Fitch Affirms Wells Fargo Commercial Mortgage Trust 2013-C14 Certificates
By Business Wire News
Fitch Ratings has affirmed 19 classes of WFRBS Commercial Mortgage Trust, Series 2013 C14 (WFRBS 2013-C14) due to stable performance since issuance. A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
The affirmations are based on the stable performance of the underlying collateral pool. As of the March distribution, the pool’s aggregate principal balance has been paid down by 1.1% to $1.35 billion from $1.36 billion at issuance. Based on the full year and annualized 2014 reported net operating income (NOI) of 98.6% of loans, the pool’s overall NOI was 6.3% greater than at issuance.
There is currently one delinquent, specially serviced loan (1.0%) and one additional Fitch Loan of Concern (0.26%). There are four loans on the servicer watchlist, two of which are encountering occupancy issues but represent minimal asset risk as property-level cashflow is sufficient to cover debt service. The remaining two (0.43%) are manufactured housing communities that are experiencing decreased net operating income attributable to higher vacancy rates due to seasonality.
The specially serviced loan, 540 Atlantic Avenue (1% of the pool), is a 68,932 square foot office building located in Brooklyn, NY. The loan was transferred to the special servicer in December 2014 after underperforming since issuance due to a tenant not taking possession of a first floor restaurant space. The physical occupancy of the building reached a low of 61% during the last year with a debt service coverage ratio (DSCR) of 0.83x. The sponsor secured two tenants during the second half of the year which raised the economic occupancy to 78% as of December 2014. The special servicer is reviewing the recently executed leases and evaluating the property before determining a resolution strategy.
The second Fitch Loan of Concern is the Crystal Lake Plaza (0.26%), an anchored retail property located in Orlando, FL. The property was fully occupied as of December 2013 with a DSCR of 1.75x. A tenant exercised a 2014 lease termination and vacated during the fourth quarter. The sponsor decided to self-manage the asset without lender consent, violating a loan covenant. The sponsor has been unresponsive to servicer requests during the last year and failed to produce year-end operating financials. Fitch will continue the monitor the loan as the master servicer secures more property-level information and resolves current management issues.
The largest loan of the pool is secured by RHP Properties Portfolio III (8.8% of the pool), a portfolio of 12 manufactured housing communities consisting of 3,312 home pads located in five different states. The loan is sponsored by a joint venture of RHP properties and Northstar Realty Finance. RHP has an extensive history of managing manufactured housing communities and is the second largest private owner-operator of the asset class with a total portfolio value in excess of $1 billion. The properties are primarily located in secondary markets. The communities feature a range of amenities that include playgrounds, swimming pools, and club houses. Performance of the portfolio has historically been stable and the portfolio level occupancy was listed at 86% as of year-end 2014.
The Rating Outlook for all classes remains Stable. Due to the recent issuance of the transaction and stable performance, 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 ‘WFRBS Commercial Mortgage Trust 2013-C14’ (May 14, 2013), available at ‘www.fitchratings.com‘.
Fitch affirms the following classes:
— $46.4 million Class A-1 at ‘AAAsf’; Outlook Stable;
— $48.2 million Class A-2 at ‘AAAsf’; Outlook Stable;
— $55 million Class A-3 at ‘AAAsf’; Outlook Stable;
— $160 million Class A-4 at ‘AAAsf’; Outlook Stable;
— $437.7 million Class A-5 at ‘AAAsf’; Outlook Stable;
— $55 million#, a Class A-3FL at ‘AAAsf’; Outlook Stable;
–$0.0a million Class A-3FX ‘AAAsf’; Outlook Stable;
— $160 million#, a Class A-4FL at ‘AAAsf’; Outlook Stable;
— $0.0a million Class A-4FX ‘AAAsf’; Outlook Stable;
— $116.2 million Class A-SB at ‘AAAsf’; Outlook Stable;
— $108.4b million Class A-S at ‘AAAsf’; Outlook Stable;
— $1.1* billion Class X-A at ‘AAAsf’; Outlook Stable;
— $102.9* million Class X-B at ‘AA-sf’; Outlook Stable;
— $102.9b million Class B at ‘AA-sf’; Outlook Stable;
— $53.3b million Class C at ‘A-sf’; Outlook Stable;
— $264.5b million Class PEX at ‘A-sf’; Outlook Stable;
— $77.2a million Class D at ‘BBB-sf’; Outlook Stable;
— $25.7a million Class E at ‘BBsf’; Outlook Stable;
— $16.5 million Class F at ‘Bsf’; Outlook Stable.
Fitch does not rate class G or the interest-only class X-C.
# Floating rate.
* Notional amount and interest-only.
a Privately placed pursuant to Rule 144A.
b Class A-S, B, and C certificates may be exchanged for Class PEX certificates; and Class PEX certificates may be exchanged for Class A-S, B, and C certificates.
Additional information is available at ‘www.fitchratings.com‘.
Applicable Criteria and Related Research:
— ‘Global Structured Finance Rating Criteria’ (March 2015);
— ‘U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria’ (Dec. 10, 2014).
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 reports:
— ‘WFRBS Commercial Mortgage Trust 2013-C14’ (May 14 2013).
— ‘WFRBS Commercial Mortgage Trust 2013-C14 — Appendix’ (May 14 2013).
Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria
Fitch Ratings, Inc.
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