Press Release|CMBS
KBRA Affirms All Outstanding Ratings for COMM 2013-CCRE6
31 Jan 2025 | New York
KBRA affirms all of its outstanding ratings for COMM 2013-CCRE6, a $230.0 million CMBS conduit transaction. The affirmations follow a surveillance review of the transaction, which has exhibited pool performance generally in line with KBRA's last ratings change in February 2024. As of January 2025, the transaction is collateralized by two remaining assets. Pertinent details regarding each asset are outlined below.
Federal Center Plaza (56.5% of the pool balance, K-LOC, Underperform, SS)
- The asset consists of two adjoining eight-story, Class-B office buildings and a controlling interest in a connected subterranean 912-space parking garage located at 400 and 500 C Street SW in Washington, D.C.
- KBRA identified the loan as a K-LOC and maintains a KPO of Underperform following its second transfer to the special servicer in November 2024 for imminent maturity default. The borrower informed the servicer that it would be unable to repay the loan by its February 2025 maturity date prior to the transfer. The lender is negotiating either a forbearance or loan extension with the borrower as it pursues other legal options. As of January 2025, the loan has accrued $461,267 in servicer principal and interest advances.
- The majority of the building is leased to two GSA agencies: FEMA leases 64.7% of the collateral sf and represents 87.1% of base rent with a lease that expires in August 2027; USAID leases 6.5% of the collateral sf and represents 9.1% of base rent with a lease that expires in January 2026. The GSA tenants previously planned to relocate to a government-owned building; however, it appears the plans have been put on hold with the GSA citing "current market conditions" as the reason.
- The servicer-reported occupancies and DSCs are: 74.4% / 2.14x (YTD June 2024); 74.4% / 2.12x (FY 2023); 75.0% / 2.59x (FY 2022); at closing these were 100% / 3.43x. An appraisal dated February 2023 valued the property at $237.0 million ($327 per sf), which is 23.3% below the $309.0 million ($426 per sf) value at issuance. KBRA’s analysis resulted in an estimated loss of $8.5 million (6.5% estimated loss severity). The loss is based on a KBRA liquidation value of $122.0 million ($168 per sf). The value is derived from a direct capitalization approach using a KNCF of $11.3 million and a capitalization rate of 9.25%.
The Avenues (43.5%, K-LOC, Underperform, WL)
- The loan is collateralized by the borrower's fee interest in 599,030 sf of a 1.1 million sf, two-story regional mall located in Jacksonville, Florida. At securitization, the anchors for the mall included Belk, Dillard’s, JCPenney, Sears and Forever 21; however, Sears closed in December 2019, ahead of its scheduled lease expiration date in September 2020. The former Sears site is collateral for this loan.
- KBRA maintains the loan's K-LOC designation and KPO of Underperform due to low occupancy. The loan transferred to the special servicer in November 2022 for imminent non-monetary default. The borrower negotiated a modification resulting in a three-year extension, with an initial maturity date of February 2026. The loan was returned to the master servicer in August 2023, and in October 2024, there was a $10.0 million principal curtailment pursuant to the modification agreement. Prior to its transfer to the special servicer, the loan had remained on the servicer's watchlist since November 2018 due to the bankruptcy of the former anchor tenant Sears. While collateral performance remains above breakeven, occupancy trended downward following the loss of Sears in December 2019.
- The servicer-reported occupancies and DSCs are: 65.6% / 3.31x (YTD June 2024); 65.0% / 3.13x (FY 2023); 62.2% / 2.92x (FY 2022); at closing these were 91.3% / 4.02x. An appraisal dated April 2023 valued the property at $166.0 million ($277 per sf), which is 32.0% below the $244.0 million ($407 per sf) value at issuance. KBRA’s analysis resulted in an estimated loss of $21.8 million (21.8% estimated loss severity). The loss is based on a KBRA liquidation value of $78.2 million ($131 per sf). The value is derived from a direct capitalization approach using a KNCF of $8.6 million and a capitalization rate of 11.00%.
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
Methodologies
- CMBS: North American CMBS Property Evaluation Methodology
- CMBS: North American CMBS Single Borrower & Large Loan Rating Methodology
- Structured Finance: Global Structured Finance Counterparty Methodology
- CMBS: Methodology for Rating Interest-Only Certificates in CMBS Transactions
- ESG Global Rating Methodology