DBRS Confirms Ratings of COMM 2013-CCRE10 Mortgage Trust

DBRS has today confirmed the ratings on the following classes of Commercial Mortgage Pass-Through Certificates, Series 2013-CCRE10 (the Certificates) issued by COMM 2013-CCRE10 Mortgage Trust, as follows:

-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class A-3 at AAA (sf)
-- Class A-3FL at AAA (sf)
-- Class A-3FX at AAA (sf)
-- Class A-4 at AAA (sf)
-- Class A-SB at AAA (sf)
-- Class A-M at AAA (sf)
-- Class X-A at AAA (sf)
-- Class B at AA (sf)
-- Class PEZ at A (high) (sf)
-- Class C at A (high) (sf)
-- Class D at BBB (low) (sf)
-- Class E at BB (sf)
-- Class F at B (sf)

All trends are Stable. DBRS does not rate the first loss piece, Class G. The Class PEZ certificates are exchangeable for the Class A-M, Class B and Class C certificates (and vice versa).

The rating confirmations reflect the overall stable performance of the pool since issuance. The pool consists of 59 loans, secured by 87 commercial properties. Since issuance in August 2013, the transaction has experienced collateral reduction of 1.05% as a result of scheduled loan amortization. According to YE2013 reporting, the pool has a weighted-average debt service coverage ratio and weighted-average debt yield of 1.90 times and 11.1%, respectively.

At issuance, DBRS shadow-rated two loans as investment grade, representing 14.8% of the current pool balance. DBRS has today confirmed that the performance of these loans remain consistent with investment-grade loan characteristics.

As of the August 2014 remittance, there is one loan in special servicing, representing 2.19% of the current pool balance. Prospectus ID#15, Strata Estates Suites, is secured by a 134-unit corporate housing portfolio, consisting of two assets. One property is located in Williston, North Dakota, and the other is located in Watford City, North Dakota, built in 2009 and 2011, respectively. The loan transferred to special servicing in February 2014 due to payment delinquency after Halliburton, which leased 55 units, decided not the renew its lease at expiration in December 2013. The properties are located within the Bakken and Three Forks oil formation, which have driven the recent regional economic growth. The property is now in foreclosure and a receiver has been installed. The receiver, Riverstone Residential Group (Riverstone), has local expertise in the region as it manages nine multifamily properties throughout Williston, Watford City and Dickinson. According to the servicer, Riverstone is currently negotiating with an oil company for the long-term lease of 50 units at the Williston location. A recent Broker Opinion of Value estimated the value of the portfolio to range from $24.4 million to $26.0 million, down from $41.0 million at issuance. Given the economic growth and increased value potential, the loan is not likely to resolve until the special servicer improves the occupancy rate.

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 August 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 methodology is 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.