DBRS Finalizes Ratings on FMBT 2012-FBLU

DBRS has today finalized its ratings on the following classes of Fontainebleau Miami Beach Trust 2012, Commercial Mortgage Pass-Through Certificates, Series 2012-FBLU (FMBT 2012-FBLU). The trends are Stable.

-- Class A at AAA (sf)
-- Class B at AA (sf)
-- Class C at A (sf)
-- Class D at BBB (sf)
-- Class E at BBB (low) (sf)

The loan is secured by the Fontainebleau Miami Beach, a 1,594-room luxury hotel resort located at 4441 Collins Avenue, Miami Beach, Florida. The collateral includes the fee interest in the land and improvements of the resort, along with a leasehold interest in a 23-slip marina. Included in the total room count, but not included in the collateral, are 748 rooms privately owned by third parties as condo-hotel units. The majority of these units participate in the hotel’s unit rental program and these rental agreements are also security for the loan.

Performance at the property has improved substantially in the past two years and revenue has continued to grow well in recent months. According to the January 2012 Smith Travel Research report, the property is experiencing year-over-year monthly RevPAR increases between 13.4% and 52.9% in the past six months, with an average increase of 33.1%. This growth should continue, albeit at a moderated pace, during 2012 and will result in significantly increased net cash flow. The DBRS loan-to-value (LTV) ratio is low at 61.4%, and significant expected cash flow growth in the near term due to the current time being very early in the lodging cycle will result in a lower LTV going forward. Given the property’s excellent quality and location, in combination with the loan’s low leverage, DBRS expects loan performance to be strong during the five-year term, and the ability to refinance the loan at maturity should be high.

Notes:
All figures are in U.S. dollars unless otherwise noted.

All classes are privately placed pursuant to Rule 144a.

The applicable methodology is CMBS Rating Methodology, which can be found on our website under Methodologies.