KBRA Downgrades One Rating of COMM 2013-LC13 to D (sf) Following Realization of Principal Losses

KBRA downgrades the rating of the Class E certificate to D (sf) from CC (sf) for COMM 2013-LC13, a CMBS conduit transaction, following realized losses taken against its outstanding principal balance. The loss resulted from the resolution of the 201 North Charles Street REO asset (originally 4th largest, $13.1 million loan balance at securitization) as reflected in the January 2025 remittance report. The asset incurred a loss of $18.3 million (139.8% loss severity of original balance).

The 201 North Charles Street REO asset was resolved in January 2025 for $2.5 million. However, liquidation expenses totaled $9.4 million, which included fees, expenses and repayment of advances, resulting in a negative $6.9 million in net proceeds. An appraisal dated July 2024 valued the subject on an As-Is basis at $4.4 million, which is 77.1% below the $19.2 million value at issuance. The asset is a 28-story, 264,126 sf office building in the Baltimore, Maryland CBD, roughly one half mile north of the Baltimore Inner Harbor.

The transaction has $47.7 million in cumulative principal losses (with adjustments) to date, as reported in the January 2025 remittance report. The realized losses reduced the principal balances of Classes F, and G to zero while the principal balance of Class E has been reduced by $9.9 million (35.1% of its original balance). Along with the liquidation of the 201 North Charles Street REO asset, the transaction has incurred adjusted losses from the disposition of four previously specially serviced assets: Red Roof Inn Laredo ($902,362 June 2019), NorthPointe Apartments ($24.4 million, January 2021), Fairfield Inn & Suites Beachwood ($479,794, May 2022), and Hampton Inn & Suites - Little Rock ($3.7 million loss, November 2024), which resulted in loss severities of 25.1%, 62.9%, 4.9%, and 23.5%, respectively.

KBRA's other outstanding transaction ratings are unchanged at this time. KBRA most recently downgraded one class of the transaction in September 2024 based on the realization of principal losses to Class F.

Details concerning the classes with ratings changes are as follows:

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 COMM 2013-LC13 March 2024 Surveillance Press Release linked below.

To access ratings and relevant documents, click here.

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