Fitch Affirms COMM 2012-CCRE5
KEY RATING DRIVERS
The affirmations are based off the continued stable performance of the underlying pool collateral. As of the October 2015 distribution date, the pool's aggregate principal balance has been reduced by 5.1% to \\$1.08 billion from \\$1.13 billion at issuance. Per the servicer reporting, three loans (3.4% of the pool) are defeased. Interest shortfalls are currently affecting class H. The pool has experienced no realized losses to date. Fitch has designated two loans (5.6%) as Fitch Loans of Concern, which does not include any specially serviced loans.
The largest loan in the pool (8.4%) is the Eastview Mall and Commons loan, which is secured by two adjacent retail properties located in Victor, NY. The Eastview Mall is a 1.37 million square foot (sf) regional mall (725,303 sf of collateral) and the Eastview Commons is a 341,871 sf (86,368 sf of collateral) power center. The transaction interests represent the A-2 note, which is pari passu to the A-1 note that is securitized in COMM 2012-CR4. Per servicer reporting, the properties experienced an increase in the debt service coverage ratio (DSCR) to 2.14x as of year-end (YE) 2014 from 1.88x as of YE 13. The combined occupancy at the properties was 95% as of YE 14.
The second largest loan, Harmon Corner loan (6.6% of the pool), is secured by 66,833 square foot (sf) portion of a 110,000 sf retail center located along the Strip in Las Vegas, NV. The transaction interest represents the A-1 note, which is pari passu with an A-2 note that is securitized in transaction COMM 2013-LC6. The A-1 note represents the controlling piece. Per servicer reporting, the debt service coverage ratio (DSCR) decreased to 1.18x for year-end (YE) 2014 from 1.41x YE 13. The drop was a result of decreased occupancy at the property during the reported period.
The largest Fitch Loan of Concern is the Holiday Village Mall loan (2.5%), which is secured by a 576,987 sf (494,928 sf which is collateral) indoor regional mall located in Great Falls, MT. The mall is anchored by Scheel's Sports, Sears, JC Penney, and Herberger's (non-collateral). On Dec. 7, 2014, the master servicer was notified that Sears, which represents 15% of the net rentable area (NRA), would be closing their store. The Mall's occupancy is expected to drop to 75%. Fifteen tenants (31.5% NRSF) have some form of a co-tenancy clause that is tied to the closing of one or more of the department stores and/or occupancy thresholds between 50%-65% of the in-line (including junior anchors) occupancy. Some of the tenant's occupancy thresholds are tied to overall occupancy, including anchors. Scheel's (99,279 sf, 20% NRSF) and Bed Bath & Beyond (20,405 sf, 4.12% NRSF) make up the majority of the square footage having co-tenancy clauses. Scheel's can vacate after one year if more than two tenants, including JC Penney, Sears, Herberger's or Ross Dress for Less, close for 180 days and sales decrease by 15%. Bed Bath & Beyond can vacate after a year if 50% of the total of all tenants cease to be open. There is approximately 5% upcoming rollover in the next year. Per servicer reporting, the DSCR for the property was 2.04x as of YE 14 compared to 2.19x as of YE 13. According to the September 2014 rent roll, the property is 89% occupied.
RATING SENSITIVITIES
The Rating Outlooks for all classes remain Stable. No rating changes are expected unless there is material performance deterioration or loans become specially serviced. Fitch will continue to monitor the performance of the Holiday Village Mall and the impact of the Sears store closing. Additional information on key rating drivers and rating sensitivities are further described in the new issue report COMM 2012-CCRE5 (Jan. 3, 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:
--\\$27.6 million class A-1 at 'AAAsf'; Outlook Stable;
--\\$159.8 million class A-2 at 'AAAsf'; Outlook Stable;
--\\$90.9 million class A-SB at 'AAAsf'; Outlook Stable;
--\\$100 million class A-3 at 'AAAsf'; Outlook Stable;
--\\$357.6 million class A-4 at 'AAAsf'; Outlook Stable;
--\\$859.1 million class X-A at 'AAAsf'; Outlook Stable;
--\\$52.4 million class X-B at 'AAsf'; Outlook Stable;
--\\$123.3 million class A-M at 'AAAsf'; Outlook Stable;
--\\$52.4 million class B at 'AAsf'; Outlook Stable;
--\\$211.1 million class PEZ at 'Asf'; Outlook Stable;
--\\$35.4 million class C at 'Asf'; Outlook Stable;
--\\$22.7 million class D at 'BBB+sf'; Outlook Stable;
--\\$32.6 million class E at 'BBB-sf'; Outlook Stable;
--\\$21.3 million class F at 'BBsf'; Outlook Stable;
--\\$18.4 million class G at 'Bsf'; Outlook Stable.
Fitch does not rate the class H 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.
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