DBRS Morningstar Confirms All Ratings on Citigroup Commercial Mortgage Trust 2014-GC25

DBRS, Inc. (DBRS Morningstar) confirmed its ratings on the Commercial Mortgage Pass-Through
Certificates, Series 2014-GC25 issued by Citigroup Commercial Mortgage Trust 2014-GC25 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 AA (high) (sf)
-- Class B at AA (sf)
-- Class C at A (low) (sf)
-- Class PEZ at A (low) (sf)
-- Class X-D at BBB (sf)
-- Class D at BBB (low) (sf)
-- Class X-E at BB (high) (sf)
-- Class E at BB (sf)
-- Class X-F at B (high) (sf)
-- Class F at B (sf)

All trends are Stable.

The rating confirmations reflect the overall stable performance of the underlying loans in the transaction since issuance. As of the January 2022 remittance, 58 of the trust’s original 62 loans remained in the pool, with an outstanding principal balance of $747.6 million, representing a collateral reduction of 11.2% since issuance. There are 10 loans, representing 16.9% of the current pool balance, that have been fully defeased, including three of the 15 largest loans.

There were 13 loans, representing 17.3% of the current pool balance, on the servicer’s watchlist, including two of the 10 largest loans, representing 7.8% of the current pool balance. The majority of the loans on the watchlist are being monitored for deferred maintenance or upcoming lease expirations where the latest servicer commentary indicates that the tenants in question have renewed. There were no loans in special servicing.

The largest loan on the servicer’s watchlist, The Pinnacle at Bishop’s Woods (Prospectus ID#12, 3.9% of the current pool), is secured by a portfolio of three adjacent Class A office buildings in Brookfield, Wisconsin. The loan was added to the servicer’s watchlist in June 2021 for a low debt service coverage ratio (DSCR), occupancy declines, and deferred maintenance. The loan remains current, and there is no indication that the borrower has requested relief, but DBRS Morningstar did note at issuance that the sponsors have reported defaults, workouts, and foreclosures on at least seven other commercial loans not related to the subject property. A cash trap has been active for several years and the reserve accounts showed a total balance of $500,000 as of January 2022. As of the trailing nine months ended September 30, 2021, the servicer reported an occupancy rate of 66.7% and a DSCR of 1.09 times (x), down from 76.2% and 1.35x, respectively, as of YE2020.

The Stamford Plaza Portfolio loan (Prospectus ID#13, 3.9% of the current pool), is secured by a portfolio of four connected Class A office properties in Stamford, Connecticut. The trust debt is a $30.0 million pari passu participation in a whole loan that totaled $270.0 million at issuance. The loan has been on the watchlist since 2018 because of occupancy and cash flow declines. A relief request related to the Coronavirus Disease (COVID-19) pandemic was granted, allowing for a deferral of reserves for 12 months, to be repaid beginning in May 2022. The loan currently reports approximately $5.0 million in replacement and repair reserves. The portfolio’s total occupancy rate was reported at 67.3% in June 2021, with approximately 20.5% of the portfolio’s net rentable area on leases that have expired or will expire in the next 12 months. A Q3 2021 DSCR of 0.62x was most recently reported.

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-D, X-E, and X-F 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#12 – The Pinnacle at Bishop’s Woods (3.9% 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/baseline-macroeconomic-scenarios-application-to-credit-ratings.

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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