DBRS Confirms Ratings of COMM 2013-CCRE10

DBRS Limited (DBRS) has today confirmed the ratings on the following classes of Commercial Mortgage Pass-Through Certificates, 2013-CCRE10 (the Certificates) issued by COMM 2013-CCRE10 Mortgage Trust:

-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class A-3 at AAA (sf)
-- Class A-3FL at AAA (sf)
-- Class A-3FX at AAA (sf)
-- Class A-4 at AAA (sf)
-- Class A-M at AAA (sf)
-- Class A-SB at AAA (sf)
-- Class X-A at AAA (sf)
-- Class B at AA (sf)
-- Class C at A (high) (sf)
-- Class PEZ at A (high) (sf)
-- Class D at BBB (low) (sf)
-- Class E at BB (sf)
-- Class F at B (sf)

The Class PEZ certificates are exchangeable for the Class A-M, Class B and Class C certificates (and vice versa).

All Trends are Stable, with the exception of Class F, which carries a Negative Trend that has been maintained by DBRS to reflect the risks with the loan in special servicing, Prospectus ID #15, Strata Estates (1.8% of the pool).

At issuance, the collateral consisted of 59 fixed-rate loans secured by 87 commercial properties. As of the June 2017 remittance report, all 59 loans remained in the pool, and the pool has seen a collateral reduction of 5.9% since issuance. There are two loans that are fully defeased, representing 2.4% of the pool balance. Overall, performance metrics have remained healthy since issuance, with all but four loans in the pool reporting YE2016 financials with a weighted-average (WA) debt service coverage ratio (DSCR) and WA debt yield of 1.98 times (x) and 12.2%, respectively. These figures compare with the DBRS issuance figures of 1.62x and 9.9%, respectively. The top 15 loans in the pool are reporting a WA DSCR and a WA debt yield of 2.09x and 12.1%, respectively, as based on the YE2016 cash flows.

As of the June 2017 remittance report, there are 11 loans on the servicer’s watchlist, representing 22.5% of the pool balance. Four of these loans are on the watchlist for relatively minor deferred maintenance items, and one of the loans is watchlisted for failure to report YE2016 financials. Four of the loans are on the watchlist for rollover. There are two loans being monitored for performance issues, including The Worcester Multifamily Portfolio (Pros ID#14, 2.4% of the pool) and 1411 Fourth Avenue (Pros ID#16, 1.9% of the pool). With this review, DBRS applied a stressed cash flow scenario in its analysis for both of those loans to increase the probability of default. The overall performance of the watchlist is stable with a WA DSCR and WA debt yield of 1.47x and 9.9%, respectively.

The specially serviced loan, Strata Estates Suites (Prospectus ID #15, 1.8% of the pool), is secured by two multifamily properties located in Williston and Watford City, North Dakota. The loan has been in special servicing since 2014, and based on the most recent appraisals for each property and the outstanding advances as of the June 2017 remittance, DBRS expects that the loss severity at liquidation could be in excess of 100%.

At issuance, DBRS shadow-rated two loans as investment grade, including the largest loan in the pool, Prospectus ID#1, One Wilshire (10.4% of the pool) and the another loan in the Top 15, Prospectus ID#4 (5.0% of the pool). Combined, these two loans represent 15.4% of the current pool balance. DBRS has today confirmed that the performance of these loans remain consistent with investment-grade loan characteristics.

The ratings assigned to Classes C, D and E materially deviate from the higher rating implied by the quantitative results. The deviations are warranted because sustainability of loan trends has not yet been demonstrated.

DBRS has provided updated loan-level commentary and analysis for larger and/or pivotal watchlisted loans, the specially serviced loan and for the largest 15 loans in the pool in the DBRS CMBS IReports platform. Registration is free. To view these and future loan-level updates provided as part of DBRS’s ongoing surveillance for this transaction, please register or log into www.ireports.dbrs.com.

Notes:
All figures are in U.S. dollars unless otherwise noted.

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

The principal methodologies is the CMBS North American Surveillance (December 2016), which can be found on dbrs.com under Methodologies.

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