Fitch Affirms UBS Commercial Trust 2012-C1

CHICAGO--()--Fitch Ratings has affirmed 11 classes of UBS Commercial Trust 2012-C1 (UBS 2012-C1) commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The affirmations of UBS 2012-C1 are based on the stable performance of the underlying collateral pool. As of the February remittance, three loans (1.3%) are in special servicing, with one additional loan in process of transferring (0.5%). Fitch has designated these four loans (1.8%) as Fitch Loans of Concern.

As of the February 2015 distribution date, the pool's aggregate principal balance has been paid down by 3.7% to $1.28 billion from $1.33 billion at issuance. Per the servicer reporting, one loan (0.3% of the pool) is defeased.

The largest loan of the pool (9.4%) is secured by the Dream Hotel Downtown Net Lease Property, which consists of the fee and leasehold interest in a 25,300-sf block parcel as well as the 12-story, 315-room luxury boutique hotel which resides on the parcel and which is subject to two net leases. The property is located in the Chelsea neighborhood of the Meatpacking District of NYC, was built in 1966 and renovated in 2011. The two co-terminus master leases have 99 years remaining. Monthly lease payments under the two net leases provide the sole source of cash flow for the payment of debt service on the subject loan. In the first quarter of 2014, the loan was assumed by an affiliate of the Chatwal family, also an affiliate of the hotel operator. As a condition of the assumption, a collateral reserve was established providing for one year of interest-only debt service reserve. As of year-end 2012, the net operating income (NOI) from hotel operations provided for 1.82x coverage on the ground lease payments; however, the coverage ratio declined to 1.39x as of year-end 2013 and 1.36x as of year-end 2014 according to hotel operating statements. In the event of a default under the net lease payments, the sponsor may take possession of hotel operations.

The second largest loan (7.1%) is secured by the Civic Opera House, a 44-story, 916,258-sf historically landmarked office building located in the Chicago CBD. At issuance the property was 74.8% occupied. The loan has been on the servicer watchlist due to occupancy being adversely affected by a multi-year road construction project in front of the property. The most recent servicer reporting is updated through June 30, 2014, with the property reporting occupancy at 88% and a debt service coverage ratio (DSCR) of 1.18x. Fitch expects the year-end 2014 financial reporting to reflect a further increase in the (DSCR) as the property achieves stabilization. The tenant roster at the property is diverse with no significant rollover.

Given the recent transfer of the four specially-serviced loans (1.8%), limited information is available about the collateral and performance concerns. Three of the loans (1.3%) are a portfolio of three Holiday Inn Express limited-service hotels located in Cicero, Warners, & East Syracuse, NY. Per the year-end 2013 servicer reporting, all had stable occupancy and cash flow in line with issuance. The fourth loan (0.5%) is an office building with ground-level retail located in the River North neighborhood of the Chicago CBD. No financial information has been reported on this loan since issuance. Fitch will continue to monitor these loans.

RATINGS SENSITIVITIES

All classes maintain Stable Outlooks, due to the overall stable performance of the pool. Additional information on rating sensitivity is available in the report UBS Commercial Mortgage Trust 2012 - C1' (April 19, 2012), available at www.fitchratings.com.

Fitch affirms the following classes:

--$23.1 million class A-1 at 'AAAsf'; Outlook Stable;

--$105.7 million class A-2 at 'AAAsf'; Outlook Stable;

--$657.2 million class A-3 at 'AAAsf'; Outlook Stable;

--$96 million class A-AB at 'AAAsf'; Outlook Stable;

--$113.1 million class A-S at 'AAAsf'; Outlook Stable;

--$66.5 million class B at 'AAsf'; Outlook Stable;

--$49.9 million class C at 'Asf'; Outlook Stable;

--$74.9 million class D at 'BBB-sf'; Outlook Stable;

--$26.6 million class E at 'BBsf'; Outlook Stable;

--$23.3 million class F at 'Bsf'; Outlook Stable;

--$995 million interest-only class X-A at 'AAAsf'; Outlook Stable.

Fitch does not rate the interest-only class X-B or the $44.9 million class G certificates.

A comparison of the transaction's Representations, Warranties, and Enforcement (RW&E) mechanisms to those of typical RW&Es for the asset class is available in the following report:

--'UBS Commercial Mortgage Trust 2012-C1 -- Appendix' (January 2014).

Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 10, 2014 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' (Aug 4, 2014);

--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 10, 2014);

--'UBS Commercial Mortgage Trust 2012 - C1' (April 19, 2012);

--'UBS Commercial Mortgage Trust 2012 - C1 Representations and Warranties Presale Appendix' (January 2014).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=812608

UBS Commercial Mortgage Trust 2012 - C1

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679149

UBS Commercial Mortgage Trust 2012 - C1 -- Appendix

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679434

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=980362

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Contacts

Fitch Ratings, Inc.
Primary Analyst
Valerie Jayson, +1-312-368-3116
Associate Director
70 W. Madison Street
Chicago, IL 60602
or
Committee Chairperson
Mary MacNeill, +1-212-908-0785
Managing Director
or
Media Relations
Sandro Scenga, New York
+1-212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings, Inc.
Primary Analyst
Valerie Jayson, +1-312-368-3116
Associate Director
70 W. Madison Street
Chicago, IL 60602
or
Committee Chairperson
Mary MacNeill, +1-212-908-0785
Managing Director
or
Media Relations
Sandro Scenga, New York
+1-212-908-0278
sandro.scenga@fitchratings.com