Fitch Affirms GS Mortgage Securities Trust 2013-GCJ12
OREANDA-NEWS. Fitch Ratings has affirmed 13 classes of GS Mortgage Securities Trust 2013-GCJ12 commercial mortgage pass-through certificates, series 2013-GCJ12. A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
The affirmations are based on stable performance of the underlying collateral pool since issuance. As of the March 2016 distribution date, the pool's aggregate principal balance has been reduced by 3.8% to $1.153 billion from $1.197 billion at issuance. Five loans (12.7% of the pool) are on the master servicer's watch list, one of which Fitch considers a Loan of Concern (FLOC). Currently there is one specially-serviced loan that accounts for 0.8% of the pool.
The specially-serviced loan is secured by two flagged limited service hotels with a total of 155 rooms. One hotel has 73 rooms and is located in Scott, LA, and the second has 82 rooms and is located in Grenada, MS. The loan transferred to special servicing in May 2015 due to payment default. The loan trigger was met for full cash management, and the lockbox will remain hard until all defaults are settled/cured. The special servicer is continuing to dual track the workout; however, per the servicer the borrower is close to accepting final terms for a forbearance agreement mandated by the lender. As of year-end (YE) 2014, portfolio occupancy, RevPAR, and DSCR were 69.1%, $63.93, and 1.93x, respectively.
The third largest loan in the pool (5.2%), Eagle Ridge Village, is an FLOC secured by a 648-unit, 87-acre apartment community. The property is located in Evans Mills, NY, less than 80 miles north of Syracuse, NY and approximately one mile west of Fort Drum, a U.S. Army base. Occupancy at issuance was 98.6% (as of December 2012); however, performance has declined with occupancy at 53% and DSCR at 0.94x as of YE 2015. The property primarily serves as off-base military housing, and therefore is impacted by leasing volatility; as per federal law soldiers can terminate any lease with 30-day notice upon receipt of deployment orders. Per the servicer, Fort Drum reported military personnel cut backs of over 2,000 in addition to 3,300 currently deployed. In years past soldiers were free to choose their own housing, but more recently soldiers have been asked to live on base in order to minimize vacancy. In addition, roughly 700 units were added to the market in 2014 creating added leasing challenges.
RATING SENSITIVITIES
Rating Outlooks on classes A-1 through D remain Stable. The Negative Outlooks on classes E and F reflect the potential for future downgrades should Eagle Ridge Village continue to underperform. Upgrades to classes B through D are not expected in the near-term as performance has been relatively stable since issuance. Additional information on rating sensitivity is available in the report 'GS Mortgage Securities Trust 2013-GCJ12' (Aug. 5, 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 and revised Outlooks as indicated:
--$39.7 million class A-1 at 'AAAsf'; Outlook Stable;
--$134.2 million class A-2 'AAAsf'; Outlook Stable;
--$200 million class A-3 'AAAsf'; Outlook Stable;
--$313.8 million class A-4 'AAAsf'; Outlook Stable;
--$105.5 million class A-AB 'AAAsf'; Outlook Stable;
--$80.8 million class A-S 'AAAsf'; Outlook Stable;
--$86.8 million class B 'AA-sf'; Outlook Stable;
--$55.4 million class C 'A-sf'; Outlook Stable;
--$49.4 million class D 'BBB-sf'; Outlook Stable;
--$32.9 million class E 'BBsf'; Outlook to Negative from Stable;
--$12 million class F 'Bsf'; Outlook to Negative from Stable;
--$874.2 million* class X-A 'AAAsf'; Outlook Stable;
--$142.2 million* class X-B 'A-sf'; Outlook Stable.
*Notional amount and interest only.
Fitch does not rate the interest-only class X-C or class G certificates.
A comparison of the transaction's Representations, Warranties, and Enforcement (RW&E) mechanisms to those of typical RW&Es for the asset class is available in the following report:
--'GS Mortgage Securities Trust 2013-GCJ12-- Appendix' (Aug. 5, 2013).
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