DBRS Confirms Two Classes of COMM 2012-9W57

DBRS Limited (DBRS) has today confirmed the ratings of the following Commercial Mortgage Pass-Through Certificates, Series 2012 9W57 issued by COMM 2012-9W57:

-- Class A at AAA (sf)
-- Class X at AAA (sf)

The trends are Stable.

The rating confirmations reflect the continued performance of the pool according to DBRS’s expectations at issuance. The deal closed in March 2012 and consists of a $625 million fixed-rate loan secured by a Class A office tower built in 1972. The property is located at 9 West 57th Street in Midtown Manhattan, directly south of Central Park. It is considered a premier office tower because of its irreplaceable location and unobstructed views. Tenants at the property are considered elite and include hedge funds, investment managers and private equity firms. At issuance, DBRS was aware that the sponsor has historically operated the property at elevated vacancy levels to maintain its elite status among users of commercial space in the submarket. There was a $25.0 million leasing reserve funded at closing, and as of the February 2015 remittance, this reserve has a current balance of $5.0 million.

According to the September 2014 rent roll, the property was 54.8% occupied, an increase from the December 2013 occupancy of 50.9%. Three new tenants representing 3.9% of the NRA have signed at the property within the past 12 months, occupying the top two floors of the building. These leases were executed with an average rental rate of approximately $195.95 per square foot (psf).

According to Reis, the property is situated in the Plaza District submarket, which reported an overall vacancy of 10.6% at Q4 2014, with an average rental rate of $93.62 psf. The property is achieving average rental rates of approximately $141.02 psf for the office portion of the collateral, according to the September 2014 rent roll. Although the subject’s average rental rate has declined slightly since issuance, the property demonstrates it is still able to achieve above-market rental rates.

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 February 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 related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link to the right under Related Research or by contacting us at info@dbrs.com.

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

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