DBRS Morningstar Confirms All Ratings on COMM 2013-CCRE6 Mortgage Trust

DBRS Limited (DBRS Morningstar) confirmed the ratings on the Commercial Mortgage Pass-Through Certificates, Series 2013-CCRE6 issued by COMM 2013-CCRE6 Mortgage Trust as follows:

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

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction since issuance, when the transaction consisted of 48 loans and an original trust balance of $1.5 billion. As of the February 2020 remittance, 38 loans remained in the trust with a balance of $913.4 million, representing a collateral reduction of 38.9% caused by loan repayments, scheduled loan amortization, realized losses, and recovered proceeds from loans liquidated from the pool. The pool benefits from eight loans, representing 5.4% of the pool, that have fully defeased.

As of the February 2020 remittance report, five loans (including three loans in the top 10), representing 32.0% of the pool, were on the servicer’s watchlist, and no loans were in special servicing. In general, the larger loans on the servicer’s watchlist are not exhibiting significantly increased risks since issuance with the largest loan, Federal Center Plaza (Prospectus ID#1; 14.3% of the pool) monitored for upcoming tenant rollover risk. The subject is the headquarters for the second-largest tenant at the property, the Federal Emergency Management Agency (FEMA), representing 42.0% of the net rentable area on a lease expiring in August 2020. According to a Federal News Network articled dated November 11, 2019, FEMA initially planned to relocate to the St. Elizabeth campus in Southeast Washington, D.C.; however, the servicer has since confirmed that the tenant will instead pursue a long-term lease at the subject property with negotiations ongoing as of March 2020. The lease rollover risk is mitigated by the fully funded $15.0 million tenant improvement/leasing commission replacement reserve held by the lender and the loan reported a YE2019 DSCR of 3.46x with a portfolio occupancy rate of 90.0%.

DBRS Morningstar notes that the transaction’s exposure to a concentration of retail properties in the top 10 non-defeased loans in the pool is particularly significant, given the 2020 Coronavirus Disease (COVID-19) outbreak and its impact on retail traffic nationwide as cities, governors, and company Chief Executive Officers have taken measures to address the spread of the coronavirus by closing stores and restaurants. DBRS Morningstar also notes that the decline in tourist and business travel related to the coronavirus will also affect the sixth-largest loan in the pool, Westin Washington DC (Prospectus ID#9; 6.6% of the pool). This loan recently reported a YE2019 DSCR of 1.84x, which is above issuance expectations, suggesting that there is some cushion for a decline in room bookings.

At issuance, DBRS Morningstar shadow-rated the Federal Center Plaza loan investment grade based on the collateral property’s desirable location, significant tenant investment, below-market rents, and added value of the property’s redevelopment parcel. With this review, DBRS Morningstar confirms that the performance of this loan remains consistent with investment-grade loan characteristics.

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 and X-B 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.

DBRS Morningstar provides updated analysis and in-depth commentary in the DBRS Viewpoint platform for the following loans in the transaction:

-- Prospectus ID#1 – Federal Center Plaza (14.3% of the pool)
-- Prospectus ID#3 – The Avenues (12.1% of the pool)

For complimentary access to this content, please register for the DBRS Viewpoint platform at www.viewpoint.dbrsmorningstar.com The platform includes issuer and servicer data for most outstanding CMBS transactions (including non-DBRS Morningstar rated), as well as loan-level and transaction-level commentary for most DBRS Morningstar-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 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 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 info@dbrsmorningstar.com.

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 info@dbrsmorningstar.com.

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