KBRA Downgrades Ratings of Three Classes of WFRBS 2014-C20 to D (sf) After Realization of Principal Loss
28 Mar 2024 | New York
KBRA downgrades the ratings of the Class D, E, and F certificates to D (sf) of WFRBS 2014-C20, a CMBS conduit transaction, following realized losses taken against their outstanding principal balances resulting from the resolution of Woodbridge Center (largest, $130.0 million loan at issuance) as reflected in the March 2024 remittance statement. Woodbridge Center was resolved via sale of the asset in February 2024 for a reported liquidation sale price of $70.4 million, resulting in a $155.7 million loss (62.3% loss severity) on the whole loan balance of $250.0 million. The loss was generally in-line with KBRA’s expectations (see August 2023 surveillance report).
The Woodbridge Center loan was collateralized by a 1.1 million sf portion of a 1.7 million sf regional mall located in Woodbridge, New Jersey, approximately 30 miles southwest of New York City. The mall was anchored by Macy’s (267,341 sf, non-collateral), JCPenney (173,594 sf, non-collateral), Boscov’s (184,301 sf, 16.6% of total collateral sf), and Dick’s Sporting Goods (100,000 sf, 9.0%). The loan sponsor was Brookfield Properties.
The $108.3 million in cumulative principal losses reported to date, as of the March 2024 remittance period . The realized losses has resulted in the principal balance of Class E, F, and G being written down in full and Class D being reduced by $19.1 million (23.1% of its original balance). Along with the losses associated with the liquidation of the Woodbridge Center asset, the transaction has incurred losses from the liquidation sale of three previously specially serviced assets: the Candlewood Suites - Denham Springs, Comfort Suites - Sulphur, and Brunswick Square assets in July 2021, January 2021, and December 2023, respectively.
KBRA's other outstanding transaction ratings are unchanged at this time. KBRA most recently downgraded two classes of certificates of the transaction in August 2023 based on KBRA's estimated losses.
Details concerning the classes with ratings changes are as follows:
- Class D to D (sf) from CC (sf)
- Class E to D (sf) from C (sf)
- Class F to D (sf) from C (sf)
Rating Sensitivities
Future rating actions will be dependent upon the ongoing assessment of the timing and likelihood of ultimate payment of principal and accrued interest on the rated certificates. The assessment will consider the expected and actual losses on the remaining assets in the transaction, as well as the magnitude and extent of interest shortfalls, if any, on the certificates.
To access rating and relevant documents, click here.