DBRS Confirms Rating of Wachovia Bank Commercial Mortgage Trust, Series 2004-C15

DBRS Limited (DBRS) confirmed the rating of the Class F Commercial Mortgage Pass-Through Certificates, Series 2004-C15 issued by Wachovia Bank Commercial Mortgage Trust, Series 2004-C15 (the Trust) as follows:

-- Class F at A (high) (sf)

The trend is Stable.

The rating confirmation reflects the stable performance of the transaction, which has experienced improved credit support to the bond as a result of continued loan amortization. Since issuance, the pool has experienced a collateral reduction of 97.6%, with four of the original 87 loans outstanding as of the June 2018 remittance. Two of the remaining loans, representing 36.6% of the pool balance, are fully defeased and are scheduled to mature in August 2019. As of June 2018, 12 loans have been liquidated from the trust with a combined realized loss of $56.4 million.

The largest loan, 4 Sylvan Way (Prospectus ID#13), representing 57.3% of the pool, is in special servicing and is real estate owned. The servicer completed a deed-in-lieu and took title in May 2015. The office property is 100% occupied by a single tenant (T-Mobile USA, Inc.) who is paying below-market rents with a lease that is scheduled to expire in June 2027. The property is undergoing an extensive tenant improvement package that will be completed in the third quarter of 2018. The servicer will then list the property for sale once improvements are complete.

The remaining loan, representing 6.1% of the pool, is secured by a freestanding retail property that is 100.0% leased to CVS. The tenant vacated the property in 2011 and continues to honor its lease obligations until October 2023. The loan is fully amortizing with approximately six years remaining. CVS is an investment-grade entity and is expected to continue to pay throughout the term of its lease.

The ratings assigned to Class F materially deviates 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 deviation is warranted because the structural features of the transaction outweigh the quantitative analysis, given the propensity for the liquidation of specially serviced assets to generate large interest shortfalls.

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:

-- 4 Sylvan Way (Prospectus ID#13)
-- CVS – Cedar Park, TX (Prospectus ID#69)

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.

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.