DBRS Morningstar Confirms all Classes of VNDO 2012-6AVE Mortgage Trust

DBRS, Inc. (DBRS Morningstar) confirmed its ratings on all classes of Commercial Mortgage Pass-Through Certificates, Series 2012-6AVE issued by VNDO 2012-6AVE Mortgage Trust (the Issuer) as follows:

-- Class A at AAA (sf)
-- Class X-A at AAA (sf)
-- Class X-B at AA (sf)
-- Class B at AA (low) (sf)
-- Class C at A (low) (sf)
-- Class D at BBB (sf)
-- Class E at BBB (low) (sf)

All trends are Stable.

The rating confirmations reflect the overall stable performance of the transaction, which remains in line with DBRS Morningstar’s expectations. The collateral is a first-lien whole mortgage loan on 1290 Avenue of the Americas, a 2.1 million square foot (sf), 43-story Class A office tower in Midtown Manhattan. Additionally, the property includes 61,737 sf of retail space and 98,568 sf of storage space. The $950 million 10-year loan pays interest only (IO) for its entire term and matures in November 2022. The loan is sponsored by Vornado Realty Trust.

According to the January 2021 rent roll, the property was 98.3% occupied. The largest tenant is Neuberger Berman Group LLC, which covers 20.9% of the net rentable area (NRA) on a lease that expires in 2037. The second-largest tenant is AXA Equitable Life Insurance Company, which accounts for 20.2% of the NRA on a lease that expires in 2023. This tenant physically occupies only 25.2% of its space and sublets the remainder. Notable subtenants include Morgan Stanley and Sirius X/M radio. The third-largest tenant is Cushman & Wakefield, which leases 8.9% of NRA through 2025.

The property has maintained a stable performance throughout its lifecycle. The YE2020 net cash flow increased 8.4% from the prior year and is 9.9% higher than at issuance. Reported cash flow has been increasing in recent years following the burn off of contractual leasing concessions associated with the 20-year Neuberger Berman lease that commenced in 2017. As of YE2020, the loan had a debt service coverage ratio (DSCR) of 3.21 times (x) compared with the YE2019 DSCR of 2.97x.

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 and X-B 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 Morningstar.

The DBRS Viewpoint platform provides additional information on this transaction and underlying loans including DBRS Morningstar metrics, commentary, servicer-reported cash flows, and other performance-related data.

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 26, 2021), 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 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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