Fitch Affirms JPMCC 2011-C5

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed 11 classes of JPMCC's (JPMorgan Chase & Co.) commercial mortgage pass-through certificates, series 2011-C5. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The affirmations reflect stable pool performance since issuance. As of the May 2016 distribution date, the pool's aggregate principal balance has been reduced by 13.27% to $893 million from $1.03 billion at issuance. There are no delinquent loans in the pool, but there are currently two Fitch Loans of Concern (7.4% of the pool) and additional loans Fitch is monitoring.

There was one variance from criteria related to class C. The surveillance criteria indicated that a rating upgrade above the recommended rating was possible for the class. Fitch has determined that further upgrades are not warranted at this time due to concern regarding near-term maturities and declining performance for select loans in the pool.

The largest loan in the pool (15.7%) is secured by a 792-room full-service hotel located in Chicago, IL. Property amenities include 45,000 square feet (sf) of meeting space, four restaurants, a junior Olympic-size swimming pool and spa and fitness facilities. The net operating income debt service coverage ratio (NOI DSCR) for the subject declined from 1.88x as of year-end (YE) 2014 to 1.58x as of YE 2015. NOI declined from YE 2014 to YE 2015 primarily due to an increase in expenses; in this timeframe property taxes increased by approximately $1.3 million (34%). Additional near-term property tax increases are anticipated following a city hall 2016 budget announcement.

The third largest loan in the pool is secured by Asheville Mall (7.9% of the pool). At the time of the review, the most recent servicer-provided year-end reporting was from 2014. The loan's sponsor, CBL & Associates, is currently under investigation for financial reporting regarding four loans originated in 2011 and 2012.

The Sun Development and Management Portfolio (5.6% of the pool), a Fitch Loan of Concern, is secured by a portfolio of five limited-service hotels (Embassy Suites, Hilton Garden Inn, Homewood Suites, Hampton Inn, and Candlewood Suites). The properties are located in five states: CA, NJ, TN, FL, and MS (total 637 rooms). The loan matured on June 1, 2016 but did not pay-off at maturity. A 60-day forbearance has been approved, and the borrower is pursuing financing options. DSCR for the portfolio was 2.47x as of YE 2015. The loan remains current.

The second Fitch Loan of Concern, Maitland 200 (1.8% of the pool), is secured by a 207,010 sf office property located in Maitland, FL (Orlando MSA). Property occupancy has fluctuated in recent years and was 83% with a 1.33x DSCR as of YE 2015. The loan is scheduled to mature in August 2016, and the third largest tenant, Welbro Building Corp (10.3% NRA), has a pending lease expiration in November 2016. Fitch will continue to request updates on the loan's refinance prospects.

RATING SENSITIVITIES

Rating Outlooks remain Stable for classes A-1 through A-S and classes C through F as overall pool performance has been stable since issuance. The Positive Outlook on class B reflects an increase in class credit enhancement and position in the capital structure. The Negative Outlook on class G reflects class credit enhancement and position in the capital structure. Upgrades may occur with stable to improved pool performance and significant paydown or defeasance.

Additional information on rating sensitivity is available in the 'JPMCC 2011-C5 Commercial Mortgage Pass-Through Certificates' (Oct. 3, 2011) new issue report, 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 and revised Outlooks where indicated:

--$112.8 million class A-2 at 'AAAsf'; Outlook Stable;

--$405.9 million class A-3 at 'AAAsf'; Outlook Stable;

--$65.4 million class A-SB at 'AAAsf'; Outlook Stable;

--$728.4 million class X-A* 'AAAsf'; Outlook Stable;

--$86.2 million class A-S at 'AAAsf'; Outlook Stable;

--$51.5 million class B at 'AAsf'; Outlook to Positive from Stable;

--$39.9 million class C at 'Asf'; Outlook Stable;

--$65.6 million class D at 'BBB-sf'; Outlook Stable;

--$12.9 million class E at 'BBsf'; Outlook Stable;

--$9 million class F at 'B+sf'; Outlook Stable;

--$16.7 million class G at 'B-sf'; Outlook to Negative from Stable.

* Notional amount and interest only.

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

Additional information is available at www.fitchratings.com.

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158

Criteria for Rating Caps and Limitations in Global Structured Finance Transactions (pub. 16 Jun 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=882401

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

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

U.S. and Canadian Fixed-Rate Multiborrower CMBS Surveillance and U.S. Re-REMIC Criteria (pub. 13 Nov 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=873395

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1006206

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1006206

Endorsement Policy

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

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 MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160616006564/en/

Contacts:
Primary Analyst
Martin Nunnally
Associate Director
+1-212-908-0871
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Mary MacNeill
Managing Director
+1-212-908-0785
or
Media Relations
Sandro Scenga
+1-212-908-0278
New York
[email protected]

Source: Fitch Ratings

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