Fitch Affirms RBSCF 2013-GSP

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed the rating for RBS Commercial Funding Inc. 2013-GSP Trust certificates. The Rating Outlook is Stable. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The trust certificates represent the beneficial interests in a mortgage loan secured by the Garden State Plaza mall in Paramus, NJ. The trust loan is a part of a split loan structure composed of the $375 million trust loan and a pari passu, $150 million related companion loan which is not part of this transaction. The $525 million, 10-year fixed rate (3.86%) interest only (IO), whole loan matures in February 2024.

The affirmations are the result of stable collateral performance since origination. Per the second quarter 2015 (2Q15) rent roll, the property was 97.1% occupied, compared to 98.5% at YE2014 and 96.6% at issuance. The servicer reported 1Q15 debt service coverage ratio (DSCR) was 4.80x, compared to 5.09x at year-end (YE) 2014 and 4.88x at issuance.

Garden State Plaza is a 2.2 million square foot (SF) super-regional mall located in Paramus, NJ. With the exception of JC Penney (which is part of the collateral), the other four anchors - Macy's, Neiman Marcus, Nordstrom and Lord & Taylor, as well as the major tenant AMC Loews theaters, own their own spaces and are only subject to ground leases. The in-line tenancy consists of a diverse mix of over 200 retail and entertainment tenants.

The subject property is located in a populated area which provides a strong shopper base for the mall. Four nearby regional malls - the Paramus Park Mall, The Shops at Riverside, Willowbrook Mall, and The Outlets at Bergen Town Center, have been identified as the competition of the subject property, all of which are located less than 10 miles away. Nevertheless, the property's in-line sales remain strong despite the competition. As of trailing twelve month (TTM) March 2015, sales for in-line tenants were $798 per square foot (PSF) including the Apple store, and $703 PSF excluding Apple, compared to $788 PSF and $695 PSF, respectively, as of YE 2014 and $787 PSF and 678 PSF, respectively, at issuance.

The property has been successful in retaining existing tenants as well as attracting new tenants. Neiman Marcus and Nordstrom have exercised options to extend their leases. The majority of the leases expiring in 2015 and 2016 have either been renewed, are under negotiation for renewal, or will be replaced by new tenants. The borrower has recently signed long term leases with a number of nationally recognized tenants, including Chanel, Ferragamo, Michael Kore, Muji, Kate Spade, Game stop, Under Amour, Eddie Bauer, Drybar and MAC.

Per the 2Q15 Reis report, the Northern NJ retail market had a vacancy rate of 5.5% with average asking rents of $28.94 PSF. The South West Bergen submarket had a vacancy rate of 5.5% with average asking rent of $33.26 PSF.

As part of its review, Fitch analyzed the performance of the loan and its underlying collateral, using YE2014 and partial year 2015 financials in its analysis. Fitch also reviewed the June 2015 rent roll and stressed the cash flow by excluding revenue from several tenants with lease rollover in 2014/2015.

The Fitch stressed DSCR for the loan is 2.00x, compared to 1.99x modeled at issuance. The Fitch stressed loan-to-value ratio is 44%, which is based on capitalization of the Fitch-adjusted net cash flow at a rate of 7.25%, compared to 44.1% modeled at issuance.

RATING SENSITIVITIES

The rating is expected to remain stable as it is anticipated the property will continue to perform within expectations.

Fitch has affirmed the following ratings:

RBS Commercial Funding Inc. 2013-GSP Trust certificates

--$375 million class A at 'AAAsf'; Outlook Stable.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Criteria for Analyzing Large Loans in U.S. Commercial Mortgage Transactions (pub. 27 Aug 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=870009

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

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

Related Research

RBS Commercial Funding Inc. 2013-GSP Trust -- Appendix

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=727198

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=990968

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=990968

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/20150917006561/en/

Fitch Ratings
Amy Gan, +1-212-908-9143
Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Mary MacNeill, +1-212-908-0785
Managing Director
or
Media Relations, New York
Sandro Scenga, +1-212-908-0278
[email protected]

Source: Fitch Ratings

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