DBRS Confirms Ratings on COMM 2014-CCRE18 Mortgage Trust

DBRS, Inc. (DBRS) has today confirmed all classes of Commercial Mortgage Pass-Through Certificates, Series 2014-CCRE18 (the Certificates) issued by COMM 2014-CCRE18 Mortgage Trust.

-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class A-3 at AAA (sf)
-- Class A-SB at AAA (sf)
-- Class A-4 at AAA (sf)
-- Class A-5 at AAA (sf)
-- Class X-A at AAA (sf)
-- Class X-B at AAA (sf)
-- Class X-C at AAA (sf)
-- Class A-M at AAA (sf)
-- Class B at AA (low) (sf)
-- Class PEZ at A (low) (sf)
-- Class C at A (low) (sf)
-- Class D at BBB (low) (sf)
-- Class E at BB (low) (sf)
-- Class F at B (low) (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 rating confirmations reflect that the current performance of the transaction remains in line with DBRS expectations at issuance in June 2014. The collateral consists of 49 fixed-rate loans secured by 60 commercial and multifamily properties. As of April 2015 remittance, the pool has an aggregate balance of $991 million, representing a collateral reduction of approximately 0.5% since issuance, due to scheduled loan amortization. The pool benefits from a relatively diverse concentration by property type; however, the pool is concentrated by loan size, as the largest 15 loans account for 68.8% of the current pool balance. To mitigate the elevated concentration risk, DBRS models the transaction with an additional probability of default penalty to the entire pool.

As of April 2015 remittance, there are no loans in special servicing or on the servicer’s watchlist.

The largest loan, Bronx Terminal Market (Prospectus ID#1, 13.6% of the current pool balance) is secured by a 912,333 sf, multi-level anchored retail center located in the Bronx, New York. The structure, including a 2,610-space parking garage, was originally built in 2009 at an estimated cost of $360 million. The $380 million whole loan consists of seven pari passu pieces, with the A-4, A-5 and A-6 notes totaling $135 million securitized within this transaction. The property is subject to a 50-year ground lease through 2055, with five consecutive ten-year renewal options. According to the February 2015 rent roll, the property was 99.3% occupied. Anchor tenants include Target (20.7% NRA through October 2033), Home Depot (19.3% NRA through February 2034) and BJ’s Wholesale Club (14.3% NRA through September 2029). As of YE2014, the loan had a debt service coverage ratio (DSCR) of 1.55x, compared to the DBRS UW DSCR of 1.58x.

The DBRS analysis included an in-depth review of the 15 largest loans in the transaction, which collectively represent 68.8% 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 April 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 applicable methodologies are North American CMBS Rating Methodology (March 2015) 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.