DBRS Confirms Two Classes of FREMF 2010-K8 Mortgage Trust, Series 2010-K8

DBRS has today confirmed two classes of FREMF 2010-K8 Mortgage Trust, Series 2010-K8 as follows:

-- Class B at A (high) (sf)
-- Class X2 at AAA (sf)

The trends are Stable.

The pool consists of 72 fixed-rate loans secured by 72 multifamily properties. As of the September 2013 remittance report, the pool reported a weighted-average debt service coverage ratio (DSCR) of 1.60 times (x) and a weighted-average debt yield of 11.2%. In comparison, at issuance the pool had a weighted-average DSCR and debt yield of 1.40x and 9.2%, respectively.

As of the September 2013 remittance report, there were three loans on the servicer’s watchlist, representing 1.6% of the current pool balance. Pro ID#18 (Village Park at Rockborough), Pro ID#19 (Village Park at Cedarbrooke) and Pro ID#20 (Village Park at Kingsborough) are three crossed loans secured by multifamily properties in Wichita, Kansas. The three loans were added to the servicer’s watchlist in January 2013, for property condition issues cited in the October 2012 site inspections. Several units were down at each property due to various causes including a fire, water damage to the foundation or poor plumbing and many other issues including deteriorating asphalt, rotting wood and damage to doors, siding and landscaping. The servicer reports that many issues have been corrected; however, the borrower is currently taking bids to remedy the remaining issues. Despite the deferred maintenance issues, the loans are still performing with a weighted-average DSCR of 1.17x and weighted-average occupancy of 87%. DBRS remains in communication with the master servicer regarding updates on the deferred maintenance at the individual properties and intends to provide updates, as they become available, in the monthly surveillance report for this transaction.

Since issuance, the pool has experienced a collateral reduction of 3.1%, as a result of loan amortization, with all original loans remaining in the transaction. One loan representing 1.7% of the current pool balance is defeased and one loan, representing 0.9% of the current pool balance is shadow rated investment grade by DBRS.

For additional details on the DBRS viewpoint for this transaction, and for details on the largest loans in the pool and the loans on the servicer’s watchlist, please see the September 2013 Monthly Surveillance Report for this transaction, which will be published shortly.

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