KBRA Downgrades One Rating of WFCM 2013-LC12 to D (sf) Following Realization of Principal Losses
5 Dec 2024 | New York
KBRA downgrades the rating of the Class F certificate to D (sf) from C (sf) for WFCM 2013-LC12, a CMBS conduit transaction, following realized losses taken against its outstanding principal balance resulting from the resolution of the $77.0 million Rimrock Mall REO asset as reflected in the November 2024 remittance report. The asset incurred a loss of $41.1 million (53.3% loss severity of original balance). The loss was generally in line with KBRA's expectations reflected in the May 2024 surveillance press release.
The Rimrock Mall REO asset was sold in October 2024 for $26.5 million ($62 per sf), below the April 2024 appraised value of $35.5 million ($83 per sf). At issuance, the asset was appraised for $112.0 million ($261 per sf). The asset consists of a 428,661 sf portion of a 586,446 sf regional mall located in Billings, Montana. Mall anchors include two Dillard’s anchor spaces, along with JCPenney, the latter of which is collateral for the loan. The asset was previously sponsored by Starwood Capital Group, L.P.
There transaction has $53.5 million in cumulative principal losses to date, as reported in the November 2024 remittance report. The realized losses has resulted in the principal balance of Class F being reduced by $6.8 million (48.0% of its original balance). Along with the liquidation of the Rimrock Mall REO asset, the transaction has incurred losses from the liquidation sale of four previously specially serviced assets: Crown Plaza Madison ($9.2 million loss, March 2020), Grand Forks Market Place ($56,418 loss, July 2023), Holiday Inn Westchase ($3.1 million, February 2021), and Holiday Inn Express - Vernal ($80,919 loss, August 2022), which resulted in loss severities of 74.6%, 0.5%, 29.0%, and 1.3%, respectively.
KBRA's other outstanding transaction ratings are unchanged at this time. KBRA most recently downgraded three classes of certificates of the transaction in May 2023 based on KBRA's estimated losses. The applied loss this month is in line with KBRA's estimated losses based on KBRA's most recent surveillance review from May 1, 2024.
Details concerning the classes with ratings changes are as follows:
- Class F to D (sf) from C (sf)
Rating Sensitivities
Future rating actions will be dependent upon the ongoing assessment of the likelihood of ultimate payment of principal and accrued interest on the rated securities. 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.
For additional details, please see the WFCM 2013-LC12 May 2024 Surveillance Press Release linked below.
To access ratings and relevant documents, click here.