DBRS Morningstar Confirms Ratings on All Classes of Citigroup Commercial Mortgage Trust 2014-GC21

DBRS Limited (DBRS Morningstar) confirmed its ratings on the Commercial Mortgage Pass-Through Certificates, Series 2014-GC21 issued by Citigroup Commercial Mortgage Trust 2014-GC21 as follows:

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

DBRS Morningstar changed the trends on Classes F and X-D to Stable from Negative. All classes now carry a Stable trend.

The rating confirmations reflect the overall stable performance of the transaction since issuance. The trend changes are a result of improvements in performance for the watchlisted loans as well as the resolution of the loans that were in special servicing at last review, specifically, Harbor Square (Prospectus ID#14) and 24 Hour Fitness (Prospectus ID#25, 1.7% of the pool). As of the January 2022 remittance, 54 of the original 70 loans remain in the pool, representing a collateral reduction of 32.2% since issuance with a current trust balance of $705.5 million. Eight loans, representing 7.4% of the current pool balance, are fully defeased. There is one loan in special servicing, Talbot Town Center & 32 North Washington Street (Prospectus ID#42, 1.1% of the pool), which DBRS Morningstar believes will ultimately be resolved with a loss to the trust at a loss severity approaching 40.0%. As of the January 2022 remittance, no loans in the pool were delinquent on debt service payments.

The largest loan on the servicer’s watchlist, Maine Mall (Prospectus ID#1, 17.7% of the pool), is secured by 730,444-square-foot (sf) portion of a 1.0 million-sf super-regional mall located approximately six miles from the Portland, Maine, CBD. The loan was added to the servicer’s watchlist in April 2020 for a declining debt service coverage ratio (DSCR) and the borrower’s Coronavirus Disease (COVID-19) relief request. The servicer and the sponsor, Brookfield, executed a forebearance agreement in November 2020. Brookfield provided rent deferrals to multiple tenants in 2020 and it was able to avoid two simultaneous dark anchors, which typically results in the triggering of co-tenancy clauses. The decline in collateral performance was exacerbated during the pandemic given the considerable rent deferrals offered to various tenants; however, the sponsor was able to maintain occupancy and the deferred amounts are expected to be repaid in the near term. The sponsor and the tenants have shown commitment to the property and the sponsor expects performance to rebound to pre-pandemic levels in 2022.

The second-largest loan on the servicer’s watchlist, Lanes Mill Marketplace (Prospectus ID#9, 3.0% of the pool), is secured by a 145,370-sf portion of a 435,074-sf retail power center in Howell, New Jersey. The loan was added to the servicer’s watchlist in November 2018 for a low DSCR. As of the most recent financial reporting from September 2021, the year-to-date DSCR was 0.77 times (x), while the effective occupancy rate of the collateral remained at 78.0%. While grocery-anchored properties have generally shown more resilience to the effects of the ongoing pandemic, the declining sales figure prior to the outbreak of the pandemic is troubling. The property does benefit from its location within an established retail corridor, strong shadow-anchors and available leasing and capital improvement reserves in excess of $1.0 million; however, leasing momentum has been slow for several years and it not expected to materially improve in the immediate future.

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#1 – Maine Mall (17.7% of the pool)
-- Prospectus ID#9 – Lanes Mill Marketplace (3.0% 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 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.

The DBRS Morningstar Sovereign group releases baseline macroeconomic scenarios for rated sovereigns. DBRS Morningstar analysis considered impacts consistent with the baseline scenarios as set forth in the following report: https://www.dbrsmorningstar.com/research/384482.

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.

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

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