DBRS Upgrades Five Classes of GS Mortgage Securities Trust 2013-GCJ16

DBRS, Inc. (DBRS) upgraded the ratings on the following classes of Commercial Mortgage Pass-Through Certificates, Series 2013-GCJ16 (the Certificates) issued by GS Mortgage Securities Trust 2013-GCJ16 (the Trust):

-- Class X-B to AA (high) (sf) from AA (sf)
-- Class B to AA (sf) from AA (low) (sf)
-- Class C to A (sf) from A (low) (sf)
-- Class PEZ to A (sf) from A (low) (sf)
-- Class D to BBB (sf) from BBB (low) (sf)

DBRS also confirmed the ratings on the following classes:

-- Class A-2 at AAA (sf)
-- Class A-3 at AAA (sf)
-- Class A-4 at AAA (sf)
-- Class A-AB at AAA (sf)
-- Class A-S at AAA (sf)
-- Class X-A at AAA (sf)
-- Class F at BB (low) (sf)
-- Class X-C at B (sf) (sf)
-- Class G at B (low) (sf)

All trends are Stable, as the trends for Class B, Class C and Class PEZ were changed to Stable from Positive. The Class A-S, B and C Certificates may be exchanged for the Class PEZ Certificates (and vice versa).

The rating actions reflect the overall stable performance of the transaction since issuance, when the collateral consisted of 77 loans secured by 134 properties with an issuance trust balance of $ $1,086.6 million. As of the September 2017 remittance, the pool has experienced a collateral reduction of 6.4% since issuance as a result of scheduled loan amortization and the repayment of two loans, with 75 loans remaining in the pool. In addition, there are six loans representing 13.1% of the pool balance that are fully defeased, Two of the defeased loans are in the top 15 and represent 9.5% of the pool. As of the YE2016 reporting, the pool reported a weighted-average (WA) debt service coverage ratio (DSCR) and WA debt yield of 1.71 times (x) and 11.7%, respectively, compared with the DBRS WA Term DSCR and Debt Yield of 1.41x and 9.4%, respectively. The top 15 loans, which represent 56.0% of the pool balance, reported a WA YE2016 DSCR of 1.41x and debt yield of 10.54%, with a WA net cash flow (NCF) growth of 11.7% over the DBRS Term NCF derived at issuance.

As of the September 2017 remittance, there were six loans representing 5.4% of the pool balance on the servicer’s watchlist. Two loans representing 3.6% of the pool balance are being monitored for tenant rollover and two loans representing 5.0% of the pool balance are being monitored for outstanding deferred maintenance. There are no loans in special servicing.

Classes X-A, X-B, X-C are interest-only (IO) certificates that reference a single rated tranche or multiple rated tranches. The IO rating mirrors the lowest-rated reference tranche adjusted upward by one notch if senior in the waterfall.

All ratings will be subject to ongoing surveillance, which could result in ratings being upgraded, downgraded, placed under review, confirmed or discontinued by DBRS.

DBRS has provided updated loan-level commentary and analysis for larger and/or pivotal watchlisted loans in the transaction, as well as the top 15 loans, in the DBRS Viewpoint 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 DBRS Viewpoint at viewpoint.dbrs.com.

The ratings assigned to Classes F and G materially deviate 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 as the sustainability of loan performance trends was not demonstrated

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

The principal methodology is CMBS North American Surveillance, which can be found on dbrs.com under Methodologies. For a list of the Structured Finance related methodologies that may be used during the rating process, please see the DBRS Global Structured Finance Related Methodologies document on www.dbrs.com. Please note that not every related methodology listed under a principal Structured Finance asset class methodology may be used to rate or monitor an individual structured finance or debt obligation.
This rating is endorsed by DBRS Ratings Limited for use in the European Union.

The rated entity or its related entities did participate in the rating process. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities.