DBRS Confirms Five Classes of FREMF 2011-K15 Mortgage Trust, Series 2011-K15

DBRS has today confirmed all five classes of the Multifamily Mortgage Pass-Through Certificates Series 2011-K15 issued by FREMF 2011-K15 Mortgage Trust, Series 2011-K15, as follows:

-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class B at A (high) (sf)
-- Class X1 at AAA (sf)
-- Class X2 at AAA (sf)

All trends are Stable.

The pool comprises 91 fixed-rate loans secured by 91 multifamily properties located across 30 states. All loans within this transaction are structured with ten-year loan terms. One loan, representing 2.23% of the current pool balance, is interest-only for the full loan term and 20 loans, representing 43.32% of the current pool balance, have partial interest-only during the loan term. The transaction closed in November 2011 and, since issuance, the outstanding principal balance has been reduced by 0.86% through amortization. As of the March 2013 remittance report, 86 loans, representing 94.79% of the current pool balance, are reporting partial or full-year 2012 financials.
The weighted-average debt service coverage ratio (DSCR) for those loans reporting updated financials was 1.57 times (x); the weighted-average DBRS DSCR was 1.37x for these loans at the time of issuance.

As of the March 2013 remittance report, there are two loans on the servicer’s watchlist, representing 1.82% of the current pool balance. The largest loan on the servicer’s watchlist, Prospectus ID #25 (Western Terrace I & II) representing 1.31% of the pool, is secured by a 404-unit garden-style apartment complex in Colorado Springs, Colorado. The loan was added to the watchlist for a low Q2 2012 DSCR of 0.97x, down from the issuer’s underwritten DSCR of 1.32x. The servicer attributed the decline in cash flow to a high tenant turnover in the spring of 2012, causing costs associated with re-letting the property to increase. The borrower has reportedly implemented a plan to stabilize expenses over the near term and has increased occupancy from 87.62% at YE2011 to 95.54% in June 2012. The DSCR has also increased slightly since Q2 2012, standing at 0.99x at Q3 2012.

Performance of the portfolio is viewed to be in line with DBRS expectations at issuance, thereby supporting the ratings confirmations. For further information on the DBRS viewpoint for this pool, including commentary on the largest loans and additional detail on the loans on the servicer’s watchlist, please see the March 2013 Monthly Surveillance Report for this transaction, which will be published shortly on the DBRS website at www.dbrs.com.

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

The applicable methodologies are CMBS Rating Methodology (January 2012) and CMBS North American Surveillance Methodology (May 2011), which can be found on our website under Methodologies.

This rating did not include issuer participation and is based solely on publicly available information.

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