NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed 13 classes of J.P. Morgan Chase Commercial Mortgage Securities Trust (JPMBB) commercial mortgage pass-through certificates series 2013-C14. A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
The affirmations are the result of stable performance of the underlying pool since issuance. As of the June 2016 distribution date, the pool's aggregate principal balance has been reduced by 3.6% to $1.11 billion from $1.15 billion at issuance. The pool has experienced no realized losses to date. One loan (0.7%) is defeased. Fitch has designated three loans (8.6%) as Fitch Loans of Concern (FLOC), which includes one specially serviced loan (0.8%). Interest shortfalls are currently affecting class NR.
The largest loan of concern is the Plaza La Cienega loan (5.5% of the pool), which is secured by a 308,143 square foot (sf) mixed use center (83% retail; 17% office) located in Los Angeles, CA. Retail tenants include LA Fitness (21% net rentable are [NRA]), Toys R' Us (20% NRA), and Ross Dress for Less (8.8% NRA). The loan has been identified as a FLOC due to the recent vacancy of Staples (previously 7.8% NRA), which vacated the property upon its lease expiration in November 2015. Current occupancy is 89%, compared to 99% at issuance. According to REIS, market fundamentals remain strong with vacancy for the Los Angeles Westside/Downtown submarket reporting at 4%. The year-end (YE) 2015 net operating income (NOI) debt service coverage (DSCR) reported at 1.70x, compared to 1.65x at YE 2014 and 1.38x at issuance. The loan remains current as of the June 2016 remittance.
The second largest loan of concern is the 575 Maryville Centre Drive (2.3%), which is secured by a 258,441 sf class B office tower in St. Louis, MO. The loan has been identified as a FLOC due to significant tenant vacancies. At issuance the largest tenant, Solutia, had subleased 45,000 sf of its total 121,000 sf (46.6% NRA) leased space to Cequel concurrent with Solutia's original lease which expires in June 2018. The servicer reported that Solutia had vacated the remaining 76,000 sf in November 2015 but continues to remit rental payments. In addition, the second largest tenant, Saavis Communication Corp. (98,640 sf, or 35.6% NRA) recently amended its lease to only extend 46,000 sf of its current space through June 2022 and will vacate the remaining 52,640 sf upon its June 2017 lease expiration. As of December 2015 the servicer reports the property as 100% leased with an NOI DSCR of 2.42x. The loan remains current as of the June 2016 remittance.
The specially serviced loan (0.8%) is secured by a 225-room full service, Sheraton Four Points Hotel located in San Diego, CA. The loan had transferred to special servicing in February 2016 due to payment default in December 2015. Property performance has declined since issuance with net operating income (NOI) debt service coverage (DSCR) reporting at 1.16x for year-end (YE) 2015, which is an improvement from YE 2014 at 0.53x but remains significantly below issuance at 1.76x. The property had become several months past due on payables owed to numerous vendors and for utility bills, which triggered a cash flow sweep and emergency funds remitted by the servicer to the property manager to keep the property operational. The servicer inspected the property in February 2016 where the property was found to be in fair condition with numerous instances of deferred maintenance. A pre-negotiation agreement was executed and a receiver was put in place in April 2016. The borrower filed for chapter 11 bankruptcy in May 2016, and the servicer is currently navigating the bankruptcy process.
The Rating Outlook remains Stable for all classes. Fitch does not foresee positive or negative ratings migration until a material economic or asset level event changes the transaction's portfolio-level metrics. Additional information on rating sensitivity is available in the report 'J.P. Morgan Chase Commercial Mortgage Securities Trust 2013-C14' (May 2, 2014), 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 ratings:
--$38.6 million class A-1 at 'AAAsf'; Outlook Stable;
--$278.3 million class A-2 at 'AAAsf'; Outlook Stable;
--$75 million class A-3 at 'AAAsf'; Outlook Stable;
--$288.5 million class A-4 at 'AAAsf'; Outlook Stable;
--$81.8 million class A-SB at 'AAAsf'; Outlook Stable;
--$80.4 million class A-S at 'AAAsf'; Outlook Stable;
--$842.6 million * class X-A at 'AAAsf'; Outlook Stable;
--$76.1 million class B at 'AA-sf'; Outlook Stable;
--$45.9 million class C at 'A-sf'; Outlook Stable;
--$53.1 million class D at 'BBB-sf'; Outlook Stable;
--$11.5 million class E at 'BBB-sf'; Outlook Stable;
--$12.9 million class F at 'BB+sf'; Outlook Stable;
--$23 million class G at 'Bsf'; Outlook Stable.
* Notional amount and interest-only.
Fitch does not rate the class NR or class X-C certificates. The class X-B certificate was withdrawn from the transaction prior to closing.
Additional information is available at www.fitchratings.com.
Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)
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)
J.P. Morgan Chase Commercial Mortgage Securities Trust 2013-C14 -- Appendix
Dodd-Frank Rating Information Disclosure Form