Fitch Upgrades WAMU 2005-C1
OREANDA-NEWS. Fitch Ratings has upgraded two and affirmed three classes of Washington Mutual Asset Securities Corporation (WAMU) commercial mortgage pass-through certificates series 2005-C1. A full list of rating actions follows at the end of this release.
KEY RATING DRIVERS
The upgrades are the result of increased credit enhancement due to scheduled loan payoffs and amortization since Fitch's last rating action. There are 21 loans remaining in the pool, none of which are delinquent or specially serviced. Fitch modeled losses of 4.9% of the remaining pool; expected losses on the original pool balance total 0.2%, including $974,312 (0.2% of the original pool balance) in realized losses to date. Fitch has designated two loans (5%) as Fitch Loans of Concern.
As of the January 2016 distribution date, the pool's aggregate principal balance has been reduced by 98.9% to $7.2 million from $649.5 million at issuance. Interest shortfalls are currently affecting class N.
The largest loan in the pool (44%) is secured by a 91,474 square foot (sf) single-tenant industrial property located in Hamilton, NJ. The property remains 100% occupied by FedEx Corporation whose lease expires in February 2023 with average rent at $9.63 sf. Per REIS as of the fourth quarter 2015 (4Q15), the Central NJ metro warehouse/distribution market vacancy is 9.7% with average asking rent of $5.24 psf and the Mercer submarket vacancy rate is 2.6% with average asking rent of $4.93 psf. The property continues to exhibit stable performance with the most recently reported debt service coverage ratio (DSCR) as of Dec. 31, 2014 at 1.27x. The loan matures July 1, 2016.
The largest loan of concern (2.7%) is secured by a multifamily property consisting of 10 units located in Los Angeles, CA. The loan is currently on the master servicer's watchlist due to a 10% decline in DSCR resulting from increased professional services (attorney fees) and general and administrative expenses. The most recently reported DSCR as of Dec. 31, 2014 is 1.09x, down from 1.21x the prior year. The master servicer has contacted the borrower for an updated rent roll. Per REIS as of 4Q15, the Los Angeles metro multifamily vacancy rate is 3.3% with average asking rent $1,611 and the West LA/Westwood multifamily submarket vacancy is 3% with an average asking rent of $2,486. The loan matures Aug. 1, 2018.
Rating Outlooks on classes J and K remains Stable due to increasing credit enhancement and continued paydown. Loan maturities are as follows: 44.2% 2016, 9.4% 2017, 40.1% 2018, and 6.3% 2019. Nineteen of the 21 loans remaining (49% of the pool) are fully amortizing.
DUE DILIGENCE USAGE
No third-party due diligence was provided or reviewed in relation to this rating action.
Fitch has upgraded the following ratings:
--$839,768 class J to 'AAAsf' from 'Asf'; Outlook Stable;
--$2.4 million class K to 'BBBsf' from 'Bsf'; Outlook Stable.
Fitch has affirmed the following ratings but revised the REs as indicated:
--$2.4 million class L at 'Bsf'; Outlook Stable;
--$812,000 class M at 'CCCsf'; RE 100%;
--$652,799 class N at 'Dsf'; RE 45%.
The class A-1, A-2, A-J, B, C, D, E, F, G and H certificates have paid in full. Fitch previously withdrew the rating on the interest-only class X certificates.