Fitch Upgrades One Class and Affirms Nine Classes of CFCRE 2011-C1

CHICAGO--(BUSINESS WIRE)--

Fitch Ratings has upgraded one class and affirmed nine classes of CFCRE Commercial Mortgage Trust 2011-C1 commercial mortgage pass-through certificates. A detailed list of rating actions follows at the end of this release

KEY RATING DRIVERS

The upgrade of class B is the result of increased credit enhancement to the class due to 24.6% paydown and the defeasance of the second largest loan in the pool, GSA-NGP Portfolio III (9.4% of the pool) since Fitch's last rating action. In total, three loans (14.9% of the pool) are reported as defeased. There are five loans designated as Fitch Loans of Concern (25.6% of the pool), which includes the only specially serviced loan, Hudson Valley Mall (11.3% of the pool).

As of the September 2015 distribution date, the pool's aggregate principal balance has been reduced by 30.7% to $439.7 million from $634.5 million at issuance. The pool is becoming concentrated, with the top 10 loans representing 59% of the pool balance. In addition, nine loans (35.8% of the pool) are scheduled to mature in the next one year. Interest shortfalls are currently affecting class NR.

The largest loan is the specially serviced Hudson Valley Mall loan. The loan is secured by a 765,465 square foot (sf) regional mall, of which 639,465 sf is collateral, located in Kingston, NY, approximately 50 miles south of Albany, NY. The property, which was built in 1981, is currently anchored by Macy's (16% net rentable area [NRA] expires 2017), Sears (15% NRA, expires 2019), Regal Cinemas (6% NRA, expires 2017) and Target (ground lease, expires 2026). JC Penney, which represented 9% of the NRA, closed in April 2015 in advance of their October 2017 lease maturity. The sponsor is working to extend leases on the anchor and junior anchor stores, several of which have upcoming 2015 and 2016 lease maturities. Significant tenant rollover has occurred since origination, with the loss of tenants including Buffalo Wild Wings, Christopher & Banks, Finish Line, New York & Co., Children's Place, Sprint, Verizon, and Zales.

The second largest non-defeased loan is Tribeca West (8.8% of the pool), which is backed by a 151,029-sf office building located on the west side of Los Angeles, CA. The property was built in 1980 and renovated in 2007 and primarily serves media and entertainment tenants for post-production facilities. The property was 88% occupied as of the servicer provided July 2015 rent roll. The loan is scheduled to mature in February 2016.

Additionally, two loans in the top 10, Westport Village Retail (4.6% of the pool) and the Heights at McArthur Park (3.8%), have both experienced a decline in occupancy since issuance. Fitch will continue to monitor the performance of these loans. The Westport Village Retail loan is scheduled to mature in April 2016.

RATING SENSITIVITIES

The Positive Outlook on class C indicates the potential for upgrade if maturing loans payoff leading to increased credit enhancement to the senior classes. The Negative Outlooks on classes E, F and G remain as there is uncertainty regarding the workout of the specially serviced loan coupled with an increase in Fitch Loans of Concern since Fitch's prior rating actions.

DUE DILIGENCE USAGE

No third-party due diligence was provided or reviewed in relation to this rating action.

Fitch has upgraded the following class:

--$16.7 million class B to 'AAAsf' from 'AAsf', Outlook Stable.

Fitch affirms the following classes and revises Rating Outlooks as indicated:

--$141.8 million class A-2 at 'AAAsf', Outlook Stable;

--$32.5 million class A-3 at 'AAAsf', Outlook Stable;

--$153.6 million class A-4 at 'AAAsf', Outlook Stable;

--Interest-only class X-A at 'AAAsf', Outlook Stable;

--$19 million class C at 'Asf', Outlook to Positive from Stable;

--$14.3 million class D at 'BBB+sf', Outlook Stable;

--$27 million class E at 'BBB-sf', Outlook Negative;

--$7.9 million class F at 'BBsf', Outlook Negative;

--$7.9 million class G at 'Bsf', Outlook Negative.

Class A-1 has paid in full. Fitch does not rate the class NR or interest-only class X-B certificates.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria (pub. 10 Dec 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=812608

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=992080

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=992080

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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