DBRS Confirms All Classes of UBS-Barclays Commercial Mortgage Trust 2012-C4

DBRS has today confirmed all classes of UBS-Barclays Commercial Mortgage Trust 2012-C4 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 X-A at AAA (sf)
-- Class X-B at AAA (sf)
-- Class A-AB at AAA (sf)
-- Class A-S at AAA (sf)
-- Class B at AA (low) (sf)
-- Class C at A (low) (sf)
-- Class D at BBB (low) (sf)
-- Class E at BB (sf)
-- Class F at B (sf)

All trends are Stable.

The rating confirmations reflect the overall stable performance of the pool since issuance. The pool consists of 89 loans secured by 131 multifamily and commercial properties. As of the November 2014 remittance, the pool had a balance of approximately $1.4 billion, representing a collateral reduction of 1.9% since issuance due to scheduled loan amortization. According to YE2013 reporting, the pool had a weighted-average (WA) debt service coverage ratio (DSCR) and WA debt yield of 1.88 times (x) and 11.4%, respectively.

At issuance, DBRS assigned an investment-grade shadow rating to one loan, 1000 Harbor Boulevard (Prospective ID#53, 0.5% of the current pool balance). DBRS has today confirmed that the performance of this loan remains consistent with investment-grade loan characteristics.

As of November 2014 remittance, there were eight loans on the servicer’s watchlist, representing 6.4% of the current pool balance. Three of these loans, representing 3.7% of the pool, are only on the watchlist for minor deferred maintenance items, as opposed to material performance issues. The largest loan on the servicer’s watchlist, which has been flagged for performance-related issues, is highlighted below.

The Bedford Green loan (Prospectus ID#11, 2.1% of the current pool) is secured by a 121,199 sf grocery-anchored retail center located in Bedford Hills, New York. The loan was placed on the servicer’s watchlist due to a YE2013 DSCR of 0.86x, which was caused by a low rental rate for the anchor tenant and a decline in occupancy. The anchor tenant, ShopRite (31.6% of the NRA), previously paid a rental rate of $9.58 psf; however, as of January 2014, its rental rate was reset to $23.53 psf (85.0% of market rent), according to terms in the tenant’s lease. The subject’s occupancy rate declined after the former second-largest tenant, Mavis Tire Supply (Mavis) (17.9% of the NRA), vacated the property at lease expiration in December 2012, leaving the space dark until August 2013. As of August 2013, approximately two-thirds of Mavis’ former space was leased to Premier Collection for one year at $3.74 psf, compared to Mavis’ former rental rate of $5.90 psf. According to the June 2014 rent roll, property occupancy rebounded to 97.2% and the average rental rate was $21.70 psf, compared with $17.62 at YE2013. As a result of Shoprite’s increased rental revenue and the decrease in vacancy, the Q1 2014 DSCR improved to 1.13x.

The DBRS analysis included an in-depth review of the 15 largest loans in the transaction, the shadow-rated loan and the loans on the servicer’s watchlist, which collectively represent 63.8% of the current pool balance.

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 November 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 and CMBS North American Surveillance Methodology, which can be found on our website under Methodologies.