DBRS Confirms All Classes of GS Mortgage Securities Trust 2013-G1

DBRS Limited (DBRS) confirmed the ratings on the Commercial Mortgage Pass-Through Certificates, Series 2013-G1 issued by GS Mortgage Securities Trust, Series 2013-G1 as follows:

-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class X-A at AAA (sf)
-- Class B at AA (sf)
-- Class C at A (sf)
-- Class D at BBB (low) (sf)
-- Class DM at BB (sf)

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction, with strong cash flow growth and generally healthy sales and occupancy trends for all three collateral properties since issuance. The collateral consists of three fixed-rate loans individually secured by two outlet malls and one regional mall in Great Lakes Crossing Outlets (Auburn Hills, Michigan), Katy Mills (Katy, Texas) and Deptford Mall (Deptford, New Jersey), respectively. The three properties are located in established suburban markets outside of Detroit, Houston and Philadelphia, respectively. As of the January 2019 remittance, all loans are reporting trailing six months ending June 2018 figures, with a weighted-average (WA) debt service coverage ratio (DSCR) and WA debt yield of 3.11 times (x) and 15.3%, respectively, which is in line with the year-end (YE) 2017 WA DSCR and WA debt yield of 3.07x and 15.1%, respectively. At YE2017, the loans reported WA cash flow growth of 25.6% over the DBRS net cash flow figures derived at issuance. The three loans report an aggregate outstanding principal balance of $519.0 million as of the January 2018 remittance, representing a collateral reduction of 8.8% from issuance due to scheduled loan amortization on the Great Lakes Crossing Outlets and Deptford Mall loans, as the Katy Mills loan is interest-only for the entire term.

Given the general environment of flux and evolution for shopping malls in the United States, the collateral properties have seen some changes in tenancy and sales since issuance. The Deptford Mall property lost its non-collateral Sears anchor in October 2018, but news reports and responses received from the servicer have recently suggested a portion of that space will be backfilled by Round1 and Dick’s Sporting Goods, with the mall’s overall healthy in-line sales trends suggesting the remaining vacant space will be attractive for prospective tenants. The outlet malls in the country, such as the collateral properties in Great Lakes Crossing and Katy Mills, have not been as directly impacted by the migration to online shopping, but operators have been required to continue investing in the physical spaces to retain shopper traffic. In the case of the subject outlet malls, the sponsors in Taubman and Simon have each shown commitment in that regard, with significant capital recently invested or planned to be invested in upgrades for both properties. For additional information and analysis on the operating metrics, sales trends and overall outlook for the three collateral malls, please see the DBRS Loan Commentary in the DBRS Viewpoint platform, for which information has been provided below.

At issuance, DBRS shadow-rated all three loans investment grade. With this review, DBRS has confirmed that the performance of these loans remains consistent with investment-grade loan characteristics. Overall, the collateralized properties are well established in their respective markets and have satisfactory in-line sales performance, high-quality sponsorship and low-leverage financing.

Class X-A is an interest-only (IO) certificate that references 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 are subject to surveillance, which could result in ratings being upgraded, downgraded, placed under review, confirmed or discontinued by DBRS.

DBRS provides updated analysis and in-depth commentary in the DBRS Viewpoint platform for this transaction.

For complimentary access to this content, please register for the DBRS Viewpoint platform at www.viewpoint.dbrs.com. The platform includes loan-level data for most outstanding CMBS transactions (including non-DBRS rated), as well as loan-level and transaction-level commentary for most DBRS-rated and -monitored 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 www.dbrs.com under Methodologies & Criteria. 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, which can be found on www.dbrs.com in the Commentary tab under Regulatory Affairs. 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.

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