DBRS Downgrades Two Classes and Confirms Two Classes of GE Commercial Mortgage Corporation, Series 2005-C1

DBRS Limited (DBRS) downgraded the ratings on two classes of the Commercial Mortgage Pass-Through Certificates, Series 2005-C1 issued by GE Commercial Mortgage Corporation, Series 2005-C1, as follows:

-- Class D to CCC (sf) from A (low) (sf)
-- Class E to C (sf) from CCC (sf)

In addition, DBRS confirmed the ratings on the following classes:

-- Class F at C (sf)
-- Class G at C (sf)

None of the ratings carry trends. Classes E, F and G also have the Interest in Arrears designation.

The rating downgrades to Class D and Class E reflect the increase in expected losses to the trust for the Lakeside Mall loan (Prospectus ID#1 – 89.3% of the current pool balance), that is currently in special servicing. The pari passu loan transferred to the special servicer in May 2016, for imminent maturity default. The sponsor, GGP Inc., has since surrendered title and the subject property became real estate owned in August 2017. Cash flows have been sustained well below issuance levels since 2010, and the property continues to experience downward-trending tenant sales with elevated competition in the market. As a result, the property value has declined significantly since issuance. The first appraisal obtained by the special servicer, dated July 2016, valued the property at $107.5 million. However, less than one year later, a February 2017 valuation estimated the property’s as-is value at $82.4 million and a subsequent August 2017 appraisal estimated the property’s value at $43.9 million. This compares with the whole loan exposure for this loan as at the January 2018 remittance of approximately $135.0 million. The trust piece represents approximately 49.7% of the whole loan balance, with the other piece held in the COMM 2005-LP5 trust not rated by DBRS.

As at the January 2018 remittance, the transaction experienced a collateral reduction of 95.6% with two of the original 127 loans outstanding and a current trust balance of $73.1 million. The Versatile Warehouse loan represents the remaining 10.7% of the pool balance and is scheduled to mature in February 2020. This loan has exhibited stable performance year over year, reporting a year-end (YE) 2016 debt service coverage ratio of 2.02 times (x) compared with 1.55x at YE2015.

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 the specially serviced loan 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 www.viewpoint.dbrs.com.

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.
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.

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 for this rating action. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

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