NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed all classes of COMM 2013-GAM Mortgage Trust. The Rating Outlooks remain Stable. A detailed list of rating actions follows at the end of this release.
KEY RATING DRIVERS
The trust certificates represent the beneficial interests in a mortgage loan secured by the Green Acres Mall property located in Valley Stream, NY. The eight-year fixed-rate (3.43%) amortizing loan matures in February 2021.
The affirmations are the result of stable performance since origination. The servicer-reported second quarter 2015 (2Q15) debt service coverage ratio (DSCR) was 1.81x, compared to 1.91x at year-end (YE) 2014 and 1.76x at issuance. Per the 2Q15 rent roll, the property was 93.4% occupied, compared to 98.1% at YE2014 and 96% at issuance. Although occupancy has declined slightly from issuance, store sales have improved and redevelopment was anticipated at issuance. The loan sponsor, Macerich, outlined plans to reposition the mall at the loan closing, including options to demolish certain parcels and reconfigure the existing layout of the property. Any lost income from such demolished space will be replaced by a master lease from the sponsor in the form and substance acceptable to the lender. At this time, Fitch expects any income disruptions to be temporary, and loan performance should remain stable.
The Green Acres Mall is a 1,811,441 square foot (sf) enclosed two-level regional mall located on Sunrise Highway in Valley Stream, NY. It is anchored by BJ's Wholesale Club, JC Penney, Kohl's, Macy's, Macy's Men's/Furniture, Sears, and Wal-Mart (subject to ground lease), all of which are part of the collateral. Major in-line tenants include Michael's, Modell's Sporting Goods, Old Navy, H&M, Express, and Victoria's Secret.
The subject property is located in one of the most densely populated areas of Nassau County, providing a strong shopper base for the mall. Three other malls, located within an approximate 15-mile radius, have been identified as Green Acres Mall's competitors. Nevertheless, the property's in-line sales have increased despite the potential competition. Comparable in-line sales increased to $612 per square foot (psf) as of trailing 12 months (TTM) March 2015, compared to $580 PSF at YE2014 and $501 psf at underwriting. Per the 2Q15 Reis report, the Long Island retail market had a vacancy rate of 5% with average asking rents of $26.55 psf.
As of the September 2015 remittance report, the transaction has paid down 4.9% to $308.6 million, from $324.4 million at issuance. As part of its review, Fitch analyzed the performance of the loan and its underlying collateral. Fitch modeled cash flow based on YE 2014 financials, as well as the June 2015 rent roll. As part of its analysis, Fitch looked at certain scenarios which stressed the cash flow by excluding revenue from several tenants with lease rollover in 2015/2016.
The Fitch stressed DSCR for the loan is 1.22x, compared to 1.11x modeled at issuance. The Fitch stressed loan-to-value ratio is 72.1%, which is based on capitalization of the Fitch-adjusted net cash flow at a rate of 7.5%, compared to 79.7% modeled at issuance.
The Outlook remains Stable for all classes. No near-term rating actions are expected unless there are material changes in property performance, including any significant changes to cash flow.
Fitch has affirmed the following classes:
--$39.3 million A-1 at 'AAAsf'; Outlook Stable;
--$154.9 million class A-2 at 'AAAsf'; Outlook Stable;
--IO class X-A at 'AAAsf'; Outlook Stable;
--$26 million class B at 'AA-sf'; Outlook Stable;
--$17 million class C at 'Asf'; Outlook Stable;
--$24.8 million class D at 'BBBsf'; Outlook Stable;
--$19 million class E at 'BBB-sf'; Outlook Stable;
--$27.6 million class F at 'BB-sf'; Outlook Stable.
Additional information is available at www.fitchratings.com.
Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions (pub. 27 Aug 2015)
Global Structured Finance Rating Criteria (pub. 06 Jul 2015)
COMM 2013-GAM -- Appendix
Dodd-Frank Rating Information Disclosure Form