NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed 12 classes of J.P. Morgan Chase Commercial Mortgage Securities Trust commercial mortgage pass-through certificates, series 2012-C6. A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
The affirmations are based on the stable performance of the underlying collateral since issuance. Per the servicer reporting, there are no delinquent or specially serviced loans. Fitch reviewed the most recently available quarterly financial performance of the pool as well as updated rent rolls for the top 15 loans, which represent 64.8% of the transaction. Fitch received year-end (YE) 2015 operating data for 18.6% of the pool and year-to-date (YTD) 2015 operating data for 80.2% of the pool.
As of the February 2016 distribution date, the pool's aggregate principal balance has been reduced by 7.5% to $1.05 billion from $1.13 billion at issuance. Since the prior rating action, two loans (2.4% of the original pool balance) have been repaid. The pool has experienced no realized losses to date. Fitch has designated four loans (11.3% of the pool) as Fitch Loans of Concern, which includes three of the top 15 loans.
The largest loan (11.8% of the pool) is secured by a 45-story, 1.2 million square foot (sf) Class A office property located in downtown Cleveland, OH. Developed in 1985, the property includes an eight-story atrium with landscaped interior gardens, various conference facilities, a fitness center, retail amenities, and an attached 757-car parking garage. Major tenants include Cliffs Natural Resources (12.2% net rentable area [NRA] through December 2021) and Benesch, Friedlander, Coplan & Aronoff LLP (9.8% NRA through July 2019). The servicer-reported occupancy and debt service coverage ratio (DSCR) were 81.6% and 1.66x, respectively, as of YE 2015 compared to 79% and 1.72x at YE 2014.
The largest Fitch Loan of Concern (5.1% of the pool) is secured by a portfolio of two Class A office buildings totaling 673,188 sf located in suburban Dallas, TX. Major tenants include Healthtexas Provider Network (37.3% NRA through November 2022) and Compass Bank (24.7% NRA through September 2023). Prior to issuance, the property struggled to maintain stable occupancy after the loss of a large single tenant at one of the buildings. The property has benefitted from some recent leasing activity, as occupancy rose to 88.6% in January 2016 from 73% as of the September 2015 rent roll. The loan is scheduled to mature on Nov. 1, 2016, and leases comprising approximately 20% of the total NRA are scheduled to expire through the end of 2016. The loan has been designated as a Fitch Loan of Concern due to the upcoming tenant roll concurrent with the upcoming loan maturity. The servicer-reported DSCR was 1.43x based on annualized YTD September 2015 operations compared to 1.24x at YE 2014.
The largest contributor to expected losses (2.5% of the pool) is secured by a portfolio of seven office buildings totaling 448,965 sf located in Oak Ridge, TN, approximately 25 miles west of Knoxville. Occupancy at the property declined to 86.6% as of the February 2016 rent roll from 91% at YE 2013 after the departure of a large government-related tenant in 2014 which was partially offset by additional leasing activity in 2015. Leases comprising approximately 47% of the portfolio's NRA are scheduled to expire in 2016, including the largest tenant, CNS LLC (26.5% NRA expiring September 2016). According to servicer commentary, government leases in Oak Ridge are technically permitted to be only one year in duration, but it is likely that the tenant will occupy the space for much longer. The servicer-reported DSCR was 1.33x based on annualized YTD September 2015 operations, compared to 1.61x at YE 2014.
The Rating Outlooks remain Stable for all classes due to stable performance of the pool and continued paydown. Fitch does not foresee positive or negative ratings migration until a material economic or asset level event changes the transaction's portfolio-level metrics.
Additional information on rating agency sensitivity is available in the report 'JPMCC 2012-C6' (April 11, 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 has affirmed the following ratings:
--$114.4 million class A-2 at 'AAAsf'; Outlook Stable;
--$491.7 million class A-3 at 'AAAsf'; Outlook Stable;
--$102.9 million class A-SB at 'AAAsf'; Outlook Stable;
--$99.2 million class A-S at 'AAAsf'; Outlook Stable;
--$56.7 million class B at 'AAsf'; Outlook Stable;
--$25.5 million class C at 'A+sf'; Outlook Stable;
--$28.3 million class D at 'A-sf'; Outlook Stable;
--$55.3 million class E at 'BBB-sf'; Outlook Stable;
--$1.4 million class F at 'BBB-sf'; Outlook Stable;
--$15.6 million class G at 'BBsf'; Outlook Stable;
--$18.4 million class H at 'Bsf'; Outlook Stable;
--$808.2 million* class X-A at 'AAAsf'; Outlook Stable.
*Notional amount and interest-only.
The class A-1 certificates have paid in full. Fitch does not rate the interest-only class X-B or class NR 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:
--'JPMCC 2012-C6 - Appendix' (April 22, 2012).
Additional information is available at www.fitchratings.com.
Global Structured Finance Rating Criteria (pub. 06 Jul 2015)
U.S. and Canadian Fixed-Rate Multiborrower CMBS Surveillance and U.S. Re-REMIC Criteria (pub. 13 Nov 2015)
JPMCC 2012-C6 -- Appendix
Dodd-Frank Rating Information Disclosure Form