DBRS Morningstar Confirms All Classes of GS Mortgage Securities Trust 2013-GCJ16

DBRS Limited (DBRS Morningstar) confirmed the ratings on all classes of Commercial Mortgage Pass-Through Certificates, Series 2013-GCJ16 issued by GS Mortgage Securities Trust 2013-GCJ16 as follows:

-- 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 AAA (sf)
-- Class B at AA (high) (sf)
-- Class C at A (high) (sf)
-- Class PEZ at A (high) (sf)
-- Class D at BBB (high) (sf)
-- Class F at BB (low) (sf)
-- Class X-C at B (sf)
-- Class G at B (low) (sf)

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction since issuance when the transaction consisted of 77 loans and an original trust balance of $1.1 billion. As of the February 2020 remittance, 64 loans remained in the trust at a balance of $780.7 million, representing a collateral reduction of 28.2% because of loan repayments and scheduled loan amortization. The pool benefits from 16 loans (18.8% of the pool) having been fully defeased.

As of the February 2020 remittance report, five loans (10.3% of the pool) are on the servicer’s watchlist, including two loans in the top 10, and no loans are in special servicing. In general, the larger loans on the servicer’s watchlist are not exhibiting significantly increased risks from issuance; however, the largest loan, Regency Portfolio (Prospectus ID #6; 5.1% of the pool), is being monitored for exposure to the Southeastern Grocers bankruptcy filing. The collateral is a portfolio of 14 retail properties located across eight states. The servicer has advised that spaces affected by the bankruptcy filing have been retained by the tenant and/or re-tenanted. The loan reported a YE2018 debt service coverage ratio (DSCR) of 1.42 times (x), with a portfolio occupancy rate of 91.0%.

DBRS Morningstar does note the transaction’s exposure to a concentration of retail properties in the top 10 non-defeased loans in the pool, a factor that is particularly noteworthy given the 2020 Coronavirus Disease (COVID-19) outbreak and its effect on retail traffic nationwide as cities and governors as well as company CEOs have taken measures to curtail viral spread by ordering stores and restaurants closed. Also noteworthy is the second-largest loan in the pool, Windsor Court New Orleans (Prospectus ID #1; 8.5% of the pool), which will also undoubtedly be affected by the decline in tourist and business travel related to the COVID-19 outbreak. That loan most recently reported a trailing 12-month period ending September 2019 DSCR of 2.02x, relatively in line with historical figures and above issuance expectations, suggesting there is some cushion for a decline in room bookings.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework and its methodologies can be found at: https://www.dbrsmorningstar.com/research/357792.

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 are subject to surveillance, which could result in ratings being upgraded, downgraded, placed under review, confirmed, or discontinued by DBRS Morningstar.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is the North American CMBS Surveillance Methodology, which can be found on www.dbrsmorningstar.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 Morningstar Global Structured Finance Related Methodologies document, which can be found on www.dbrsmorningstar.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.

For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/357883.

For more information regarding structured finance rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/358308.

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 [email protected].

The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar 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. Please note a sensitivity analysis is not performed for CMBS bonds rated CCC or lower. The DBRS Morningstar long-term rating scale definition indicates that ratings of CCC or lower are assigned when the bond is highly likely to default or default is imminent, thereby prevailing over a sensitivity analysis.

For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at [email protected].

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