Fitch Affirms COMM 2010-C1

CHICAGO--()--Fitch Ratings has upgraded three and affirmed 10 classes of Deutsche Bank Securities COMM 2010-C1 commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The upgrades reflect an increase in credit enhancement, defeasance, the expectation of future paydown due to upcoming loan maturities and the stable performance of the underlying collateral pool since issuance.

Fitch modelled losses of 2.8% of the remaining pool and expected losses based on the original pool balance are 1.7%, with no losses realized to date. The transaction currently has five loans on the servicer watchlist, of which two (8.3%) are designated as Fitch Loans of Concern. The pool has increasing loan concentrations with only 30 of the original 42 loans outstanding. Five loans (11.1%) are fully defeased. The remaining non-defeased loans consist of balloon maturities (100%). The loans' final maturity dates are in 2015 (27%), 2017 (1%), 2018 (8.2%) and 2020 (63.8%). Of the 2015 maturities, 9.2% are in July, 15.4% in August, 27.9% in September, and 47.5% in October.

The largest Fitch Loan of Concern is Central Plaza (3.6% of the pool) secured by a 405,693 square foot (sf), 20 story office tower, three two story office buildings, and a nine-level parking garage. The property is located in a commercial zone that is approximately one mile north of downtown Phoenix, AZ. Occupancy at the subject modestly improved to 61% as of March 2015 from a low of 56% during the 2012 calendar year. The sponsor continues to market the vacant space in an effort to further backfill the campus vacancy. Servicer commentary indicates that interest in the space has increased during the calendar year from a number of specialty medical and governmental users. The submarket vacancy rate is expected to continue to fall over the next three years as the region's economic activity continues to expand and the new development is limited in the area. The loan matures in October 2015.

The second Fitch Loan of Concern, is a loan secured by a 195,326 sf office complex, 400 Skokie Boulevard (2.1%), located in Northbrook, IL, approximately 20 miles north of Chicago. The subject was built in 1984 and renovated in 2006. The property's occupancy has continued to decline from 85% at issuance to 78% as of March 2015. The sponsor continues to work in a challenging submarket environment to increase occupancy. The subject will continue to experience weak operating performance due to a number of tenants receiving rent abatements and lease incentives during the next 12 months. Per Reis, Chicago's north suburban office market vacancy rate is currently 21% and is expected to decrease 2% over the next two years as the tightening office market recovery spreads to the Chicago suburbs. The loan matures in September 2015.

RATING SENSITIVITIES

The Stable Rating Outlooks reflect increasing credit enhancement, defeasance and the anticipated further principal paydown of the pool balance through year-end. Further upgrades of the lower classes will be limited due to adverse selection and increasing asset concentration. Downgrades are possible if loans transfer to special servicing or if realized losses are greater than Fitch expectations.

DUE DILIGENCE USAGE

No third party due diligence was provided or reviewed in relation to this rating action.

Fitch has upgraded the following classes:

--$24.6 million class B to 'AAAsf' from 'AAsf', Outlook Stable;

--$28.9 million class C to 'AAsf' from 'Asf', Outlook Stable;

--$45 million class D to 'BBBsf' from 'BBB-sf', Outlook Stable.

Additionally, Fitch has affirmed the following classes:

--$127.1 million class A-1 at 'AAAsf', Outlook Stable;

--$12.3 million class A-1D at 'AAAsf', Outlook Stable;

--$75.1 million class A-2 at 'AAAsf', Outlook Stable;

--$179.5 million class A-3 at 'AAAsf', Outlook Stable;

--$112.7 million class XP-A at 'AAAsf', Outlook Stable;

--$197.0 million class XS-A at 'AAAsf', Outlook Stable;

--$197.0 million class XW-A at 'AAAsf', Outlook Stable;

--$7.5 million class E at 'BBB-sf', Outlook Stable;

--$12.8 million class F at 'BBsf', Outlook Stable;

--$12.9 million class G at 'B-sf', Outlook Stable.

Fitch does not rate the interest-only class XW-B or the $17.1 million class H.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Global Structured Finance Rating Criteria (pub. 31 Mar 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864268

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria (pub. 10 Dec 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=812608

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=986582

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=986582

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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Contacts

Fitch Ratings
Primary Analyst
Jay Bullie
Associate Director
+1-312-368-2079
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Committee Chairperson
Mary MacNeill
Managing Director
+1-212-908-0785
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Jay Bullie
Associate Director
+1-312-368-2079
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Committee Chairperson
Mary MacNeill
Managing Director
+1-212-908-0785
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com