CHICAGO--(BUSINESS WIRE)--Fitch Ratings has affirmed Morgan Stanley Bank of America Merrill Lynch Trust series 2014-C18 (MSBAM 2014-C18), commercial mortgage pass-through certificates. A complete list of rating actions follows at the end of this release.
The transaction is collateralized by 65 loans and 100 properties. Fitch has only issued ratings for the 300 North LaSalle B Note (300N Rake) certificates issued by MSBAM 2014-C18. These certificates are subordinate in right of payment of interest and principal to the 300 North LaSalle A notes and derive their cash flow solely from the 300 North LaSalle Street loan. The 300N Rake certificates are generally not subject to losses from any of the other loans collateralizing the MSBAM 2014-C18 transaction. No other classes issued by MSBAM 2014-C18 are rated by Fitch.
KEY RATING DRIVERS
The affirmations reflect the stable collateral performance and partial-year financial reporting pool since issuance in September 2014. The 300 North LaSalle certificates represent the beneficial interests in the mortgage loan securing the fee interest in the 300 North LaSalle Street office property in Chicago, IL. Proceeds of the loan, along with $381 million in borrower equity, were used by an affiliate of The Irvine Company LLC (Irvine) to acquire the property in July 2014 for a total cost of $850 million ($652 per square foot [psf]), as well as fund closing costs and escrows. The certificates will follow a sequential-pay structure.
Constructed in 2009, 300 North LaSalle is a 60-story, class A, LEED Platinum central business district (CBD) office building. The property is located along the north bank of the Chicago River in the River North neighborhood and features high-quality amenities. 300 North LaSalle is considered by Fitch to be one of the premier buildings in the city of Chicago. Fitch assigned the subject a property quality grade of 'A'.
Institutional-Quality Tenants on Long-Term Leases: The property is currently 98.1% leased to a set of nationally recognized and institutional-quality tenants. In-place leases have an average of 11 years remaining. The building's four largest tenants have lease expirations occurring in 2024 or later - Kirkland & Ellis LLP (Kirkland; 52.8% of total net rental area [NRA]; expiry 2029), The Boston Consulting Group (BCG; 9.5%; 2024), Quarles and Brady LLP (Quarles; 6.3%; 2024) and GTCR Golder Rauner (GTCR; 6.3%; 2024).
RATING SENSITIVITIES
The Rating Outlook for all classes remains Stable. Due to the recent issuance of the transaction, limited historical servicer reporting, and stable performance, Fitch does not foresee positive or negative ratings migration until a material economic or asset-level event changes the transaction's portfolio-level metrics. The rated certificates are secured by a single property and are, therefore, more susceptible to single-event risk related to the market, sponsor or the largest tenants occupying the property.
DUE DILIGENCE USAGE
No third-party due diligence was provided or reviewed in relation to this rating action.
Fitch has affirmed the following classes:
--$67.4 million class 300-A at 'AA-sf'; Outlook Stable;
--$39 million class 300-B at 'A-sf'; Outlook Stable;
--$57 million class 300-C at 'BBB-sf'; Outlook Stable;
--$49 million class 300-D at 'BB-sf'; Outlook Stable;
--$32 million class 300-E at 'Bsf'; Outlook Stable.
Fitch does not rate classes A-1, A-2, A-3 or any classes of Morgan Stanley Bank of America Merrill Lynch Trust, series 2014-C18 other than those listed above.
Additional information is available at www.fitchratings.com.
Applicable Criteria
Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions (pub. 20 Mar 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=862818
Global Structured Finance Rating Criteria (pub. 06 Jul 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952
Related Research
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2014-C18 - Appendix
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=773508
Additional Disclosures
Dodd-Frank Rating Information Disclosure Form
https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=989963
Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=989963
Endorsement Policy
https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31
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