CHICAGO--(BUSINESS WIRE)--Fitch Ratings has assigned the following ratings and Rating Outlooks to the GAHR Commercial Mortgage Trust 2015-NRF, Commercial Mortgage Pass-Through Certificates series 2015-NRF.
--$444,700,000 class A-FL1 'AAAsf'; Outlook Stable;
--$150,000,000 class A-FL2 'AAAsf'; Outlook Stable;
--$119,026,000 class A-FX 'AAAsf'; Outlook Stable;
--$321,446,000 class X-FX* 'AAsf'; Outlook Stable;
--$202,420,000 class B-FX 'AAsf'; Outlook Stable;
--$151,182,000 class C-FX 'Asf'; Outlook Stable;
--$192,171,000 class D-FX 'BBB-sf'; Outlook Stable;
--$215,501,000 class E-FX 'BB-sf'; Outlook Stable;
--$180,000,000 class F-FX 'B-sf'; Outlook Stable.
* Interest-only class X-FX will be equal to the aggregate balances of classes A-FX and B-FX.
Fitch does not rate the $146,378,000 class G-FX and class X-EXT certificates. Fitch has withdrawn its expected ratings on the class X-CP certificate as the capital structure no longer includes this class. The classes above reflect the final ratings and deal structure.
The certificates represent the beneficial interests in the mortgage loan secured by the fee and leasehold interests in 215 medical office and healthcare-related properties totaling approximately 10.5 million sf. The portfolio collateral consists of 142 medical office buildings (51.0% of appraised value), 59 healthcare properties NNN-leased to third party operators (35.2%), and 14 healthcare properties subject to operating leases which are tied directly to free cash flow from the underlying property operations (13.8%). The portfolio's healthcare properties are operated as independent living facilities, skilled nursing facilities (SNFs), senior housing, and Long Term Acute Care Hospitals (LTACHs). The financing, sponsored by NorthStar Realty Finance Corp., was used (along with approximately $1.3 billion in equity) to acquire the U.S. properties associated with its acquisition of Griffin-American Healthcare REIT II, Inc. The loan was originated by Citigroup Global Markets Realty Corp., JPMorgan Chase Bank, National Association, Barclays Bank PLC, and Column Financial, Inc.
KEY RATING DRIVERS
Leverage Metrics: The $1.8 billion mortgage loan has a Fitch Ratings DSCR and LTV of 0.96x and 97.3%, respectively.
Additional Debt: In addition to the trust debt there is a $390 million senior mezzanine loan, a $1 million senior junior mezzanine loan, and a $420.2 million junior mezzanine loan, resulting in a total debt Fitch DSCR and LTV of 0.66x and 141.1%, respectively. All mezzanine loans are fully subordinate to the mortgage loan and are subject to subordination and standstill agreements as well as an intercreditor agreement.
Portfolio Diversity: The 215 property portfolio exhibits significant geographic diversity with assets located in 31 states and no individual state representing more than 10% of total appraised value. The medical office properties are 91.5% occupied by more than 520 tenants. Further, the collateral is diversified among multiple asset types with 49.5% of Fitch NCF attributed to medical office, 23.9% to SNFs, 17.8% to senior housing, and 9.0% to LTACHs.
Fitch found that the pool could withstand a 79.6% decline in appraised value and an approximate 61.5% decrease in the Fitch net cash flow prior to experiencing $1 of loss to any 'AAAsf' rated class.
Fitch evaluated the sensitivity of the ratings of the 'AAAsf' rated classes and found that an 18% decline in Fitch net cash flow (NCF) would result in a one-category downgrade, while a 45% decline would result in a downgrade to below investment grade.
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:
--'Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions' (September 2014);
--'Global Structured Finance Rating Criteria' (August 2014);
--'Rating Criteria for U.S. Commercial Mortgage Servicers' (February 2014);
--'Counterparty Criteria for Structured Finance Transactions and Covered Bonds' (May 2014).
Applicable Criteria and Related Research:
Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions
Global Structured Finance Rating Criteria
Rating Criteria for U.S. Commercial Mortgage Servicers
Counterparty Criteria for Structured Finance Transactions -- Effective 12 March 2012 to 20 May 2012