KBRA Downgrades Six Ratings and Affirms All Other Ratings for GSMS 2014-GC24

KBRA downgrades the ratings of six classes of certificates and affirms all other ratings of GSMS 2014-GC24, a $539.6 million CMBS conduit transaction. The rating actions follow a surveillance review of the transaction, which has exhibited an increase in estimated losses since KBRA’s last ratings change in August 2023, associated primarily with the three largest loans in the pool (58.5% of the total pool balance). The rating actions also consider the likelihood that interest shortfalls could reach higher in the capital stack as K-LOCs reaching maturity in the near term are unable to pay off. However, the top of the transaction's capital structure has benefitted from deleveraging from loan payoffs, amortization, and defeasances.

As of the July 2024 remittance period, there is one specially serviced asset (16.2%). KBRA identified 13 K-LOCs (69.3%), including the specially serviced asset. Of the K-LOCs, four (59.1%) have estimated losses. The K-LOCs include:

Seven of the top 10 loans (65.2%):

Stamford Plaza Portfolio (largest, 23.8% of the pool balance, 58.6% estimated loss severity)
Coastal Grand Mall (2nd largest, 18.5%, 15.5%)
Beverly Connection (3rd largest, 16.2%, 10.9%)
Arbutus Shopping Center (4th largest, 2.6%)
Holiday Inn Express Corvallis (7th largest, 1.5%)
Hurstbourne Business Park Portfolio (8th largest, 1.3%)
Holiday Inn Express Utica (9th largest, 1.1%)
One other K-LOC has an estimated loss:
The Vantage Office Condominium (0.6% of the pool balance, 10.2% estimated loss severity)

Details concerning the classes with rating changes are as follows:

Class B to A (sf) from AA- (sf)
Class C to BBB- (sf) from A- (sf)
Class PEZ to BBB- (sf) from A- (sf)
Class D to CC (sf) from B- (sf)
Class E to C (sf) from CC (sf)
Class X-C to C (sf) from CC (sf)

KBRA Downgrades Six Ratings and Affirms All Other Ratings for GSMS 2014-GC24

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