DBRS Confirms All Classes of FREMF 2013-K26 Mortgage Trust, Series 2013-K26

DBRS has today confirmed all classes of FREMF 2013-K26 Mortgage Trust, Series 2013-K26, as follows:

-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class X1 at AAA (sf)
-- Class X2-A at AAA (sf)
-- Class B at AA (low) (sf)
-- Class C at A (low) (sf)

The trends on all classes are Stable.

The rating confirmations reflect the overall stability of the pool’s performance since the transaction closed in May 2013. The pool consists of 81 loans secured by 81 multifamily properties and has experienced 0.36% of collateral reduction since issuance as a result of scheduled amortization. As of the May 2014 remittance, loans secured by properties located within suburban markets represent 71% of the current pool balance, while loans secured by properties located within urban markets represent 20% of the current pool balance. The pool benefits from strong origination practices and strong sponsorship, with many borrowers being repeat clients of Freddie Mac.

As of May 2014 reporting, there was only one loan, The Links at Windsor (Prospectus ID#13, 1.73% of the current pool balance), with a YE2013 reporting figure that showed a decline in cash flow since issuance. It is likely the short-term decline in cash flow was a result of a transfer of management. Following this change, the new management company has invested capital in the property through renovations to common areas and upgrades to units, resulting in occupancy rebounding to 96% as of September 2013, compared to 91% in March 2013. The weighted-average debt service coverage ratio (DSCR) and weighted-average debt yield for the pool were 1.51x and 8.1%, respectively. There are no watchlisted, delinquent or specially serviced loans as of the May 2014 remittance.

There is one loan shadow-rated investment grade by DBRS, representing 3.7% of the current pool balance. The shadow ratings were confirmed as part of the above-noted rating actions.

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 loans in the pool. The May 2014 Monthly 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.

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

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