DBRS Confirms Ratings of GSMS 2013-G1

DBRS has today confirmed the ratings on the following classes of Commercial Mortgage Pass-Through Certificates, Series 2013-G1 (the Certificates), issued by GS Mortgage Securities Trust 2013-G1:

-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class X-A at AAA (sf)
-- Class B at AA (sf)
-- Class C at A (sf)
-- Class D at BBB (low) (sf)
-- Class DM at BB (sf)

All trends are Stable.

All classes are privately placed pursuant to Rule 144a.

Class DM is secured by a non-pooled subordinate rake bond associated solely with the Deptford Mall loan.

The Class X-A balance is notional. DBRS ratings on interest-only certificates address the likelihood of receiving interest based on the notional amount outstanding. DBRS considers the interest-only (IO) certificate’s position within the transaction payment waterfall when determining the appropriate rating.

The collateral consists of three fixed-rate loans that are secured by two outlet malls and one regional mall – Great Lakes Crossing Outlets, Katy Mills and Deptford Mall – located in established suburban markets outside of Detroit, Houston and Philadelphia, respectively. Combined, the three senior pooled mortgage loans total $561.12 million and are not cross-collateralized or cross-defaulted. The three ten-year loans carry a weighted-average interest rate of 3.619%, with Great Lakes Crossing Outlets and Deptford Mall amortizing on 30-year schedules, while Katy Mills is IO for the entire loan term.

Each of the three loans is sponsored by a major mall operator (Taubman Centers Inc., The Macerich Company and Simon Property Group, Inc., respectively) who have significant national relationships and financial resources. For malls, it is highly desirable to have an owner that owns many other malls, as they can leverage their relationships with tenants in order to bring certain tenants to the mall that otherwise would not locate there.

With only three loans, the pool is concentrated by loan size. This lack of diversity exposes the pool to event risk, as losses incurred to any of the three senior trust loans would result in losses to investment-grade-rated bonds. The DBRS sizing hurdles, which were used to confirm the ratings, contemplate stand-alone transactions with no diversity. The DBRS analysis gives minimal credit to the diversity afforded by pooling the three loans.

As a result of the stable market positions, strong in-line sales performance, high-quality sponsorship and the low-leverage financing, Great Lakes Crossing Outlets, Katy Mills and the senior pooled portion of the Deptford Mall loan, are shadow rated investment grade by DBRS.

DBRS continues to monitor this transaction in its Monthly CMBS Surveillance Report, with additional information on the DBRS viewpoint for this transaction, including details on the largest loans in the pool. The April 2014 Monthly CMBS Surveillance Report for this transaction will be published shortly. If you are interested in receiving this report, contact us at info@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 (November 2012), which can be found on our website under Methodologies.

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