DBRS Confirms the Ratings of DECO 2011-CSPK Commercial Mortgage-Backed Floating-Rate Notes

DBRS has today confirmed the ratings of DECO 2011-CSPK Commercial Mortgage-Backed Floating-Rate Notes as follows:

Commercial Mortgage-Backed Floating-Rate Notes, Class A at AAA (sf)
Commercial Mortgage-Backed Floating-Rate Notes, Class B at AA (sf)
Commercial Mortgage-Backed Floating-Rate Notes, Class C at “A” (sf)

As of the cut-off date, the collateral for the transaction consists of a single GBP 297.7 million loan (the Loan) on an office park located in West London between Central London and Heathrow Airport. At issuance, proceeds from the Loan were used by the sponsor/borrower, The Blackstone Group, to acquire the 1.16-million-square-foot office development called Chiswick Park and ancillary space.

At issuance, the property was 90.6% occupied by 40 tenants on 59 leases. As part of this surveillance review, DBRS has obtained the May 2012 rent roll, indicating that the property occupancy level has improved to 96.4%. The new tenants at the subject generally signed between ten-year and 15-year leases, and obtained rental rates that were consistent with the average rental rates of the other tenants at the subject.

A few of the new tenants were given concessions in the form of free rental periods, ranging from 12 months to 16 months. Free rental periods were contemplated in the DBRS cash flow analysis at issuance and as part of this review.

Given the improvement in the occupancy rate and likelihood of positive movement in the cash flow as a result of the increased revenue, DBRS has confirmed the ratings as initially assigned to the transaction.

Notes:
The applicable methodologies are European CMBS Rating Methodology (March 2011), European CMBS Surveillance Methodology (May 2011), Legal Criteria for European Structured Finance Transactions (April 2012), Swap Criteria for European Structured Finance Transactions (June 2011) and Unified Interest Rate Model for European Securitisations (June 2011), which can be found on our website under Methodologies.

For additional information on this rating, please see European Disclosure Requirements, located at http://www.dbrs.com/research/237777.

The sources of information used for this rating include parties involved in the rating, including but not limited to Deutsche Bank AG (London Branch), The Blackstone Group and DECO 2011-CSPK. DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.

Lead Analyst: Scott Goedken
Rating Committee Chair: Erin Stafford
Initial Rating Date: 3 June 2011