Fitch Affirms GSMSC 2013-KYO

Fitch Ratings has affirmed GS Mortgage Securities Corporation Trust 2013-KYO Commercial Pass-Through Certificates, series 2013-KYO as follows:

--$552.6 million class A 'AAAsf'; Outlook Stable;

--$552.6 million class XA-1 'AAAsf'; Outlook Stable;

--$552.6 million class XA-2 'AAAsf'; Outlook Stable;

--$552.6 million class XAF-1'AAAsf'; Outlook Stable;

--$552.6 million class XAF-2 'AAAsf'; Outlook Stable.

Fitch does not rate the following classes:

XB-1, XB-2, XBF-1, XBF-2, B, C, D, E.

KEY RATING DRIVERS

The affirmations and Stable Rating Outlooks are based on improved property performance since issuance. The trailing-twelve month (TTM) Sept. 30, 2013 servicer-reported net cash-flow (NCF) was approximately 18% higher than Fitch's issuance cash flow analysis. Revenue per available room (RevPAR) increased to $237.57 as of TTM Sept. 30, 2013 compared to $218.01 at issuance.

RATING SENSITIVITIES

The Outlook remains Stable for all classes. No rating actions are expected unless there are material declines in property occupancy or cash flow. The transaction is secured by six hotels, five of which are located in Hawaii (91.5% of the allocated loan amount) and one in San Francisco. The loan is more susceptible to single event risk related to a market. Hotel performance is considered to be more volatile due to the segments operating nature.

Initial Key Rating Drivers and Rating Sensitivity is further described in the New Issue report titled GS Mortgage Securities Corporation Trust, Series 2013-KYO (March 2013) which is available at www.fitchratings.com.

The transaction represents a securitization of the beneficial interests in the mortgage loan securing the Sheraton Waikiki, The Royal Hawaiian, Westin Moana Surfrider, and Sheraton Princess Kaiulani hotels located in Waikiki, HI; Sheraton Maui Resort & Spa in Kaanapalai, HI; and The Palace Hotel in San Francisco, CA. Proceeds of the loan were primarily used to pay off existing debt secured by the property, return equity to sponsors, fund reserves, and pay closing costs. The certificates will follow a sequential-pay structure.

The largest asset in the pool is the full-service Sheraton Waikiki. It is the second largest hotel in Waikiki and can accommodate large tour operators and meeting groups. The 1,636-key hotel includes two, 30-story, wing-shaped structures that opened in 1971, built around the seven-story Manor Wing originally built in 1960, which, today, only serves as offices for ownership. Property amenities include approximately 65,000 sf of meeting space (including a 26,000-sf ballroom), 41,000 sf of retail space, 75% ocean-view guest rooms, three outdoor swimming pools (inclusive of the new infinity pool), a fitness center, and seven food and beverage outlets.

The second largest asset is the Royal Hawaiian, a 528-key, full-service luxury hotel located along Waikiki Beach. The property opened in 1927 and included the 350-key historical building. The tower building was completed in 1969 and includes 178 more spacious guest rooms. Hotel amenities include renovated rooms and suites, approximately 11,832 sf of meeting space, 42,000 sf of lawn space, three restaurants, and 20,600 sf of retail space, including the Abhasa Spa. Royal Hawaiian shares the parking facilities located at Sheraton Waikiki. The Royal Hawaiian is one of only two hotels in Waikiki (the other being Westin Moana Surfrider) with its own private beach for guests.

The third largest asset in the pool is the Westin Moana Surfrider, the oldest hotel in Waikiki. The property benefits from its location along Waikiki Beach and direct frontage along Kalakaua Avenue. The 793-key, full-service hotel originally opened in 1901 with the Banyan Wing and was later expanded in 1952 and 1967 with the addition of the Diamond Head Tower Wing and Surfrider Tower, respectively. Amenities include renovated rooms and suites, an oceanfront pool, 13,942 sf of meeting space, 21,360 sf of retail space, three restaurants, a fitness center, an outdoor pool, the full-service Moana Lani Spa, and an oceanfront chapel leased to a third-party operator. The hotel is one of only two hotels in Hawaii (the other being Royal Hawaiian) with its own private beach for guests

The loan sponsor is Kyo-ya Hotels & Resorts, LP, which is indirectly owned by Kyo-ya Company LLC, an indirect wholly owned subsidiary of Kokusai Kogyo Kabushiki Kaisha (or KK, the Japan Sponsor). The Japan Sponsor is jointly owned by funds and entities controlled by or managed by Cerberus Capital Management, L.P. and/or Cerberus Real Estate Capital Management, LLC (55%) and Kokusai Holdings K.K., an entity owned and controlled by Takamasa Osano and his family members and affiliates (45%).

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 Corporation Trust, Series 2013-KYO--Appendix (March 2013).

Applicable Criteria and Related Research:

--GS Mortgage Securities Corporation Trust, Series 2013-KYO (March 2013);

--'Global Structured Finance Rating Criteria' (May 2013);

--'Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions' (Sept. 2013).

Applicable Criteria and Related Research:

GS Mortgage Securities Corporation Trust, Series 2013-KYO

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=701993

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=718468

GS Mortgage Securities Corporation Trust, Series 2013-KYO -- Appendix

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=703534

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=816666

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