DBRS Confirms All Classes of COMM 2004-LNB2

DBRS Limited (DBRS) confirmed all classes of the Commercial Mortgage Pass-Through Certificates, Series 2004-LNB2 issued by COMM 2004-LNB2 as follows:

-- Class C at AAA (sf)
-- Class D at AAA (sf)
-- Class E at AAA (sf)
-- Class F at AAA (sf)
-- Class G at AAA (sf)
-- Class H at AAA (sf)
-- Class J at AAA (sf)
-- Class K at CCC (sf)

All trends are stable except for Class K, which carries no trend.

The rating actions reflect the current composition of the remaining collateral in the transaction. As of the July 2018 remittance report, the transaction has experienced collateral reduction of 92.4% as a result of successful loan repayment, scheduled amortization, realized losses from liquidated loans and principal recoveries from liquidated loans as only five of the original 90 loans remain in the pool.

The largest three loans, representing 94.8% of the current pool balance, are fully defeased and are scheduled to mature in December 2018, March 2019 and January 2019, respectively. Additionally, the Walgreens College Station loan, representing 2.3% of the pool, is secured by a single-tenant retail property occupied by the Walgreen Company (Walgreens), an investment-grade-rated tenant, on a triple-net lease with extension options until May 2078. The loan is fully amortizing and Walgreens’ original lease expires at loan maturity in April 2028. The remaining loan, Alta Mesa, representing 3.0% of the current pool balance, is in special servicing because of a maturity default and became real-estate owned in February 2016. The property has struggled since its former shadow anchor, Sack N Save, vacated in 2010. In DBRS’s analysis for this review, DBRS assumed a loss severity approaching 40% based on the most recent appraised value of $2.9 million as of February 2018. For additional information on this loan, please see the loan commentary on the DBRS Viewpoint platform, for which information is provided below.

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 loan in the transaction:

-- Prospectus ID #54 – Alta Mesa

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 Class K 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 uncertain 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.

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.