Morningstar DBRS Confirms Credit of COMM 2013-CCRE10 Mortgage Trust

DBRS, Inc. (Morningstar DBRS) confirmed its credit ratings on the remaining classes of the Commercial Mortgage Pass-Through Certificates, Series 2013-CCRE10 issued by COMM 2013-CCRE10 Mortgage Trust as follows:

-- Class E at BB (sf)
-- Class F at B (low) (sf)

The trends are Stable.

Both classes maintain Stable trends.

Since the last credit rating action, one loan that was previously in special servicing was disposed from the trust with a better-than-expected recovery. As of the October 2024 remittance, only two loans remain in the pool, both of which defaulted at maturity and have since been granted maturity extensions. To test the recoverability of the remaining bonds, Morningstar DBRS considered liquidation scenarios for both loans based on conservative haircuts to the most recent appraised values and concluded that any losses are likely to be contained to the unrated Class G. However, given the adverse selection and concentration of defaulted loans, Morningstar DBRS' credit ratings remain reflective of the high credit risk of the remaining assets.

The largest loan remaining is Prince Kuhio Plaza (Prospectus ID#6, 89.8% of the pool), secured by a regional mall in Hilo, Hawaii, owned by Brookfield. The loan transferred to special servicing in June 2023 prior to the July 2023 repayment maturity date. Brookfield was granted a 12-month forbearance through July 2024 in exchange for a $5.0 million reserve deposit. The maturity date has been extended again to July 2025, though it is unclear if there was an additional deposit made. As of the October 2024 remittance, the loan has a current total reserve balance of $11.2 million and is pending return to the master servicer. Historically, the loan has reported stable cash flow, although occupancy declined following the departure of previous anchor tenant Sears, which continues to pay rent. Morningstar DBRS expects this revenue stream will drop once Sears stops paying rent after the April 2025 lease expiration. The asset primarily serves shoppers local to the region, as it is located some distance from the main tourist areas on the island. It is the only enclosed regional mall on the Big Island. An updated appraisal, dated April 2024, valued the property at $54.0 million, down from the issuance appraised value of $71.0 million. This value could withstand up to an additional 30% of stress before the loan would experience any loss at disposition, indicating significant cushion against additional deterioration in performance and/or value.

The smallest loan is Starks Parking Louisville (Prospectus ID# 47, 10.2% of the pool), secured by a 725-space parking garage located in downtown Louisville, Kentucky. Performance was drastically affected by the COVID-19 pandemic, as demand for parking plummeted and monthly permits were cancelled. The loan's maturity date was extended to August 2025. The April 2024 appraised value of $5.1 million indicates the asset could withstand an additional 10% in value deterioration before the loan would experience any loss at disposition. A full loss to the loan amount would still be contained to the unrated Class G.

Morningstar DBRS' credit ratings on the applicable classes address the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. Where applicable, a description of these financial obligations can be found in the transactions' respective press releases at issuance.

Morningstar DBRS' long-term credit ratings provide opinions on risk of default. Morningstar DBRS considers risk of default to be the risk that an issuer will fail to satisfy the financial obligations in accordance with the terms under which a long-term obligation has been issued. The Morningstar DBRS short-term debt rating scale provides an opinion on the risk that an issuer will not meet its short-term financial obligations in a timely manner.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS
There were no Environmental, Social, or Governance factors that had a significant or relevant effect on the credit analysis.

A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings (August 13, 2024), https://dbrs.morningstar.com/research/437781.

All credit ratings are subject to surveillance, which could result in credit ratings being upgraded, downgraded, placed under review, confirmed, or discontinued by Morningstar DBRS.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is North American CMBS Multi-Borrower Rating Methodology (March 1, 2024), https://dbrs.morningstar.com/research/428797.

Other methodologies referenced in this transaction are listed at the end of this press release.

The credit rating was initiated at the request of the rated entity.

The rated entity or its related entities did participate in the credit rating process for this credit rating action.

Morningstar DBRS had access to the accounts, management, and other relevant internal documents of the rated entity or its related entities in connection with this credit rating action.

This is a solicited credit rating.

Morningstar DBRS notes that a sensitivity analysis was not performed for this review as the transaction is in wind down, with only two loans remaining. In such cases, Morningstar DBRS credit ratings are typically based on a recoverability analysis.

DBRS, Inc.
22 West Washington Street
Chicago, IL 60602 USA
Tel. +1 312 332-3429

The credit rating methodologies used in the analysis of this transaction can be found at: https://dbrs.morningstar.com/about/methodologies.

-- North American CMBS Multi-Borrower Rating Methodology (March 1, 2024), https://dbrs.morningstar.com/research/428797
-- Morningstar DBRS North American Commercial Real Estate Property Analysis Criteria (September 19, 2024), https://dbrs.morningstar.com/research/439702
-- North American Commercial Mortgage Servicer Rankings (August 23, 2024), https://dbrs.morningstar.com/research/438283
-- Legal Criteria for U.S. Structured Finance (October 28, 2024), https://dbrs.morningstar.com/research/441840

For more information on this credit or on this industry, visit https://dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.