Fitch Ratings upgrades two classes of GE Capital Commercial Mortgage Corp.'s (GECCMC) commercial mortgage pass-through certificates, series 2002-3. A detailed list of rating actions follows at the end of this release.
KEY RATING DRIVERS
The upgrades are due to high credit enhancement and continued stable performance of the four remaining loans. The largest loan (89.3%) is performing under modified terms. The remaining three loans are fully amortizing and collateralized by single tenanted Walgreens with maturity dates in 2018 and 2019.
The pool's aggregate principal balance has been paid down by 97.5% to $29.3 million from $1.2 billion at issuance with only 0.2% in realized losses. Interest shortfalls of $1.4 million are affecting the non-rated class P.
The largest loan of the pool is secured by Carroll's Creek Landing Apartments (89.3% of the pool), a 288 unit multifamily complex located in Arlington, WA 20 miles north of Seattle. The complex has an agreement with the U.S. Navy that provides subsidized and preferred housing to the service men and women located at the nearby installation. The complex has a unique offering of townhomes and has no direct competitors within a nine-mile radius. Occupancy fluctuates due to ship deployments but its most recently reported occupancy was 87% as of second quarter 2014. The loan was modified in 2011 with a reduced rate and interest-only payments, with a reported year-end 2013 DSCR at 1.56x; however the original loan rate and terms resumed in July 2014. The loan has a maturity date in November 2017.
RATINGS SENSITIVITY
The Rating Outlook on class N and O is Stable as rating changes are not expected for the remaining life of the pool. Although the classes have high credit enhancement, there is significant concentration risk with only four loans remaining and with the largest being a Fitch Loan of Concern.
Fitch upgrades the following classes:
--$8.8 million class N to 'Asf' from 'B+sf'; Outlook Stable;
--$5.9 million class O to 'BBsf' from 'B-sf'; Outlook Stable.
Classes A-1, A-2, B, C, D, E, F, G, H, J, K, L, M, and X-2 have repaid in full. Fitch does not rate the $15.5 million interest-only class P. The rating on class X-1 was previously withdrawn.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (May 20, 2014);
--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 10, 2014).
Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=812608
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=970936
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