DBRS Confirms Class B of FREMF 2011-K11 Mortgage Trust, Series 2011-K11

DBRS has today confirmed Class B of the Multifamily Mortgage Pass-Through Certificates Series 2011-K11 issued by FREMF 2011-K11 Mortgage Trust, Series 2011-K11 (the Trust) at A (high) (sf) with a Stable trend.

The overall performance of the pool has been trending positively, with a current weighted-average debt service coverage ratio (DSCR) of 1.6 times (x) and a weighted-average debt yield of 10.4%, as of the April 2014 remittance. These figures compare favorably with the weighted-average DSCR and weighted-average debt yield at issuance of 1.4x and 8.8%, respectively. The weighted-average net cash flow growth for the largest 15 loans in the pool is 13.1% over the DBRS underwritten (UW) figures.

Since the last surveillance review, one loan has been added to the watchlist, for a total of four watchlisted loans, representing 14.7% of the current pool balance, as of the April 2014 remittance. The largest loan on the servicer watchlist is also the largest loan in the pool, Truffles Tribeca (Prospectus ID#1, 8.5% of the current pool balance). This loan is secured by a multifamily property located in Manhattan’s Tribeca neighborhood and is being monitored as a result of property damage sustained in October 2012 during Hurricane Sandy. The servicer reports that as of December 2013, the borrower had completed approximately 95% of the repairs. Occupancy has been relatively stable despite the damages to the property, and as of September 2013 the property was 93% occupied. The Q3 2013 DSCR for the loan was reported to be 1.69x, which represents a 17.2% cash flow improvement over the DBRS UW figure.

There are three additional loans currently on the watchlist for realized cash flow decline, and a third loan in the top 15 that reported a YE2012 DSCR of 0.75x, representing a 38.0% cash flow decline from the DBRS UW figure, which is not on the watchlist. DBRS will continue to monitor these loans in its monthly surveillance of the transaction; however, at this time, none of these loans are believed to be at risk of immediate default.

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 and the loans on the servicer’s watchlist. The April 2014 Monthly Surveillance Report for this transaction will publish 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.

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

The applicable methodologies are CMBS Rating Methodology and CMBS North American CMBS Surveillance Methodology, which can be found on our website under Methodologies.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.