CHICAGO--(BUSINESS WIRE)--Fitch Ratings has upgraded three classes and affirmed four of 1345 Avenue of the Americas and Park Avenue Plaza Trust series FB 2005-1 commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this release.
KEY RATING DRIVERS
The upgrades reflect strong property level cash flow coupled with deleveraging of the trust notes due to amortization. Class A-2 began receiving principal in 2015 after the non-trust 1A-1 and 1A-2 notes for both properties paid in full. As of the March 2016 distribution date, the pool's aggregate certificate balance was $539.9 million. The trust loans are scheduled to mature in 2025.
The certificates are backed by two office properties located in Midtown Manhattan: 1345 Avenue of Americas (79.6% of the outstanding trust balance), and Park Avenue Plaza (20.4%).
The 1345 Avenue of Americas loan is collateralized by a 1.9 million square foot (sf) class 'A' office building. The collateral also includes the Ziegfeld Theater, a 19,844 sf motion picture theater; a three-level, subterranean 341-space parking garage; and a 40 space parking lot. As of the servicer provided March 2016 rent roll, the property was 99.1% leased. The largest tenant at the property is AllianceBernstein, L.P., which leases approximately 58% of the total net rentable area (NRA) through 2019. The landlord has a unilateral option to extend the lease on the majority of AllianceBernstein's space for five years. Other major tenants include PIMCO Advisors L.P. (14% of the NRA, a portion of which will be extended to 2031) and Linklaters LLP (13%). Fortress will take additional space starting in 2017 with their lease extended to 2032.
The Park Avenue Plaza loan is collateralized by a 1.1 million sf class 'A' office building. As of the servicer provided March 2016 rent roll, the property was 99.5% leased. Major tenants include BlackRock, Inc. (33% of NRA, lease expiration of 2023), Aon Service Corporation (24%, 2023 lease expiration) and McKinsey & Company Inc. (18%, 2019 lease expiration).
The Rating Outlooks are expected to remain Stable as the collateral performance is strong. Though upgrades may be possible in the future as the loans amortize and tenants continue to renew and extend leases, they may be limited due to the pro-rata structure of the trust and non-trust loans.
DUE DILIGENCE USAGE
No third-party due diligence was provided or reviewed in relation to this rating action.
Fitch has upgraded the following ratings:
--$27.7 million class C to 'AAsf' from 'AA-sf'; Outlook Stable;
--$10 million class D to 'AAsf' from 'A+sf'; Outlook Stable;
--$17.2 million class F to 'Asf' from 'A-sf'; Outlook Stable.
Fitch has affirmed the following ratings:
--$76.5 million class A-2 at 'AAAsf'; Outlook Stable;
--$364.1 million class A-3 at 'AAAsf'; Outlook Stable;
--$26 million class B at 'AAsf'; Outlook Stable;
--$18.5 million class E at 'Asf'; Outlook Stable.
Fitch previously withdrew the rating on the interest-only class X.
Additional information is available at www.fitchratings.com.
Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)
Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions (pub. 27 Aug 2015)
Criteria for Rating Caps and Limitations in Global Structured Finance Transactions (pub. 28 May 2014)
Global Structured Finance Rating Criteria (pub. 06 Jul 2015)
Dodd-Frank Rating Information Disclosure Form