Kroll Bond Rating Agency Assigns Final Ratings to GSMS 2012-BWTR

NEW YORK--()--Kroll Bond Rating Agency (KBRA) assigned its final ratings to six classes of GSMS 2012-BWTR, a $300.0 million CMBS single borrower transaction. Concurrently, we have withdrawn our preliminary ratings on the certificates, which were assigned on December 7, 2012 (see our ratings listed below).

The transaction is collateralized by a single, non-recourse, first lien mortgage loan. The loan is secured by the borrower’s fee simple interest in 546,411 sf of an 898,762 sf, three story super-regional mall known as Bridgewater Commons and an adjacent 93,799 sf lifestyle center known as The Village at Bridgewater (the “Property”). The Property is located in Bridgewater, New Jersey and features over 150 major and in-line tenants that are predominately leased to national retailers. The mall is anchored by Bloomingdale’s, Lord & Taylor and Macy’s. Lord & Taylor and Macy’s own their improvements and the underlying land.

The mall is indirectly owned by Four State Properties, LLC (“Sponsor”), a joint venture between GGP Limited Partnership, an affiliate of General Growth Properties, Inc. (“GGP”), which owns 35% of the Sponsor, and Fourmall Acquisition, LLC, which owns 65% of the Sponsor. Fourmall Acquisition, LLC is a joint venture between the New York State Teachers’ Retirement System and the Commingled Pension Trust Fund of JPMorgan Chase Bank, National Association, which is managed by JPMorgan Asset Management – Global Real Assets. The Property is managed by General Growth Management, Inc., an affiliate of GGP. The collateral was 97.9% occupied as of September 30, 2012. Comparable in-line sales were $782 per sf for the trailing 12 months ending August 2012, resulting in an occupancy ratio of 14.2%.

KBRA’s analysis of the transaction included a detailed evaluation of the property’s cash flow using our CMBS Property Evaluation Guidelines, and the application of our CMBS Single Borrower and Large Loan Rating Methodology. The results of our analysis yielded a KBRA Net Cash flow (KNCF) of $31.4 million. To value the property, we applied a 7.25% capitalization rate to arrive at a KBRA value of $433.0 million. Our resulting KBRA Loan to Value (KLTV) was 69.3%. In our analysis of the transaction, we also reviewed and considered third party engineering and environmental reports, as well as our own on-site inspection of the property and the competition.

For complete details on the analysis, please see our presale report, GSMS 2012-BWTR, published at www.krollbondratings.com.

Final Ratings Assigned: GSMS 2012-BWTR

Class       Expected Rating       Balance (US$)
A       AAA (sf)       $217,590,000
X-A*       AAA (sf)       $217,590,000
X-B*       AAA (sf)       $39,410,000
B       AA- (sf)       $39,410,000
C       A- (sf)       $28,700,000
D       BBB (sf)       $14,300,000
* Notional Amount            

Related publications (available at www.krollbondratings.com):

CMBS: GSMS Trust 2012-BWTR 17g-7 Disclosure Report

CMBS Single Borrower and Large Loan Rating Methodology

CMBS Property Evaluation Guidelines, published June 10, 2011

About Kroll Bond Rating Agency

KBRA was established in 2010 by Jules Kroll to restore trust in credit ratings by creating new standards for assessing risk and by offering accurate, clear and transparent ratings. KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).

Contacts

Kroll Bond Rating Agency
Yee Cent Wong, 646-731-2374
ywong@krollbondratings.com
or
Keith Kockenmeister, 646-731-2349
kkockenmeister@krollbondratings.com

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Contacts

Kroll Bond Rating Agency
Yee Cent Wong, 646-731-2374
ywong@krollbondratings.com
or
Keith Kockenmeister, 646-731-2349
kkockenmeister@krollbondratings.com