Fitch Affirms BSCMST 2005-PWR10
CHICAGO--(BUSINESS WIRE)--Fitch Ratings affirms 17 classes of Bear Stearns Commercial Mortgage Securities Trust (BSCMST), series 2005-PWR10 commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this release.
KEY RATING DRIVERS
The affirmations reflect the stable performance across the pool. Fitch modeled losses of 14.0% for the remaining pool; expected losses as a percentage of the original pool balance are at 13.6%, including losses already incurred to date (2.7%). Fitch has designated 43 loans (23.7%) as Fitch Loans of Concern, which includes the four specially serviced loans (8.7%). Fitch expects that classes B through S may be fully depleted from realized and expected losses.
The Negative Outlook on the class A-M reflects the possibility of continued downward ratings migration. An increase in expected losses on the specially serviced loans or deterioration in performance of the top 15 loans, several of which have high leverage, would lead to additional downgrades.
As of the February 2013 distribution date, the pool's aggregate principal balance has been reduced by approximately 21.2% to $2.1 billion from $2.6 billion at issuance. Interest shortfalls total $24.7 million and are affecting classes C through S.
The largest contributor to Fitch modeled losses, Oasis Net Leased Portfolio (5.3%), is the largest specially serviced loan and second largest loan in the pool. The portfolio originally consisted of eight suburban office properties and two research and development/flex properties totaling 769,507-square feet (sf). The majority of the buildings are clustered around the outside of Boston, MA and one located directly north of Las Vegas, NV along Interstate 15. Nine of the buildings were originally occupied by single tenants, three of which were rated investment-grade. The portfolio's occupancy rate dropped to a low of 23% in 2012 from 100% at securitization. The first property in the portfolio was recently disposed of in a December 2013 sale. The special servicer continues to work on releasing several of the vacant assets before exploring further sales in the upcoming year.
The second-largest contributor to modeled losses is the World Market Center loan (9.3% of the pool), which is secured by a 10-story, approximately 1.1 million-sf furniture mart approximately five miles north of the center of the Las Vegas Strip. The loan was modified in 2011 into an A/B note structure after the recapitalization by a joint venture between Bain & Oaktree Capital. The modification included writing down the loan by $10.7 million, splitting the loan into a $94.3 million interest-only A note and a $105.9 million B note. The property was returned to the master servicer in March 2012 and continues to perform according to the terms of the modification. The new sponsor continues to invest in the subject in order to increase occupancy and the property experienced significant improvement during 2013 with the revival of travel and conventions to the Las Vegas area.
The third-largest contributor to modeled losses is a 335,766-sf retail center (1.6%) located in Port Richey, FL approximately 40 miles northwest of Tampa's central business district. A large percentage of the remaining tenants at the center are national and regional tenants that serve 240,000 residents within a 10-mile radius of the subject. The property was transferred to the special servicer in August 2012 after the sponsor was unable to refinance at the scheduled maturity. The loan is cash-managed and the special servicer continues to work to remedy the default through its rights under the loan documents.
Fitch has affirmed the following classes as indicated:
--$10.4 million class A-3 at 'AAAsf'; Outlook Stable;
--$63.3 million class A-AB at 'AAAsf'; Outlook Stable;
--$1.05 billion class A-4 at 'AAAsf'; Outlook Stable;
--$234.2 million class A-1A at 'AAAsf'; Outlook Stable;
--$263.4 million class A-M to 'AAsf'; Outlook Negative;
--$210.7 million class A-J at 'CCCsf'; RE 90%;
--$19.8 million class B at 'CCCsf'; RE0%;
--$29.6 million class C at 'CCCsf'; RE 0%;
--$23 million class D to 'CCsf'; RE O%;
--$16.5 million class E to 'CCsf'; RE 0%;
--$26.3 million class G to 'Csf'; RE 0%;
--$26.3 million class F at 'CCsf'; RE 0%;
--$29.6 million class H at 'Csf'; RE 0%;
--$26.3 million class J to 'Csf'; RE 0%;
--$36.2 million class K to 'Csf'; RE 0%;
--$3.3 million class L to 'Csf'; RE 0%;
--$7.8 million class M at 'Dsf'; RE 0%.
Classes N, O, P, and Q remain at 'Dsf'; RE0%; due to realized losses. Classes A-1 and A-2 have repaid in full. The ratings on the interest-only classes X-1 and X-2 were withdrawn. Fitch does not rate the $0.0 million class S.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (May 24, 2013);
--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 11, 2013).
Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria