CHICAGO--(BUSINESS WIRE)--Fitch Ratings has affirmed 12 classes of Citigroup Commercial Mortgage Trust 2012-GC8 commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this release.
KEY RATING DRIVERS
The affirmations are based on stable performance of the underlying collateral pool. As of the August 2015 distribution date, the pool's aggregate principal balance has been reduced by 3.2% to $1.01 billion from $1.04 billion at issuance. Full year 2014 financials were available for all of the remaining loans in the pool. The pool has no realized losses to date. Historically one loan (0.7% of balance) has been delinquent but has since become current. There are currently $11,067 of interest shortfalls currently affecting class G.
There are 10 loans on the servicer watch list (19.85% of the pool). The loans are on the watch list as a result of deferred maintenance, lower than underwritten DSCR, lower than underwritten occupancy, and potential vacancy of large tenants due to mergers and acquisitions. All of these loans are current as of the August 2015 distribution.
The largest loan of the pool (10.9%) is the Miami Center, which is secured by a 786,836 square foot (sf), Class A office tower located on Biscayne Bay in downtown Miami. The property, the second largest office building in the state of Florida, is 35-stories and includes an attached 9-story parking garage with 918 spaces. Additionally, 45% of the property's net rentable area (NRA) is leased to investment grade tenants or top law firms. The servicer-reported occupancy as of first-quarter 2015 was 86% with a year-end 2014 DSCR of 1.92x.
The second largest loan, 222 Broadway (9.9%), is secured by a 786,552 sf office tower located in Manhattan's Financial District. Occupancy has increased from 79.1% at issuance to 96.1% as of first quarter 2015. As a result of this lease-up, substantial rent abatements were in place through the fourth quarter of 2014 resulting in a year-end 2014 DSCR of 1.16x and the loan being added to the servicer watch list. However, with the majority of rent abatements now expired, property level DSCR has increased to 1.71x as of first quarter of 2015 with new retail tenant Zara's (4.4% NRA) rent abatement running through July of 2015.
The third largest loan, 17 Battery Place South (9%), is secured by a 428,450 sf office tower located in Manhattan's Financial District, adjacent to Battery Park and overlooking New York Harbor. The 13-story office component is part of a 31-story building, which also contains luxury rental apartments. As of the year-end 2014, DSCR had declined to 1.53x, compared with 1.63x and 1.84x DSCR in 2013 and 2012, respectively. The year-end 2014 decline is largely the result of increased expenses. As of the May of 2015, the servicer-reported occupancy was approximately 80.7%.
Notably, the fourth largest loan in the pool, Pinnacle at Westchase is potentially a concern as the result of one of its tenant's construction of a new headquarters nearby. The tenant, Phillips 66 (44.8% NRA), has a lease that expires at the end of July in 2019 but is actively seeking to sublease the property beginning in August of 2016, concurrent with the completion of their new headquarters. This asset will be closely monitored for any changes in leasing status which could materially impact this loan.
The Rating Outlooks on all classes remain Stable. Fitch does not foresee positive or negative ratings migration until a material economic or asset level event changes the transaction's overall portfolio-level metrics. Additional information on rating sensitivity is available in the report 'CGCMT Commercial Mortgage Trust 2012-GC8' (Sept. 6, 2012), available at www.fitchratings.com.
DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation to this rating action.
Fitch affirms the following classes:
--$24.8 million class A-1 at 'AAAsf'; Outlook Stable;
--$181.6 million class A-2 at 'AAAsf'; Outlook Stable;
--$27.7 million class A-3 at 'AAAsf'; Outlook Stable;
--$379.6 million class A-4 at 'AAAsf'; Outlook Stable;
--$80.3 million class A-AB at 'AAAsf'; Outlook Stable;
--$93.6 million class A-S at 'AAAsf'; Outlook Stable;
--$61.1 million class B at 'AA-sf'; Outlook Stable;
--$39 million class C at 'A-sf'; Outlook Stable;
--$45.5 million class D at 'BBB-sf'; Outlook Stable;
--$19.5 million class E at 'BBsf'; Outlook Stable;
--$19.5 million class F at 'Bsf'; Outlook Stable;
--$788.8 million* class X-A at 'AAAsf'; Outlook Stable.
Fitch does not rate the class G and X-B certificates.
*Notional and interest only.
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:
'CGCMT Commercial Mortgage Trust 2012-GC8 -- Appendix' (Sept. 6, 2012).
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 ReREMIC 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.
Global Structured Finance Rating Criteria (pub. 06 Jul 2015)
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria (pub. 10 Dec 2014)
CGCMT Commercial Mortgage Trust 2012-GC8 -- Appendix
Dodd-Frank Rating Information Disclosure Form