DBRS Confirms All Classes of COMM 2013-CCRE8 Mortgage Trust

DBRS Limited (DBRS) confirmed all classes of COMM 2013-CCRE8 Mortgage Trust as follows:

-- Class A-4 at AAA (sf)
-- Class A-5 at AAA (sf)
-- Class A-SBFL at AAA (sf)
-- Class A-SBFX at AAA (sf)
-- Class A-M 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 (high) (sf)
-- Class D at BBB (sf)
-- Class E at BB (high) (sf)
-- Class X-C at BB (low) (sf)
-- Class F at B (high) (sf)

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction. At issuance, the pool consisted of 59 fixed-rate loans secured by 94 commercial properties and, as of the January 2019 remittance, there are 53 loans remaining in the trust. According to the most recent remittance, the pool has experienced a collateral reduction of 22.1% since issuance and 16.7% since January 2018 with a current outstanding trust balance of $1,078.4 million as a result of scheduled loan amortization and successful loan repayments. Notably, Classes A-1 through A-3 were paid in full throughout 2018.

As of the January 2019 remittance, eight loans representing 13.7% of the current pool balance, are fully defeased. At issuance, 12 loans, representing 35.6% of the pool balance, were structured with partial-term interest-only (IO) payments; all of these loans are now amortizing. The pool benefits from limited concentration in retail properties with only 12 loans, representing 17.0% of the pool balance, secured by this property type. Two such loans, representing 8.6% of the pool balance, are within the top 15 loans; these loans reported a weighted-average (WA) YE2017 debt service coverage ratio (DSCR) and debt yield of 1.55 times (x) and 9.8%, respectively. Forty-one loans, representing 77.9% of the current pool balance, are reporting YE2017 figures and these loans reported a WA DSCR and current debt yield of 1.76x and 9.3%, respectively. The top 15 non-defeased loans reported a WA YE2017 DSCR and debt yield of 2.18x and 10.2%, respectively, representing a 5.2% year-over-year improvement in cash flows.

As of the January 2018 remittance, DoubleTree Pittsburgh Airport (Prospectus ID#30; 0.9% of the pool) and Georgetown MHC Portfolio (Prospectus ID#29; 0.9% of the pool), collectively representing 1.8% of the pool balance, are in special servicing. The DoubleTree Pittsburgh Airport loan was transferred in December 2017 for imminent balloon default after being monitored on the servicer’s watchlist for declining revenues from decreased convention bookings, lower occupancy and increased operating expenses. Foreclosure has been filed and the asset is now real-estate owned (REO). The Georgetown MHC Portfolio loan has been REO since April 2016 and, according to the servicer, there are no disposition plans at this time because the asset manager is negotiating new water sewage provisions for the property with the city. DBRS expects both specially serviced loans to ultimately be disposed from the trust at a loss to bondholders. Five loans, representing 7.1% of the pool balance, are on the servicer’s watchlist, four of which for performance-related issues. Where warranted, DBRS applied stressed cash flows for these loans to reflect current risk profiles.

At issuance, DBRS shadow-rated the largest loan in the pool, 375 Park Avenue loan (Prospectus ID#1; 19.7% of the current pool balance) and the Paramount Building loan (Prospectus ID#6; 5.1% of the current pool balance) investment grade. With this review, DBRS confirms that the performance of these loans remains consistent with investment-grade loan characteristics.

Classes X-A, X-B and X-C are 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 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 the following loans in the transaction:
-- Prospectus ID#1 – 375 Park Avenue (19.7% of the pool)
-- Prospectus ID#6 – The Paramount Building (5.2% of the pool)
-- Prospectus ID#27 – Carlsbad Airport Corporate Center (1.0% of the pool)
-- Prospectus ID#28 – 11000 Equity Drive (1.0% of the pool)
-- Prospectus ID#30 – DoubleTree Pittsburgh Airport (0.9% of the pool)
-- Prospectus ID#29 – Georgetown MHC Portfolio (0.9% 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 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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