CHICAGO--(BUSINESS WIRE)--Fitch Ratings has affirmed 20 classes of Wachovia Bank Commercial Mortgage Trust, 2005-C22 commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
The affirmations are due to stable performance and modeled losses consistent with those modeled at the last rating action. Fitch modeled losses of 12% of the remaining pool; expected losses on the original pool balance total 14%, including $121.6 million (4.8% of the original pool balance) in realized losses to date. Fitch has designated 15 loans (16.6%) as Fitch Loans of Concern, which includes six specially serviced assets (14%).
As of the March 2014 distribution date, the pool's aggregate principal balance has been reduced by 23.2% to $1.95 billion from $2.53 billion at issuance. Per the servicer reporting, two loans (0.5% of the pool) are defeased. Interest shortfalls are currently affecting classes G through Q.
The largest contributor to expected losses is the specially serviced Westin Casuarina Hotel & Spa loan (7.1% of the pool), which is secured by an 826-room full-service hotel located a quarter of a mile east of the Las Vegas Strip. The loan was transferred to special servicing in March 2010 for imminent default. Property performance declined as a result of decreased tourism and travel in the Las Vegas market. A receiver was appointed in October 2011. Servicer reported trailing 12-month (TTM) occupancy as of February 2014 was 82.4%, up from 80.2% the prior year, with an average daily rate (ADR) of $91.21, up from $87.38 the prior year, and revenue per room (RevPAR) of $75.13, up from $70.04 the prior year. While improving year-over-year, the property remains challenged against its competitive set and cash flow is below break-even. A renewal of the franchise agreement with Starwood Hotels is in process.
The next largest contributor to expected losses is the specially serviced Birtcher Phoenix Pool loan (2%), which is secured by five office buildings totaling 225,528 sf in Phoenix, AZ. The loan transferred to the special servicer in March 2011 due to monetary default. A receiver was appointed in August 2011 and the properties were foreclosed on in October 2011. Originally a seven-property portfolio, two of the properties were sold in July 2013. The remaining properties are 68% occupied. Fitch's analysis indicates the property is leased at below-market rents. Market conditions in the Phoenix area remain challenged with REIS reporting Class B/C office vacancy at 26.7% as of year-end 2013. The special servicer is currently evaluating the method of disposition for the remaining assets.
The third largest contributor to expected losses is the specially serviced River City Renaissance Pool loan (1.3%), which is secured by 362 multifamily units across 23 renovated buildings in Richmond, VA. The loan transferred to special servicing in January 2014 due to monetary default and a receiver was appointed in March 2014. A press release issued from the U.S. Attorney's Office for the Eastern District of Virginia dated Dec. 19, 2013 indicates the loan's sponsor pleaded guilty for his role in stealing over $12 million from federal and state tax credit programs that are designed to promote the rehab of historic buildings in the Richmond area. The special servicer is proceeding with foreclosure. Fitch analyzed the most recent cash flow statements for the property and derived a projected debt service coverage ratio of 0.56x as of year-end 2013.
Rating Outlooks on classes A-4 through A-M remain Stable due to increasing credit enhancement and continued paydown. The Rating Outlook on class A-J remains Negative as further declines in collateral performance could cause downgrades.
Fitch affirms the following class and revises REs as indicated:
--$22.2 million class B at 'CCCsf', RE 30%.
Fitch affirms the following classes as indicated:
--$41.8 million class A-PB at 'AAAsf', Outlook Stable;
--$941 million class A-4 at 'AAAsf', Outlook Stable;
--$324.8 million class A-1A at 'AAAsf', Outlook Stable;
--$253.4 million class A-M at 'Asf', Outlook Stable;
--$152 million class A-J at 'Bsf', Outlook Negative;
--$31.7 million class C at 'CCsf', RE 0%;
--$25.3 million class D at 'Csf', RE 0%;
--$47.5 million class E at 'Csf', RE 0%;
--$31.7 million class F at 'Csf', RE 0%;
--$28.5 million class G at 'Csf', RE 0%;
--$28.5 million class H at 'Csf', RE 0%;
--$16.7 million class J at 'Dsf', RE 0%;
--$0 class K at 'Dsf', RE 0%;
--$0 class L at 'Dsf', RE 0%;
--$0 class M at 'Dsf', RE 0%;
--$0 class N at 'Dsf', RE 0%;
--$0 class O at 'Dsf', RE 0%;
--$0 class P at 'Dsf', RE 0%.
The class A-1, A-2, A-3 and A-PB certificates have paid in full. Fitch does not rate the class Q certificates. Fitch previously withdrew the rating on the interest-only class IO certificates.
Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 11, 2013 report, 'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria', which is available at 'www.fitchratings.com' under the following headers:
Structured Finance >> CMBS >> Criteria Reports
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (May 24, 2013);
--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 11, 2013).
Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria