Fitch Affirms GS Mortgage Securities Trust 2013-G1
KEY RATING DRIVERS
The affirmations reflect the relatively stable performance of the assets in the pool. Fitch reviewed the most recently available rent rolls and financial performance of the collateral. Full year 2014 and year-to-date (YTD) March 31, 2015 performance data for all three malls were provided.
As of the August 2015 distribution date, the pool's aggregate certificate balance declined by 3.4% to \\$549.5 million from \\$569 million from issuance due to scheduled amortization. The transaction consists of three mortgage loans secured by the Great Lakes Crossing Outlets (Great Lakes), located in Auburn Hills, MI; Deptford Mall (Deptford) in Deptford, NJ; and Katy Mills Mall (Katy Mills), in Katy, TX. All three malls are sponsored by large national real estate investment trusts focused on regional and super-regional shopping centers.
Great Lakes (39.0% of the pool) is a 1.4 million square foot (sf) super-regional mall/outlet center anchored by Outdoor World, AMC Theater, Burlington Coat Factory, and The Sports Authority. Collateral consists of 1.1 million sf, which excludes Outdoor World and AMC Theater. The servicer reported occupancy for the collateral space improved to 98.4% as of Mar. 31, 2015 from 94.1% at issuance. Upcoming rollover for the collateral space includes 2.0% for the remainder of 2015 and 3.5% in 2016. Total sales for the collateral space excluding the anchors and tenants greater than 14,000 sf remained relatively flat at \\$400 psf at year-end (YE) 2014 and YE 2013. Servicer-reported Net Cash Flow (NCF) debt service coverage ratio (DSCR) YE 2014 improved to 2.21x as of YE 2014 compared to 2.16x at issuance.
Deptford (35.5%) is a 1.0 million sf regional mall anchored by Macy's, JC Penney, Sears and Boscov's. Collateral for the loan consists of 343,910 sf of in-line space, which excludes the four anchor tenants. The servicer reported occupancy for the collateral space declined to 83.0% as of June 2015 from 96.0% at YE 2014 primarily due to the loss of multiple tenants after their leases expired during the first half of 2015.
Additionally Charlotte Russe, New York & Company and Express/Express Men collectively reduced their respective spaces, representing a 3.3% vacancy loss. Two newly executed leases are scheduled to commence in November 2015, including a new H&M store (6.5%), and are expected to raise occupancy to approximately 90%. Sales for tenants open for more than one year and less than 10,000 sf remained relatively flat at \\$516 psf at YE 2014 and YE 2013. Upcoming tenant rollover includes 4.1% for the remainder of 2015 and 5.8% in 2016. Per the master servicer, the Borrower indicated multiple leases were under negotiations and the recent leasing activity at the mall is a result of its remerchandising plan for the property. YE 2014 servicer reported NCF DSCR adjusted for recent leasing activity is 1.58x and below issuance DSCR of 1.67x. Fitch will continue to monitor the mall's performance as leasing updates are received.
Katy Mills (25.5% of the pool) is a 1.6 million sf, regional, mall/outlet center whose major tenants include the following: Bass Pro Shops Outdoor, AMC Theaters, Marshalls, Burlington Coat Factory, Bed Bath & Beyond, Marshalls and Off-Fifth Saks Fifth Avenue. Collateral consists of 1.2 million sf, which excludes Wal-Mart and 12 additional outparcels. The servicer reported occupancy for the collateral space improved to 95.9% as of March 31, 2015 compared to 88.9% at issuance. Upcoming tenant rollover for the collateral includes 1.9% for the remainder of 2015 and 3.2% in 2016. Sales for tenants less than 10,000 sf were a reported \\$445 psf at YE 2014 compared to \\$413 psf as of YE 2013. Servicer-reported NCF DSCR improved to 4.74x as of YE 2014 compared to 4.38x at issuance.
RATING SENSITIVITIES
The Rating Outlook for all classes remains Stable. No rating actions are anticipated unless there are material changes in property performance or cash flow. Fitch will continue to monitor each mall's performance, including the volatility at Deptford.
DUE DILIGENCE USAGE
No third-party due diligence was provided or reviewed in relation to this rating action.
Fitch has affirmed the following classes:
--\\$65.9 million class A-1 at 'AAAsf'; Outlook Stable;
--\\$295.7 million class A-2 at 'AAAsf'; Outlook Stable;
--Interest only class X-A at 'AAAsf'; Outlook Stable;
--\\$76.0 million class B at 'AA-sf'; Outlook Stable;
--\\$49.7 million class C at 'A-sf'; Outlook Stable;
--\\$38.3 million class D at 'BBB-sf'; Outlook Stable;
--\\$24.0 million class DM* at 'BBsf'; Outlook Stable.
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