Fitch Upgrades 2 Classes of GSMS 2010-C2

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has upgraded two classes and affirmed six classes of Goldman Sachs Commercial Mortgage Capital, L.P. commercial mortgage pass-through certificates series 2010-C2. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrades to classes B and C reflect continued paydown and sufficient credit enhancement. The affirmations are based on the generally stable performance of the underlying collateral pool since issuance. The pool is concentrated with only 27 loans remaining, down from 43 loans at issuance. All of the remaining loans mature in the fourth quarter of 2020. There are no delinquent or specially serviced loans.

As of the May 2016 distribution date, the pool's aggregate principal balance has been reduced by 34.5% to $574.4 million from $876.5 million at issuance. Per the servicer reporting, one loan (3.1% of the pool) is defeased. Interest shortfalls are currently affecting class G.

The largest loan in the pool (14.9% of the pool balance) is secured by a 399,935 square foot (sf) class B office property in the Financial District of Manhattan, NY. The property is 100% occupied by the United Federation of Teachers (UFT) under a long-term lease which expires in August 2034. UFT also holds a 9.9% ownership interest in the building. The loan is structured with a letter of credit (LOC), which can be drawn upon to cover debt service shortfalls. The loan is amortizing on a 30-year schedule after a four-year interest-only period concluded in 2014. The servicer-reported debt service coverage ratio (DSCR) as of September 2015 was 2.09x, compared to 2.32x at year-end (YE) 2014 and 2.50x at YE 2013.

The second largest loan (7.3%) is secured by a 669,682 sf mixed-use office retail property located in Pittsburgh, PA. The property is considered an area landmark and tourist destination. It consists of five buildings that house office space, retail shops, restaurants, commuter parking and also includes marina slips and an outdoor amphitheater. Various media reports state that the borrower is planning 300 apartment units at the site, with the first units originally scheduled for the summer of 2017. The project, however, has been on hold due to a delay in grant funds and state budget issues. As of YE 2015, the property was 89% occupied, compared to 88% at YE 2014 and 80% at YE 2013. The servicer-reported YE 2015 DSCR was 1.88x, compared to 1.64x at YE 2014 and 1.90x at YE 2013.

The third largest loan (7.8%) is secured by a 626,594-sf historic office property in the Center City submarket of Philadelphia. The building was originally built in 1895 and renovated in 1927 and 1989. The property's largest tenant is Wells Fargo, which occupies 31.6% of the net rentable area through December 2021, one year after the loan's maturity. Occupancy has remained stable at 93% reported at YE 2015 compared to 97% at YE 2014. The servicer-reported YE 2015 DSCR was 2.09x, compared to 2.02x at YE 2014 and 1.79x at YE 2013.

RATING SENSITIVITIES

Rating Outlooks on classes A-1 though F remain Stable as the majority of the pool has maintained performance consistent with issuance. Further upgrades are possible with continued paydown. Downgrades to the junior classes are possible should there be any significant performance declines.

DUE DILIGENCE USAGE

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

Fitch upgrades the following classes revises the Rating Outlook as indicated:

--$26.3 million class B to 'AAAsf' from 'AAsf'; Outlook to Stable from Positive;

--$29.6 million class C to 'AAsf' from 'Asf'; Outlook Stable.

Fitch affirms the following classes:

--$44.9 million class A-1 at 'AAAsf'; Outlook Stable;

--$376.1 million class A-2 at 'AAAsf'; Outlook Stable;

--$421 million interest-only class X-A at 'AAAsf'; Outlook Stable;

--$47.1 million class D at 'BBB-sf'; Outlook Stable;

--$12.1 million class E at 'BBsf'; Outlook Stable;

--$9.9 million class F at 'Bsf'; Outlook Stable.

Fitch does not rate the class G certificates or the 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=1006200

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1006200

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/20160616006545/en/

Fitch Ratings
Primary Analyst
Daniel Anderson
Associate Director
+1 312-606-2305
Fitch Ratings, Inc.
70 West Madison
Chicago, IL 60602
or
Committee Chairperson
Karen Trebach
Senior Director
+1 212-908-0215
or
Media Relations, New York
Sandro Scenga, +1 212-908-0278
[email protected]

Source: Fitch Ratings

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