CHICAGO--(BUSINESS WIRE)--Fitch Ratings has affirmed seven classes of Goldman Sachs Commercial Mortgage Capital, L.P. commercial mortgage pass-through certificates series 2010-C2. A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
The affirmations are based on the generally stable performance of the underlying collateral pool since issuance. There are currently 39 loans down from 43 loans at issuance. There are no delinquent or specially serviced loans. Fitch reviewed servicer-reported year-end (YE) 2014 financial performance for the collateral pool in addition to updated rent rolls for the top 15 loans, which represent 68.8% of the transaction. Of the pool, 27% matures in the fourth quarter of 2015, which includes the second largest loan (7.7%).
As of the July 2015 distribution date, the pool's aggregate principal balance has been reduced by 9.6% to $792.7 million from $876.5 million at issuance. Per the servicer reporting, three loans (6.1% of the pool) are defeased. Interest shortfalls are currently affecting class G.
The largest loan in the pool (11% of the pool balance) is secured by a 399,935 square foot (sf) class B office property in the Financial District of Manhattan, NY. The property is 100% occupied by the United Federation of Teachers (UFT) under a long-term lease which expires in August 2034. UFT also holds a 9.9% ownership interest in the building. The loan is structured with a letter of credit (LOC), which can be drawn upon to cover debt service shortfalls. The loan is amortizing on a 30-year schedule after a four-year interest-only period concluded in 2014. The servicer-reported year-end (YE) 2014 debt service coverage ratio (DSCR) was 2.32x, compared to 2.50x at YE 2013.
The second largest loan (7.7%) is secured by two office properties totaling 1.15 million sf in downtown Cleveland, OH. One Cleveland Center is a 34-story building with tenants that include Roetzel & Andress, Vorys Sater Seymour Pease, and Bank of America. The other property is Penton Media Building, which is a 20-story building with tenants that include Penton Media, PR Newswire Associates and National Union Fire Insurance. The portfolio has experienced occupancy decline since issuance. The combined occupancy for the two properties at YE 2014 was 72%, which is an improvement from the 69% reported for YE 2013, but still down compared to 79% at issuance. The DSCR has also declined as a result of occupancy and increased expenses. For YE 2014, the DSCR was reported at 1.56x compared to 1.63x at YE 2013 and 1.79x at YE 2012. Despite the decline in performance, the servicer reports that the borrower will pay off the loan next month ahead of the September 2015 maturity date.
The third largest loan (7.3%) is secured by a 669,682 sf mixed-use office retail property located in Pittsburgh, PA. The property is considered an area landmark and tourist destination. It consists of five buildings that house office space, retail shops, restaurants, commuter parking and also includes marina slips and an outdoor amphitheater. Various media reports state that the borrower is planning 300 apartment units at the site, with the first units expected in the summer of 2017. As of YE 2014, the property was 88% occupied, compared to 80% at YE 2013 and 85% at YE 2012. The servicer-reported YE 2014 DSCR was 1.64x, compared to 1.90x at YE 2013 and 1.70x at YE 2012.
The Rating Outlook on class B remains Positive due to the expected paydown and increased credit enhancement from loans with 2015 maturities. Rating Outlooks on classes A-1, A-2 and C though F remain Stable as the majority of the pool has maintained performance consistent with that at issuance. Downgrades are considered unlikely, but are possible should loans not pay off at maturity or if they show significant performance declines.
DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation to this rating action.
Fitch affirms the following classes:
--$263.2 million class A-1 at 'AAAsf'; Outlook Stable;
--$376.1 million class A-2 at 'AAAsf'; Outlook Stable;
--$639.3 million interest-only class X-A at 'AAAsf'; Outlook Stable;
--$26.3 million class B at 'AAsf'; Outlook Positive;
--$29.6 million class C at 'Asf'; Outlook Stable;
--$47.1 million class D at 'BBB-sf'; Outlook Stable;
--$12.1 million class E at 'BBsf'; Outlook Stable;
--$9.9 million class F at 'Bsf'; Outlook Stable.
Fitch does not rate the class G certificates or the interest-only X-B certificates.
Additional information is available at www.fitchratings.com.
Global Structured Finance Rating Criteria (pub. 06 Jul 2015)
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria (pub. 10 Dec 2014)
Dodd-Frank Rating Information Disclosure Form