DBRS Upgrades Four Classes of GS Mortgage Securities Trust, Series 2011-GC3

DBRS Limited (DBRS) upgraded four classes of the Commercial Mortgage Pass-Through Certificates Series 2011-GC3 issued by GS Mortgage Securities Trust, Series 2011-GC3 as follows:

-- Class D to AA (sf) from AA (low) (sf)
-- Class E to BBB (high) (sf) from BBB (sf)
-- Class X to BBB (low) (sf) from BB (high) (sf)
-- Class F to BB (high) (sf) from BB (sf)

DBRS also confirmed the ratings of three classes as follows:

-- Class A-4 at AAA (sf)
-- Class B at AAA (sf)
-- Class C at AAA (sf)

DBRS has assigned a Positive trend for classes D, E, X, and F. All other trends are Stable.

The rating upgrades reflect the continued strong performance of the transaction, which has experienced collateral reduction of 49.3% since issuance, with 35 of the original 57 loans remaining in the pool as of the May 2018 remittance report. The majority of the remaining loans in the pool were structured with ten-year terms and will mature in 2020 and 2021. A total of 12 loans, representing 15.5% of the pool, including four of the top 15 loans, are fully defeased. Loans representing 58.3% of the pool reported YE2017 financials. These loans reported a weighted-average (WA) debt service coverage ratio (DSCR) and debt yield of 2.05 times (x) and 16.4%, respectively.

As of the May 2018 remittance, there were five loans, representing 34.7% of the pool, on the servicer’s watchlist and no loans in special servicing. All five loans on the watchlist are being monitored for deferred maintenance. At issuance, DBRS assigned an investment-grade shadow rating on Oxford Valley Mall (Prospectus ID #7), representing 8.7% of the pool. DBRS has confirmed that the performance of this loan remains consistent with investment-grade loan characteristics. For additional information on this loan, please see the loan commentary on the DBRS Viewpoint platform, for which information is provided below.

Class X is an interest-only (IO) certificate that reference a single rated tranche or multiple rated tranches. The IO rating mirrors the lowest-rated applicable reference obligation 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.

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#4 – Cape Cod Mall
-- Prospectus ID#7 – Oxford Valley Mall

For complimentary access to this content, please register for the DBRS Viewpoint platform at www.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.

The ratings assigned to Classes E and F 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 given loan-level event risk.

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.