NEW YORK--(BUSINESS WIRE)--
Fitch Ratings has affirmed 11 classes of J.P. Morgan Chase Commercial
Mortgage Securities Trust, commercial mortgage pass-through
certificates, series 2010-C2 (JPMCC 2010-C2). A detailed list of rating
actions follows at the end of this press release.
KEY RATING DRIVERS
The affirmations are based upon the generally stable performance of the
underlying collateral pool. As of the June 2014 remittance report, the
pool has no delinquent or specially serviced loans. Fitch has designated
four loans (23.7% of pool) as Fitch Loans of Concern. The pool's
aggregate principal balance has been paid down by 7.5% to $1.02 million
from $1.10 million at issuance. The entire pool reported full-year 2013
financials. Based on the full-year financial statements, the pool's
overall net operating income (NOI) improved 8.9%, with the top 15 loans
improving 7.3% since issuance. No loans are defeased. Interest
shortfalls are currently affecting class NR.
The largest loan, Arizona Mills (16.3% of pool), is secured by a 1.24
million square foot (sf) outlet mall located in Tempe, AZ. Property
performance has remained stable since issuance. As of the March 2014
rent roll, the overall mall occupancy was 95.8% and the in-line
occupancy was 91%. The property's anchor tenants include JC Penney
Outlet, Harkins Theatres, Burlington Coat Factory, and Sports Authority.
The servicer is in the process of approving a three-year lease extension
for Marshall's to July 2017. In-line sales reported for 2012 have
remained relatively flat when compared to 2011, but have increased by
approximately 10% since issuance. As of year-end (YE) 2013, the debt
service coverage ratio (DSCR), on a net operating income (NOI) basis,
was 2.26x compared to 2.31x, 2.18x, and 2.21x at YE 2012, YE 2011, and
YE 2010, respectively.
The second largest loan, EDT Retail Trust Portfolio (13.2%), is secured
by a portfolio of five cross-collateralized, cross-defaulted anchored
shopping centers containing 2.2 million square feet located in
Wisconsin, Connecticut, Florida, and Minnesota. The loan was assumed by
Blackstone and DDR Corporation from EDT Retail Trust in 2012. As of the
March 2014 rent roll, the overall portfolio occupancy was 97.8% with
individual property occupancies ranging from 96.2% to 100%. The largest
tenant at each of the individual properties has a lease until 2017 or
beyond, the majority of which has additional multiple-year extension
options. YE 2013 NOI DSCR was 2.17x.
The third largest loan, Goodyear Portfolio (10.4%), is secured by a
portfolio of six industrial properties located in the Atlanta, Chicago,
Dallas, Columbus, and York, PA manufacturing markets. The loan was
assumed by American Realty Capital Properties from a joint venture
between Fortress Capital and Cardinal Industrial Real Estate Services in
2014. As of the December 2013 rent roll, the portfolio remains 100%
leased to Goodyear (rated 'B+/Rating Outlook Positive' by Fitch) through
December 2021; however, physical occupancy was 87.9%, remaining the same
since issuance, due to one of the underlying properties in McDonough, GA
being dark. The servicer has indicated that Goodyear has resumed
operations at the McDonough, GA location as of March 2014. YE 2013 NOI
DSCR was 1.63x.
The largest Fitch Loan of Concern, The Shops at Sunset Place (7.2%), is
secured by a 514,428 sf open-air lifestyle center located in Miami, FL.
Property occupancy and NOI have both declined significantly from
underwritten expectations at issuance. As of the March 2014 rent roll,
the property was 75.5% occupied, dropping from 77.5%, 77.2%, 88.7%, and
91.5% at YE 2013, YE 2012, YE 2011, and YE 2010, respectively. Many of
the tenants left when their leases expired. As a result of the drop in
occupancy, NOI in 2013 has declined nearly 24% from 2010 and remains 11%
below Fitch's stressed NOI at issuance. At securitization, the property
had an occupancy of 88%, which was below market of 92.5%. Fitch did not
apply an additional vacancy factor as the property's vacancy at that
time exceeded that of the market and submarket. According to REIS and as
of first quarter 2014, the overall Miami retail market reported a
vacancy of 7.1%, while the Coral Gables/Kendall submarket reported a
vacancy of 11.3%. Near-term rollover includes 5.5% of the square footage
in 2014, 7.2% in 2015, and 8.9% in 2016. YE 2013 NOI DSCR was 1.39x,
down from 1.58x, 1.79x, and 1.84x in 2012, 2011, and 2010, respectively.
Rating Outlooks on classes A-1 through H remain Stable due to increasing
credit enhancement and continued paydown.
Fitch has affirmed the following classes as follows:
--$184 million class A-1 at 'AAAsf'; Outlook Stable;
--$243.1 million class A-2 at 'AAAsf'; Outlook Stable;
--$390.5 million class A-3 at 'AAAsf'; Outlook Stable;
--Interest-only class X-A at 'AAAsf'; Outlook Stable;
--$37.2 million class B at 'AAsf'; Outlook Stable;
--$53.7 million class C at 'Asf'; Outlook Stable;
--$33 million class D at 'BBB+sf'; Outlook Stable;
--$22 million class E at 'BBB-sf'; Outlook Stable;
--$16.5 million class F at 'BBsf'; Outlook Stable;
--$13.8 million class G at 'Bsf'; Outlook Stable;
--$2.8 million class H at 'B-sf'; Outlook Stable.
Fitch does not rate the class NR and interest-only class X-B
Additional information on Fitch's criteria for analyzing U.S. CMBS
transactions is available in the Dec. 11, 2013 report, 'U.S. Fixed-Rate
Multiborrower CMBS Surveillance and Re-REMIC Criteria', which is
available at 'www.fitchratings.com'
under the following headers:
Structured Finance then CMBS then Criteria Reports
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (May 21, 2014);
--'U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC
Criteria' (Dec. 11, 2013).
Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
U.S. Fixed-Rate Multiborrower CMBS Surveillance and Re-REMIC Criteria
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DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING
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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
Melissa Che, +1 212-612-7862
33 Whitehall Street
New York, NY 10004
Mary MacNeill, +1 212-908-0785
Sandro Scenga, +1 212-908-0278
Source: Fitch Ratings