Kroll Bond Rating Agency Assigns Preliminary Ratings to COMM 2013-GAM

NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings for the COMM 2013-GAM transaction (see ratings list below). COMM 2013-GAM is a $324.0 million CMBS single borrower transaction.

The collateral for the securitization is a single, non-recourse, first lien mortgage loan that is secured by the borrower’s fee simple and leasehold interests in Green Acres Mall, which is comprised of 1.8 million square feet (sf). The property is a super-regional mall located in Valley Stream, New York that has seven anchor tenants including BJ’s Wholesale Club, JC Penney, Kohl’s, Macy’s, Macy’s Men’s/Furniture Gallery, Sears, and Walmart. The center was initially constructed in 1956 and has undergone several renovations over the years. The most recent renovation occurred in 2010, and involved the conversion of the Macy’s Men’s/Furniture Gallery second floor space to Kohl’s. The property was purchased by Macerich in January 2013 from Vornado Realty Trust, and has a current occupancy of 95.3%. For the TTM period ending January 2013, comparable in-line stores generated average sales of $501 per sf, which resulted in an occupancy cost of 17.9%.

KBRA’s analysis of the transaction included a detailed evaluation of the property’s cash flow using our CMBS Property Evaluation Guidelines, and the application of our CMBS Single Borrower and Large Loan Rating Methodology. The results of our analysis yielded a KBRA Net Cash flow (KNCF) of $28.5 million. To value the property, we applied a 7.50% capitalization rate to arrive at a value of $380.6 million. Our resulting KBRA Loan to Value (KLTV) was 85.2%. In our analysis of the transaction, we also reviewed and considered third party engineering, environmental and appraisal reports, our own on-site inspections of the properties and the competition and legal documentation and opinions.

For complete details on the analysis, please see our Pre-Sale Report, entitled COMM 2013-GAM, which was published today at www.krollbondratings.com.

The preliminary ratings are based on information known to KBRA at the time of this publication. Information received subsequent to this release could result in the assignment of final ratings that differ from the preliminary ratings.

Preliminary Ratings Assigned: COMM 2013-GAM

Class	Expected Rating	Balance (US$)
A-1	AAA (sf)	$55,145,000
A-2	AAA (sf)	$154,855,000
X-A	AAA (sf)	$210,000,000
X-B	AAA (sf)	$26,000,000
B	AA- (sf)	$26,000,000
C	A (sf)	$17,000,000
D	BBB (sf)	$24,754,000
E	BBB- (sf)	$19,024,000
F	BB (sf)	$27,642,482

*Notional Amount

17g-7 Disclosure:

All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC Rule 17g-7, to provide a description of a transaction’s representations, warranties and enforcement mechanisms that are available to investors when issuing credit ratings. KBRA’s disclosure for this transaction can be found in the report entitled COMM 2013-GAM 17g-7 Disclosure Report.

Related publications:

CMBS Property Evaluation Guidelines, published June 10, 2011

CMBS Single Borrower & Large Loan Rating Methodology, published August 8, 2011

About Kroll Bond Rating Agency

Kroll Bond Rating Agency, Inc. (www.krollbondratings.com) is registered with the SEC as a nationally recognized statistical rating organization (NRSRO). Kroll Bond Rating Agency was established in 2010 to restore trust in credit ratings by establishing new standards for assessing risk and by offering accurate, clear, and transparent ratings.