Market Overview

Fitch Affirms MSC 2011-C1

NEW YORK--(BUSINESS WIRE)--

Fitch Ratings has affirmed 11 classes of Morgan Stanley Capital I Trust (MSC) commercial mortgage pass-through certificates series 2011-C1 due to stable performance. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

Fitch's affirmations are based on the stable performance of the underlying collateral pool. There have been no delinquent or specially serviced loans since issuance. The pool has experienced no realized losses to date.

As of the January 2013 distribution date, the pool's aggregate principal balance has been reduced by 1.9% to $1.52 billion from $1.55 billion at issuance. No loans have defeased since issuance.

The largest loan in the transaction (15.5%) is secured by a 1.1 million square foot (sf) (435,219 sf owned) regional mall located in Newark, DE. The mall is anchored by Macy's, JC Penney, Target, and Nordstrom. Major tenants include Barnes & Noble (anchor owned), Forever 21 (2.5%) net rentable area (NRA) and H&M (1.8%) NRA. In-line tenants include Express/Express Men, Anthropologie, Victoria's Secret, and Urban Outfitters. Total mall occupancy as of Sept. 30, 2012 was 98%, compared to 94% at issuance. The most recent servicer-reported debt service coverage ratio (DSCR) as of third quarter 2012 was 2.67 times (x) up from 1.88x at issuance. The loan sponsors are Prime Property Fund and General Growth Properties.

The second largest loan in the pool (11.5%) is secured by a two-building office complex consisting of 1.9 million sf located in Chicago, IL. Major tenants are Blue Cross and Blue Shield Association (12%), lease expiration in March 2024, Fox Television Studios (5%), lease expiration December 2022, and Teng & Associates (4%), lease expiration June 2017. There is limited near-term rollover with 8% rolling in 2013. Additionally, less than 15% rolls annually through 2020. The property is currently 79% leased, which compares to 73% at issuance. The most recent servicer-reported DSCR as of third quarter 2012 was 1.99x up from 1.87x at issuance.

The largest Fitch Loan of Concern is the eighth largest loan in the deal (3.6%) and is secured by a 222,768 sf office building located in the Westwood section of Los Angeles, CA. The property has seen a decline in occupancy since issuance. The largest tenants at issuance were Richardson & Patel (10.3%) NRA, with a lease expiration in October 2011, Castle & Cook (10.2%), lease expiration July 2015, and The Regency Club (8.2%), lease expiration in June 2011. The most recent servicer-reported occupancy as of September 2012 is 60% down from 70% at year-end 2011 and 84.2% at issuance. The most recent servicer-reported DSCR as of September 2012 was 1.04x, down from 1.55x at issuance. Fitch is awaiting an updated rent roll. Fitch will continue to closely monitor this loan.

Fitch affirms the following classes:

--$58 million class A-1 at 'AAAsf'; Outlook Stable;
--$597.2 million class A-2 at 'AAAsf'; Outlook Stable;
--$105.1 million class A-3 at 'AAAsf'; Outlook Stable;
--$404.1 million class A-4 at 'AAAsf'; Outlook Stable;
--Interest-only class X-A 'at 'AAAsf'; Outlook Stable;
--$60 million class B at 'AAsf'; Outlook Stable;
--$89 million class C at 'Asf'; Outlook Stable;
--$85.2 million class D at 'BBBsf'; Outlook Stable;
--$19.4 million class E at 'BBB-sf'; Outlook Stable;
--$13.5 million class F at 'BB+sf'; Outlook Stable;
--$15.5 million class G at 'BBsf'; Outlook Stable.

Fitch does not rate the class H, J, K, L, M and interest-only class X-B certificates.

Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 18, 2012 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 >> CMBS >> Criteria Reports

Additional information is available at www.fitchratings.com. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (June 6, 2012);
--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 18, 2012).

Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679923
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=696969

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.

Fitch Ratings
Primary Analyst:
Alex Benz, +1-212-908-0854
Analyst
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Committee Chairperson:
Mary MacNeill, +1-212-908-0785
Managing Director
or
Media Relations:
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com

 

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