CHICAGO--(BUSINESS WIRE)--Fitch Ratings has assigned the following ratings and Rating Outlooks to the COMM 2015-3BP Mortgage Trust commercial mortgage pass-through certificates:
--$637,000,000 class A 'AAAsf'; Outlook Stable;
--$637,000,000* class X-A 'AAAsf'; Outlook Stable;
--$81,000,000 class B 'AA-sf'; Outlook Stable;
--$75,000,000 class C 'A-sf; Outlook Stable;
--$100,000,000 class D 'BBB-sf; Outlook Stable;
--$79,178,000 class E 'NR';
--$152,822,000 class F 'NR'.
*Interest-only class X-A is equal to the notional balance of class A.
The certificates represent the beneficial ownership in the issuing entity, the primary asset of which is one loan having an aggregate principal balance of approximately $1.125 billion as of the cutoff date and secured by the fee interests in four office and retail condominium units in Three Bryant Park, an approximately 1.1 million square foot (sf) office and retail building located in the Grand Central submarket of Manhattan. As of November 2014, the property was 96.9% leased by 13 office tenants and five retail tenants, with major tenants including MetLife (35.5% of net rentable area [NRA]), Dechert, LLP (20.1%), Standard Chartered Bank (9.2%), Instinet Group, L.L.C. (8.5%) and Bank of Scotland (5.9%). The loan was originated by German American Capital Corporation (GACC).
KEY RATING DRIVERS
Superior Quality Manhattan Office Building: Three Bryant Park consists of a 41-story, class A office building located within the Grand Central submarket in Midtown Manhattan. The property underwent a $305 million redevelopment between 2007 and 2008 including replacing the exterior facade with a glass curtain wall, modernizing and replacing mechanical systems and renovating the public plaza. Fitch considers the property to be one of Manhattan's highest quality office buildings.
High Quality Tenant Base and Limited Rollover: The property is 96.9% leased to 13 office tenants and five retail tenants. The top five office tenants account for 79.2% of the NRA and include headquarter locations for MetLife (35.5% of NRA and rated 'A'), Dechert (20.1% of NRA) and Standard Chartered Bank (9.2% of NRA and rated 'AA-'). The ground floor retail includes the flagship Manhattan location for Equinox and a newly signed lease to Whole Foods for a 42,818 sf food hall and marketplace concept. Through the 10-year loan term, leases representing 44.7% of the NRA are due to expire.
Loan Structure: Up-front reserves of approximately $42.5 million were provided to address all outstanding tenant improvement and leasing costs, free rents, future rent bumps and rent gap up to Whole Foods' rent commencement. Additionally, the loan includes a hard lockbox with springing cash management.
RATING SENSITIVITIES
Fitch found that the property could withstand a 71.1% decline in value and an approximate 71% decrease in the issuer's net cash flow prior to experiencing $1 of loss to any 'AAAsf' rated class.
Fitch performed several stress scenarios in which the Fitch net cash flow (NCF) was stressed. Fitch determined that a 58.2% reduction in Fitch's NCF would cause the notes to break even at a 1.0x debt service coverage ratio (DSCR), based on the actual debt service.
Fitch evaluated the sensitivity of the ratings for class A (rated 'AAAsf') and found that a 6% decline in Fitch NCF would result in a one category downgrade, while a 31% 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' (June 2012);
--'Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions' (September 2014);
--'Criteria for Special-Purpose Vehicles in Structured Finance Transactions' (May 2012);
--'Counterparty Criteria for Structured Finance and Covered Bonds' (May 2014).
Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389
Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=772328
Counterparty Criteria for Structured Finance and Covered Bonds
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=980054
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