DBRS Confirms All Classes of WFRBS Commercial Mortgage Trust 2014-LC14

DBRS Limited (DBRS) confirmed the ratings on the following classes of Commercial Mortgage Pass-Through Certificates, Series 2014-LC14 issued by WFRBS Commercial Mortgage Trust 2014-LC14:

-- Class A-2 at AAA (sf)
-- Class A-3FL at AAA (sf)
-- Class A-3FX at AAA (sf)
-- Class A-4 at AAA (sf)
-- Class A-5 at AAA (sf)
-- Class A-SB at AAA (sf)
-- Class A-S at AAA (sf)
-- Class X-A at AAA (sf)
-- Class B at AA (low) (sf)
-- Class C at A (low) (sf)
-- Class PEX at A (low) (sf)
-- Class X-B at BBB (sf)
-- Class D at BBB (low) (sf)
-- Class E at BB (sf)
-- Class X-C at B (high) (sf)
-- Class F at B (sf)

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction. At issuance, the transaction consisted of 71 fixed-rate loans, secured by 144 commercial and multifamily properties, with a trust balance of $1.3 billion. Per the October 2018 remittance, 69 loans remain in the pool with an aggregate principal balance of $1.2 billion, representing a collateral reduction of 7.9% due to loan repayment and scheduled loan amortization. To date, approximately 92.9% of the pool is reporting YE2017 financials, and based on the most recent year-end reporting, the pool reported a weighted-average (WA) debt service coverage ratio (DSCR) and debt yield of 1.85 times (x) and 12.2%, respectively, which compares favorably with the DBRS Term figures reported at issuance of 1.51x and 9.7%, respectively. Based on the most recent year-end reporting, the Top 15 loans (excluding defeasance) reported a WA DSCR and debt yield of 1.88x and 11.6%, respectively, representing net cash flow (NCF) growth of 19.1% over DBRS NCF figures derived at issuance. The pool also benefits from defeasance, as three loans (7.4% of the pool) are fully defeased.

Per the October 2018 remittance, there are 12 loans (16.8% of the pool) on the servicer’s watchlist and three loans (5.3% of the pool) in special servicing. Two of the loans in special servicing (4.3% of the pool) are current as of the October 2018 remittance, with workout plans yet to be determined. The third loan in special servicing, Westridge Apartments (Prospectus ID#33, 1.0% of the pool), is secured by a multifamily property in Williston, North Dakota, and was transferred to the special servicer in June 2016 due to declining cash flow performance stemming from the regional economy’s reliance on the oil and gas industry. Based on current property performance, an updated appraised value and limited liquidity and demand in the market, DBRS estimates that the trust will experience a loss with the ultimate disposition of the loan from the pool.

At issuance, DBRS shadow rated The Outlet Collection – Jersey Gardens (Prospectus ID#3, 6.4% of the pool) investment grade. DBRS confirms with this review that the performance of this loan remains consistent with investment-grade loan characteristics.

Classes X-A, X-B and X-C 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:

-- The Outlet Collection – Jersey Gardens (Prospectus ID#3, 6.4% of the pool)
-- Williams Center Towers (Prospectus ID#6, 3.6% of the pool)
-- West Side Mall (Prospectus ID#14, 2.0% of the pool)
-- Westridge Apartments (Prospectus ID#33, 1.0% of the pool)
-- HIE Houston West (Prospectus ID#41, 0.7% of the pool)
-- h.h Gregg – Boca Raton (Prospectus ID#48, 0.6% of the 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 North American CMBS 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.

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.