DBRS Confirms FREMF 2014-K37 Mortgage Trust, Series 2014-K37

DBRS Limited (DBRS) confirmed the ratings on the following classes of Multifamily Mortgage Pass-Through Certificates, Series 2014-K3 issued by FREMF 2014-K37 Mortgage Trust, Series 2014-K37:

-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class B at AA (low) (sf)
-- Class C at A (sf)
-- Class X-1 at AAA (sf)
-- Class X2-A at AAA (sf)
-- Class X2-B at A (high) (sf)

All trends are Stable.

The rating confirmations reflect the overall performance of the transaction since issuance. At issuance, the collateral consists of 102 fixed-rate loans secured by 102 multifamily properties and as of the October 2017 remittance, all loans remain in the pool and there had been a collateral reduction of 3.8% since issuance. Loans representing 92.2% reported YE2016 financials, with the Top 15 loans reporting a weighted-average (WA) debt service coverage ratio (DSCR) and debt yield of 1.55 times (x) and 11.1%, respectively. The Top 15 loans in the pool collectively represent 37.6% of the transaction balance and those loans reported a WA net cash flow growth of 6.8% over the YE2015 figures. Six loans, representing 6.2% of the current pool balance, are fully defeased.

There are eight loans, representing 7.1% of the pool balance, on the servicer’s watchlist and no loans in special servicing as of the November 2017 remittance. All but one of the watchlisted loans reported a healthy DSCR at the most recent year-end reporting period, with the majority of loans monitored for relatively minor property condition issues observed at the most recent servicer’s site inspections. For additional information on the larger and/or noteworthy loans on the watchlist, please see the DBRS Loan Commentary on the DBRS Viewpoint platform.

Classes X-1, X2-A and X2-B are interest-only (IO) certificates that reference 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.

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 under Related Documents or by contacting us at info@dbrs.com.

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

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