NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed Freddie Mac's FREMF Mortgage Trust, series 2011-K14 multifamily mortgage pass-through certificates.
KEY RATING DRIVERS
The affirmation is based on the stable performance of the underlying collateral pool. The pool's aggregate principal balance has been paid down by 6.92% to $1.11 billion from $1.19 billion at issuance. Since the last rating action, six loans have defeased (5.2% of the pool).
There is currently one specially serviced asset (1.3% of the pool). In addition, three loans are on the servicer watch list (2.3% of the pool); the loans are on the watch list due to deferred maintenance and declines in occupancy and DSCR. One loan out of the three (0.8% of the pool) watch list loans is considered a Fitch Loan of Concern. The loan is secured by a student housing community with an NOI DSCR below 1.0x as of YE 2015.
The specially-serviced loan is The Heights at Slippery Rock (1.3% of the pool), which is secured by a 400 unit student housing apartment community built in 2007 and located in Slippery Rock, PA. Slippery Rock University experienced a 6% decrease in enrollment from 2010 to 2013 causing a negative impact on the local student housing market. The enrollment decrease was compounded by an increase of new supply with the completion of a new student housing project in fall 2013 containing 603 beds. The net effect was a reduction in occupancy and rental rates at the subject. NOI DSCR has declined from 1.49x as of YE 2013 to 1.07x and 0.70x, as of YE 2014 and 3Q 2015, respectively. However, occupancy rebounded from 70% as of YE 2014 to 99% as of September 2015. The special servicer is developing a business plan to pursue a receiver sale, assumption and modification of the debt.
The Rating Outlook on class B remains Stable, as overall pool performance has been relatively stable since issuance. Fitch does not foresee positive or negative ratings migration until a material economic or asset level event changes the transaction's overall portfolio-level metrics. Upgrades may occur with stable to improved pool performance and significant paydown or defeasance. Additional information on rating sensitivity is available in the 'FREMF 2011-K14 Multifamily Mortgage Pass-Through Certificates' (Sept. 2, 2011) new issue report, available at www.fitchratings.com.
DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation to this rating action.
Fitch has affirmed the following rating:
--$53.6 million class B at 'Asf', Outlook Stable.
Additional information is available at www.fitchratings.com.
Global Structured Finance Rating Criteria (pub. 06 Jul 2015)
U.S. and Canadian Fixed-Rate Multiborrower CMBS Surveillance and U.S. Re-REMIC Criteria (pub. 13 Nov 2015)
Dodd-Frank Rating Information Disclosure Form