Fitch Upgrades 1 Class of JPMCCM 2004-C3

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has upgraded one class and affirmed 11 classes of JP Morgan Chase Commercial Mortgage Securities Corp. (JPMCC) commercial mortgage pass-through certificates series 2004-C3. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrade is due to additional paydown since Fitch's last rating action. The affirmations reflect the pool's stable performance.

Fitch modeled losses of 28.5% of the remaining pool; expected losses on the original pool balance total 6.1%, including $65.6 million (4.3% of the original pool balance) in realized losses to date. Fitch has designated four loans (70.1%) as Fitch Loans of Concern, which includes two specially serviced assets (28%).

As of the April 2015 distribution date, the pool's aggregate principal balance has been reduced by 93.9% to $93.1 million from $1.52 billion at issuance. Per the servicer reporting, two loans (5.2% of the pool) are defeased. Interest shortfalls are currently affecting classes J through NR.

The largest contributor to expected losses is the specially-serviced Cambridge Court Phase I & II loan (19.9% of the pool), which is secured by 254,698 square foot (sf) medical office property located in Auburn Hills, MI. The largest tenants are Plante & Moran LLP (27%), Ascension Health (11.8%), Strategic Manufacturing (6.7%), and RICOH (4.2%), with lease expirations in November 2015, March 2016, December 2015, and January 2017; respectively. As of December 2014, the property was 58% occupied. Per the special servicer, discussions with borrower have not produced an acceptable alternative loan resolution and foreclosure has been filed.

The next largest contributor to expected losses is the Lakeshore Club Apartments loan (28.9%), which is secured by a multifamily property consisting of 613 units located in Tampa, FL. The loan was modified in November 2012 and the maturity date was extended to Nov. 11, 2015. The Borrower is paying as agreed. The property is 98.4% occupied as of February 2015 with below market average rent of $645. Per REIS as of the 4th quarter 2014, the Tampa - St. Petersburg metro multifamily market had a vacancy rate of 4.7% with average asking rent $917.

The third largest contributor to expected losses is the specially-serviced South Hadley Shopping Center loan (8.1%), which is secured by a 91,648 sf retail property located in South Hadley, MA. The loan was transferred to special servicing in November 2014 due to imminent maturity default. The borrower was unable to secure financing to pay off the loan prior to its maturity in November 2014 as a result of the property's anchor tenant, Big Y Foods, vacating their space in August 2013 prior to lease expiration. The anchor tenant continues to pay rent until their lease expires in November 2015. Per the special servicer, the property is being marketed and there has been interest in the space. The borrower requested a one-year loan extension, but without any good prospects to replace the anchor tenant, the special servicer will proceed with the foreclosure process.

RATING SENSITIVITIES

Rating Outlooks on classes D through F remain Stable due to increasing credit enhancement and continued paydown. Fitch has deemed the first (29%) and third (13%) largest loans in the transaction as Fitch loans of concern and will continue to monitor their ability to payoff at their respective maturity extension and forbearance agreement expirations in November and May 2015. Further upgrades are limited by the binary risk associated with these two loans. Downgrades to classes G and H are possible if either of these loans transfer to special servicing.

Fitch upgrades the following classes as indicated:

--$13.1 million class D to 'BBB-sf' from 'BBsf'; Outlook Stable.

Fitch affirms the following classes and revises REs as indicated:

--$19 million class G at 'CCCsf'; RE 100%;

--$15.2 million class H at 'CCCsf'; RE 35%.

Fitch affirms the following classes as indicated:

--$15.2 million class E at 'BBsf'; Outlook Stable;

--$15.2 million class F at 'Bsf'; Outlook Stable;

--$15.5 million class J at 'Dsf'; RE 0%;

--$0 class K at 'Dsf'; RE 0%;

--$0 class L at 'Dsf'; RE 0%;

--$0 class M at 'Dsf'; RE 0%;

--$0 class N at 'Dsf'; RE 0%;

--$0 class P at 'Dsf'; RE 0%;

--$0 class Q at 'Dsf'; RE 0%.

The class A-1, A-1A, A-2, A-3, A-4, A-5, A-J, B and C certificates have paid in full. Fitch does not rate the class NR certificates. Fitch previously withdrew the ratings on the interest-only class X-1 and X-2 certificates.

Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 10, 2014 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'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (Aug. 4, 2014);

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

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria - Effective from 4 August 2014 to 31 March 2015

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria

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

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=983881

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.

Fitch Ratings
Primary Analyst:
Lisa Cook, +1-212-908-0665
Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson:
Robert Brook Sutherland, +1-312-606-2346
Senior Director
or
Media Relations:
Sandro Scenga, New York, +1-212-908-0278
[email protected]

Source: Fitch Ratings

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