DBRS Confirms Ratings of Goldman Sachs Mortgage Securities Trust 2013-GCJ14

DBRS has today confirmed the ratings of Goldman Sachs Mortgage Securities Trust 2013-GCJ14, as follows:

-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class A-3 at AAA (sf)
-- Class A-4 at AAA (sf)
-- Class A-5 at AAA (sf)
-- Class A-AB at AAA (sf)
-- Class A-S at AAA (sf)
-- Class B at AA (sf)
-- Class C at A (high) (sf)
-- Class PEZ at A (high) (sf)
-- Class D at BBB (sf)
-- Class E at BBB (low) (sf)
-- Class F at BB (sf)
-- Class G at B (sf)
-- Class X-A at AAA (sf)
-- Class X-C at AAA (sf)

All classes have Stable trends. DBRS does not rate the first loss piece, Class H. The Class A-S, Class B, and Class C certificates may be exchanged for the Class PEZ certificates (and vice versa).

The rating confirmations reflect the overall stability of the pool’s performance since issuance in August 2013. The transaction consists of 83 loans, with the pool experiencing collateral reduction of 1.64% since issuance as a result of scheduled loan amortization and the liquidation of one loan. The Langtree Ventures loan, which was secured by a medical office property in Charlotte, North Carolina, was liquidated from the trust this month at a loss of approximately $64,000. The loss was contained to unrated Class H. The loan transferred to special servicing in March 2014 for imminent default and was liquidated in August 2014 at a loss severity of 1.0%.

The transaction benefits from loans secured by properties located within urban markets representing 29.4% of the current pool balance, and is diverse in regards to loan size since the largest 15 loans represent 58.3% of the current pool balance. As of the August 2014 remittance report, the WA debt service coverage ratio (DSCR) and WA Debt Yield for the pool are 1.97 times (x) and 11.4%, respectively. There are six loans on the servicer’s watchlist, representing approximately 5.9% of the current pool balance, with one of the loans highlighted below.

The Indiana Mall loan (Prospectus ID#20, representing 1.35% of the current pool balance) is secured by a retail mall in Indiana, Pennsylvania. The loan was added to the servicer’s watchlist after the YE2013 DSCR decreased to 1.00x compared to the DBRS UW DSCR of 1.28x. The Q1 2014 DSCR further declined to 0.96x. According to the July 2014 servicer commentary, the decline in performance was a result of a drop in expense reimbursements from $1,450,000 at issuance to $1,054,085 as of YE2013. In addition, operating expenses also increased by 10.4% due to high snow removal costs. The May 2014 sales report indicates an overall 4.4% decline in sales for the mall due to lowered sales from anchor tenants; Bon Ton, J.C. Penney, Kmart and Sears compared to the prior year. The property remains well occupied at 92% according to the December 2013 rent roll. Leases expiring within the next 12 months include anchor tenants Bon Ton and Kmart, occupying 13.1% and 15.0% of the net rentable area, respectively. According to the servicer, both tenants have exercised their five-year renewals options, with their respective leases now set to expire in January 2020 and November 2019. Additionally, the loan is relatively low leverage at $36 psf.

DBRS continues to monitor this transaction in its Monthly CMBS Surveillance Report, with additional information on the DBRS viewpoint for this transaction. The August 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.