DBRS Confirms All Classes of COMM 2004-LNB2

DBRS Limited (DBRS) has today confirmed all classes of Commercial Mortgage Pass-Through Certificates, Series 2004-LNB2 issued by COMM 2004-LNB2 as follows:

-- Class C at AAA (sf)
-- Class D at AAA (sf)
-- Class E at AAA (sf)
-- Class F at AAA (sf)
-- Class G at AAA (sf)
-- Class H at AAA (sf)
-- Class J at AAA (sf)
-- Class K at CCC (sf)

All trends are stable, except for Class K, which carries no trend.

The rating actions reflect the current composition of the remaining collateral in the transaction. As of the July 2017 remittance report, the transaction has experienced collateral reduction of 92.2% as a result of successful loan repayment, scheduled amortization, realized losses from liquidated loans and principal recoveries from liquidated loans as only five of the original 90 loans remain in the pool.

Three of the remaining loans, representing 94.6% of the current pool balance, are fully defeased and are scheduled to mature in December 2018, January 2019 and March 2019, respectively. Additionally, the Walgreens College Station loan, representing 2.4% of the pool, is secured by a fully occupied single-tenant retail property occupied by the Walgreen Company (Walgreens), an investment-grade-rated tenant, on a triple-net lease with extension options until May 2078. This loan is fully amortizing and Walgreens’ original lease expires at loan maturity in April 2028. The remaining loan, Alta Mesa, representing 3.1% of the current pool balance, is in special servicing because of a maturity default and became real estate owned in February 2016.

The rating assigned to Class K materially deviates from the higher ratings implied by the quantitative results. DBRS considers a material deviation to be a rating differential of three or more notches between the assigned rating and the rating implied by the quantitative results that is a substantial component of a rating methodology. The deviations are warranted, given uncertain loan-level event risk.

DBRS has provided updated loan-level commentary and analysis for all remaining 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 at or log into DBRS CMBS IReports at www.ireports.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 principal methodologies are CMBS North American Surveillance (March 2017) and North American Single-Asset/Single-Borrower Methodology (March 2017), which can be found on dbrs.com under Methodologies.