Fitch Ratings has affirmed 14 classes of WFRBS Commercial Mortgage Trust 2013-C11 certificates due to stable performance since issuance. A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
The affirmations are based on the stable performance of the underlying collateral pool. As of the January distribution, the pool's aggregate principal balance has been paid down by 1.25% to $1.42 billion from $1.44 billion at issuance. 100% of the loans reported full year 2013 financials. Based on the 2013 financials, the pool's overall net operating income (NOI) has been stable with a 3.2% NOI increase over the reported portfolio NOI at issuance.
There have been no delinquent or specially serviced loans since issuance. There are five loans on the servicer watchlist, three of which are on the watchlist due to concerns with upcoming lease expirations at the properties and the lack of information from the sponsors regarding the status of renewals. The remaining two loans are on the servicer list for increased expenses and deferred maintenance issues that have occurred since issuance. Although there are no Fitch Loans of Concern in the pool, Fitch is monitoring the performance of three loans in the top 15.
The second largest loan is collateralized by a 1,285,834 square foot (sf) Concord Mills, a super-regional mall located in Concord, NC (8.82% of the pool). The property is located one mile from Charlotte Motor Speedway and approximately 10 miles northeast of downtown Charlotte, NC. The sponsor of the property is Simon Property Group (Simon), which purchased the development in 2007. The mall is the top outlet format in the state of North Carolina and sales are second only to Southpark Mall (also owned by Simon) that is located 23 miles southwest of the subject. In addition, Charlotte Premium Outlet Mall, also owned by Simon, opened 27 miles to the southwest of the mall in 2014. While the performance of Concord Mills has not yet been impacted by the new competition, Fitch continues to monitor the loan for any changes in performance associated with the new Premium Outlet opening.
The seventh largest loan in the pool, Encana Oil & Gas (4.66%), a 318,582-sf suburban office building located in Plano, TX, is 100% leased by Encana through June 2027. Per media reports, Encana vacated the building during 2014 in an effort to consolidate business operations in Denver and Calgary. The servicer through the 17g5 website confirmed that Encana expects to honor the lease through the term and is currently marketing the space for sublease. Encana has received several unsolicited bids on the building but continues to market the space with the expectation of subleasing at higher rates than the master lease. LegacyTexas Bank recently signed a lease for the 12th floor, which is under servicer review. Fitch will continue to monitor the status of subleasing at the property.
Community Corporate Center, the fourteenth largest loan in the pool (1.06%), is collateralized by 255,371 sf office property located in suburban Columbus, OH. The subject has a diverse rent roll of 25 distinct tenants with the top five comprising only 45.9% of the net rentable area (NRA). Tenant rollover at the property is concentrated over the next 24 months with 24.8% and 24.1% of the NRA rolling in 2015 and 2016, respectively. A leasing reserve was established at issuance to mitigate the risk and costs associated with renewing the existing tenants in a highly competitive market environment. Fitch will monitor the status of leasing at the property.
RATINGS SENSITIVITY
The Rating Outlook for all classes remains Stable. 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 'WFRBS Commercial Mortgage Trust 2013-C11' (Feb. 27, 2014), available at 'www.fitchratings.com'.
Fitch affirms the following classes:
--$47.1 million class A-1 at 'AAAsf'; Outlook Stable;
--$278.5 million class A-2 at 'AAAsf'; Outlook Stable;
--$46.8 million class A-3 at 'AAAsf'; Outlook Stable;
--$100.0 million class A-4 at 'AAAsf'; Outlook Stable;
--$417.8 million class A-5 at 'AAAsf'; Outlook Stable;
--$97.3 million class A-SB at 'AAAsf'; Outlook Stable;
--$134.7 million class A-S at 'AAAsf'; Outlook Stable;
--$1.1 billion class X-A at 'AAAsf'; Outlook Stable;
--$152.6 million class X-B at 'A-sf'; Outlook Stable;
--$93.4 million class B at 'AA-sf'; Outlook Stable;
--$59.2 million class C at 'A-sf'; Outlook Stable;
--$46.7 million class D at 'BBB-sf'; Outlook Stable;
--$32.2 million class E at 'BBsf'; Outlook Stable;
--$25.1 million class F at 'Bsf'; Outlook Stable.
Fitch does not rate the class G certificate.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (August 4, 2014);
--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 10, 2014).
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 reports:
--'WFRBS Commercial Mortgage Trust 2013-C11' (Feb. 27, 2013).
--'WFRBS Commercial Mortgage Trust 2013-C11 -- Appendix' (Feb. 27, 2013).
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
WFRBS Commercial Mortgage Trust 2013-C11
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=701027
WFRBS Commercial Mortgage Trust 2013-C11 -- Appendix
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=701633
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=975055
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