Fitch Ratings has downgraded three distressed classes and affirmed 13 classes of GMAC Commercial Mortgage Securities, Inc. (GMACC 2005-C1) commercial mortgage pass-through certificates series 2005-C1. A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
The downgrades to the distressed classes are due to the increased probability of losses. Fitch modeled losses of 20.3% of the remaining pool; expected losses on the original pool balance total 14%, including $132.6 million (8.3% of the original pool balance) in realized losses to date. There are 49 loans remaining in the pool; Fitch has designated 15 loans (38%) as Fitch Loans of Concern, which includes seven specially serviced assets (16.5%).
As of the January 2015 distribution date, the pool's aggregate principal balance has been reduced by 72% to $447.5 million from $1.6 billion at issuance. Per the servicer reporting, six loans (11.8% of the pool) are defeased. Interest shortfalls are currently affecting classes A-J through P.
The largest contributor to expected losses is the 3301 N. Buffalo Drive - A note and B note loan (12.9% of the pool), which is secured by a 321,041 square foot (sf) office property located in Las Vegas, NV. Subsequent to its 2010 restructure into an A and B note and return back to the master servicer, the loan has continued to perform under the terms of the modification. Occupancy has remained flat at 60.7% as of Sept. 30, 2014 from 60.6% as of year-end (YE) 2012. While the debt service coverage ratio (DSCR) has improved to 1.80x from 1.23x over the same period. Fitch is modeling a significant loss on the loan due to the property's consistently low occupancy and weak market. According to REIS, as of the third quarter of 2014, the overall Vegas office market reported a 31.6% vacancy rate.
The next largest contributor to expected losses is a real estate owned (REO) 180,737 sf retail property (4.1% of the pool) located in Colorado Springs, CO. Foreclosure was completed in June 2013. As of November 2014, the property was 53.6% occupied. The property is expected to be marketed for sale after repair issues are addressed and the property is further leased up.
The third largest contributor to expected losses is a specially-serviced loan (3.5% of the pool), which is secured by a 225,439 sf retail center located in East Hartford, CT. The loan transferred in 2013 due to imminent default. As of November 2014, the property was 91% occupied with a DSCR well below 1.00x, as rent concessions are currently in place to avoid a co-tenancy trigger. The two largest tenants (70% of total space) have lease expirations in March and September 2015. Foreclosure proceedings have been initiated.
RATING SENSITIVITIES
The Stable Outlooks on classes A1-A, A-5 and A-M reflect increased credit enhancement and continued pay down. The distressed classes are subject to further downgrades should additional losses be realized.
Fitch downgrades the following classes as indicated:
--$34 million class B to 'Csf' from 'CCCsf'; RE 0%;
--$12 million class C to 'Csf' from 'CCsf'; RE 0%;
Fitch affirms the following classes as indicated:
--$78.2 million class A-1A at 'AAAsf'; Outlook Stable;
--$22.5 million class A-5 at 'AAAsf'; Outlook Stable;
--$159.8 million class A-M at 'AAAsf'; Outlook to Stable from Negative;
--$127.8 million class A-J at 'CCCsf'; RE 50%.
--$13.2 million class D at 'Dsf'; RE 0%.
--$0 class E at 'Dsf'; RE 0%;
--$0 class F at 'Dsf'; RE 0%;
--$0 class G at 'Dsf'; RE 0%;
--$0 class H at 'Dsf'; RE 0%;
--$0 class J at 'Dsf'; RE 0%;
--$0 class K at 'Dsf'; RE 0%;
--$0 class L at 'Dsf'; RE 0%;
--$0 class M at 'Dsf'; RE 0%;
--$0 class N at 'Dsf'; RE 0%.
Fitch does not rate the class P certificates. Fitch previously withdrew the ratings on class O and the interest-only class X-1 and X-2 certificates.
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 then CMBS then 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=978955
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