DBRS Confirms Ratings of GSMS 2013-G1

DBRS Limited (DBRS) has today confirmed the ratings on the following classes of Commercial Mortgage Pass-Through Certificates, Series 2013-G1 (the Certificates) issued by GS Mortgage Securities Trust 2013-G1:

-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class X-A at AAA (sf)
-- Class B at AA (sf)
-- Class C at A (sf)
-- Class D at BBB (low) (sf)
-- Class DM at BB (sf)

All trends are Stable.

All classes are privately placed pursuant to Rule 144a.

Class DM is secured by a non-pooled subordinate rake bond associated solely with the Deptford Mall loan.

The Class X-A balance is notional. DBRS ratings on interest-only (IO) certificates address the likelihood of receiving interest based on the notional amount outstanding. DBRS considers the IO certificate’s position within the transaction payment waterfall when determining the appropriate rating.

The rating confirmations reflect the overall stability of the pool, which has experienced a collateral reduction of 2.7% since issuance as a result of scheduled loan amortization. At issuance, the pool consisted of three fixed-rate loans secured by two outlet malls and one regional mall – Great Lakes Crossing Outlets, Katy Mills and Deptford Mall – located in established suburban markets outside of Detroit, Houston, and Philadelphia, respectively. As of the February 2015 remittance, all three of the original loans remain in the pool with an aggregate outstanding principal balance of $553.8 million. Great Lakes Crossing Outlets and Deptford Mall amortize on 30-year schedules, whereas Katy Mills is IO for the entire loan term. The loans exhibit stable performance with a weighted-average (WA) debt service coverage ratio (DSCR) and WA debt yield of 2.60 times (x) and 12.3%, respectively, based on the current balance and the most recent year-end reporting available for the individual loans. The YE2013 reported net cash flow was $68.3 million compared with the DBRS underwritten net cash flow at issuance of $62.5 million. Overall, all three loans demonstrate stable market positions, satisfactory in-line sales performance, high-quality sponsorship and low-leverage financing. There are no loans are on the servicer’s watchlist, and the largest loan in the pool is highlighted below.

Great Lakes Crossing Outlets (Prospectus ID#1, representing 39.1% of the current pool balance) is secured by an outlet center located in Auburn Hills, Michigan. The YE2013 DSCR was reported at 2.06x, which is in line with the DBRS UW DSCR of 2.04x. According to the October 2014 rent roll, the property is 97.5% occupied, and major tenants include Burlington Coat Factory (7.3% of the net rentable area (NRA), with a lease expiring in January 2019), Sports Authority (5.5% of the NRA, with a lease expiring in January 2020) and Forever 21 (4.3% of the NRA, with a lease expiring in January 2025). There is minimum tenant rollover risk within the next 12 months, and the property reported a net cash flow (NCF) of approximately $25.3 million, which is in line with the DBRS underwritten NCF of approximately $25.0 million. Also, the loan exhibits strong credit metrics, with a DBRS term DSCR, DBRS refinance DSCR and DBRS exit debt yield of 2.04x, 1.58x and 14.2%, respectively.

At issuance, DBRS shadow-rated all three loans, representing 100% of the current pool balance, as investment grade. DBRS has today confirmed that the performance of these loans remains consistent with investment-grade loan characteristics.

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 applicable methodologies are 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.