Fitch Affirms GSMS 2013-GC10
KEY RATING DRIVERS
The affirmations of GSMS 2013-GC10 are based on the stable performance of the underlying collateral since issuance. As of the December 2015 distribution date, the pool's aggregate principal balance has been reduced by 6.1% to $807.3 million from $859.4 million at issuance. The pool has experienced no realized losses to date. Per the servicer reporting, there is currently one loan that is both delinquent and in special servicing (0.5% of the pool) and two loans are fully defeased (3% of the pool). Ten loans are considered Fitch Loans of Concern (12.4% of the pool). Interest shortfalls are currently affecting the non-rated class G.
The specially serviced loan (0.5% of the pool) is secured by a 129,112 square foot (sf) neighborhood shopping center located in Eaton, OH. The center is anchored by Kroger (20% net rentable area [NRA] through February 2016) and Tractor Supply Company (33.1% NRA through October 2021). The loan transferred to special servicing on Nov. 4, 2015 for imminent default due to continued noncompliance and unresponsiveness in setting up the cash management account and remitting excess cash flow. Per servicer correspondence, the lender is in discussions with the borrower regarding setting up the cash management account and reinstating the loan. Local counsel has been retained to file for foreclosure and/or receivership, if necessary. Additionally, the loan is 30 days delinquent as of the December 2015 distribution date.
The largest Fitch Loan of Concern (4.1% of the pool) is secured by an 182,181 sf mixed use property with retail and office space located in downtown Portland, OR. The property is leased to CityTarget (48.7% NRA through January 2029), Le Cordon Bleu College of Culinary Arts (43.8% NRA through September 2018), and Brooks Brothers (6.4% NRA through November 2017). According to third party news reports, Le Cordon Bleu will be closing this location by the end of 2017, prior to the tenant's 2018 expiration. An update has been requested from the master servicer regarding the rollover risk associated with Le Cordon Bleu. Year-end (YE) 2014 occupancy and debt service coverage (DSCR) figures from the servicer were not available as of the review date. As of the July 2015 rent roll, the property was 98.9% occupied.
Since the prior review, one loan (2.7% of the original pool balance) has been repaid. The loan, secured by a 353-key full service hotel in downtown Raleigh, NC, was prepaid in July 2015 with a yield maintenance penalty of approximately $1.8 million. The loan balance before prepayment was $21.9 million.
RATING SENSITIVITIES
The Rating Outlooks remain Stable for all classes due to stable performance of the pool 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 agency sensitivity is available in the report 'GS Mortgage Securities Trust 2013-GC10' (May 21, 2013), 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:
--$1.4 million class A-1 at 'AAAsf'; Outlook Stable;
--$35.3 million class A-2 at 'AAAsf'; Outlook Stable;
--$21 million class A-3 at 'AAAsf'; Outlook Stable;
--$110 million class A-4 at 'AAAsf'; Outlook Stable;
--$300.5 million class A-5 at 'AAAsf'; Outlook Stable;
--$81.4 million class A-AB at 'AAAsf'; Outlook Stable;
--$54.8 million class A-S at 'AAAsf'; Outlook Stable;
--$604.3 million class X-A* at 'AAAsf'; Outlook Stable;
--$103.1 million class X-B* at 'Asf'; Outlook Stable;
--$63.4 million class B at 'AAsf'; Outlook Stable;
--$39.7 million class C at 'Asf'; Outlook Stable;
--$34.4 million class D at 'BBB-sf'; Outlook Stable;
--$22.6 million class E at 'BB+sf'; Outlook Stable;
--$16.1 million class F at 'Bsf'; Outlook Stable.
*Notional amount and interest-only.
Fitch does not rate the class G certificates.
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