Fitch Affirms CGCMT 2014-GC25
OREANDA-NEWS. Fitch Ratings has affirmed 11 classes of Citigroup Commercial Mortgage Trust (CGCMT) commercial mortgage pass-through certificates series 2014-GC25. A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
The affirmations of CGCMT 2014-GC25 are based on the stable performance of the underlying collateral since issuance. As of the October 2015 distribution date, the pool's aggregate principal balance has been reduced by 0.45% to $838.2 million from $842 million at issuance. The pool has experienced no realized losses to date. There are currently no delinquent or specially serviced loans, and no loans are defeased. De minimis interest shortfalls are currently affecting the non-rated class G.
The largest loan in the pool (13.1%) is secured by Bank of America Plaza, a 1.4 million square foot (sf) office building located in downtown Los Angeles. The largest tenants include The Capital Group Companies (22.6% of the net rentable area [NRA]), Shepard, Mullin, Richter, & Hampton LLC (13% NRA) and Bank of America (11.4% NRA). As of June 2015, the property was 92% occupied and reported a net operating income (NOI) debt service coverage ratio (DSCR) of 2.37x.
The second largest set of loans in the pool (7.34% of the pool) consists of five cross-collateralized and cross-defaulted loans secured by five anchored or unanchored retail properties located in CA, ND, or CO. Anchors include Office Depot, Stater Bros, Sears, Chuck E. Cheese, Trader Joes, and King Soopers. The combined occupancy for the five properties reported at 93%. The largest of the loans is the $20.4 million Orange Plaza Shopping Center loan (2.4% of the pool), secured by a 132,000 sf shopping center in Redlands, CA. The property was 99.8% occupied per the December 2014 rent roll and is anchored by Office Depot (29% NRA) and Trader Joes (15% NRA) and shadow-anchored by Vons grocery store.
The third largest loan in the pool (7.2%) is the Fenley office portfolio, secured by 11 office properties totaling 922,903 sf located throughout Louisville, KY. The portfolio is highly granular and at issuance was leased to 76 tenants of various industries, including financial, insurance and legal. The portfolio's largest tenant, ADP Inc. (previously 5.2% of the total NRA), had vacated at the end of its lease term in July 2015. According to the servicer, a new 10-year lease has been executed for 64% of the vacated space and a letter of intent is outstanding for the remainder of the former ADP space. As of June 2015 (prior to ADP Inc. vacancy) occupancy reported at 94%, with NOI DSCR at 2.12x.
The Rating Outlooks remain Stable for all classes due to stable performance of the pool since issuance. 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 'Citigroup Commercial Mortgage Trust 2014-GC25' (July 28, 2015), 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:
--$26.8 million class A-1 at 'AAAsf'; Outlook Stable;
--$9.8 million class A-2 at 'AAAsf'; Outlook Stable;
--$235 million class A-3 at 'AAAsf'; Outlook Stable;
--$248.8 million class A-4 at 'AAAsf'; Outlook Stable;
--$65.2 million class A-AB at 'AAAsf'; Outlook Stable;
--$634.7 million* class X-A at 'AAAsf'; Outlook Stable;
--$52.6 million* class X-B at 'AA-sf'; Outlook Stable;
--$45.3 million a class A-S at 'AAAsf'; Outlook Stable;
--$52.6 million a class B at 'AA-sf'; Outlook Stable;
--$40.0 million a class C at 'A-sf'; Outlook Stable.
--$137.9 million a class PEZ at 'A-sf'; Outlook Stable;
*Notional amount and interest-only.
a Class A-S, B, and C certificates may be exchanged for class PEZ certificates, and class PEZ certificates may be exchanged for up to the full certificate principal amount of the class A-S, B and C certificates.