Fitch Assigns Final Ratings to Aventura Mall Trust 2013-AVM, Series 2013-AVM P-T Certs

CHICAGO--()--Fitch Ratings has assigned the following ratings and Rating Outlooks to the Aventura Mall Trust 2013-AVM commercial mortgage pass-through certificates:

--$747,000,000 class A 'AAAsf'; Outlook Stable;

--$138,000,000 class B 'NR';

--$101,000,000 class C 'NR;

--$94,000,000 class D 'NR';

--$120,000,000 class E 'NR'.

Although Fitch assigned expected ratings to classes X-A and X-B, they are no longer part of the final structure of this transaction and have been withdrawn.

The certificates represent the beneficial ownership in the trust, the primary asset of which is one loan having an aggregate principal balance of approximately $1.2 billion as of the cutoff date and secured by the Aventura Mall, a 2.1 million sf (collateral consisting of approximately 1 million sf of space owned by the borrower and approximately 900,000 sf of space on ground leases to anchor tenants) super-regional mall located in Aventura, FL. The property is anchored by Bloomingdales, Macy's Home & Men, Macy's, Nordstrom, (all on ground leases), Sears (non-owned) and JC Penney. The collateral is approximately 99.8% leased by over 230 tenants. As of the trailing 12 months ended August 2013, the mall reported comparable in-line sales and occupancy costs of $1,750 psf and 9.3%, respectively. The loan was originated by JP Morgan Chase Bank, National Association, German American Capital Corporation, Morgan Stanley Mortgage Capital Holdings LLC and Wells Fargo Bank, National Association.

KEY RATING DRIVERS

Strong Asset Quality: The property received a Fitch property quality grade of 'A'. The interior of the mall is in above-average condition, with the sponsors having spent $131 million on the renovation and expansion completed in 2008, adding the 167,000-sf Nordstrom, 160,392 sf of in-line space and a four-level parking structure. The mall is surrounded by affluent residential neighborhoods such as Turnberry Isle, Porto Vita and Waterways of Biscayne Bay.

Outstanding Sales: Aventura Mall features a diverse tenant mix that generated total sales of approximately $1.4 billion in 2012. As of year-end 2012, anchor sales were estimated to be over $452 million, with each anchor achieving annual aggregate sales greater than their respective national chain averages. For the trailing 12 month (TTM) period ended August 2013, comparable in-line sales psf were $1,750, the highest in-line sales figure for any regional mall rated by Fitch.

Low Occupancy Costs: For the TTM ended August 2013, occupancy costs were 9.3%. For comparable trophy caliber malls with sales exceeding $1,000 psf, occupancy costs are typically between 15%?20%.

Mall Draws from a Diverse Customer Base: Approximately 40% of the customer base resides outside the trade area, and 33% of shoppers are regional day trippers or tourists. The mall is the second most visited mall behind the Mall of America, with over 28 million visitors a year. The mall generates high demand from a wealthy customer base from South America, Canada and Europe.

Experienced Ownership and Management: The loan is sponsored jointly by Turnberry Retail Holding, L.P. (66.7%) and Simon Property Group, L.P. (33.3%). The property has been operated and managed by Turnberry Development, LLC since being built in 1983.

RATING SENSITIVITIES

Fitch performed several stress scenarios in which the Fitch NCF was stressed. Fitch determined that a 52.7% reduction in Fitch's NCF would cause the notes to break even at a 1.0x DSCR, based on the actual debt service.

Fitch evaluated the sensitivity of the ratings for class A and a 5.2% decline in Fitch NCF would result in a one category downgrade, while a 29.6% decline would result in a downgrade to below investment grade. The Rating Sensitivity section in the presale report includes a detailed explanation of additional stresses and sensitivities.

Key Rating Drivers and Rating Sensitivities are further described in the accompanying presale report. The presale report is available to all investors on Fitch's web site 'www.fitchratings.com'.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 2013);

--'Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions' (September 2013);

--'U.S. Commercial Mortgage Servicer Rating Criteria' (February 2011);

--'Counterparty Criteria for Structured Finance and Covered Bonds' (May 2013).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=718468

U.S. Commercial Mortgage Servicer Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=584005

Counterparty Criteria for Structured Finance and Covered Bonds

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=707155

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=812909

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts

Fitch Ratings
Primary Analyst
Jeff Watzke
Senior Director
+1-312-606-2358
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60602
or
Secondary and Surveillance Analyst
Darren Liss
Director
+1-212-908-0753
or
Committee Chairperson
Eric Rothfeld
Managing Director
+1-212-908-0761
or
Media Relations:
Elizabeth Fogerty, New York, +1 212-908-0526
Email: elizabeth.fogerty@fitchratings.com

Sharing

Contacts

Fitch Ratings
Primary Analyst
Jeff Watzke
Senior Director
+1-312-606-2358
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60602
or
Secondary and Surveillance Analyst
Darren Liss
Director
+1-212-908-0753
or
Committee Chairperson
Eric Rothfeld
Managing Director
+1-212-908-0761
or
Media Relations:
Elizabeth Fogerty, New York, +1 212-908-0526
Email: elizabeth.fogerty@fitchratings.com