DBRS Morningstar Confirms All Classes of Citigroup Commercial Mortgage Trust 2014-GC19

DBRS Limited (DBRS Morningstar) confirmed its ratings on the Commercial Mortgage Pass-Through Certificates, Series 2014-GC19 issued by Citigroup Commercial Mortgage Trust 2014-GC19 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 AAA (sf)
-- Class PEZ at AA (sf)
-- Class C at AA (sf)
-- Class D at BBB (high) (sf)
-- Class X-C at BBB (sf)
-- Class E at BBB (low) (sf)
-- Class X-D at BB (high) (sf)
-- Class F at BB (sf)

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction. As of the February 2021 remittance, 68 of the original 78 loans remain in the pool, with an aggregate trust balance of $713.8 million, representing a collateral reduction of approximately 29.8% since issuance due to loan repayments and scheduled loan amortization. The transaction is concentrated by property type, as loans secured by retail, multifamily, and mixed-use properties represent 26.7%, 23.4%, and 21.0% of the current trust balance, respectively. There are also 20 loans, representing 22.3% of the current pool balance, secured by collateral that has been fully defeased.

According to February 2021 reporting, there are four loans in special servicing, representing 4.8% of the current trust balance, that have all transferred as a result of ongoing difficulties caused by the Coronavirus Disease (COVID-19) pandemic; the largest of these four loans, Festival Plaza (Prospectus ID#19, 1.7% of the current trust balance), is highlighted in detail below. Per the servicer, the Berwyn Shopping Center loan (Prospectus ID#29, 1.3% of the current trust balance) is expected to repay in the near term, while the 334-336 West 46th Street loan (Prospectus ID#35, 1.1% of the current trust balance) has discounted payoff discussions ongoing while the servicer dual-tracks foreclosure. The smallest of the four loans in special servicing, Ramada Denver (Prospectus ID#49, 0.7% of the current trust balance), was made current with the February 2021 remittance, while discussions on a resolution remain ongoing.

Festival Plaza is secured by a 108,356 sf shopping center in suburban Montgomery, Alabama, about eight miles southeast of the central business district. The loan transferred to special servicing in May 2020 as a result of imminent monetary default and is 121+ days as of the February 2021 reporting. The borrower has asked for mortgage relief and discussions regarding a potential loan modification are ongoing. The primary driver for the relief request was rent loss, stemming from the property’s largest tenant, AMC Theaters (AMC; 54.4% of the net rentable area), which closed its doors in late March 2020 and reopened on a modified schedule in August 2020. While AMC originally had a December 2020 lease expiration, the servicer has indicated the tenant’s lease was extended through December 2023 with significant concessions, indicating the tenant’s desire to remain at the property. An August 2020 appraisal valued the property at $9.7 million, representing a 46.0% decline from the issuance value of $18.1 million. To account for the possible credit risk this loan presents to the trust, DBRS Morningstar increased the probability of default to more accurately reflect the current credit profile of the loan.

According to the February 2021 reporting, there are 11 loans on the servicer’s watchlist, representing 14.5% of the current trust balance. Three of these loans, representing 4.4% of the current trust balance, were added to the watchlist as a result of deferred maintenance, while another three loans, representing 5.1% of the current trust balance, were flagged for failing to provide updated financials or repay servicer advances. Only five of these loans, representing 5.1% of the current trust balance, were added as a result of performance declines and/or upcoming tenant rollover. As of Q3 2020, these five loans had a weighted-average debt service coverage ratio of 1.25 times (x), compared with the year-end 2019 figure of 1.72x, representing a 24.4% decline.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/373262.
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 loan in the transaction:

-- Prospectus ID#19 – Festival Plaza (1.7% 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 (March 6, 2020), 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.

For more information regarding the structured finance rating approach and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/359905.

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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