Fitch Ratings has affirmed 14 classes of Goldman Sachs Mortgage Company's GS Mortgage Securities Trust (GSMS) commercial mortgage pass-through certificates, series 2013-GC10. A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
The affirmations are due to stable performance of the underlying pool since issuance. As of the January 2015 distribution date, the pool's aggregate principal balance has been reduced by 2.3% to $839.6 million from $859.4 million at issuance. Fitch has designated six loans (4.5%) as Fitch Loans of Concern. There are currently no delinquent or special serviced loans. All 61 loans (100% of the pool) reported year end (YE) 2013 financials, and 54 loans (94.8%) reported partial year or trailing 12 month (TTM) 2014 financials. Based on the servicer provided most recent financials, the pool's overall net operating income (NOI) has been stable with a 4.1% NOI increase over the portfolio NOI at issuance.
The largest loan of concern is secured by a 124,000 square foot (SF) retail center located in West Palm Beach, FL (1.3% of the pool). Anchor tenants include Bed Bath & Beyond (23% net rentable area [NRA]), Michael's Stores Inc. (21% NRA), and Staples (18% NRA). Occupancy has remained at 78% since issuance, primarily due to a large vacant anchor space (21%). The vacant space was recently filled with a temporary seasonal tenant, Spirit of Halloween, whose lease expired in November 2014. The year to date (YTD) September 2014 net cash flow (NCF) debt service coverage ratio (DSCR) reported at 1.06x, a decline from 1.26x at YE 2013. The loan remains current as of the January 2014 remittance date.
The second largest loan of concern is secured by a 32,100 SF retail center located in Nassau, NY (1.2%). Occupancy declined to 50% as of September 2014 compared to 100% at issuance. Loehmann's, the property's largest tenant at issuance (52% NRA), had filed for bankruptcy and subsequently vacated the center. As a result the YTD September 2014 NOI DSCR declined to 0.85x, compared to 1.64x at YE 2013. The servicer reported that the vacant space is currently listed for lease. The loan remains current as of the January 2014 remittance date.
The largest loan in the pool, Empire Hotel & Retail (13.1% of the pool), is secured by a 423-room hotel located on Manhattan's Upper West Side, adjacent to Lincoln Center and two blocks from Columbus Circle and Central Park. The property includes 61,223 square feet (sf) of retail space leased to five third party tenants including the Rooftop Lounge. As of the TTM ended November 2014, occupancy reported at 87.9%, compared to 88.1% at YE December 2013 and 87.5% at issuance. The TTM November 2014 average daily rate (ADR) and revenue per available room (RevPAR) reported at $250.01 and $219.81, respectively. The NOI DSCR reported at 1.64x for TTM September 2014, compared to 1.68x at YE 2013, and 1.71x at issuance.
RATING SENSITIVITY
The Rating Outlook remains Stable for all classes. Due to the recent issuance of the transaction and stable performance, 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 'GS Mortgage Securities Trust' (May 21, 2013), available at 'www.fitchratings.com'.
Fitch affirms the following classes:
--$33.6 million class A-1 at 'AAAsf'; Outlook Stable;
--$35.3 million class A-2 at 'AAAsf'; Outlook Stable;
--$21 million class A-3 at 'AAAsf'; Outlook Stable;
--$110 million class A-4 at 'AAAsf'; Outlook Stable;
--$300.5 million class A-5 at 'AAAsf'; Outlook Stable;
--$81.4 million class A-AB at 'AAAsf'; Outlook Stable;
--$54.8 million class A-S at 'AAAsf'; Outlook Stable;
--$636.5 million* class X-A at 'AAAsf'; Outlook Stable;
--$103.1 million* class X-B at 'Asf'; Outlook Stable;
--$63.4 million class B at 'AAsf'; Outlook Stable;
--$39.7 million class C at 'Asf'; Outlook Stable;
--$34.4 million class D at 'BBB-sf'; Outlook Stable;
--$22.6 million class E at 'BB+sf'; Outlook Stable;
--$16.1 million class F at 'Bsf'; Outlook Stable.
*Notional amount and interest-only.
Fitch does not rate the class G certificates.
A comparison of the transaction's Representations, Warranties, and Enforcement (RW&E) mechanisms to those of typical RW&Es for the asset class is available in the following report:
--'GS Mortgage Securities Trust 2013-GC10 -- Appendix' (May 21, 2013).
Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 10, 2014 report, 'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria', which is available at 'www.fitchratings.com' under the following headers:
Structured Finance >> CMBS >> Criteria Reports
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (Aug. 4, 2014);
--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 10, 2014).
Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=812608
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=975095
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