DBRS Confirms Ratings on JPMBB Commercial Mortgage Securities Trust 2014-C21

DBRS Limited (DBRS) has today confirmed all classes of Commercial Mortgage Pass-Through Certificates, Series 2014-C21 (the Certificates), issued by JPMBB Commercial Mortgage Securities Trust 2014-C21 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 A-SB at AAA (sf)
-- Class X-A at AAA (sf)
-- Class X-B at AAA (sf)
-- Class X-C at AAA (sf)
-- Class X-D at AAA (sf)
-- Class A-S at AAA (sf)
-- Class B at AA (low) (sf)
-- Class C at A (low) (sf)
-- Class EC at A (low) (sf)
-- Class D at BBB (low) (sf)
-- Class E at BB (sf)
-- Class F at B (high) (sf)

All trends are Stable. DBRS does not rate the first loss piece, Class NR.

The rating confirmations reflect that the current performance of the transaction is in line with DBRS expectations at issuance in July 2014. The collateral consists of 73 fixed-rate loans secured by 84 commercial and multifamily properties. As of the March 2015 remittance, the pool has an aggregate balance of $1.26 billion, representing a collateral reduction of approximately 0.3% since issuance because of scheduled loan amortization. The pool benefits from concentration within urban (36.0%) and suburban (47.6%) markets, which historically benefit from higher investor demand and liquidity. The transaction does, however, have exposure to loans secured by hotel properties (six loans representing 14.1% of the current pool balance) and student housing properties (three loans representing 3.1% of the current pool balance), which have higher cash flow volatilities.

DBRS shadow-rated two loans, Miami International Mall (Prospectus ID#3; 4.8% of the current pool balance) and 307 West 38th Street (Prospectus ID#12; 2.8% of the current pool balance) as investment grade at issuance. DBRS has today confirmed that the performance of these loans is consistent with investment-grade loan characteristics.

As of the March 2015 remittance report, there is one loan on the servicer’s watchlist, representing 0.9% of the current pool balance. This loan is highlighted below.

Blooming Terrace (Prospectus ID#26; 0.9% of the current pool balance) is secured by a 70,267 square foot office building located in Denver, Colorado. The property was originally constructed as a warehouse in phases from 1941 through 1951; however, in 2001, a gut renovation converted the structure into a multi-tenant office building. The loan was placed on the servicer’s watchlist in January 2015 because of upcoming lease expirations for two tenants. According to the September 2014 rent roll, the property was 93% occupied. The largest tenants include DirecTV’s Root Sports (26.4% of the net rentable area (NRA), December 2020 lease expiration); Beatport (21.2% of the NRA, May 2015 lease expiration); Photobucket Inc. (16.4% of the NRA, March 2018 lease expiration); and Mersive (11% of the NRA, June 2015 lease expiration). According to the servicer, Mersive will renew its lease; however, Beatport has indicated that it will not be renewing its lease. Beatport has agreed to an early termination date as a new prospective tenant is interested in assuming approximately 10,000 square feet (14.2% of the NRA) of Beatport’s former space. According to the servicer, the borrower expects to lease the remaining vacancy at the property by May 2015.

The DBRS analysis included an in-depth review of the 15 largest loans in the transaction as well as the loan on the servicer’s watchlist and shadow-rated loans, which collectively represent 60.1% 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. The March 2015 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.

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 Surveillance Methodology (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.