Fitch Affirms COMM 2012-CCRE3
KEY RATING DRIVERS
The affirmations reflect the stable performance of the underlying collateral pool since issuance. As of the July 2015 remittance, the pool has experienced 2.9% collateral reduction. Of the pool balance, 91.5% is reporting 2014 year-end financials and 72.4% of the pool is reporting partial-year 2015 financials.
There is currently one loan in special servicing, representing 1.4% of the current pool balance, which serves as the only Fitch Loan of Concern.
RATING SENSITIVITIES
The Rating Outlook for all classes remains Stable. Due to the recent issuance of the transaction, limited historical servicer reporting and stable performance, Fitch does not foresee positive or negative ratings migration until a material economic or asset level event changes the transaction's portfolio-level metrics.
The largest loan in the pool, 260 and 261 Madison Avenue (10.4% of the pool) is secured by two office properties totalling 923,277 square feet (sf) located in Midtown Manhattan. The loan has a \\$105 million pari-passu note which was securitized in the COMM 2012-CCRE2 transaction. The loan is currently on the servicer's watchlist in relation to a crane accident that occurred in May. During the installation of new air conditioning equipment, a crane malfunctioned which resulted in a 23,000 pound air conditioning unit falling 30 stories to the ground. There were no serious injuries reported, but exterior and interior components of the building were damaged in the fall. The accident occurred on a weekend and the building was open for tenants the following day; however, restoration work continues and there has not been an estimated cost of the damage. The property was 90.4% occupied according to a first-quarter 2015 rent roll and the YE2014 debt service coverage ratio (DSCR) was reported to be 1.75x.
The second largest loan (8.5% of the pool) is secured by Crossgates Mall, a 1.7 million sf (of which, 1.3 million sf is collateral) three-story enclosed mall located in Albany, NY. The property is anchored by Macy's (non-collateral), JC Penney, Lord and Taylor, Dick's Sporting Goods, Forever 21, Burlington Coat Factory and an 18-screen Regal Cinemas. Another previously vacant anchor pad is currently being built out for Latitude 360, an entertainment venue, and should be open for business by YE2015. The whole loan is split between five notes, two of which are securitized in this transaction, two in COMM 2012-CCRE2 and another in COMM 2012-CCRE1. The collateral was 89.1% occupied according to a March 2015 rent roll, and inline sales were reported to be \\$455 psf for the trailing 12 months ending February 2015.
The only loan in special servicing is Landmark Building (1.4% of the pool), which is secured by a 331,361 sf office building in Greenville, SC. The loan was transferred to special servicing in May 2014 after the guarantor filed for bankruptcy. The guarantor is currently working through reorganization and has been cooperative and communicative with the special servicer. The loan is current and the YE2014 DSCR was reported to be 2.0x. An updated appraisal was ordered due to the transfer to special servicer and indicated sufficient equity in the property. Fitch does not anticipate any losses on the loan.
Fitch affirms the following classes as indicated:
--\\$32.7 million class A-1 at 'AAAsf', Outlook Stable;
--\\$155.4 million class A-2 at 'AAAsf', Outlook Stable;
--\\$75.8 million class A-SB at 'AAAsf', Outlook Stable;
--\\$576.3 million class A-3 at 'AAAsf', Outlook Stable;
--\\$118.9 million class A-M at 'AAAsf', Outlook Stable;
--\\$75.1 million class B at 'AA-sf', Outlook Stable;
--\\$26.6 million class C at 'Asf', Outlook Stable;
--\\$0 million class PEZ at 'Asf', Outlook Stable
--\\$26.6 million class D at 'A-sf', Outlook Stable;
--\\$43.8 million class E at 'BBB-sf', Outlook Stable;
--\\$21.9 million class F at 'BBsf', Outlook Stable;
--\\$20.3 million class G at 'Bsf', Outlook Stable;
--\\$959.1* million class X-A at 'AAAsf', Outlook Stable.
*Notional amount and interest only
Fitch does not rate the class H and X-B certificates. The class A-M, B and C certificates may be exchanged for the class PEZ certificates, and the class PEZ certificates may be exchanged for the class A-M, B and C certificates. Fitch rates the class PEZ equivalent to the first loss of the lowest rated class C exchangeable certificates.
DUE DILIGENCE USAGE
No third-party due diligence was provided or reviewed in relation to this rating action.
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