DBRS Confirms Ratings of Citigroup Commercial Mortgage Trust 2014-GC25 with Stable Trends

DBRS Limited (DBRS) confirmed the ratings of Commercial Mortgage Pass-Through Certificates, Series 2014-GC25 (the Certificates), issued by Citigroup Commercial Mortgage Trust 2014-GC25 as follows:

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

All trends are Stable.

Up to the full certificate balance of the Class A-S, Class B and Class C certificates may be exchanged for Class PEZ certificates. Class PEZ certificates may be exchanged for up to the full certificate balance of the Class A-S, Class B and Class C certificates.

The rating confirmations reflect the overall stable performance of the transaction since issuance. At issuance, the collateral consisted of 62 fixed-rate loans, secured by 99 commercial properties, with an original trust balance of $842.0 million. As of the July 2018 remittance, 61 loans remain in the pool with an aggregate principal balance of $816.5 million, representing a collateral reduction of 3.0% since issuance due to the repayment of one loan and scheduled loan amortization. To date, approximately 95.0% of the pool is reporting YE2017 financials, with a weighted-average (WA) debt service coverage ratio (DSCR) of 1.71x and 10.1%, respectively, compared with the WA DBRS Term DSCR and WA DBRS Debt Yield for those loans at issuance of 1.42x and 8.3%, respectively. In addition to the overall improved credit metrics for the underlying loans, the pool also benefits from defeasance, as two loans collectively representing 4.7% of the pool have been fully defeased as of the July 2018 remittance.

The pool is concentrated by property type, as eight loans, representing 36.3% of the pool, are secured by office properties and 26 loans, representing 25.1% of the pool, are secured by retail properties. The pool is also concentrated by loan size, as the top 15 loans represent 71.0% of the current pool. The largest loan in the pool, Bank of America Plaza (Prospectus ID#1), represents a relatively high 13.1% of the pool balance. In general, the performance of these loans has been strong, as the top 15 loans (excluding defeasance) reported a WA DSCR of 1.74x, compared with the WA DBRS Term DSCR of 1.44x, representing a net cash flow (NCF) growth of 19.6% over DBRS NCF figures.

As of the July 2018 remittance, there are six loans (7.3% of the pool) on the servicer’s watchlist. The largest loan on the watchlist, Pinnacle at Bishop’s Woods (Prospectus ID#12, 3.7% of the pool), was added in May 2018 due to a drop in occupancy as the former largest tenant, Bader & Rutter & Associates (27.0% of NRA), vacated the property. The second-largest loan on the watchlist, Gateway Fashion Centre (Prospectus ID#4, 1.3% of the pool), was added in January 2018 as Sears (27.0% of NRA) vacated the property. For additional information on these loans, please see the loan commentary on the DBRS Viewpoint platform, for which information is provided, below.

Classes X-A, X-B, X-D, X-E and X-F are interest-only (IO) certificates 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:

-- Stamford Plaza Portfolio (Prospectus ID#13, 3.6% of the current pool)
-- Denver Merchandise Mart (Prospectus ID#14, 3.2% of the current pool)
-- The Pinnacle at Bishop’s Woods (Prospectus ID#12, 3.7% of the current pool)
-- Hampton Inn Thibodaux (Prospectus ID#26, 1.0% of the current pool)
-- Orange Plaza Shopping Center (Prospectus ID#2, 2.5% of the current pool)
-- Gateway Fashion Center (Prospectus ID#4, 1.3% of the current pool)

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.

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.