 5-story, office building located in Southfield, MI (Detroit MSA). The loan was transferred to special servicing in March 2013 due to the borrower's inability to pay off in full at maturity. The special servicer has filed for foreclosure. Major Tenants include Zamler, Mellen (6% NRA; mat. 2/2016); Radley Corp. (3% NRA; mat. 2/2019). The most recent reported occupancy is 66% as of November 2014. Leases for approximately 18% of the current tenants are on a month to month schedule and the majority of the remaining tenants roll in 2015-2017. An updated rent roll has been requested.
The third largest contributor to expected losses is the specially-serviced 2 Executive Plaza asset (6.6%), a 102,013 sf suburban office property located in Cherry Hill, NJ (Philadelphia/Camden MSA). The collateral is part of the Executive Plaza which has 6 properties with similar structure and characteristics. The decline in performance was a result of the largest tenant (Campbell Soup Co; 30% NRA) vacating at their 2013 lease expiration. The loan transferred to special servicing in January 2013 and foreclosure was completed in September 2013. Per the special servicer, the property sold in the April on-line auction and was scheduled to close in June 4, 2015. The closing has now been rescheduled to July 2, 2015. The property is 35% occupied as of April 2015 with average rent \$20 psf.
RATING SENSITIVITIES
Rating Outlooks on classes C through G are Stable and the Outlook for class H has been revised to Positive due to increasing credit enhancement and continued loan amortization. Upgrades to class H are possible with continued stable performance and increasing credit enhancement. Additional downgrades to the distressed classes (those rated below 'B') are expected as losses are realized.
DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation to this rating action.
Fitch upgrades the following class as indicated:
--\$13 million class G to 'A' from 'BBBsf'; Outlook Stable.
Fitch affirms the following classes and assigns/revises Rating Outlooks and REs as indicated:
--\$15.6 million class C at 'AAAsf'; Outlook Stable;
--\$11.7 million class D at 'AAAsf'; Outlook Stable;
--\$14.3 million class E at 'AAAsf'; Outlook Stable;
--\$10.4 million class F at 'Asf'; Outlook Stable;
--\$15.6 million class H at 'BBsf'; Outlook revised to Positive from Stable;
--\$5.2 million class J at 'BBsf'; Outlook revised to Stable from Negative;
--\$7.8 million class K at 'CCCsf'; RE 25%;
--\$5.2 million class L at 'CCsf'; RE 0%;
--\$3.9 million class M at 'CCsf'; RE 0%;
--\$1.3 million class N at 'Csf'; RE 0%.
The class A-1, A-2, B, and X-2 certificates have paid in full. Fitch does not rate the class NR certificates. Fitch previously withdrew the rating on the interest-only class X-1 certificates.
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