DBRS Confirms Ratings of COMM 2014-UBS3 Mortgage Trust

DBRS Limited. (DBRS) confirmed the ratings on the following classes of Commercial Mortgage Pass-Through Certificates, Series 2014-UBS3 (the Certificates) issued by COMM 2014-UBS3 Mortgage Trust:

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

All trends are Stable.

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

At issuance, the collateral consisted of 49 fixed-rate loans secured by 81 commercial properties. As of the February 2018 remittance, all loans remain in the pool, which has an outstanding balance of $1,032.5 million, representing a collateral reduction of 2.2% since issuance. There is one loan that is fully defeased, representing 0.5% of the pool balance. The weighted-average (WA) DBRS Term debt service coverage ratio (DSCR) and WA DBRS Debt Yield at issuance were 1.47 times (x) and 8.6%, respectively. As of YE2016 reporting, the pool reported a WA DSCR and in-place debt yield of 1.57x and 9.5%, respectively (98.3% reporting). Forty-one loans (81.8% of the pool) are reporting Q3 2017 financials. The top 15 loans reported a YE2016 WA DSCR of 1.60x compared with the YE2015 WA DSCR of 1.53x and the WA DBRS Term DSCR of 1.50x. Based on YE2016 figures, the top 15 loans showed a WA net cash flow (NCF) growth of 7.55% over the DBRS issuance figures.

As of February 2018, there are eight loans on the servicer’s watchlist, representing 18.4% of the pool balance. Four of these loans are on the watchlist for outstanding deferred maintenance items, three are watchlisted for a low DSCR and the remaining loan was watchlisted as a result of a tenant’s bankruptcy. Village Square and Deerpath Court (Prospectus ID #10, 2.5% of the pool) and Woodbridge Apartments (Prospectus ID #32, 0.5% of the pool) both showed a large drop in NCF with the most recent reporting for each. The overall performance of the loans on the watchlist is stable, with a WA DSCR and WA debt yield of 1.27x and 8.8%, respectively.

There are three specially serviced loans in the pool, collectively representing 2.2% of the transaction balance: Cincinnati Multifamily Portfolio (Prospectus ID #19, 1.3% of the pool), Fairfield Inn & Suites by Marriott (Prospectus ID #35, 0.5% of the pool) and Radcliff Square Shopping Center (Prospectus ID #39, 0.5% of the pool). The Cincinnati Multifamily Portfolio loan has been with the special servicer since 2015, but the two smaller loans are relatively recent transfers, both having been shipped to the special servicer in early 2017. For additional information on these loans, please see the Loan Commentary in the DBRS Viewpoint platform. Information on accessing the DBRS Viewpoint platform is provided below.

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

As part of this review, DBRS has provided updated analysis and in-depth commentary in the DBRS Viewpoint platform for the following loans in the transaction:
-- Prospectus ID#1 – Bronx Terminal Market
-- Prospectus ID#2 – State Farm Portfolio
-- Prospectus ID#3 – Equitable Plaza
-- Prospectus ID#4 – Southfield Town Center
-- Prospectus ID#5 – Sixty LES
-- Prospectus ID#6 – 1100 Superior Avenue
-- Prospectus ID#7 – Solo Cup
-- Prospectus ID#8 – Hilton Charlotte University Place
-- Prospectus ID#9 – Sunrise Hospitality Portfolio
-- Prospectus ID#10 – Village Square and Deerpath Court
-- Prospectus ID#11 – Newport Commons
-- Prospectus ID#12 – Preserve at Grande Oaks
-- Prospectus ID#13 – Pine Haven RV Park
-- Prospectus ID#14 – Westgate Plaza
-- Prospectus ID#15 – Enclave at Prestonwood
-- Prospectus ID#19 – Cincinnati Multifamily Portfolio
-- Prospectus ID#35 – Fairfield Inn & Suites by Marriott
-- Prospectus ID#39 – Radcliff Square Shopping Center

For complimentary access to this content, please register for the DBRS Viewpoint platform at viewpoint.dbrs.com. The platform includes issuer and servicer data for the entire CMBS universe, as well as deal and loan-level commentary for all DBRS rated transactions.

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.

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