DBRS Confirms Ratings of COMM 2013-CCRE6

DBRS, Inc. (DBRS) has today confirmed the ratings on the following classes of Commercial Mortgage Pass-Through Certificates, Series 2013-CCRE6 (the Certificates), issued by COMM 2013-CCRE6 Mortgage Trust, as follows:

-- Class A-1 at AAA (sf)
-- Class A-2 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 X-B at AAA (sf)
-- Class B at AA (sf)
-- Class PEZ at A (sf)
-- Class C at A (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, B and C certificates (and vice versa).

The collateral consists of 48 fixed-rate loans secured by 80 commercial properties. As of the January 2015 remittance, the pool had a balance of approximately $1.47 billion, representing a collateral reduction of 1.8% since issuance due to scheduled loan amortization. Based on updated financial reporting, the pool has exhibited stable performance as the largest 15 loans in the transaction have a weighted-average (WA) debt service coverage ratio (DSCR) and debt yield of 2.24x and 10.17%, respectively.

At issuance, DBRS shadow-rated the Federal Center Plaza (Prospectus ID#1, 8.8% of the current pool balance) as investment grade. DBRS has today confirmed that the performance of this loan remains consistent with investment-grade loan characteristics.

As of the January 2015 remittance, there are no delinquent or specially serviced loans or any loans on the servicer’s watchlist. As of the December 2014 remittance report, there were four loans on the servicer’s watchlist report; however, each loan has now been removed. The largest loan, which was previously on the servicer’s watchlist, is highlighted below.

The 540 West Madison Street loan (Prospectus ID#5, 6.76% of the current pool) is secured by a Class A, LEED-EB certified office building, located in Chicago, Illinois. The 1.1 million sf building features an extensive uninterruptable power supply (UPS) with an emergency power supply (EPS) system, efficient floor plates with floor-by-floor after-hours heating and cooling, as well as an advanced fiber-optic technology that could maintain power for up to 72 hours with on-site generators in the event of service interruption. As of January 2015, the property became 62.2% occupied, after the Bank of America (BOA) executed its second contraction option to return 236,000 sf (21% of the NRA), which took effect as of YE2014; the first contraction option took effect atYE2013 when BOA returned 166,000 sf (15% of the NRA). Per the Prospectus Supplement, BOA has the option to terminate its remaining space no earlier than January 2016 with at least 12 months’ notice. Without notice, BOA will maintain 32.2% of the NRA on a lease expiring at YE2021. DBRS has contacted the servicer inquiring about the status of the final contraction option.

To mitigate the rollover of BOA, the loan was originally structured with over $30 million of TI/LC reserves in order to help sign new tenants. As of December 2014, the servicer approved $2.9 million in leasing commissions and $1.9 in tenant improvements, leaving the reserve with a balance of $24.9 million. Newly signed tenants include Valiance Health (11.2% of the NRA), SAC Wireless (3.4% of the NRA) and Segal Bryant & Harnill, LLC (2.4% of the NRA). Valiance Health will incrementally assume the 15th floor (April 2015), the 13th floor (October 2015) and the 14th floor (January 2016), with its lease expiring in 2029. The signing of these tenants is expected to generate additional rental revenue, which should aid in stabilizing the property performance. According to the servicer, the borrower has reported that the property is actively being marketed, with multiple interested prospective tenants. Given the large remaining TI/LC reserve and the status of the subject, it appears likely that the borrower will be able to sign additional tenants at the property.

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 January 2015 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 (January 2015), which can be found on our website under Methodologies.

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

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.