Fitch Affirms WFRBS 2013-C12

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has affirmed 15 classes of WFRBS Commercial Mortgage Trust (WFRBS) commercial mortgage pass-through certificates series 2013-C12. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The affirmations reflect the transaction's stable performance since issuance and that the pool continues to perform as expected. There are no delinquent or specially serviced loans. Based on the year-end (YE) 2014 net operating incomes (NOIs) for the 95% of the pool that reported, the pool's overall NOI has increased 7.4% since issuance. There is, however, a notable single tenant exposure within the transaction. Five of the top 15 loans representing 19% of the pool are secured by properties 100% leased to a single tenant.

There are 14 loans (11.6%) on the master servicer's watchlist, of which five (7.9%) are due to occupancy declines, three (1.7%) for lease rollover concerns and two for deferred maintenance. Two of the watchlist loans (1%) that are due to occupancy declines are considered Fitch Loans of Concern.

As of the November 2015 distribution date, the pool's aggregate principal balance has been reduced by 3.3% to $1.19 billion from $1.23 billion at issuance. Per the servicer reporting, two loans (9.5% of the pool) are defeased. Interest shortfalls are currently affecting class G.

The largest loan in the pool is the Grand Beach Hotel loan (10.4% of the pool), which is secured by a 424-room, 20-story, full-service oceanfront hotel located in Miami Beach, Florida. Amenities at the property include a fitness center, three pools, full service restaurant, meeting facilities, a business center, and valet parking including 560 spaces. As of September 2015, the debt service coverage ratio (DSCR) was reported to be 2.41x compared to 2.13x at issuance. According to the September 2015 STR report, the trailing 12 month (TTM) occupancy was reported to be 69%, which ranks last in the property's competitive set. Occupancy has been trending downward since 2013 when the TTM occupancy was reported to be 83%. ADR and RevPar, however, have remained in the middle of the competitive set for the last two years.

The next largest loan in the pool is the RHP Portfolio II loan (9.6% of the pool). The loan is collateralized by 18 manufactured housing communities comprising 2,967 home pads with nine properties in Colorado (1,814 pads), six in Wyoming (737 pads), two in Illinois (351 pads), and one in Arizona (65 pads). As of September 2015, the occupancy and DSCR was reported to be 92% and 1.85x respectively, which compares favorably to 86% and 1.47x at issuance.

The third largest loan in the pool, One South Wacker Drive (8%), is fully defeased. The fourth largest loan in the pool is the Merrill Lynch Office loan, which is secured by three class-A office buildings totaling 481,854 square-feet (sf) located in Hopewell, NJ. The buildings are part of a larger 1.8 million sf Merrill Lynch campus. The properties are 100% leased to Merrill Lynch through December 2024. As of YE 2014, the DSCR for the interest-only loan was reported to be 3.08x.

RATING SENSITIVITIES

The Rating Outlook for all classes remains Stable due to stable collateral performance. Fitch does not foresee positive or negative ratings migration unless a material economic or asset level event changes the underlying transaction's portfolio-level metrics.

DUE DILIGENCE USAGE

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

Fitch affirms the following classes:

--$23.8 million class A-1 at 'AAAsf'; Outlook Stable;

--$143 million class A-2 at 'AAAsf'; Outlook Stable;

--$165 million class A-3 at 'AAAsf'; Outlook Stable;

--$298.2 million class A-4 at 'AAAsf'; Outlook Stable;

--$102 million class A-SB at 'AAAsf'; Outlook Stable;

--$90 million class A-3FL at 'AAAsf'; Outlook Stable;

--$0 class A-3FX at 'AAAsf'; Outlook Stable;

--$120.1 million class A-S at 'AAAsf'; Outlook Stable;

--$942 million class X-A at 'AAAsf'; Outlook Stable;

--$126.2 million class X-B at 'A-sf'; Outlook Stable;

--$75.4 million class B at 'AA-sf'; Outlook Stable;

--$50.8 million class C at 'A-sf'; Outlook Stable;

--$41.6 million class D at 'BBB-sf'; Outlook Stable;

--$27.7 million class E at 'BBsf'; Outlook Stable;

--$16.9 million class F at 'Bsf'; Outlook Stable.

Fitch does not rate the class X-C or G 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. 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

Related Research

WFRBS Commercial Mortgage Trust 2013-C12 Appendix

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=706097

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=995827

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=995827

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/20151202006245/en/

Fitch Ratings
Primary Analyst
Daniel Anderson
Associate Director
+1-312-606-2305
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60602
or
Committee Chairperson
Mary MacNeill
Managing Director
+1-212-908-0785
or
Media Relations:
Sandro Scenga, +1 212-908-0278
[email protected]

Source: Fitch Ratings

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