Fitch Affirms WFRBS 2011-C5
KEY RATING DRIVERS
The affirmations of WFRBS 2011-C5 are based on the stable performance of the underlying collateral. The transaction continues to have a high retail concentration of 46%, with five (56.8%) of the top 15 loans being secured by retail properties. The pool has experienced no realized losses to date. Since issuance only one loan (0.6% of the pool) has been in special servicing due to a borrower bankruptcy, and was subsequently returned to the master servicer in July 2013, following a change in ownership. The property's performance has since remained stable.
As of the August 2015 distribution date, the pool's aggregate principal balance has been reduced by 5% to \\$1.04 billion from \\$1.09 billion at issuance. There are no specially serviced or delinquent loans, and three loans (3.3% of the pool) are fully defeased. Four loans are considered Fitch Loans of Concern (3.1% of the pool). Interest shortfalls are currently affecting the non-rated class H.
The largest loan of the pool (19%) is secured by an 878,974-square foot (sf) lifestyle center comprised of retail and office space located in Austin, TX. The center features four anchors, Dillard's and Macy's, which are non-collateral, Dick's Sporting Goods, and Neiman Marcus. The servicer-reported debt service coverage ratio (DSCR) increased to 1.94x at year-end (YE) 2014 from 1.82x at YE 2013. Occupancy increased to 97% from 95% during the same period.
The second largest loan of the pool (8.2%) is secured by a 206,693-sf mixed use retail and office property located in the SoHo neighborhood of Manhattan. The building was recently renovated and repositioned as a residential and commercial development. The property's performance has improved significantly over the last two years due to the expiration of tenant rent abatements in 2012. The servicer-reported occupancy and DSCR were 100% and 1.36x respectively as of YE 2014 compared to 1.22x and 97% at YE 2012.
The largest Fitch Loan of Concern (1.9% of the pool) is secured by an 186,117-sf office complex comprised of eight buildings located in Torrance, CA. As of the June 2015 rent roll, the property was 87% leased to a diverse mix of approximately 60 tenants, with the largest tenant representing 9.4% of the collateral. There is considerable rollover over the next two years, with approximately 43% of net rentable area (NRA) scheduled to expire through the end of 2016, including the largest tenant (Providence Medical Institute). At YE 2014, the servicer-reported DSCR and occupancy increased to 1.56x and 86%, respectively, from 1.52x and 82% at YE 2013. Fitch will continue to monitor the loan as leasing status updates are received.
The Rating Outlooks remain Stable for all classes due to relatively stable performance of the pool since last review and continued paydown. Fitch does not foresee positive or negative ratings migration until a material economic or asset level event changes the transaction's portfolio-level metrics. 11% of the pool matures in 2016, which could allow for future upgrades assuming paydown occurs. Downgrades would be considered if there were material, negative changes to property occupancies or cash flows, increased delinquencies, or loans transferred to special servicing Additional information on rating sensitivity is available in the report 'WFRBS Commercial Mortgage Trust 2011-C5' (Dec. 6, 2011), 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:
--\\$12.1 million class A-1 at 'AAAsf'; Outlook Stable;
--\\$118.4 million class A-2 at 'AAAsf'; Outlook Stable;
--\\$107.9 million class A-3 at 'AAAsf'; Outlook Stable;
--\\$471 million class A-4 at 'AAAsf'; Outlook Stable;
--\\$85.9 million class A-S at 'AAAsf'; Outlook Stable;
--\\$795.3 million* class X-A at 'AAAsf'; Outlook Stable;
--\\$54.6 million class B at 'AAsf'; Outlook Stable;
--\\$40.9 million class C at 'Asf'; Outlook Stable;
--\\$25.9 million class D at 'BBB+sf'; Outlook Stable;
--\\$49.1 million class E at 'BBB-sf'; Outlook Stable;
--\\$17.7 million class F at 'BBsf'; Outlook Stable;
--\\$16.4 million class G at 'Bsf'; Outlook Stable;
*Notional amount and interest-only.
Fitch does not rate the class H and X-B certificates.