Fitch Ratings has upgraded three classes and affirmed eight classes of JP Morgan Chase Commercial Mortgage Securities Corp. series 2005-LDP1 (JPMCCM 2005-LDP1) commercial mortgage pass-through certificates A detailed list of rating actions follows at the end of this press release.
KEY RATING DRIVERS
The upgrades were due to significant pay down to the transaction. Fitch modeled losses of 23.5% of the remaining pool; expected losses on the original pool balance total 4.5%, including $81.5 million (2.8% of the original pool balance) in realized losses to date. Fitch has designated 33 loans (75.7%) as Fitch Loans of Concern, which includes 16 specially serviced assets (47.8%).
The pool is concentrated with only 46 loans remaining. As of the January 2015 distribution date, the pool's aggregate principal balance has been reduced by 93% to $200.5 million from $2.88 billion at issuance. Per the servicer reporting, two loans (1.9% of the pool) are defeased. Interest shortfalls are currently affecting classes F through NR.
The largest contributor to expected losses is the real estate owned (REO) Southbridge Mall (4.5% of the pool), a 223,000 sf mall located in Mason City, IA, which is located near the Iowa, Minnesota border, about halfway between Des Moines and Minneapolis. The mall is anchored by Younkers (22% of NRA through 2019) and J.C. Penney (22% through 2019). As of the September 2014 rent roll, the mall was 72.7% leased, but the J.C. Penney location appears on the company's recently announced store closure list. Foreclosure was completed and title transferred in December 2012.
The next largest contributor to expected losses is the specially-serviced Indian River Office Building loan (5%), which is secured by a 94,000 sf medical office property located in Vero Beach, FL. The property began suffering occupancy declines in 2011 most likely due to increased competition from newer properties in the area. The loan transferred to special servicing in January 2014 due to imminent default as the borrower advised the master servicer that it would be unable to pay-off the loan at maturity in September 2014. A foreclosure action is currently in process.
The third largest contributor to expected losses is the specially-serviced Harley Davidson Center loan (4.6%), which is secured by a 104,000 sf retail property located in Las Vegas, NV. The loan recently transferred to special servicing due to its upcoming maturity in February 2015. The largest tenant, Las Vegas Harley Davidson (64% of NRA), vacated the property at lease expiration in January. 2015. The space is currently listed for lease.
RATING SENSITIVITY
Rating Outlooks on classes D through F are Stable due to increasing credit enhancement and continued expected pay down. Fitch performed additional stresses when considering upgrades. Although credit enhancement remains high relative to the rating category, upgrades were limited given the concentrated nature of the pool. The distressed classes (those rated below 'B') may be subject to further downgrades as additional losses are realized.
Fitch upgrades the following classes and assigns or revises Rating Outlooks and REs as indicated:
--$47.9 million class D to 'Asf' from 'BBBsf'; Outlook to Stable from Negative;
--$28.8 million class E to 'BBBsf' from 'BBsf'; Outlook to Stable from Negative;
--$28.8 million class G to 'CCCsf' from 'CCsf'; RE 100%.
Fitch affirms the following classes and assigns or revises Outlooks or REs as indicated:
--$46.8 million class F at 'Bsf'; Outlook to Stable from Negative;
--$32.4 million class H at 'Csf'; RE 10%.
Fitch affirms the following classes:
--$10.8 million class J at 'Csf'; RE 0%;
--$5 million class K at 'Dsf'; RE 0%;
--$0 class L at 'Dsf'; RE 0%;
--$0 class M at 'Dsf'; RE 0%;
--$0 class N at 'Dsf'; RE 0%;
--$0 class P at 'Dsf'; RE 0%.
The class A-1, A-1A, A-2, A-3, A-4, A-SB, A-J, A-JFL, B and C certificates have paid in full. Fitch does not rate the class NR certificates. Fitch previously withdrew the ratings on the interest-only class X-1 and X-2 certificates.
Additional information on Fitch's criteria for analyzing U.S. CMBS transactions is available in the Dec. 10, 2014 report, 'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria', which is available at 'www.fitchratings.com' under the following headers:
Structured Finance >> CMBS >> Criteria Reports
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (Aug. 4, 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=978859
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