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Fitch Affirms GSMS 2011-GC5

CHICAGO--(BUSINESS WIRE)--Fitch Ratings has affirmed 11 classes of Goldman Sachs Commercial Mortgage Capital, L.P., series 2011-GC5 commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The affirmations reflect the stable performance of the underlying pool. As of the August 2014 distribution date, the pool's aggregate principal balance has been reduced by 3.2% to $1.69 billion from $1.75 billion at issuance. Per the servicer reporting, three loans (4.1% of the pool) are defeased. Interest shortfalls are currently affecting class G. Fitch has designated four loans (2.3%) as Fitch Loans of Concern, which includes one specially serviced asset (0.9%).

The specially-serviced asset (0.9% of the pool) is secured by a 236,134 square foot (sf) office complex comprising six, single-story buildings located in North Richland Hills, TX. The loan transferred to special servicing in April 2013 due to imminent default following an occupancy decline. The occupancy decline occurred when the largest tenant vacated the property in early February 2013 without providing notice. In addition, the property's second largest tenant reduced their leased space by 10.3% upon their renewal date. The asset became real estate owned (REO) in July 2013 through a non-judicial foreclosure. As per the property's May 2013 rent roll, the occupancy was reported at 32.5%.

The largest loan of the pool (11.3%) is secured by 478,028 square feet (sf) of in-line and major tenant retail space within a 1.1 million-sf regional mall in Tucson, AZ. The property is anchored by Sears, Dillard's, Macy's and Century Theaters, which is the only anchor that is part of the collateral. The servicer-reported debt service coverage ratio (DSCR) was 1.64x at year-end (YE) 2013 compared to 1.50x at YE 2012. Occupancy has dropped slightly to 95% as of YE 2013 compared to 99% at YE 2012.

The second largest loan of the pool (10.7%) is secured by a three-story, 25,600-sf single-tenant retail property located in Times Square in Manhattan. The property was constructed in 2008 and has been 100% occupied by American Eagle Outfitters since completion. It also includes a 250-foot (14,504 sf) rentable LED signage tower. The servicer-reported DSCR was 1.75x at YE 2013 compared to 1.71x at YE 2012.

RATING SENSITIVITY

Rating Outlooks on classes A-1 through F remain Stable due to the relatively stable performance of the pool since issuance and continued paydown. No rating changes are expected unless there is material performance deterioration or additional loans become specially serviced.

Fitch affirms the following classes as indicated:

--$34.1 million class A-1 at 'AAAsf', Outlook Stable;

--$476.6 million class A-2 at 'AAAsf', Outlook Stable;

--$86.4 million class A-3 at 'AAAsf', Outlook Stable;

--$568.2 million class A-4 at 'AAAsf', Outlook Stable;

--$181.1 million class A-S at 'AAAsf', Outlook Stable;

--$96 million class B at 'AA-sf', Outlook Stable;

--$69.8 million class C at 'A-sf', Outlook Stable;

--$74.2 million class D at 'BBB-sf', Outlook Stable;

--$28.4 million class E at 'BBsf', Outlook Stable;

--$24 million class F at 'Bsf', Outlook Stable;

--$1.36 billion* class X-A at 'AAAsf', Outlook Stable.

*Notional amount and interest only.

Fitch does not rate the class G and X-B certificates.

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 Re-REMIC 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'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (Aug. 4, 2014);

--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 11, 2013).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=724961

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=858735

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts

Fitch Ratings
Primary Analyst
Daniel Anderson
Associate Director
+1-312-606-2305
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60602
or
Committee Chairperson
Karen Trebach
Senior Director
+1-212-908-0215
or
Media Relations
Alyssa Castelli, New York, +1-212-908-0540
alyssa.castelli@fitchratings.com