OREANDA-NEWS. March 21, 2016. Fitch Ratings has placed two classes of COMM 2013-CCRE12 commercial mortgage pass-through certificates on Rating Watch Negative. Fitch has also revised the Rating Outlook to Negative on two classes. A full list of rating actions follows at the end of this ratings action commentary.

KEY RATING DRIVERS

The Rating Watch Negative (RWN) placement and Outlook revision are due to the significant decline in performance and recent transfer to special servicing of three loans totaling \\$23.7 million, or 2.0% of the pool. The three multifamily properties are located in the Bakken shale region of North Dakota, a market that has been severely affected by low oil prices. Fitch analysts recently visited the area to assess the market conditions and the demand for housing. Fitch visited these properties and confirmed the low demand for housing in the area.

The largest specially serviced loan, Roosevelt East Apartments (1.4% of the pool) is secured by a 131-unit garden style multifamily complex in Williston, ND (Bakken Formation). The loan was transferred to the special servicer in October 2015 for imminent default, and subsequently defaulted on the November 2015 payment. A recent draft appraisal indicates property value has declined considerably from issuance. Fitch assumed additional stresses based on the local market conditions and declining occupancy. As of year-end 2015, occupancy declined to 63% from 96% year-end 2014. The loan is listed as in foreclosure.

The second specially serviced loan (0.4%) is Pheasant Ridge A, collateralized by a 42 unit multifamily property located in Watford City, ND. The property's occupancy has declined to 30% per the December 2015 rent roll compared with 95% at year-end 2014. The loan is listed as 30 days delinquent.

The third specially serviced loan (0.2%) is Dakota Apartments A, collateralized by a 32 unit multifamily property located in Stanley, ND. The property's occupancy declined to 50% per the December 2015 rent roll compared with 100% at year-end 2014. The loan is listed as 30 days delinquent.

RATING SENSITIVITIES

The Rating Watch Negative placements are due to the uncertainty of value as updated appraisals are pending. In addition, the special servicer's workout plan is unknown, although a sale of the property in the near term is unlikely due to the depressed market conditions. Downgrades of one category or more are possible to these classes should the updated information exceed conservative estimates. Rating actions are expected in three to six months. The Rating Outlook revision indicates the potential for a negative rating action in the next 1 - 2 years should overall pool performance decline.

DUE DILIGENCE USAGE

No third-party due diligence was provided or reviewed in relation to this rating action.

Fitch places the following ratings on Negative Watch:

--\\$23.9 million class E 'BBsf';
--\\$16.5 million class F 'Bsf'.

Fitch revises the following Rating Outlooks:

--\\$64.3 million class D 'BBB-sf'; Outlook to Negative from Stable;
--\\$193 million* class X-B 'BBB-sf'; Outlook to Negative from Stable.

*Notional amount and interest only.