NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed Deutsche Bank Securities, Inc.'s (COMM) commercial mortgage pass-through certificates series 2014-CCRE17. A full list of rating actions follows at the end of this release.
KEY RATING DRIVERS
The affirmations are due to overall stable
performance. The stable performance reflects no material changes to pool
metrics since issuance; therefore the original rating analysis was
considered in affirming the transaction.
Fitch modeled losses of 3.6% of the remaining pool; expected losses on the original pool balance total 3.6%. There are three loans on the master servicer's watchlist, (3.1%), of which Fitch is monitoring the performance of two (1.9%). There are no specially serviced loans.
As of the April 2016 distribution date, the pool's aggregate principal balance has been reduced by 1.2% to $1.18 billion from $1.19 billion at issuance. No loans are defeased. Interest shortfalls are currently affecting class H.
The largest loan in the transaction is the Bronx Terminal Market loan (11.9% of the pool), which is secured by a 912,333 square foot (sf), multilevel retail power center located in Bronx, NY. The property was developed by the sponsor, the Related Companies, L.P. in 2009 and consists of two towers, which are connected via a six-level parking garage. The largest tenants at the property are Target (20.7%), BJs (14.3%), and Home Depot (13.7%); with lease expirations in October 2033, August 2029, and February 2034, respectively. The property's occupancy remains stable at 99.3% as of December 2015. There is no upcoming rollover until 2019 when 5% of the space rolls. The most recent servicer reported debt-service coverage ratio (DSCR) is 1.75x as of year-end (YE) 2015, up from 1.64x YE 2014. Performance at the property remains in line with Fitch's expectations at issuance.
Fitch is monitoring the performance recovery at the Northeast Ohio Multifamily Portfolio loan (2.6%), which is secured by a portfolio of three multifamily properties located in the Cleveland and Akron, OH markets, totaling 702 units. The portfolio is 85% occupied as of September 2015. The most recent servicer reported DSCR is 1.45x as of September 2015, up from 0.97x at YE 2014. The decline in portfolio performance was back in May 2014 was mostly attributed to the Village at Wyoga Lake Apartments property which suffered significant damage to 80 units as a result of heavy rains and flooding. The units were placed back online between November and February 2015.
Fitch is monitoring leasing updates at the 330 South Tryon Office loan (1%), which is secured by a 65,570 sf office property located in Charlotte, NC. The largest tenants are Charlotte Chamber of Commerce (46%), BBVA Compass (18%), and Ai Design Group (14%), with lease expirations in March 31, 2015, July 31, 2021, and Feb. 28, 2025, respectively. Fitch confirmed the Charlotte Chamber of Commerce is still at the property but was unable to confirm if they have renewed their lease. The loan is currently on the master servicer's watchlist for decline in base rents since issuance due to high rental concessions at the property. Per the master servicer, performance is improving, as the average rental rate has increased to $20.13 sf from $18.78 sf and rental concessions are beginning to diminish. As per REIS, as of first quarter 2016, the Charlotte metro office vacancy rate is 15.8% with average asking rent $23.10 sf.
RATING SENSITIVITIES
Rating Outlooks on classes A-1 through F
remain Stable due to the overall stable performance of the pool.
Downgrades are possible with significant performance decline. Upgrades,
while not likely in the near term, are possible with increased credit
enhancement and overall improved pool performance.
DUE DILIGENCE USAGE
No third-party due diligence was provided or
reviewed in relation to this rating action.
Fitch has affirmed the following ratings:
--$34.9 million class A-1 at 'AAAsf'; Outlook Stable;
--$149
million class A-2 at 'AAAsf'; Outlook Stable;
--$12.4 million class
A-3 at 'AAAsf'; Outlook Stable;
--$69.9 million class A-SB at
'AAAsf'; Outlook Stable;
--$220 million class A-4 at 'AAAsf';
Outlook Stable;
--$333.7 million class A-5 at 'AAAsf'; Outlook
Stable;
--Interest-only class X-A at 'AAAsf'; Outlook Stable;
--$65.6
million class A-M at 'AAAsf'; Outlook Stable;
--$82 million class B
at 'AA-sf'; Outlook Stable;
--$199.7 million class PEZ at 'A-sf';
Outlook Stable;
--$52.2 million class C at 'A-sf'; Outlook Stable;
--Interest-only
class X-B at 'BBB-sf''; Outlook Stable;
--$50.7 million class D at
'BBB-sf'; Outlook Stable;
--$14.9 million class E at 'BBB-sf';
Outlook Stable;
--Interest-only class X-C at 'BB-sf'; Outlook
Stable;
--$29.8 million class F at 'BB-sf'; Outlook Stable.
Fitch does not rate the interest-only class X-D, class G and H certificates. Class A-M, B, and C certificates may be exchanged for class PEZ certificates, and class PEZ certificates may be exchanged for class A-M, B, and C certificates.
Additional information is available at www.fitchratings.com.
Applicable Criteria
Counterparty Criteria for Structured Finance
and Covered Bonds (pub. 14 May 2014)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158
Criteria
for Rating Caps and Limitations in Global Structured Finance
Transactions (pub. 28 May 2014)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748781
Global
Structured Finance Rating Criteria (pub. 06 Jul 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952
U.S.
and Canadian Fixed-Rate Multiborrower CMBS Surveillance and U.S.
Re-REMIC Criteria (pub. 13 Nov 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=873395
Related Research
COMM 2014-CCRE17 Mortgage Trust -- Appendix
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=876100
Additional Disclosures
Dodd-Frank Rating Information Disclosure Form
https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1004063
Solicitation
Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1004063
Endorsement
Policy
https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31
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