DBRS Confirms All Classes of JPMBB Commercial Mortgage Securities Trust 2014-C26

DBRS Limited (DBRS) confirmed the Commercial Mortgage Pass-Through Certificates, Series 2014-C26 issued by JPMBB Commercial Mortgage Securities Trust 2014-C26 as follows:

-- Class A-2 at AAA (sf)
-- Class A-3 at AAA (sf)
-- Class A-4 at AAA (sf)
-- Class A-SB 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 X-C at AA (low) (sf)
-- Class C at A (high) (sf)
-- Class EC at A (high) (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.

The rating confirmations reflect the overall stable performance of the transaction. The collateral consists of 67 loans secured by 91 commercial and multifamily properties. As of the September 2018 remittance, the pool had an aggregate trust balance of approximately $1.39 billion, representing a collateral reduction of approximately 4.7% since issuance due to the repayment of two loans and scheduled loan amortization. Four loans, representing 3.9% of the current pool balance, are fully defeased. To date, 95.7% of the pool is reporting year-end 2017 financials. Based on the most recent year-end financials, the pool reported a weighted-average (WA) debt service coverage ratio (DSCR) and debt yield of 1.80 times (x) and 10.4%, respectively, compared with the WA DBRS Term DSCR and WA DBRS Debt Yield figures of 1.49x and 8.4% at issuance, respectively.

The transaction is concentrated by property type, as 22 loans (46.0% of the current pool balance) are secured by office properties, while 11 loans (16.5% of the current pool balance) are secured by hotel properties. The pool has benefited from stable cash flow performance, as the top 15 loans (52.0% of the current pool balance) reported a WA DSCR of 1.86x (based on the most recent year-end financials), compared with the WA DBRS Term DSCR of 1.50x at issuance, representing WA net cash flow (NCF) growth of 25.4%.

As of the September 2018 remittance, there are seven loans, representing 8.1% of the current pool balance, on the servicer’s watchlist. All of these loans were flagged because of either performance declines and/or increased vacancy. Based on the most recent financials available (both partial and full-year reporting), these loans had a WA DSCR of 0.62x, compared the DBRS WA figure of 1.28x, representing a NCF decline of 44.2% over the DBRS Term figure. The two largest loans, 117 Kendrick Street (Prospectus ID#10, 2.9% of the current pool balance) and Columbia Centre I & II (Prospectus ID#14, 2.6% of the current pool balance), are both in the top 15 and have recently had increases in vacancy in excess of 15.0%. Both of these loans are highlighted in the DBRS Viewpoint platform.

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:

-- Wells Fargo Center Tampa (Prospectus ID#3, 4.1% of the current pool balance)
-- Heron Lakes (Prospectus ID#4, 3.7% of the current pool balance)
-- 117 Kendrick Street (Prospectus ID#10, 2.9% of the current pool balance)
-- Columbia Centre I & II (Prospectus ID#14, 2.6% of the current pool balance)
-- Hilton Garden Inn Westampton (Prospectus ID#37, 0.9% of the current pool balance)
-- Gander Mountain (Prospectus ID#57, 0.4% of the current pool balance)

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 commercial mortgage-backed securities (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 North American CMBS Surveillance Methodology, 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.

Please see the related appendix for additional information regarding the sensitivity of assumptions used in the rating process.

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