News Column

Fitch Affirms Wells Fargo Commercial Mortgage Trust 2013-LC12 Certificates

June 25, 2014

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed 15 classes of Wells Fargo Commercial Mortgage Trust 2013-LC12 certificates due to stable performance since issuance. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

The affirmations are based on the stable performance of the underlying collateral pool. As of the June distribution, the pool's aggregate principal balance has been paid down by 0.7% to $1.40 billion from $1.41 billion at issuance. Based on the annualized 2013 reported net operating income (NOI) of the 56.6% of the pool that reported, the pool's overall NOI is flat since issuance.

There are currently no delinquent or specially serviced loans and four loans on the servicer watchlist. Two of the properties are encountering occupancy issues that were anticipated at issuance and represent minimal asset risk. Two additional loans (6.9%) are Fitch loans of concern.

The largest Fitch loan of concern, Carolina Place (6.4% of the pool), is a 1,158,558 square foot regional mall located 10 miles southwest of the Charlotte CBD. The loan is sponsored by a joint venture between General Growth Properties and the New York State Common Retirement Fund. The mall has undergone two rounds of redevelopment in less than 10 years and is the dominant property in the South Charlotte/North Rock Hill trade area. A newly constructed property by Simon Properties and Taubman, Carolina Premium Outlets, is expected to open at the end of the July 2014. This property is located only 10 miles from the subject on a site that is in close proximity to Interstate 485 and 77. A number of Carolina Place's inline tenants are opening stores at this new center which has the potential to cannibalize sales at the subject. Fitch anticipates that the opening of the center could have a negative impact on Carolina Place's sales, but the strong economic growth of the area and the center's dominant position could mute a significant decline in retail sales activity.

The second Fitch loan of concern is the Inland Family Dollar/Dollar General Portfolio (0.5%), a 10 property portfolio of single tenant retail buildings located in secondary markets of Texas, Wisconsin, and Ohio. The retail buildings were built in 2012 and represent some of the newest locations for the companies. The Family Dollar intends to close 370 underperforming stores and the sponsor has not received notification if any portfolio locations are on their list.

The largest loan in the pool (7.4%) is secured by a portfolio of 13 suburban office properties, Innsbrook Office Portfolio, located in Richmond, VA metropolitan statistical area (MSA), 20 miles northwest of the central business district. The portfolio's rent roll is diversified with 96 unique tenants. The largest tenant, Capital One Services LLC, occupies 13.6% of the portfolio's net rentable area and has an upcoming lease expiration in 2016. A competing mixed-use development is currently under construction one mile north of the subject portfolio and could potentially start to compete for tenants upon its 2015 completion. However, the portfolio has maintained an average occupancy of 93.2% for the past decade which exceeds the 10 year submarket vacancy rate of 11%.

RATINGS SENSITIVITY

The Rating Outlook for all classes remains Stable. Due to the recent issuance of the transaction and stable performance, Fitch does not foresee positive or negative ratings migration until a material economic or asset level event changes the transaction's portfolio-level metrics. Additional information on rating sensitivity is available in the report 'Wells Fargo Commercial Mortgage Trust 2013-LC12' (July 09, 2013), available at 'www.fitchratings.com'.

Fitch affirms the following classes:

--$120.8 million class A-1 'AAAsf'; Outlook Stable;

--$80.0 million class A-2 'AAAsf'; Outlook Stable;

--$160.0 million class A-3 'AAAsf'; Outlook Stable;

--$363.1 million class A-4 'AAAsf'; Outlook Stable;

--$149.9 million class A-SB 'AAAsf'; Outlook Stable;

--$103.0#a million class A-3FL 'AAAsf'; Outlook Stable;

--$0.0a million class A-3FX 'AAAsf'; Outlook Stable;

--$116.3b million class A-S 'AAAsf'; Outlook Stable;

--$88.1b million class B 'AA-sf'; Outlook Stable;

--$56.4b million class C 'A-sf'; Outlook Stable;

--$260.7b million class PEX 'A-sf'; Outlook Stable;

--$976.8* million class X-A 'AAAsf'; Outlook Stable;

--$66.9a million class D 'BBB-sf'; Outlook Stable;

--$28.2a million class E 'BBsf'; Outlook Stable;

--$14.1a million class F 'Bsf'; Outlook Stable.

Fitch does not rate class G or the interest-only class X-B. Fitch previously withdrew the ratings on class A-5.

# Floating rate.

* Notional amount and interest-only.

a Privately placed pursuant to Rule 144A.

b Class A-S, class B and class C certificates may be exchanged for class PEX certificates; and class PEX certificates may be exchanged for class A-S, class B and class C certificates.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 20, 2014);

--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria' (Dec. 11, 2013).

A comparison of the transaction's Representations, Warranties, and Enforcement (RW&E) mechanisms to those of typical RW&Es for the asset class is available in the following reports:

--'Wells Fargo Commercial Mortgage Trust 2013-LC12' (July 09, 2013).

--'Wells Fargo Commercial Mortgage Trust 2013-LC12 -- Appendix' (July 09, 2013).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748821

U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=724961

Wells Fargo Commercial Mortgage Trust 2013-LC12

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=715855

Wells Fargo Commercial Mortgage Trust 2013-LC12 -- Appendix

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=716898

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=836546

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.



Fitch Ratings

Primary Analyst

Jay Bullie

Associate Director

+1-312-368-2079

Fitch Ratings, Inc.

70 W. Madison Street

Chicago, IL 60602

or

Committee Chairperson

Britt Johnson

Senior Director

+1-312-606-2341

or

Media Relations

Sandro Scenga, New York, +1 212-908-0278

sandro.scenga@fitchratings.com

Source: Fitch Ratings


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