DBRS Confirms Ratings on GECMC 2007-C1

DBRS has today confirmed the ratings on GE Commercial Mortgage Corporation’s Commercial Mortgage Pass-Through Certificates, Series 2007-C1 as follows:

-- Class A-M at BB (sf)
-- Class A-MFX at BB (sf)

The trends are Stable.

The rating confirmations reflect the stable performance of the transaction. The ratings were originally issued at the request of an investor and are based exclusively on the credit provided by the transaction structure and underlying trust assets.

The transaction currently consists of 145 loans, totaling $2.6 billion. As of the December 2014 remittance, the pool has experienced total collateral reduction of 33.2% as a result of loan repayments, scheduled amortization and realized losses associated with loan liquidations. The transaction also benefits from defeasance collateral as four loans, representing 4.7% of the current pool balance, are fully defeased.

There are currently 19 loans on the servicer’s watchlist and 19 loans in special servicing, representing 18.0% and 13.7% of the current pool balance, respectively. Among the special-serviced loans, there are seven loans, representing 7.4% of the current pool balance, that have been deemed non-recoverable by the master servicer.

The most pivotal loan in the transaction continues to be the Skyline Portfolio loan (Prospectus ID#4; 7.7% of the current pool balance), which is secured by a portfolio of Class A and Class B office properties in Falls Church, Virginia, totaling over 2.6 million square feet. The $678.0 million whole loan initially transferred to special servicing in April 2012 because of default after occupancy decreased as the Department of Defense and its subcontractor tenants vacated the property. The loan was ultimately modified in November 2013 with terms of the modification for the trust including an A-note of $105.0 million, a B-note of $98.4 million and a five-year maturity extension to February 2022. While the A-note will remain interest only and continue to pay interest at the original rate of 5.7%, the B-note will accrue interest. As part of the modification the sponsor, Vornado Realty Trust, has made a $150 million funding vehicle available, which is the estimated combined tenant improvement/leasing commission and reserve requirements expenditure needed through 2020. According to the most recent reporting, portfolio occupancy and the YE2013 net cash flow remain depressed at 58% and $26.9 million, respectively, compared with 97% and $49.1 million, respectively, at issuance.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The applicable methodologies are CMBS Rating Methodology (January 2012) and CMBS North American Surveillance Methodology (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.