Fitch Affirms 15 Classes of CGCMT 2013-GC17
KEY RATING DRIVERS
The affirmations of CGCMT 2013-GC17 are based on the stable performance of the underlying collateral since issuance. As of the November 2015 distribution date, the pool's aggregate principal balance has been reduced by 1.8% to \\$851.7 million from \\$867 million at issuance. The pool has experienced no realized losses to date. There have been no specially serviced loans since issuance and no loans are defeased. Three loans are considered Fitch Loans of Concern (2.7% of the pool). There are currently no interest shortfalls to any classes.
The largest loan (10.7% of the pool) is secured by the leasehold interest in a 19-story, 475,708 square foot (sf) newly constructed office building located in the Flats East Bank mixed-use redevelopment project in downtown Cleveland, OH. The property, completed in 2013, was the first new office tower delivered in the Cleveland CBD in over 20 years. As of the September 2015 rent roll, the property was 91.3% leased, with Ernst & Young occupying 29.8% of the building's net rentable area (NRA) through November 2023. Other major tenants include Tucker Ellis and West and OM Group. The servicer-reported occupancy and debt service coverage ratio (DSCR) were 88% and 1.44x, respectively, as of year-end (YE) 2014 compared to 86% and 1.51x at YE 2013. Fitch analyzed the impact of the borrower's recent proposed issuance of an \\$18 million preferred equity position on the loan in the context of the pool.
The second largest loan (9.1% of the pool) is secured by a 371,098 sf newly constructed retail outlet center located in Woodstock, GA, approximately 30 miles north of Atlanta. Completed in July 2013, the property stabilized quickly, and was 92.9% leased to over 90 tenants as of July 2015. Major tenants include Saks Fifth Avenue - Off Fifth, Nike Factory Store, Love Culture, Columbia Sportswear, and Brooks Brothers. The servicer-reported YE 2014 DSCR increased to 1.85x from 1.77x at securitization. Occupancy decreased to 96% from 97.2% during the same period.
The largest Fitch Loan of Concern (1.6% of the pool) is secured by a 155-room limited service hotel located in Willow Grove, PA, approximately 16 miles north of the Philadelphia CBD. The hotel was built in 2002 and includes a fitness center, market pantry, vending area, coin-operated guest laundry facility, indoor pool, and three meeting rooms. The loan has been on the watchlist since October 2014 due to a decline in DSCR since issuance and deferred maintenance. While the deferred maintenance has since been remedied, performance at the property has continued to decline. The servicer-reported YE 2014 DSCR decreased to 1.25x from 1.76x at securitization (TTM Sept. 30, 2013), as occupancy declined to 53% from 69% during the same period. As of YE 2014, the average daily rate (ADR) and revenue per available room (RevPAR) were reported at \\$133 and \\$71, respectively, compared to \\$122 and \\$86 at securitization.
RATING SENSITIVITIES
The Rating Outlooks remain Stable for all classes due to stable performance of the pool since last review and continued paydown. Fitch does not foresee positive or negative ratings migration until a material economic or asset level event changes the transaction's portfolio-level metrics.
Additional information on rating sensitivity is available in the report 'Citigroup Commercial Mortgage Trust 2013-GC17' (Jan. 16, 2014), available at www.fitchratings.com.
DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation to this rating action.
Fitch has affirmed the following ratings:
--\\$30.8 million class A-1 at 'AAAsf'; Outlook Stable;
--\\$193 million class A-2 at 'AAAsf'; Outlook Stable;
--\\$120 million class A-3 at 'AAAsf'; Outlook Stable;
--\\$192.3 million class A-4 at 'AAAsf'; Outlook Stable;
--\\$55.5 million class A-AB at 'AAAsf'; Outlook Stable;
--\\$69.4 million class A-S* at 'AAAsf'; Outlook Stable;
--\\$54.2 million class B* at 'AA-sf'; Outlook Stable;
--\\$33.6 million class C* at 'A-sf'; Outlook Stable;
--\\$157.2 million class PEZ* at 'A-sf'; Outlook Stable;
--\\$42.3 million class D at 'BBB-sf'; Outlook Stable;
--\\$17.3 million class E at 'BBsf'; Outlook Stable;
--\\$8.7 million class F at 'Bsf'; Outlook Stable;
--\\$661 million class X-A** at 'AAAsf'; Outlook Stable;
--\\$54.2 million class X-B** at 'AA-sf'; Outlook Stable;
--\\$17.3 million class X-C** at 'BBsf'; Outlook Stable.
*The class A-S, B and C certificates may be exchanged for class PEZ certificates, and class PEZ certificates may be exchanged for the class A-S, B and C certificates.
**Notional amount and interest-only.
Fitch does not rate the class G and X-D certificates.
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