Press Release|CMBS

KBRA Affirms All Ratings for JPMCC 2013-C10

28 Feb 2025 | New York

KBRA affirms all of its outstanding ratings for JPMCC 2013-C10, a $153.0 million CMBS conduit transaction. The affirmations follow a surveillance review of the transaction and are based on the performance and expected recovery of the transaction's remaining three loans, which have not meaningfully changed since KBRA’s last review in March 2024. All three remaining loans failed to pay off at their respective maturity dates and were subsequently modified and extended. As of the February 2025 remittance period, two loans (69.7%) are specially serviced, including the first loan below (60.7%) which is in foreclosure. The details of the loans are outlined below.

Gateway Center (largest, 60.7%, K-LOC, Underperform, Foreclosure)

The loan is collateralized by a 743,945 sf portion of a 1.5 million sf four-building office complex located in the Pittsburgh, Pennsylvania CBD. The loan sponsor is Hertz Investment Group.

KBRA maintains the loan's K-LOC designation and KPO of Underperform primarily due to the asset's foreclosure status. The loan transferred to the special servicer for imminent maturity default during the December 2022 remittance period, prior to its original scheduled maturity in January 2023. The loan was modified in March 2023, with its maturity date extended to January 2024, and returned to the master servicer in November 2023. In January 2024, the loan was modified again, and the maturity was extended for another year, through January 2025. The loan was reported as in foreclosure in December 2024 and subsequently was not paid off at maturity in January 2025. The special servicer is working to dual track foreclosure with negotiations for a loan modification.
The servicer-reported occupancies and DSCs are: 54.0% / -0.51x (YTD September 2024), 53.0% / -0.19x (FY 2023); at closing these were 86.0% / 1.32x. An appraisal dated October 2024 valued the property at $87.9 million ($60 per sf), which is 43.5% below the $155.5 million ($106 per sf) appraised value at issuance. KBRA’s analysis resulted in an estimated loss of $15.6 million (16.8% estimated loss severity) on the $92.9 million loan balance. The loss is based on a liquidation value of $79.1 million ($54 per sf), which was derived by applying a 10% haircut to the October 2024 appraised value.

West County Center (2nd largest, 30.3%, K-LOC, Underperform, Watchlist)

The loan is collateralized by a 743,945 sf portion of a 1.2 million sf super-regional mall located in Des Peres, Missouri, approximately 20 miles west of the St. Louis CBD. The mall is anchored by JCPenney, Macy’s and Nordstrom, none of which are currently on any corporate store closure lists. Nordstrom owns its improvements but operates subject to a ground lease with the borrower that expires in 2028, with seven 10-year extension options remaining. JCPenney and Macy’s do not service as loan collateral. The loan sponsor is a 50/50 joint venture between CBL & Associates Properties, Inc. (CBL) and TIAA-CREF.
KBRA maintains the loan's K-LOC designation and KPO of Underperform primarily due to the loan's prior status with the special servicer and loan modification. The loan was transferred to the special servicer in May 2020 for imminent monetary default and became non-performing after it did not pay off at its scheduled maturity date in December 2022. The loan was modified in April 2023, became current in May 2023, and was transferred back to the master servicer in July 2023. The borrower paid down the loan by $3.4 million and received a two-year maturity extension to December 2024, with an additional two-year extension option available. The loan was reported non-performing in January 2025 after failing to pay off at loan maturity in December 2024 but was subsequently reported current in February 2025. Updated servicer reporting reports a December 2026 maturity date, indicating that the two-year extension option was exercised. As part of the extension, there was a $3.0 million principal curtailment in February 2025.
The servicer-reported occupancies and DSCs are: 97.0% / 1.19x (YTD September 2024), 98.0% / 1.19x (FY 2023); at closing these were 98.0% / 2.11x. An appraisal dated December 2022 valued the property at $240.0 million ($323 per sf), which is 29.4% below the $340.0 million ($457 per sf) value at issuance. KBRA’s analysis resulted in an estimated loss given default of $70.3 million (48.8% estimated loss severity) on the $144.0 million whole loan balance. The loss is based on a liquidation value of $74.2 million ($61 per sf).

17600 North Perimeter (3rd largest, 9.0%, K-LOC, Underperform, Specially Serviced)

The loan is collateralized by a 127,689 sf suburban office property located in Scottsdale, Arizona.
KBRA maintains the loan’s K-LOC designation and KPO of Underperform primarily due to declining occupancy. According to the June 2024 rent roll, property occupancy has declined to 51.7% from 100% at closing. Additionally, per media sources, Fender Guitar, the only remaining tenant, is expected to vacate at lease expiration in March 2025. The loan initially transferred to the special servicer for imminent maturity default in November 2022 and failed to pay off at its scheduled maturity date in January 2023. The loan was modified and paid current in July 2023, and returned to the master servicer in December 2023. As part of the modification, the borrower paid down the loan by $500,000, contributed $1.0 million in leasing reserves, and received a two-year maturity extension through January 2025. The loan transferred to the special servicer for a second time in January 2025 due to maturity default. The workout plan is to dual track foreclosure with a possible loan modification.
The servicer-reported occupancies and DSCs are: 52.0% / 0.52x (YTD September 2024), 52.0% / 1.08x (FY 2023); at closing these were 100% / 1.62x. An appraisal dated January 2023 valued the property at $18.1 million ($142 per sf), which is 35.4% below the $28.0 million ($219 per sf) appraised value at issuance. KBRA’s analysis resulted in an estimated loss of $560,000 (4.1% estimated loss severity) on the $13.7 million loan balance. The loss is based on a distressed liquidation value of $14.1 million ($110 per sf), which considers the potential for a protracted workout period and a distressed non-stabilized disposition of the asset.

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 ratings and relevant documents, click here.

Related Publication

CMBS: JPMCC 2013-C10 Pre-Sale Report

KBRA Affirms All Ratings for JPMCC 2013-C10

Related Publication

Methodologies