DBRS Morningstar Confirms All Classes of GS Mortgage Securities Trust 2014-GC22

DBRS Limited (DBRS Morningstar) confirmed the ratings on the following classes of Commercial Mortgage Pass-Through Certificates, Series 2014-GC22 issued by GS Mortgage Securities Trust 2014-GC22:

-- Class A-3 at AAA (sf)
-- Class A-4 at AAA (sf)
-- Class A-5 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 AA (high) (sf)
-- Class B at AA (sf)
-- Class C at A (high) (sf)
-- Class PEZ at A (high) (sf)
-- Class D at BBB (low) (sf)
-- Class X-C at BB (high) (sf)
-- Class E at BB (sf)
-- Class X-D at B (high) (sf)
-- Class F at B (sf)

DBRS Morningstar removed classes X-D and F from Under Review with Negative Implications where it had placed them on August 6, 2020. All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction since issuance. As of the February 2021 remittance, the initial trust balance of $961.5 million has been reduced by 15.2% to $815.5 million, with 55 of the original 59 loans remaining in the pool. The transaction is concentrated by property type as 20 loans, representing 26.8% of the pool, are secured by retail collateral and nine loans, representing 23.0% of the pool, are secured by office collateral.

As of the February 2021 remittance, two loans, representing 2.0% of the pool, are in special servicing and 16 loans, representing 41.9% of the pool, are on the servicer’s watchlist, including two of the three largest loans in the pool. Maine Mall (Prospectus ID#1; 13.5% of the pool), secured by a super-regional mall in South Portland, Maine, was added to the watchlist in April 2020 for declining debt service coverage ratio (DSCR) and for a borrower’s Coronavirus Disease (COVID-19) relief request. The mall has seen its occupancy fall to as low as 75% after its Bon Ton anchor (16.5% of the net rentable area (NRA)) vacated in 2017. The space remained vacant until July 2020 when Jordan’s Furniture was signed as a replacement tenant. As of Q3 2020 occupancy has increased to 92.3% with the loan’s annualized DSCR being reported at 1.34 times.

The EpiCentre loan (Prospectus ID#3; 10.4% of the pool), secured by a mixed-use property in downtown Charlotte, North Carolina, is being monitored on the servicer’s watchlist for occupancy declines. The property, which mainly consists of retail and entertainment space, has been affected by restrictions related to the coronavirus pandemic. Local news articles report that five restaurant and bar tenants were evicted from the property in October 2020 with an additional four tenants having been evicted in December 2020. Servicer commentary notes that the property is only 35% occupied as of January 2021. Foot traffic at the property had begun to decline following several instances of violent crime on the premises. In addition, the property was hampered for a good portion of 2020 as North Carolina banned indoor dining during the initial stages of the pandemic. While dining has reopened subject to capacity limits, lack of activity at the convention center and nearby offices continues to impede foot traffic. DBRS Morningstar has inquired about any leasing updates and the status of the loan ahead of its June 2021 maturity.

DBRS Morningstar is also monitoring the Maccabees Center loan (Prospectus ID#12; 2.3% of the pool) for significant occupancy declines in the last year. This loan, secured by a class B office in Southfield, Michigan, saw its two largest tenants, collectively 47.0% of the NRA, vacate at their respective lease expiries in February 2020 and December 2020. With those departures, occupancy has dropped from 83% to approximately 35% as of January 2021.

ESG CONSIDERATIONS
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.

Classes X-A, X-B, X-C, and X-D 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#3 – EpiCentre (10.4% of the pool) (DBRS Morningstar Hotlist)
-- Prospectus ID#12 – Maccabees Center (2.3% 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 the 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 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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