Fitch Upgrades TIAA 2001-C1

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has upgraded one and affirmed two classes of TIAA CMBS I Trust's commercial mortgage pass-through certificates, series 2001-C1. All Rating Outlooks remain Stable. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The upgrade of class M to 'AAAsf' is primarily due to an increase in credit enhancement as a result of continued principal paydown of the transaction. Fitch expects that the outstanding principal balance on the class will be fully covered by defeasance within the next four to five months. Although credit enhancement for class N has also increased, an upgrade is not warranted at this time due to increasing concentration of the transaction and high retail exposure. In addition, the second largest loan has been transferred to the special servicer due to payment default and Fitch has modeled significant losses based on servicer provided valuation of the property. Fitch applied stressed cap rates and cash flow variances to the most recent servicer reported net operating income (NOI) to derive the Fitch stressed property values. In addition, 29.7% of the pool consists of loans collateralized by single tenant retail properties that are under credit tenant leases.

As of the February 2016 distribution date, the pool's aggregate principal balance has been reduced by 97.1% to $42.642.6 million from $1.46 billion at issuance. Currently, there are 45 loans remaining in the pool, all of which are fully amortizing. Eleven loans (30.2% of the pool) are defeased, five of which (24.5%) are among the top 15 loans. The maturity schedule of the collateral pool is as follows: 37.6% of the pool (37 loans) matures in 2018, including eight defeased loans (8.7%); 16.9% (four loans) in 2019, including one defeased loan (6.3%); 7% (one defeased loan) in 2020; 8.2% (one defeased loan) in 2023 and two loans (30.4%) in 2024.

The largest loan in the pool (19.1% of the pool) is secured by a 331,130 square foot (sf) retail property in College Point, NY .As of September 2015, the property was 100% occupied by five tenants. The largest two tenants are Target (42.3% of the net rental area [NRA]) with lease expiring July 2023 and BJ's (36% of the NRA) with lease expiring September 2028. The servicer reported third quarter 2015 (3Q15) debt service coverage ratio (DSCR) was 2.17x, compared to 1.91x at YE 2014, 2.01x at YE 2013, 1.91x at YE 2012 and 1.91x at YE 2011.

The second largest loan in the pool (11.3%) is secured by a 77,036 sf retail property in Matawan, NJ and transferred to special servicing in July 2015. The property was anchored by A&P, which formerly occupied 76% of the property with a lease ending on March 31, 2023. In July 2015, A & P filed for bankruptcy which triggered the transfer to the special servicer. A & P subsequently rejected the lease and closed the store in September 2015. The property is currently 24.7% occupied and the loan is now over 90 day delinquent. The special servicer is working to file for foreclosure and appoint a receiver. Current appraisal valuations indicate significant losses upon liquidation of the loan.

RATING SENSITIVITIES

The remaining rated classes have Stable Outlooks as future affirmations are expected. Class L is fully covered by defeasance and class M is expected to be fully covered by defeasance within several months. Although the credit enhancement is high on class N, future upgrades may not be warranted based on increasing concentrations and adverse selection.

DUE DILIGENCE USAGE

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

Fitch has upgraded the following ratings:

--$7.3 million class M to 'AAAsf' from 'Asf'; Outlook Stable.

Fitch has affirmed the following ratings:

--$10.5 million class L at 'AAAsf'; Outlook Stable;

--$7.3 million class N at 'BBBsf'; Outlook Stable.

The class A-1, A-2, A-3, A-4, A-5, B, C, D, E, F, G, H, J and K certificates have paid in full. Fitch does not rate the class O certificates. Fitch previously withdrew the rating on the interest-only class X 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

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1000690

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1000690

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/20160309006432/en/

Fitch Ratings
Primary Analyst
Amy Gan
Director
+1 212-908-9143
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Britt Johnson
Senior Director
+1 312-606-2341
or
Media Relations, New York
Sandro Scenga, +1 212-908-0278
[email protected]

Source: Fitch Ratings

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